CORRECTING and REPLACING Ceradyne, Inc. Receives $2.37 Billion XSAPI/ESAPI Body Armor 5 Year ID/IQ (Indefinite Delivery/Indefini
October 06 2008 - 4:37PM
Business Wire
Second graph, third sentence of release should read: ... 500 sets
per year to a maximum of 240,000 sets per year. (sted:�... 500
plates per year to a maximum of 240,000 plates per year.) The
corrected release reads: CERADYNE, INC. RECEIVES $2.37 BILLION
XSAPI/ESAPI BODY ARMOR 5 YEAR ID/IQ (INDEFINITE DELIVERY/INDEFINITE
QUANTITY) CONTRACT Ceradyne, Inc. (NASDAQ:CRDN) announced that it
has received an ID/IQ contract for both its XSAPI and ESAPI
personal ceramic armor plates from the U.S. Army RDECOM, Aberdeen
Proving Grounds, Maryland. The total amount of this contract is
approximately $2.37 billion and covers a period of approximately
five years. Simultaneously, Ceradyne received the first delivery
order for First Article Testing (FAT) valued at $943,000 scheduled
for shipment by November 2008. This initial FAT order is for both
XSAPI and ESAPI armor plates. This ID/IQ contract is for both XSAPI
and ESAPI armor plates (front and back). The U.S. Army can order
one or both types of plates over the 5 year life of the contract.
The contract provides for a minimum of 500 sets per year to a
maximum of 240,000 sets per year. Ceradyne�s practice with all
ID/IQ contracts is to record as backlog only the portion of the
contract which has firm delivery orders issued against the total
contract. In this particular case, Ceradyne initially will only
book Delivery Order 0001 for $943,000 for FAT plates. David P.
Reed, Ceradyne President North American Operations, commented:
�This ID/IQ contract is by far the largest body armor contract
Ceradyne has ever received. We are very pleased to receive this
contract and believe that the government�s decision was based in
good part on the performance of our actual XSAPI and ESAPI plates
which were submitted in response to the Army�s original Request for
Proposal, as well as our past performance in body armor
procurements relating to both delivery and quality. We also believe
that the Company�s investment in our Lexington, Kentucky and
Irvine, California manufacturing facilities will allow us to meet
any quantity demand against this contract, including the potential
maximum quantities.� Reed continued: �Ceradyne�s vertical
integration strategy, from beginning with manmade raw materials, to
ceramic fabrication, to armor assembly and final testing, allows us
to control all quality aspects, as well as making our Company�s
product competitive.� Reed further commented: �We strongly believe
the XSAPI plate is especially required in the field to defeat next
generation armor piercing projectiles and protect American fighting
men and women�s lives. We expect that once the initial FAT plates
are evaluated that there will be a series of volume production
delivery orders issued to us against the total $2.37 billion ID/IQ
contract. �This type of ID/IQ award gives the government a wide
range of flexibility as to what it orders and in what timeframe it
requires delivery. As I stated above, we believe the fielding of
XSAPI is urgent. As we have done in the past, we will continue to
announce delivery orders that are issued and provide longer range
visibility as we receive it from the government.� Ceradyne
develops, manufactures and markets advanced technical ceramic
products and components for defense, industrial, automotive/diesel
and commercial applications. Additional information about the
Company can be found at www.ceradyne.com. Except for the historical
information contained herein, 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, 2007, and its Quarterly
Reports on Form 10-Q, as filed with the U.S. Securities and
Exchange Commission.
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