KVH Reports Results for First Quarter
First quarter revenue of
MIDDLETOWN, R.I.,
"We just completed a difficult quarter in an extremely challenging economic environment that put significant pressure on sales of our satellite products into the leisure land and marine markets. However, we believe the first quarter offered evidence that our strategic growth drivers are gaining ground and establishing a foundation for long-term success," explained Martin Kits van Heyningen, KVH's chief executive officer.
"Recurring airtime revenues for satellite communications and broadband Internet increased as we expanded our reach into the commercial maritime market and continued the rollout of our planned global mini-VSAT Broadband network. We made excellent progress on our aeronautical satellite TV initiative, and demand for our fiber optic gyros (FOGs) grew for both military and commercial applications. Together, these elements of our business plan represent diverse revenue streams that are helping us weather the recession and offset some of the weakness in our leisure markets."
In the first quarter of 2009, mobile communications revenue from products and services was
"During the first quarter, we did see continued strength in sales of our TracPhone(R) V7 satellite communications systems and the mini-VSAT Broadband(sm) service to commercial maritime operators. We also achieved several notable milestones that further increased the appeal of our satellite communications system. First, customers began to take advantage of our northern Pacific coverage area that went live late last year, enabling us to support vessels making the transit from Asia to the west coast of the
KVH's defense-related guidance and stabilization revenue from KVH's fiber optic gyro solutions, TACNAV(R) military navigation systems, and related services was approximately
Commenting on the company's financial results,
"Our original guidance for the year was contingent on general economic conditions not getting materially worse than at that point in time. However, economic conditions did get materially worse. Consumer demand and new vessel and vehicle production by OEMs were very weak and are expected to remain so. We expect sequential increases in sales for our mini-VSAT Broadband offering and for our fiber optic gyroscopes. Given these assumptions, we believe that the second quarter top and bottom line results should show improvement compared to the first quarter but in this environment, any prediction is uncertain. Although we remain very optimistic with respect to our strategic progress, we do not feel it would be prudent to provide additional guidance for the full year until we see clear evidence of economic stabilization."
Recent Operational Highlights:
-- On April 8, 2009 , KVH announced that it had received $1.3 million in
new orders for its tactical navigation systems for international
customers.
-- On April 7, 2009 , KVH received $3.8 million in new orders for fiber
optic gyros. The orders included $2.9 million for KVH's DSP-3100 FOGs
from a major remote weapons station manufacturer and a $0.9 million
order for KVH's CNS-5000 continuous navigation system for use in
commercial applications.
-- On April 7, 2009 , KVH disclosed that its TracPhone V7 satellite
communications system and mini-VSAT Broadband network were in use
aboard U.S. military and government platforms operating in the Persian
Gulf. This initial deployment is expected to generate roughly $1
million in combined hardware and airtime sales in the first year.
-- On March 3, 2009 , KVH's Inmarsat FleetBroadband-compatible TracPhone
systems began to support global voice and Internet access following
the expansion of the Inmarsat coverage area to include the Pacific
Ocean.
-- On February 17, 2009 , KVH and ViaSat announced that the mini-VSAT
Broadband service had been successfully expanded to include the
Persian Gulf.
KVH is webcasting its first quarter conference call live at
About
This press release contains forward-looking statements that involve risks and uncertainties. For example, forward-looking statements include statements regarding our financial goals for future periods, anticipated revenue growth, anticipated profitability, anticipated orders for our mobile communication and military products, and anticipated improvements in our competitive position. The actual results we achieve could differ materially from the statements made in this press release. Factors that might cause these differences include, but are not limited to: the impact of the worsening recession, such as availability of consumer credit and increases in fuel prices, on the sale and use of motor vehicles and marine vessels; delays or an inability to expand coverage of the mini-VSAT Broadband service to new regions; the potential inability to secure adequate Ku-band satellite capacity or the licenses necessary for any expansion of the mini-VSAT Broadband network; risks associated with the delivery or performance of critical hardware; future decisions about the expected profitability of additional satellite regions; the need for qualification of products to customer or regulatory standards; delays in customers' qualification processes for our products or other delays in shipping; the risk that we may not receive expected orders; competitors' products and services; unanticipated declines or changes in customer demand, due to economic, seasonal and other factors, particularly with respect to the TracPhone V7; the unpredictability of military budget priorities as well as the order timing, purchasing schedules and priorities for our defense products; order cancellations or unexercised options, particularly for longer-term defense orders; potential reductions in our overall gross margins in the event of a shift in product mix; weakened consumer demand for our products and services, especially at the more price sensitive low end of our product offerings; changes in interest rates; our dependence on third-party satellite networks for programming and satellite services; delays in delivery arising from supplier production constraints; poor or delayed research and development results; currency fluctuations, export restrictions, delays in procuring export licenses, and other international risks; potential product liability claims; the difficulty in protecting our proprietary technology; potential claims of intellectual property infringement; expenses associated with corporate governance requirements; and changes in our equity compensation practices, including the impact of fluctuations in our stock price. These and other factors are discussed in more detail in our Annual Report on Form 10-K filed with the
KVH INDUSTRIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts, unaudited)
Three Months Ended
March 31,
2009 2008
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Sales:
Product $15,565 $21,247
Service 2,710 1,886
-------- --------
Net sales 18,275 23,133
-------- --------
Costs and expenses:
Costs of product sales 11,090 12,447
Costs of service sales 1,687 945
Research and development 2,115 2,335
Sales, marketing and support 4,159 4,084
General and administrative 1,927 1,746
-------- --------
Total costs and expense 20,978 21,557
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(Loss) income from operations (2,703) 1,576
Interest income 112 449
Interest expense 12 45
Other expense, net (2) (206)
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(Loss) income before income taxes (2,605) 1,774
Income tax (benefit) expense (48) 193
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Net (loss) income $(2,557) $1,581
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Net (loss) income per common share:
Basic and diluted $(0.18) $0.11
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Weighted average number of common shares
outstanding:
Basic 14,011 14,670
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Diluted 14,011 14,672
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KVH INDUSTRIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
March 31, December 31,
2009 2008
-------- --------
ASSETS
Cash, cash equivalents and marketable
securities $37,136 $42,660
Accounts receivable, net 11,882 13,960
Inventories 14,408 15,484
Other current assets 1,272 807
-------- --------
Total current assets 64,698 72,911
-------- --------
Property and equipment, net 12,955 13,286
Deferred income taxes 3,334 3,334
Other non-current assets 4,900 4,226
-------- --------
Total assets $85,887 $93,757
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $9,710 $12,662
Current portion of long-term debt - 2,026
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Total current liabilities 9,710 14,688
-------- --------
Stockholders' equity 76,177 79,069
-------- --------
Total liabilities and
stockholders' equity $85,887 $93,757
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SOURCEKVH Industries, Inc. -0-04/23/2009 /CONTACT:Patrick Spratt ofKVH Industries , +1-401-847-3327, orChristine Mohrmann of Financial Dynamics, +1-212-850-5600/ /Web Site: http://www.kvh.com / (KVHI) CO:KVH Industries, Inc. ST:Rhode Island ,Illinois ,Denmark IN: AUT CPR FIN MAR TRN SU: ERN CCA PR -- NE03811 -- 891104/23/2009 07:30 EDT http://www.prnewswire.com