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To: robert b furman who wrote (1139)4/25/2002 9:01:54 AM
From: robert b furman
   of 6936
 
Our new family member: ISN'T SHE PRETTY !

kvh.com

Hey anybody want to build a drone??gg

Bob

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To: robert b furman who wrote (1140)4/25/2002 9:15:00 AM
From: Sector Investor
   of 6936
 
YES!

The "in development" banner has been removed.

Note that the banner is still on the IMU, so another announcement is still coming

kvh.com

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To: Sector Investor who wrote (1141)4/25/2002 9:19:31 AM
From: robert b furman
   of 6936
 
New products at "rich margins".

More to come.

These are exciting times and at a pivotal moment historically.

JMHO

Bob

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To: robert b furman who wrote (1142)4/29/2002 8:28:55 AM
From: Sector Investor
   of 6936
 
For those who haven't yet listened to the KVHI Conference Call, here is a full transcript. I haven't finished proofing against the audio yet, so it may not be 100% accurate, but it is very close.

Wow! I never knew SI had a size limit on posts before, because I never hit it, but I just did. I will break up the transcript into two parts and post the Q&A as the second part.
=================================================================================

KVH Industries

Q1 2002 Earnings Conference Call

Richard Forsyth: CFO

Standard forward-looking statements disclaimer.

Martin Kits van Heyningen, CEO

Our last conference call was just two months ago. Since then we have made significant progress in our strategic goals. I'm also happy to report that we are starting to see more tangible results in terms of increasing revenues and new product introductions. KVH had an excellent first quarter with record revenues of $9.6 million, which is a 19% increase over Q1 2001. Our operating loss was almost cut in half from last year's 18 cents to this quarters 10 cents, and we are on track to meet our goals of achieving solid growth and returning to profitability this year. The revenue growth in Q1 was driven by a 29% increase in our satellite communications sales, as well as 100% growth in our military sales over the same period last year. Our Fiber Optic sales were actually down by about $500,000 as a result of a delayed shipment. However, that order is expected to ship this quarter and fiber optic production should be back on track. We finished the first quarter with a total backlog of roughly $7 million, which will be shippable in Q2, and we expect to see continued growth in the current quarter.

Now I'll go into each of our key markets in a bit more detail, starting with our Communications group.

Probably the most significant event of the quarter was the sudden surge in our satellite business. Last year, given the state of the economy, we were pleased to record a 9% growth. Now this quarter the satellite communications group had a very strong first quarter with 5.9 million in revenues, which is a 29% increase over the first quarter of 2001. This is due mostly to the rapid growth in our land mobile market. In the first quarter unit shipments of our TracVision mobile satellite TV antennas to the land mobile market were up 60% over last year. During the first quarter, we also signed our first OEM agreement to have TracVision antennas sold as standard equipment on RVs produced by a major US manufacturer. We'll be issuing a formal announcement in June when our customer introduces their 2003 model year vehicles. While we've been part of an option with several major players this will really be the first time that our TracVision is sold as standard equipment by a major RV company. We hope that this will be the catalyst for many of the major players in the industry to follow suit.

With the land mobile market growing rapidly, we are also starting to see signs that the Marine market is beginning to stabilize - sales in Europe, which were down in Q4, have recovered and were up significantly over last year. Overall our Marine satellite sales in terms of units have held even with the same period last year and growth is coming from new product introductions. As we announced in February, we signed an agreement with Thrane and Thrane, one of the world's largest manufacturers of Inmarsat satellite communication systems. We are now the prime US distributor of their Marine satellite communication products. In addition, KVH and Thrane & Thrane will work together to introduce new products geared towards supporting high-speed two-way data communications. Now the first of these products, the new TracPhone F77, delivers worldwide high-speed access to the Internet, E-Mail, and voice communications. Shipments of that product began this month.

Our mobile broadband project also achieved a milestone as we ship the first of our TracNet mobile systems this month. Now this product, introduced late in 2001, offers the only high-speed mobile Internet access for vehicles or vessels throughout North America. We currently have a solid order backlog, and volume shipments for this product will begin the 1st week of May. Together with the Tracphone F77, KVH has the products to provide high-speed Internet access throughout North America and around the globe.

The product development of our low-profile satellite TV antenna also continues to make excellent progress, and this is the new antenna that is suitable for use aboard sport utility vehicles and minivans, which we have talked about in previous conference calls, and will be a tremendous new market for KVH. We are now preparing to carry out live driving demonstrations for key potential customers and technology partners in the next few months, and we remain on track to launch this exciting new product in the second half of this year.

