KVH Reports Results for Third Quarter
For the nine months ended
"In the third quarter, we enjoyed growth on the top and bottom lines that exceeded our expectations," said Martin Kits van Heyningen, KVH's chief executive officer. "We are realizing the benefits from our strategic growth plans that focused on fiber optic gyros and maritime communications, which enabled us to post solid growth despite the larger economic challenges. We are confident in the strength of our competitive position and optimistic that we've positioned the company well for the future."
KVH's defense-related guidance and stabilization revenue from KVH's fiber optic gyro solutions, TACNAV(®) military navigation systems, and related services was approximately
In the third quarter of 2009, mobile communications revenue from marine, land, and aeronautical products and services was
"During the third quarter, we made significant progress in the rollout of our satellite communication network, with the activation of the mini-VSAT Broadband service in the
Speaking about the company's financial results,
"Although visibility is improving, we still see uncertainties in our markets overall. But in general, for the fourth quarter, we expect that revenue will grow 18% to 24% year over year. We expect that this increase will be driven by sequential growth in sales of mini-VSAT Broadband products and services, fiber optic gyros, tactical navigation products, and our new aeronautical antenna system. We anticipate seasonal declines and continued weakness in consumer satellite communications businesses. During the quarter we will continue the aggressive investment in our mini-VSAT Broadband infrastructure and we expect to initiate new additions to fiber optic gyro production capacity. We expect to achieve a net profit of between
Recent Operational Highlights:
-- On October 7, 2009 , KVH and On-Waves announced that they signed an
agreement to collaborate to offer maritime cell phone service via KVH's
mini-VSAT Broadband network and On-Waves' picocell technology.
-- On October 5, 2009 , KVH announced that it had signed a contract to
support mini-VSAT Broadband coverage for Internet and voice service for
Africa .
-- On October 2, 2009 , KVH announced that it had received $2 million in new
military systems orders, including TACNAV tactical navigation system
components and its Universal Multilingual Display.
-- On September 24, 2009 , KVH announced that it had received a $2.1 million
order for fiber optic gyros for remote weapon stations.
-- On September 16, 2009 , KVH expanded Atlantic Ocean Coverage for
mini-VSAT Broadband Service to provide service into Greenland and
northern Europe and as far south as the horn of Brazil .
-- In August 2009 , mini-VSAT Broadband service went live in Asia-Pacific
waters as well as for Australia and New Zealand .
-- On August 5, 2009 , KVH announced that it had received a $1.7 million
fiber optic gyro order for use in remote weapon stations.
-- During the third quarter, KVH won several new commercial shipping
customers for its TracPhone V7 and mini-VSAT Broadband service,
including Clipper Tankers, which is adding the KVH solution to 22
vessels in its fleet, and M. H. Simonsen ApS , which is adding the
TracPhone V7 to a number of its tankers.
KVH is webcasting its third 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 extended economic weakness, such as availability of consumer credit and increases in fuel prices, on the sale and use of motor vehicles and marine vessels; the need to increase sales of the TracPhone V7 and related services to improve airtime gross margins; 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; 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 Quarterly Report on Form 10-Q filed with the
KVH Industries, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts, unaudited)
---------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Sales:
Product $18,620 $12,325 $52,314 $52,734
Service 4,023 3,415 10,461 8,454
----- ----- ------ -----
Net sales 22,643 15,740 62,775 61,188
------ ------ ------ ------
Costs and expenses:
Costs of product
sales 10,663 7,693 33,139 31,754
Costs of service
sales 3,044 1,571 7,422 3,893
Research and
development 2,292 1,813 6,265 5,804
Sales, marketing and
support 4,241 3,573 12,370 11,830
General and
administrative 1,943 1,992 5,723 5,280
----- ----- ----- -----
Total costs and expenses 22,183 16,642 64,919 58,561
------ ------ ------ ------
Income (loss) from
operations 460 (902) (2,144) 2,627
Interest income 74 278 279 1,037
Interest expense 26 36 63 118
Other expense, net 29 42 21 236
--- ---- ------ -----
Income (loss) before income
tax expense 479 (702) (1,949) 3,310
Income tax expense 94 110 30 558
-- --- -- ---
Net income (loss) $385 $(812) $(1,979) $2,752
==== ===== ======= ======
Net income (loss) per
common share:
Basic and diluted $0.03 $(0.06) $(0.14) $0.19
===== ====== ====== =====
Weighted average number
of common shares
outstanding:
Basic 13,978 14,251 13,981 14,461
====== ====== ====== ======
Diluted 14,241 14,251 13,981 14,474
====== ====== ====== ======
KVH Industries, Inc. and Subsidiary
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
-------------------------
September December
30, 31,
2009 2008
---- ----
ASSETS
Cash, cash equivalents and marketable
securities $41,503 $42,660
Accounts receivable, net 12,342 13,960
Inventories 14,762 15,484
Other current assets 1,380 807
----- ---
Total current assets 69,987 72,911
------ ------
Property and equipment, net 15,564 13,286
Deferred income taxes 3,334 3,334
Other non-current assets 5,913 4,226
----- -----
Total assets $94,798 $93,757
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $12,991 $12,662
Current portion of long-term debt 116 2,026
--- -----
Total current liabilities 13,107 14,688
------ ------
Other long-term liabilities 82 -
Long-term debt, excluding current
portion 3,837 -
Stockholders' equity 77,772 79,069
------ ------
Total liabilities and
stockholders' equity $94,798 $93,757
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SOURCE
Patrick Spratt of KVH Industries, +1-401-847-3327; or Christine Mohrmann of Financial Dynamics, +1-212-850-5600