Force Protection, Inc. Letter to Shareholders

Business Wire, Nov 15, 2004

LADSON, S.C. -- Force Protection, Inc. (OTCBB:FRCP): This letter is one in a series of letters we are committed to sending each year to update shareholders on the status and progress of the company.

Overall progress: During fiscal year 2003, company revenue rose from $2.6 million to $6.2 million. We anticipate even greater gains for fiscal 2004. Our personnel have increased from fewer than 20 employees to more than 140. The contractual backlog of vehicle orders is approximately $20 million as of September 30, 2004 and is expected to increase by the end of 2004. We have assembled a strong team in management, sales, marketing and manufacturing and are moving forward with the systems, procedures and infrastructure necessary to support continued expansion.

Cougar delivery to U.S. Marines: We formally presented the 4X4 Cougar Hardened Engineer Vehicle (HEV) to the U.S. Marines on September 10th, 2004 during "South Carolina Strikes Back", a ceremony commemorating the events of 9/11. Technical issues delayed final acceptance of the Cougar, which passed all required tests and was accepted by the Marines on October 15, 2004.

This delivery took place one week short of six months after contract award date (ACAD), a short lead-time given the Cougar was not in production when the contract was awarded, and the HEV is a new design variant of the Cougar H series. In addition, worldwide steel shortages persist, and backlogs and long lead times are still the norm in the commercial truck manufacturing industry (from which we obtain components), which contribute to production delays. We are pleased with the speed by which our team has documented and produced the new Cougar.

We are equally pleased to have incorporated the majority of modifications requested by the customer into these Cougar HEVs. Additional modifications will be incorporated in subsequent vehicles.

Delivery of an additional Cougar HEV to the Marines took place on November 10, 2004. The configuration of the vehicle has been confirmed and we are concentrating on ramping up the production rate. Our focus for the remainder of 2004 is to double the quantity of Cougar vehicles produced each month. Earlier this year, we received a contract from the Marines for up to 27 Cougar HEVs. The combination of 4x4 and 6x6 vehicles was left flexible. The first 14 vehicles were released under this contract.

Four Buffalos delivered to U.S. Army: On May 10, 2004 we received a contract to produce 21 Buffalos for the U.S. Army. The first four vehicles under this contract were delivered on November 9, 2004. The time from Contract Award Date to initial delivery was one day less than six months. Our original plan was to deliver all 21 of these vehicles by the end of 2004, but additional customer requests and modifications in testing have delayed the schedule.

Plant capacity and utilization: Plant expansion continues effectively demonstrating our commitment and ability to accommodate ever larger orders. We anticipate additional capacity in place by the end of November 2004. Our goal is to increase the production rate to about 10 vehicles per month by the end of the fourth quarter, thereby establishing plant utilization at about 40%. Further improvements to production facilities will take place in coming months. This "full up" capacity is important as it helps determine potential contract size. The actual rate of production is driven by orders, component lead times, and customer schedules.

Information release policy: We appreciate the avid interest that many of our shareholders take in Force Protection. On occasion, a shareholder contacts our customers in an attempt to obtain information that has not been publicly released. We are prohibited by law from answering such inquiries and anyone who might make trading decisions based on any information that has not been fully publicly disclosed could be violating various regulations. Additionally, by attempting to contact our customers, individuals may be putting Force Protection at risk for future opportunities or negotiations since the customers do not appreciate such contacts.

The Fair Disclosure laws require that all concerned parties be given material information at the same time. Our policy is to make a public statement each time a material event takes place. We announce contracts as they are received. We do not generally make announcements concerning potential new business. We do not generally provide guidance. Financial results are disclosed in 10Q and 10K filings and are sometimes accompanied by further discussion.

On a personal note, this team is dedicated to, and takes great personal satisfaction in our contribution to protecting the lives of the people relying on our vehicles. As many shareholders have noted in the current proxy, we are recommending actions that we believe will enable us to apply for listing on a national exchange. Many opinions will be expressed, and voices heard during this period. We will continue to listen, but believe these steps are in the long-term interest of all stakeholders in the Company.