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SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 |
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Delaware
(State or Other Jurisdiction of Incorporation) |
0-28082
(Commission File Number) |
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05-0420589 |
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50 Enterprise Center
Middletown, RI (Address of Principal Executive Offices) |
02842
(Zip Code) |
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Registrant’s
telephone number, including area code: (401) 847- 3327
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ITEM 12. RESULTS OF OPERATION AND FINANCIAL CONDITION.
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.
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| KVH INDUSTRIES, INC. |
| Date: April 22, 2004 |
BY: /s/ Patrick J. Spratt
—————————————— Patrick J. Spratt Chief Financial Officer |
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EXHIBIT INDEX Exhibit No. Description 99.1 April 22, 2004 press release entitled "KVH Industries Announces Results for the First Quarter" |
EXHIBIT 99.1
PRESS RELEASE
KVH Industries Contact: Pat Spratt, Chief Financial Officer
401-847-3327
Investor Relations Contact: Kellie Nugent, Financial Dynamics
212-850-5600
KVH INDUSTRIES ANNOUNCES RESULTS FOR THE FIRST QUARTER
- - Record Quarterly Revenue of $18.0 Million
- - Return to Profitability with $0.01 Earnings per Share
- - Satellite Communications Revenues Up 81%
MIDDLETOWN, RI - April 22, 2004 - KVH Industries (Nasdaq: KVHI), a leading
provider of mobile satellite communications products and defense-related
navigation and guidance systems, today reported its results for the quarter
ended March 31, 2004. Revenue for the first quarter was $18.0 million, up 37%
from $13.1 million for the quarter ended March 31, 2003. Net income for the
period was $0.1 million, or $0.01 per share compared to net income of $0.2
million, or $0.02 per share, during the same period last year.
"We're off to a strong start this year with excellent growth in our satellite
communications business, which helped us post quarterly revenues that broke our
previous record by more than $2 million. We also executed a $1.75 million
sequential improvement on the bottom line as we achieved our immediate objective
of returning to profitability," said Martin Kits van Heyningen, KVH's president
and chief executive officer.
Overall, the company's satellite products generated year-over-year revenue
growth of 81% for the first quarter with revenue of $13.9 million, compared to
$7.7 million in the first quarter of 2003.
"Ongoing efforts to strengthen our leadership position in the marine and land
mobile satellite communication markets helped drive quarterly satellite revenues
to a record high," continued Mr. Kits van Heyningen. "Expanded marine sales and
new OEM customers in the RV marketplace helped strengthen our results for the
first quarter."
Reviewing the status of the company's TracVision(R) A5 low-profile satellite TV
system, Mr. Kits van Heyningen explained, "As planned, in the first quarter we
largely focused on developing market awareness and consumer pull through our
marketing and dealer training programs. These efforts helped support our
retailers' sell-through of TracVision A5 inventory already in the sales channel.
New sales to retailers were lower than in Q4 as that initial channel fill was
consumed. Our recent informal channel checks suggest that there is only limited
inventory in the retail channel and we anticipate seeing reorders from the
dealer network during the second quarter. In response to consumer and retail
interest, we have also started to offer the TracVision A5 with a new rooftop
mounting system to the RV and motor coach market. This is a natural evolution
for our satellite TV antenna technology and allows us to take a step toward our
goal of applying our hybrid phased-array antenna across all of our satellite
markets. In addition to using our new rooftop mounting system for RVs, we have
also started selling the TracVision A5 to several of the country's leading
conversion vehicle manufacturers."
Defense revenue, which includes the company's tactical navigation and fiber
optic product lines, was approximately $3.5 million for the first quarter, a
sequential increase but a 27% decline from the first quarter of 2003 when the
company experienced the effect of the preparation for the conflict in Iraq.
"The recovery of our defense sales has been somewhat slower than initially
expected as we have not received the $2 million TACNAV (R) product order
originally expected in the fourth quarter of 2003," explained Mr. Kits van
Heyningen. "Information we have recently received indicates that this order,
along with several other U.S. military requests unrelated to KVH products, is
now part of a broader needs assessment for the Iraq conflict and has entered a
new review cycle with the military. As a result, it is not clear when this order
might be placed and we have elected to remove it from our near-term sales
forecasts. Because this order was for a standard stock item, we have already
started to sell this finished goods inventory."
With regard to the company's financial results, Pat Spratt, KVH's chief
financial officer, said, "The first quarter was highlighted by our continued
growth, achieving record quarterly revenue, and strong sequential improvement on
the bottom line from the fourth quarter of 2003. We benefited from continuing
product cost improvement efforts, including progress with regard to the
TracVision A5. At 39%, overall gross margin reflected a solid 10-percentage
point improvement compared to the fourth quarter of 2003. This is, however,
still below the gross margin in the first quarter of 2003 when the product mix
consisted of a much larger percentage of military products. Measured as a
percentage of quarterly revenue, the company's operating expenses declined to
38% compared to 44% in the first quarter of 2003. While we see room for
continued improvement on our balance sheet, we believe that the company's
fundamentals remain sound and we are confident in our ability to achieve our
financial goals for 2004. Indicative of this is the continuing solid performance
in inventory turns as well as the improved aging of our accounts receivable."
Mr. Kits van Heyningen concluded, "This year has started out on a very positive
note for KVH. We achieved our first objective of returning to profitability and
are now focused on improving profitability through continued revenue growth,
product cost improvements and operating expense control. We expect our land and
marine satellite business to remain strong and receive additional support from
the expansion of TracVision A5 sales in the auto, RV, and conversion vehicle
markets. We are also confident that our defense business will make positive
contributions to our overall results during the course of the year."
Recent Highlights:
- - On February 11, 2004, the company introduced the Tracphone F33, one of the
most compact high-powered commercially available mobile satellite
communications systems. Tracphone F33 offers global voice coverage and is
the first antenna compatible with Inmarsat's Fleet F33 service to also
provide access to not only Fleet's 9.6 Kbps data channel but also the
high-speed 64 Kbps Mobile Packet Data Service (MPDS).
- - On February 13, 2004, KVH announced that it had closed its public offering
of 2,750,000 shares of common stock, yielding net proceeds of approximately
$48.0 million.
- - During the first quarter, several regional retail chains joined KVH's
authorized TracVision A5 retail network. Among these were New Jersey-based
6th Avenue Electronics and Good Guys, Inc., with more than 70 stores on the
west coast.
- - On March 2, 2004, KVH announced that it had successfully demonstrated a
TACNAV M100 navigation system enhanced with a satellite communications
link. When commercialized, this advancement is expected to permit TACNAV
systems to communicate directly with digital battlefield management systems
being used by U.S. and allied military forces.
- - On April 6, 2004, KVH announced that Coachmen Recreational Vehicle Company
had started offering the company's TracVision LF and TracVision SF
satellite TV systems on all new Sportcoach Elite diesel motorhomes.
KVH is webcasting its first quarter conference call live at 10:30 a.m. Eastern
Time today through the company's web site. The conference call can be accessed
at http://www.kvh.com/InvRelations. The audio archive also will be available on
the company web site within three hours of the completion of the call.
KVH Industries, Inc., designs and manufactures products that enable mobile
communication, navigation, and precision pointing through the use of its
proprietary mobile satellite antenna and fiber optic technologies. The company
is developing next-generation systems with greater precision, durability, and
versatility for communications, navigation, and industrial applications. An ISO
9001-certified company, KVH has headquarters in Middletown, Rhode Island, with a
fiber optic and military navigation product manufacturing facility in Tinley
Park, Illinois, and a European sales, marketing, and support office in
Hoersholm, Denmark.