Stewart & Stevenson Receives Additional FMTV Orders Valued at $219 Million; Company to Provide U.S. Army With 1,706 Additional Vehicles

Category: Contracts

FMTV

HOUSTON, -- Stewart & Stevenson Services, Inc. announced that Stewart & Stevenson Tactical Vehicle Systems, LP (TVS) received contract modifications from the U.S. Army valued at approximately $219 million. These modifications are funded by the 2005 U.S. Congress Supplemental Spending Bill and represent the second award to TVS under that bill in recent weeks.

The current modification adds an additional 1,706 Family of Medium Tactical Vehicles (FMTV) to the third program year of the current production contract with deliveries scheduled from June 2006 through September 2008.

"This is the second award for FMTV under the Supplemental Spending Bill, which in total provides for an additional 3,016 additional vehicles. We believe these orders continue to demonstrate the overall success of the FMTV and the high confidence placed in this vehicle by our customer, the U.S. Army," said Dennis Dellinger, President and Chief Operating Officer of TVS.

Max Lukens, Stewart & Stevenson's President and Chief Executive Officer, said, "We are proud of the success of the FMTV and our long-standing relationship with the U.S. Army. We are confident that our industry-leading expertise in the manufacture of tactical vehicles and our broad product portfolio uniquely positions us to continue to design and produce world-class tactical vehicles for customers around the world."

The company noted that TVS is evaluating the requirements under the contract modification and will increase its production capacity for 2006 in order to meet the required delivery schedule. This will require capital expenditures in the near term for additional equipment and facilities. The contract modification is not expected to have a significant impact on the company's fiscal 2005 financial statements. The company will comment further as to the impact of this contract modification at its second quarter earnings conference call to be scheduled in late August.

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