Our Fiber Optic group took a major technological step forward with the introduction of our new DSP-5000 Fiber Optic Gyros. Thanks to it's integrated Digital Signal Processing, the DSP-5000 offers tactical grade accuracy, which is in the 1-10 degree per hour range, and this new gyro is ideal for use in drone and unmanned vehicle navigation as well as land vehicle navigation in a variety of commercial applications. More importantly, it's available for a fraction of the cost of competing precision gyros. Smart munition guidance and drone navigation are two applications that are receiving increasing priority in defense budgets. And with our DSP technology, we are able to participate in these programs. In fact, we recently received a development contract to design a low-cost precision Inertial Measurement Unit or IMU, specifically for use in smart bomb guidance systems. Demonstration tests of a DSP gyro based IMU prototype were conducted just a few days ago. We are extremely pleased with the performance of our DSP gyro, and we are optimistic about the opportunities that are now open to us. I believe that this technology will allow our Fiber Optic Group to participate in these very large Defense programs.

Speaking of Defense, our military sales for our TacNav tactical navigation system for vehicles were also way up for the first quarter. Revenues were up 102% to $2.2 million, compared to the first quarter of 2001. Now there were some delays in other military programs that prevented the increase from being even larger. And we are hopeful that those orders will add to our already substantial military backlog in the near future. Defense related sales continue to expand, and we are still on course to double our military revenues over our 2001 total results. And we entered the second quarter with more than $3 million in backlog for the current quarter, and we are actively pursuing a number of new contracts.

Looking ahead to the second quarter, and the year as a whole, I continue to believe that 2002 will be a breakthrough year for KVH. We still have a solid military backlog in military and Fiber Optic markets, and our satellite business continues to accelerate. The development of both our mobile broadband and ActiveFiber fiber optic projects are still on track, and we are investing about $1.5 million per quarter on these two projects along with our TracNet technology, and clearly, because of this, I mean our base business is now solidly profitable, because without this incremental R&D investment, KVH would have been profitable on a net basis in Q1. We should begin to see a decline in our R&D expenses as these projects wind down towards the end of the year. A reduction of R&D, the introduction of new products and service revenues, and continued growth in our core business, should bring us to profitability and solid growth this year.

Now I would like to turn the call over to Dick to go over the financial details.

09:50 Richard Forsyth, CFO

Net sales for Q1 2002 $9.6 million, a 19% increase from last year's first quarter sales of $8.1 million.

Q1 defense sales doubled from the prior year to $2.2 million despite delays in the placement of defense orders. We are very encouraged by the demand for our Defense products and Q2 defense backlog rose to roughly $3 million.

Q1 Communication sales increased to $5.9 million, a 29% increase from last year's sales of $4.6 million. This growth in communication sales resulted from broader distribution of products from our national distributors and increased OEM sales to RV manufacturers. We anticipate continued growth for our communications products throughout the remainder of the year, as we introduce new products, benefit from stronger distribution networks and strengthen our role as an OEM supplier to RV manufacturers. Positive gains in defense and communications sales were offset by a delay in shipping a FOG order. The shipping delay was caused by a customer's revision of a product specification late in the first quarter. As a result, our first quarter FOG revenues decreased to $500,000 from last year's $1 million. Our FOG manufacturing group has since implemented the revised product specification, and the delayed order will ship later this quarter.

Overall, our sales projections remain positive, and we continue to forecast annual revenue growth of 30%-40% above last year's results.

Q1 Gross profit as a percentage of net sales increased to 44% up from last year's 38% of sales. This improvement resulted from a doubling of higher margin defense shipments, reductions in product direct costs, and decreased manufacturing overhead spending. Improved manufacturing methods and other cost savings lowered our Manufacturing Overhead rate to 13% of sales, a significant reduction from last year's 17%.

We anticipate that Gross Margins will remain at current levels throughout the year, as we make more efficient use of our manufacturing facilities, and continue to reduce product costs.

Q1 R&D expense increased to $2.33 million, a 34% increase from last year's spending of $1.7 million. This R&D increase resulted from ongoing investments in PhotonicFiber and low-profile antenna technology, which represented $1.1million, or 48% of total Q1 R&D expense. We estimate that PhotonicFiber and Mobile Broadband spending will continue at current spending levels in the second quarter, but begin to decline thereafter. Factors that will reduce R&D expense include decreased use of outside consultants and increased customer funding. Our goal is to reduce R&D to 16% of sales by year-end.

Q1 S&M expense increased to $2.3 million, a 3% increase from last year's first quarter spending of $2.2 million. Spending increases were primarily related to increased outside sales commissions that resulted from a doubling of Defense sales and a 29% increase in Communication revenues. We anticipate that marketing and sales expense will increase at a slower rate than sales, and decline to roughly 23% of sales by year-end.

Q1 G&A expense increased to $700,000, a 13% increase from last year's spending of $600,000. Spending growth is primarily due to increased wages and travel costs.
Administrative expenses are expected to remain relatively stable at roughly 7% of sales for the remainder of the year.

