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[October 2008]
Ceradyne Receives $2.37 Billion Ceramic Armour Contract
Ceradyne Inc (Costa Mesa, CA, USA) has received an ID/IQ contract for both its XSAPI and ESAPI personal ceramic armour plates from the US Army RDECOM, Aberdeen Proving Grounds, MD, USA. The total amount of this contract is approximately US$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 US$943,000 scheduled for shipment by November 2008. This initial FAT order is for both XSAPI and ESAPI armour plates.
This ID/IQ contract is for both XSAPI and ESAPI armour plates (front and back). The US Army can order one or both types of plates over the five-year life of the contract. The contract provides for a minimum of 500 plates per year to a maximum of 240,000 plates 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 US$943,000 for FAT plates.
David Reed, Ceradyne’s President North American Operations, commented: “This ID/IQ contract is by far the largest body armour 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 armour 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.
“Ceradyne’s vertical integration strategy, from beginning with man-made raw materials, to ceramic fabrication, to armour assembly and final testing, allows us to control all quality aspects, as well as making our Company’s product competitive.
“We strongly believe the XSAPI plate is especially required in the field to defeat next generation armour 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.”
www.ceradyne.com
ENDS