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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: July 6, 2004 |
BY: /s/ Patrick J. Spratt
—————————————— Patrick J. Spratt Chief Financial Officer |
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EXHIBIT INDEX Exhibit No. Description 99.1 July 6, 2004 press release entitled "KVH Provides Second Quarter Update" |
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 PROVIDES SECOND QUARTER UPDATE
o Revenue to be Approximately $14.2 Million to $14.5 Million
o Lower Manufacturing Costs Lead to Substantial Reduction in TracVision A5
Suggested Retail Price and Charge for Inventory Revaluation
o Expected Loss of Approximately ($0.34) to ($0.37) Per Share, Including
Roughly $2.5 Million for TracVision A5 Inventory Revaluation
MIDDLETOWN, RI - July 6, 2004 - KVH Industries (Nasdaq: KVHI) today provided an
update on the progress of its business during the second quarter of 2004.
"Preliminary financial results indicate that our overall second quarter revenues
will be between $14.2 million and $14.5 million, well below our original
expectations for the quarter. This was primarily due to lower than expected
sales for our military navigation products and land mobile satellite systems,"
remarked Pat Spratt, KVH's chief financial officer. "On the other hand, the
continued success of our aggressive manufacturing cost reduction efforts for the
TracVision A5 is enabling us to now offer this product with a suggested retail
price of $2,295, reduced from $3,495. By offering the TracVision A5 at a lower
price point, we hope to substantially broaden the market for this product while
maintaining reasonable margins. Our existing inventory and vendor purchase
commitments have been revalued to reflect the new sales price and reduced
go-forward production costs. As a result of the combination of revenues that
were below expectation and the approximately $2.5 million inventory valuation
reserves, we anticipate recording a net loss of ($0.34) to ($0.37) per share or
$4.9 million to $5.3 million for the quarter."
The reduction in the MSRP of the TracVision A5 was the result of a successful
six-month effort that resulted in a significant sustainable cost reduction in
materials that exceeded the company's internal design goals. The Company intends
that dealers at the retail level will implement the new suggested retail price
immediately.
"Although we are very disappointed with our results this quarter, we do not see
any fundamental weakness in the business or in the demand for our products going
forward," said Martin Kits van Heyningen, KVH's president and chief executive
officer. "We experienced an unusual confluence of factors during the second
quarter that resulted in revenues that were much lower than expected in most of
our key markets. These included an unusual timing of reorders from our major RV
customers, potential key military programs where purchasing decisions have been
delayed, and booked fiber optic product orders that were rescheduled for the
third quarter rather than in the second."
"For the second half of the year we expect total revenues will rebound compared
to the second quarter and show solid sequential growth for both the third and
fourth quarters," he continued. "Having little visibility for near-term military
navigation sales, we believe it is prudent to assume no rebound in military
navigation systems revenues beyond the level of business that we experienced in
the first half of the year, although we do expect to see significant new
bookings that should rebuild our backlog for 2005 and beyond. In the third
quarter we expect improvement in total operating margin, but we anticipate
results will reflect a modest loss for the quarter. We expect to return to
modest profitability in the fourth quarter. These expectations include the
incremental $1 million advertising campaign previously announced, and we assume
sequential growth and acceleration of TracVision A5 sales as a result of our new
pricing."
Discussing the status of the TracVision A5, Mr. Kits van Heyningen said, "We
believe that the reduction in the TracVision A5's MSRP, together with our new
national advertising campaign and our recently announced agreement with DIRECTV,
allows us to aggressively position the TracVision A5 in the marketplace. By
establishing a consumer price of approximately $2,000, we are hopeful that we
will see a significant increase in demand. People are extremely pleased with the
performance of our products and now we've made TracVision A5 more affordable and
attractive to the rapidly expanding market of consumers with in-vehicle video
systems."
KVH's second quarter closed on June 30, 2004, and all statements in this release
reflect only a preliminary analysis of the company's quarterly financial
results. The company expects to release its actual results for the second
quarter of 2004 on July 22, 2004.
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 Kokkedal,
Denmark.
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This press release may contain certain forward-looking statements that involve
risks and uncertainties. For example, any statements regarding the company's
financial and product development goals for 2004; the functionality,
characteristics, quality and performance of KVH's products and technology;
anticipated innovation and product development; and customer preferences,
requirements and expectations are forward-looking statements. The actual results
realized by the company could differ materially from the statements made herein.
Factors that might cause such differences include, but are not limited to:
failure to successfully develop and market products; lack of reliable vendors,
service providers, and outside products; uneven military sales cycles;
unforeseen changes in competing technologies and products; worldwide economic
variances; and poor or delayed research and development results. Additional
factors are discussed in the company's most recent Form 10-Q filed with the SEC.
Copies are available through the company's Investor Relations department and web
site, www.kvh.com. KVH assumes no obligation to update its forward-looking
statements to reflect new information and developments.