Consistent with our accounting treatment for the prior year, we fully reserved the tax benefit associated with our quarterly operating loss. Reserving the Income Tax benefit increased our quarterly loss by roughly $400,000 and our net loss per share by 4 cents. Although this accounting treatment increased our net loss, I would like to point out that we have not lost the positive tax savings associated with the current tax benefit. As soon as we are profitable, we can recover the Income Tax benefit directly against income tax expense, which will increase earnings per share in that period.

Quarterly asset management resulted in DSO of 49 days, unchanged from year-end, and 4.3 Inventory turns, down from 5 turns at year-end. Manufacturing inventory growth represented a buildup of Defense related finished goods in anticipation of orders forecast to ship in the 2nd and 3rd quarters of this year. Our quarter end cash balance was $9.1 million. Our forecast cash burn rate will increase this quarter, but steadily decrease as we return to profitability in the second half of this year. We believe our cash balances and bank line of credit are sufficient to complete our new product initiatives and fund planned operating and capital requirements. In summary, we're very encouraged by our current sales outlook. We look forward to renewed growth and a return to profitability in the second half of the year


Now we'd like to take our Questions and Answers. Operator, please open the call

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To: Sector Investor who wrote (1143)4/29/2002 8:32:00 AM
From: Sector Investor
   of 6936
 
Now we'd like to take our Questions and Answers. Operator, please open the call

15:31 Q&A

Steve Kreuger, Forsythe Investments

Q. Could you give us an idea on the DSP-5000 FOG, what the 2-3-4 largest application opportunities are and give us some sense of how big those annual revenue opportunities might be?
A. Well, the biggest opportunities are right now for the areas of munitions guidance systems. These are, for example, a tail kit that gets attached to a bomb. These are the type of weapons that were used in Afghanistan and have recently been depleted from our inventory, and there is a big scramble now to try and build up the inventories again. And also to make, uh, there have been statements made that we would like all of our bombs to be smart bombs. So that is an enormous opportunity that represents, you know, for the guidance package, hundreds of millions of dollars in annual revenues today, so it is a very, very large market. So the opportunity for a company like us is to be a supplier to the companies that are making the guidance package, or companies that are making the tail kits rather, and to participate in that product by building the gyros.
Q. What would you expect the ASP to your customers to be on that?
A. Well, it would depend obviously on the final configuration, but right now the DSP, in quantity sells for roughly $3,000, so it is a fairly expensive, sophisticated sensor.
Q. Are you saying that your product sells for $3,000 or the versions on the market that you are competing with sell for $3,000?
A. Ours does.
Q. In your press release you said that yours is maybe half the cost of existing?
A. Right. So for a comparable performance single axis sensor is roughly double that price.
Q. Today? That your competitors are selling for?
A. Right. Yes.
Q. OK. And are you talking about - so I guess one might try to extrapolate how many smart bombs might get used and multiply it by $3,000. That is sort of roughly the market opportunity for you there?
A. Right. Well you have to multiply by 3 because there are 3 gyros in every smart bomb.
Q. I see. OK. And what other opportunities do you see? How about commercial opportunities?
A Well, we have some other commercial opportunities for the sensors for things like camera stabilization, and we're working on a project with Sportvision similar to something we've done with them before, and we will integrate the DSP into a new sports product for broadcast television, and of course we are using it in all our land vehicle navigation systems as well, so we will be converting our own products to use the DSP technology also, so the TacNav family of products will switch to the new DSP technology.
Q. OK. That's not an incremental revenue stream in that case though. How about, does this play into the Current Sensor product?
A. Yes. The same technology is used for current sensing as well. In other words, the DSP is signal processing technology that works with the existing optical circuits, and
whether the optical circuit is a current sensor or a gyro, and we in fact have delivered Current Sensors with the DSP technology.
Q. Do we think that that represents the long awaited breakthrough that will bring that product to market? What is your outlook on Current Sensor?
A. Well, I think that the Current Sensor continues to be a very interesting application of our standard technology. The pace continues to disappoint us in terms of how quickly the market is developing for that. And that may be a post-Enron issue where the power industry is not moving as quickly as people thought they were going to. From our perspective, the product is developed, and we are continuing to refine our signal processing technology as part of the DSP, and those benefits get applied to the Current Sensor as well as our gyros, just because it is the same technology. That's really the nice thing about this application, as it really is, from a signal processing point of view, the same circuit.
Q. So, at this point, is it fair to say that you are no longer the cause of delay on Current Sensor. Your customer is delaying bringing the Current Sensor to market then?
A. Yes. As far as we are concerned, as of today, we've done everything we need to do to demonstrate feasibility, and it is really just a question of the business decision now, for how and when it gets rolled out. We can participate in that, but we can't make that decision.
Q. Shifting gears a little bit, do you have any sense on what kind of selling price you expect the low profile antenna to come out at?
A. We haven't established a retail price point yet. We've been talking with retailers about where it needs to be, to be attractive. And they would like to see it with their margins built in, obviously, and it's fitting right in line with where we expected. We are currently selling products that are in the $1,500 to $3,000 range at retail, and it will be in that range somewhere.
Q. OK. And what else would the purchaser of a mini-van - in order to take advantage of your technology, first the purchaser of a vehicle has to buy a vehicle that has the back seat video option on it?
A. Right. Well last year about a million units were sold into that market, so there is already, you know, that was a year ago, there are already a million screens installed in vehicles, and this year the number is much higher. So you are starting to have an installed base that already has the TV screens. So, initially, the obvious target market is to sell to people who have a TV and would like something to watch on that TV. So that's where we are going to start. So there wouldn't be any additional purchase required for those customers. Now if a customer wants to retrofit it, and he didn't have a screen, obviously he'd have to buy one of these flat panel screens, and those can be had now for a couple hundred bucks, maybe $500 installed.
Q. For people with the back seat video already, what do they have to buy in order to allow them to receive satellite television signal. They have to buy your antenna. I mean, do they have to buy a converter box or anything like that?
A. We will provide the entire system, so they have to do nothing but have it installed.
Q. They would have to bring it to an installer, and have the installer, sort of turnkey, install the antenna, and whatever electronic cabling and conversion equipment are necessary?
A. Right. Yes. It will be a turnkey package.
Q. And you are thinking that the cost of that whole retail package will be in the $1,500 - $3,000 range?
A. Yes.
Q. And subsequently, what kind of monthly subscription package are you thinking about offering to those people? Will you be involved in selling that as well, and what kind of costs would that add?
A. Yes, that's something that we will be announcing in partnership with the satellite TV service providers, so I can't comment on that yet.
Q. But it would be like people who have a fixed antenna in their homes. There would be a monthly subscription?
A. Correct. And as you know, the way it is organized today is that if you added a receiver, say a second receiver it currently costs about $5/month to add an additional receiver, for example, if you already are a subscriber.

