Stewart & Stevenson announces $63.4 million contract modification from Army

Stewart & Stevenson Services, Inc., announced today that its subsidiary, Stewart & Stevenson Tactical Vehicle Systems, LP (TVS), has been awarded a contract modification by the U.S. Army Tank automotive and Armaments Command (TACOM) valued at approximately $63.4 million.

The contract modification exercises a government prerogative for option vehicles under the A1R competitive rebuy contract, previously awarded to TVS in April 2003. Base production under that contract provides for approximately 11,000 trucks and trailers with an option to order up to an additional 12,000 trucks and trailers over the term of the contract. This modification represents an exercise of a portion of the options provided for under that contract.

The exercised option calls for 482 Family of Medium Tactical Vehicles (FMTV) Trucks and 167 Trailers. The FMTV trucks will consist of 65 LMTV (Light Medium Tactical Vehicles) Cargo and Van vehicles and 417 MTV (Medium Tactical Vehicles) Cargo, Long Wheel Base Cargo, Cargo with MHE (Material Handling Equipment), Tractor, and Wrecker vehicles. Delivery is currently scheduled for 2005.

"The FMTV products continue to excel in meeting the needs of our customers, TACOM and U.S. Armed Services," stated Denny Dellinger, President of TVS. "The FMTV has seen extensive duty in Operation Iraqi Freedom, offering superior off-road mobility while proving to be the most reliable vehicle in the tactical vehicle fleet. It is gratifying to receive this exercise of option trucks as an endorsement of the value our customer receives with the extensive use of our products."

Max Lukens, Stewart & Stevenson's President and Chief Executive Officer, said, "We are pleased that the U.S. Army has awarded TVS this valuable contract modification. Building upon our contracts with the U.S. Army and leveraging the success of our industry leading FMTV vehicles will enable us to pursue additional opportunities in this important segment of our business."

Stewart & Stevenson has delivered over 23,000 FMTV vehicles since 1991 from its state-of-the-art facility in Sealy, Texas. The FMTV, which includes 2.5-Ton and 5-Ton trucks in more than 15 active variants, has become the platform of choice for the U.S. Army, to include new C-130 transportable weapon system platforms such as the High Mobility Artillery Rocket System, or HIMARS.

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