SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JANUARY 26, 2000
STEWART & STEVENSON SERVICES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 0-8493 74-1051605
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction Identification No.)
of incorporation)
2707 NORTH LOOP WEST
HOUSTON, TEXAS 77008
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (713) 868-7700
Item 5. Other Events.
On January 26, 2000, Stewart & Stevenson Services, Inc. (the "Company") issued
the press release attached hereto as Exhibit 99.1 announcing certain milestones
with respect to the FMTV driveline upgrade.
Item 7. Exhibits.
Exhibit 99.1 Company Press Release dated January 26, 2000, titled
"FMTV DRIVELINE UPGRADE PROGRAM HITS TWO MAJOR MILESTONES."
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STEWART & STEVENSON SERVICES, INC.
Date: January 26, 2000 By: /s/ JOHN H. DOSTER
Name: John H. Doster
Title: Senior Vice President
and Chief Financial
Officer
EXHIBIT INDEX
99.1 Company Press Release dated January 26, 2000, titled "FMTV DRIVELINE
UPGRADE PROGRAM HITS TWO MAJOR MILESTONES"
Exhibit 99.1
Exhibit 99.1
News From: Stewart & Stevenson
Corporate Headquarters
P.O. Box 1637
Houston, TX 77251-1637
FOR IMMEDIATE RELEASE:
FMTV DRIVELINE UPGRADE PROGRAM HITS TWO MAJOR MILESTONES
HOUSTON, TX (January 26, 2000) STEWART & STEVENSON SERVICES, INC.
(NASDAQ:SSSS), a leading manufacturer and distributor of industrial and energy
related equipment, announced that the driveline upgrade program designed to
improve the performance of the initial model Family of Medium Tactical Vehicles
has reached two major milestones - completion of upgrade on some 3,340 trucks at
the Company's manufacturing plant in Sealy, Texas and more than 50 percent of
the total fleet world-wide.
More than 10,000 two and one-half-ton and five-ton trucks delivered to
the Army since January 1996 are being upgraded by replacement of the flywheel
housing, drive shaft, yokes and seals.
FMTV has proven to be one of the Army's most durable pieces of equipment
with a 97 percent operational readiness rate. However, the initial models were
susceptible to a driveline vibration when driven above 45 mph on paved highways
for long distances. The vibration-induced stress on u-joints in the drive shafts
caused three u-joint failures in the 10,000 vehicle FMTV fleet.
Stewart & Stevenson President and CEO Mike Grimes, who was present on
Wednesday to observe the successful conclusion of the upgrade program at Sealy,
said, "Today marked a major accomplishment in the program with the completion of
all the trucks in Sealy. The vehicles are being fielded to the Army and can now
operate at highway speeds. The program has produced a safer and more reliable
truck for the Army."
"We are ahead of schedule with a planned completion of the upgrade
program set for May 2000," said Richard M. Wiater, Vice President and General
Manager of Stewart & Stevenson's Tactical Vehicle Systems Division in Sealy.
"One of the decisions that I made - with the full support of Mike Grimes
- - when I first came here was that we were going to fix the problem and upgrade
the driveline on the initial FMTV A0 fleet," said Wiater, who assumed leadership
of TVS in the spring of 1999. "We went to the Army and told them we were going
to fix it. Our engineers worked out the solution and we started a program to
make the upgrades on location."
The driveline upgrade has been completed in Korea and Hawaii as well as
at Ft. Myer, VA. and Ft. Carson, CO. A major program is in progress at Ft.
Bragg, NC, where almost half of their 2629 trucks have been completed. Other
upgrade programs are underway at Ft. Campbell, KY; Ft. Stewart, GA; Ft. Jackson,
SC; Ft. Huachuca, AZ; and Ft. Leonard Wood, MO. Future sites include Ft. Drum,
NY; Ft. Gordon, GA; Ft. Hood, TX; Ft. Benning, GA; and Ft. Lewis, WA.
Army Acquisition Executive Paul J. Hoeper gave Stewart & Stevenson the
production go-ahead in early September 1999 to manufacture the A1, an enhanced
version of the truck, after prototypes successfully completed more than 90,000
miles of extensive testing at the U.S. Army's Aberdeen Proving Ground. The A1
FMTV incorporates the driveline upgrade as well as other improvements.
"The new A1 models incorporate the latest in truck technology -
improving on what had already proven to be a durable and reliable vehicle,"
Wiater explained. "Many of the enhancements are the result of the field
experience of the FMTV and a number of changes requested by soldiers to make
their job easier. The changes are designed to provide higher quality vehicles."
The FMTV A1 proved its ability to operate for long periods without
failing during demanding U.S. government-run Production Verification Tests.
During these tests, the A1 vehicles recorded more than 13,000 mean miles
between hardware mission failure against a contract reliability requirement of
5,500 miles, thus exceeding design specifications by more than two times.
The original FMTV, first fielded in 1996, demonstrated more than double the
contract specified reliability values for some variants, prompting the Army to
set reliability standards for the A1 two times the requirement of the initial
contract.
The FMTV is the backbone for tactical maneuvers and logistics from
platoon through division levels in all units and is replacing the Army's aging
fleet of M35 two-and-one half ton and M59/809/939 five-ton trucks. The FMTV set
significantly higher standards for off-road mobility, ease of transportability
into a war zone by cargo aircraft, reliability and maintainability, soldier
comfort, ease of operation, and safety.
The two and one-half-ton version is available in cargo and van
variants and the five-ton in cargo, dump, tanker, line-haul tractor, wrecker,
and material handling variants.
FMTV trailers complement most variants. Trailers are matched in both
payload and cube to the towing vehicle and share many components with the truck.
The trailers represent state-of-the-art designs, incorporating an anti-locking
brake system and high travel suspension for unparalleled off-road mobility while
not adversely affecting mobility of the truck.
Production of the A1 started in September 1999. Stewart & Stevenson
will build approximately 7,800 FMTV A1s through the year 2003 under the new
$1.4 billion multi-year contract with the Army. The improved A1 model follows
production of some 11,000 FMTV built for the Army by TVS between 1993 and late
1998.
This press release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Stewart & Stevenson believes that its expectations, as
expressed in these statements, are based on reasonable assumptions regarding the
risks and uncertainties inherent in achieving those expectations. These
statements are not, however, guarantees of future performance and actual results
may differ materially. The most important factors that may cause actual results
to differ from expectations are the risk of cancellation, adjustment or
termination of the FMTV procurement program; unilateral changes directed by the
U. S. Army in the scope or timing of the retrofit program; the availability of
vehicles for retrofit at the times and in the places they are required; the
availability of parts and trained service technicians to perform the retrofit at
the times and in the places they are required; and the outcome of pending and
future proceedings relating to the costs of the retrofit effort. Other risk
factors are listed in Stewart & Stevenson Services, Inc. annual report to the
Securities and Exchange Commission on Form 10-K for the year ended January 31,
1999.
Contact: Paul Justice
Director of Public Relations
Tactical Vehicle Systems Division
Phone: 713-867-1774
Fax: 713-867-1518
Email: [email protected]
HTTP://www.ssss.com
