By Dan McCue
Staff Writer

LADSON -- Force Protection plans to restate its financial reports for the third quarter of 2007 and has alerted shareholders that the company has discovered significant accounting problems related to how it managed its inventory.

The Ladson-based armored vehicle manufacturer also told the Securities and Exchange Commission that it will delay its annual report for the past year.

On Monday, the company’s chief operating officer, Raymond Pollard, resigned after Chief Financial Officer Michael Durski left the company Friday. The company did not say the resignations were related to the accounting problems but did say they were part of a reorganization plan.

Michael Moody, who only last month was named chairman and interim CEO, was named CEO, president and chairman of the company Monday.

Moody formally succeeded former Chairman and CEO Gordon McGilton on Feb. 22.

Force Protection issued a statement three days ago that it would restate previously reported interim financial reports for the three- and nine-month periods ended Sept. 30.

“The company reached the conclusion to restate based upon the recommendation of management and the concurrence of the Audit Committee of the company’s board of directors,” the statement said.

The company said shareholders should not rely on the company’s previously issued financial statements for the third quarter of 2007.

“Management discovered significant accounting errors during its year-end review, including errors specifically related to the recording of accounts payable related to inventory purchased from a subcontractor as a result of a contract termination,” the statement said.

Force Protection spokesman Tommy Pruett did not immediately return calls.

The company’s board of directors indicated that a formal search for a CEO had been under way since McGilton announced his intention to retire in January, and that it concluded Moody’s background in corporate turnaround situations, coupled with his familiarity with Force Protection’s operations and his proposed initiatives, made him an ideal candidate.

 “I am very proud to take this position with Force Protection,” Moody said in a written statement. “Recent events have clearly underlined that there is a tremendous amount of work to do and that there is significant urgency to many of the tasks at hand.”

No replacement has been named for Pollard’s position. Moody will assume responsibility for Pollard’s direct reports, which include company vice presidents Damon Walsh, Daniel Busher and Mark Edwards.

Francis E. Scheuerell Jr., a managing director of Huron Consulting Group LLC, has been named interim chief financial officer. He replaces Durski.

Scheuerell has more than 26 years of experience addressing complex accounting and reporting issues, Force Protection said.

“I believe deeply in the importance and quality of our products and in the opportunities provided by our niche orientation in the survivability market,” Moody said. “It is our intent to utilize the strength of our product offerings to both reinforce our position in the tactical wheeled vehicle space and to diversify our business into other categories of survivability products.

“The changes we are announcing today are intended to mark the beginning of a new chapter in the history of this company. In order to leverage the opportunities that exist for us, we must take decisive action both internally and externally.”