Historical ProblemsTo be fair, APT Leadership seemed to have its work cut out for it when it came to Force Protection. Just take a look at that company's history. Five years ago, Force Protection -- then known as Sonic Jet Performance -- was boasting about its international reach after landing a deal to sell its boats in Russia. By the time it filed its annual report, however, the company was referring to 2002 as "a year of restructuring" and shifting away from the recreational boat business altogether. After acquiring Technical Solutions Group, a maker of blast-resistant vehicles, the company had decided to specialize in "products that save lives" instead. In 2005, after bidding adieu to a CEO who was beset by a tax dispute, the company engineered a 1-for-12 reverse stock split in an effort to boost the shares and attract more investor interest. It also welcomed some new help in the executive suite. Scott Ervin, a lawyer and board member, stepped in as interim CEO. Ervin then tapped industry veteran Ted McQuinn as president of operations. McGilton, hired around that time as the company's chief quality officer, took over as permanent CEO a couple of months later. During 2006, his first full year as CEO, McGilton scored $420,000 in cash, 300,000 shares of stock and 1 million stock options -- with a strike price of just 72 cents a share -- for his service to the company. He had picked up a jet boat as an added bonus the previous year. Aldrich says that Force Protection supplied the boat to McGilton, a collector of vehicles, as payment for past services provided to the company by APT Leadership. But the perk has raised some eyebrows. "This 'in kind' compensation was for work performed by Mr. McGilton as an independent contractor during 2001 and 2002 -- three years earlier?" notes Phillips, who has no position in the company's stock. "And it is not like McGilton could not afford to buy a new boat."
Revolving DoorBy then, with McGilton firmly in charge, other executives had started to flee. Garth Barrett, the chief technology officer who helped start the company, left in August 2005. Tom Thebes resigned as CFO two months later. In response, the versatile Ervin switched hats once again, stepping in as acting CFO -- a position that he continues to hold some 15 months later. In April 2006, McQuinn quit after 14 months on the job. But the company, which originally welcomed him as a crucial addition, downplayed that departure. "We are pleased with the progress we've made under Ted in the past year," McGilton announced just days after McQuinn resigned. But "Ted's departure will have really no effect on the continuity of the senior executive team which has been responsible for our dramatic growth." By most accounts, however, the company's senior management team -- with McGilton ranking as a veteran -- looks somewhat fresh even today. "The management team has been together for a short period of time," C.E. Unterberg Towbin analyst James McIlree acknowledged in an otherwise bullish note on the company earlier this month. "And while it has been successful responding to the urgent operational needs of its customers, it has yet to test itself in the more arcane and intensively competitive budgeting process." McIlree has a buy recommendation and a $25 price target on Force Protection's stock. His firm has investment banking ties to the company.