MANUFACTURING
Armored vehicle maker's deal draws flak
BY PATRICK DANNER
pdanner@MiamiHerald.com
In war zones, armored buses called Rhino Runners protect soldiers and others from gunfire and bomb blasts. Former Secretary of Defense Donald Rumsfeld and Saddam Hussein are among the Rhino Runners' more recognizable passengers.
The maker of the armored vehicles is a small company in Weston called Advanced Blast Protection. The company just won a $10 million contract to produce 27 of the vehicles for the Army. ''It's been blown 10 feet in the air by a mine,'' said Warren R. Phillips, Advanced Blast Protection's chairman and chief executive. ``It blew out the tires but it was still in perfectly good shape.''
The company has much bigger plans beyond supplying noncombat vehicles to ferry soldiers between Baghdad International Airport and the Green Zone.
ABP sees a big opportunity for furnishing armored vehicles to friendly nations, retrofitting old tanks and equipping vans that transport cash.
It's planning a public offering early next year to pay for its growth plans. Phillips predicted ABP will be generating a half-billion dollars in revenue annually within five years.
That's an ambitious forecast considering ABP has been around less than two years and has much larger rivals.
ABP's progress has gotten some flak. In February, it acquired the assets of Labock Technologies -- the company that created the Rhino Runner. A former Labock executive contends the transaction was a fraud, a convenient way for the company to start anew without the mounds of debt that hobbled Labock.
Some of the same executives who ran Labock now are in charge at ABP, including Phillips.
Labock was founded by Carlos Davidov in 2002, when it acquired technology developed by Yoseph Labock of Israel. Its products included antiballistic metal plates for use on military and civilian vehicles and one-way bullet-resistant glass. The glass is designed to stop hostile fire while permitting return fire.
Labock was a beneficiary of its times. With the wars in the Middle East, Labock anticipated orders would reach $60 million in 2004, the Sun-Sentinel reported at the time.
In reality, Labock's revenues peaked at $26 million. Phillips couldn't explain why the financial projection was off so badly, other than to say Labock was a ''one-year story.'' Davidov couldn't be reached for comment. Annual revenues have hovered between $5 million and $6 million in recent years.
Davidov left in 2005, the same year Labock raised $15 million from investors. The money was cash flow for Labock as it prepared for a public offering.
But the offering never happened. While Labock's products won accolades, the debt load made it a money loser. Ultimately, Labock defaulted on the $15 million because it didn't generate enough revenues to pay back the loans and vendors, some of whom sued for payment.
''Looking at it for a year, I couldn't figure out a way to refinance Labock,'' said Phillips, a longtime college professor who joined Labock's board in 2006 and later became chairman and CEO. ''The only thing I could do was surrender the assets'' to the secured lenders.
A foreclosure sale was held in February. Two investment banks, representing the investors, bid what they were owed on the assets, which included technology, contracts and equipment valued at $3.5 million. No other parties bid.
Less than a week later, the investment banks sold the assets to ABP in exchange for company stock.
ABP tapped Phillips to run the company. Joining him were John M. Quaranta, Labock's general counsel, and other Labock executives and employees. ABP has about 30 employees.
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