Ceradyne, Inc. Receives New Five-Year $611.7 Million ID/IQ Contract; For Ceramic Side Plate Body Armor, $59.8 Million Initial D
July 03 2006 - 7:30AM
Business Wire
Ceradyne, Inc. (Company) (Nasdaq:CRDN) received a new 60-month
Indefinite Delivery/Indefinite Quantity (ID/IQ) government contract
for Enhanced Side Ballistic Inserts (ESBI) with a maximum value of
$611.7 million. Simultaneously, the Company received an initial
delivery order for $59.8 million scheduled to be shipped from July
2006 to November 2006. The contract was awarded to Ceradyne by the
U.S. Army, Aberdeen Proving Ground, Maryland. David Reed, Ceradyne
president of North American operations, commented, "We are very
pleased that the government's high level of confidence in Ceradyne
has resulted in this major win for us. Over the past few years, we
have expanded our capacity for state-of-the-art lightweight ceramic
body armor here in Costa Mesa, California, and our new Lexington,
Kentucky, facility. We are confident we will meet the Army's
quality and delivery requirements. "In addition, this new
multi-year contract provides visibility for potential future
revenue," Reed continued. "Furthermore, we believe we will receive
our next delivery order under this contract late in 2006." Reed
noted, "Under an ID/IQ government-type contract, the government is
obligated to purchase only certain minimum quantities. Each
delivery order, such as this initial delivery order for $59.8
million, is issued as a release against a maximum amount, which for
this ID/IQ contract is $611.7 million. Therefore, our projections
of follow-on business under this contract depend upon anticipated
receipt of additional releases or delivery orders. "We have been
manufacturing these ESBI side plates since January 2006 and
continue to believe that our extensive research into the Ceradyne
optimum design was a key factor in the decision to award Ceradyne
this contract," Reed stated. "And from a capacity perspective, the
August 2004 acquisition of ESK Ceramics assures us a supply of the
finest boron carbide powders, which are the starting materials for
Ceradyne's armor system technology. The combination of having these
starting materials, in conjunction with our Kentucky and California
hot pressing plants, and our recently announced Irvine, California,
assembly operation expansion, results in a vertically integrated
manufacturing operation." Reed added, "Ceradyne is proud to have
been awarded this contract and is confident that its armor systems,
which will be fielded in large quantities, will save American
lives." Ceradyne develops, manufactures and markets advanced
technical ceramic products and components for defense, industrial,
automotive/diesel, and consumer applications. Additional
information about the Company can be found at www.ceradyne.com.
This press release contains forward-looking statements regarding
future events and the future performance of Ceradyne that involve
risks and uncertainties that could cause actual results to differ
materially from those projected. Words such as "anticipates,"
"believes," "plans," "expects," "intends," "future," and similar
expressions are intended to identify forward-looking statements.
These risks and uncertainties are described in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2005,
and its Quarterly Reports on Form 10-Q, as filed with the U.S.
Securities and Exchange Commission.
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