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Monday, July 10, 2006

Ceradyne Fighting Uphill Battle for Vehicle Armor Business

Stocks: (CRDN)(AH)

By William Trent of Stock Market Beat

In a modest negative for Watch List member Ceradyne (CRDN), Armor Holdings (AH) has announced an acquisition that it expects will have a “material financial impact” on its vehicle armor business. Although Ceradyne is currently focused on body armor rather than vehicle armor, the latter category was a potential area for it to generate growth, since its body armor business appears to be peaking.

Armor Holdings is the leader in vehicle armor, and this acquisition suggests it intends to maintain that position.

Armor Buys Integrated Textile: Financial News - Yahoo! Finance
Armor Holdings Inc., which makes security products and vehicle armor systems, said Monday it bought Integrated Textile Systems Inc. for an undisclosed sum.

Monroe, N.C.-based Integrated Textile makes Tensylon, a high-strength yarn used to manufacture lightweight vehicle armor. Armor said it plans to make investments of more than $12 million over the next two years to increase its Tensylon capacity.

While Armor does not expect the acquisition to have an immediate impact on its 2006 financial outlook, the company does expect Tensylon to have a “meaningful financial impact” on its financial results over the next five years.

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