Stock Jumps 19% After Army Deal
Safety Components International Inc.’s stock jumped by nearly 19% after the company announced it has been awarded a contract by the U.S. Army for the production of 120mm mortar cartridges. Safety Components’ stock closed Monday at $17.25, up $2.75 from Friday’s closing price of $14.50.
The two-year contract to produce the casing used in making the large caliber ammo is valued at $65 million and contains an option for the Army to purchase up to $200 million worth of mortar cartridges. A spokesman for the company, which is primarily a producer of air bags for the automotive industry, said the exact terms of the option are unknown.
For the record:
12:00 a.m. Sept. 21, 1994 For the Record
Los Angeles Times Wednesday September 21, 1994 Orange County Edition Business Part D Page 2 Column 6 Financial Desk 2 inches; 37 words Type of Material: Correction
Mortar contract--Safety Components International Inc. in Costa Mesa won a $65-million Army contract with an option to purchase an additional $32.5 million worth of casings for 120mm mortar cartridges. A story Tuesday misstated the value of the contract option.
President Robert A. Zummo said he expects the contract to add significantly to the company’s revenue and increase the share of the company’s business that is defense-related beyond the current 17%. For the fiscal year ended March 31, Safety Components recorded losses of $384,000 on revenue of $22.44 million.
Safety Components International in Costa Mesa sold $15 million worth of air bags to TRW Safety Systems, a division of TRW Inc., last fiscal year and a spokesman said the company is on track to sell about $40 million in air bags to TRW this fiscal year.