25:30 Richard Cabot: - Amertech Financial

Q. I have two questions. My first question is on the Smart Bombs and fiber optic gyros. Are you an approved supplier of these to any of the current suppliers of smart bombs?
A. No. No, this is a brand new product in a brand new application.
Q. How long will it take for approval with some of these companies?
A. Normally it can take quite a while, but right now there is quite an urgent situation, so it might happen faster. So the current demand is unable to be met by the approved supplier that is available now. So, there are opportunities now that are somewhat unique. In the defense procurement cycle, you get these periods where, if there is an urgent demand, there is a motivation to bring second sources up to speed. So that is something we are hoping to take advantage of, and we have contracts in place to develop a product, so that we can do exactly that.
Q. And I assume there would be like a testing period before you get into any actual manufacturing contracts?
A. Absolutely. Obviously these things are being dropped out of airplanes, and you would like to know that they are going to land where they are supposed to. It's a very precise guidance package and it will be thoroughly tested before it is released for production.
Q. So this would be more for next year's earnings projections and revenues rather than for 2002?
A. I think it is a question of how quickly things can ramp, and you know, the demand is immediate. so, if we were an approved supplier today, we could deliver tomorrow.

Q. OK. My second question is your planned distribution channels for the Low-profile antenna and for the fiber optic modulator. I assume you are going to start testing these products with the potential customers. Could you just elaborate a little bit on who might be potential customers and what type of distribution channels you would be looking for these two products?
A. Right. Let me start with the modulator. The modulator is a very unique product and there are very few customers for that type of technology. Obviously it's very different from a retail type product. So there are only about 35 customers in the world that buy this type of product, so it is a very focused, targeted selling effort, both to people who use them, the Telecom companies, as well as the people who make products like transceivers that use a combination of a laser and a modulator to drive electronics. So those are the companies that we will be targeting, and that might include selling to companies that already make modulators, who, on the one hand could be seen as competitors, but also are companies that are building these completed transceivers. So that is a very focused sales effort that starts with delivering samples for testing, and it is fairly straightforward.

The TV antenna is a completely different problem. There the issue is trying to get into a mass market. Obviously we are in some pretty good niche markets like the RV and Marine, that give us credibility, and we have distribution there and some brand recognition that we are trying to extend into an after market retail environment, at least initially. These are the high-end audio places that install equipment for cars, and where you would go to have a nice stereo or CD player or speakers installed, or TV screens installed. So, the After Market is where we will start because that is a market we can penetrate very quickly. At the same time, in parallel with that we will try to sell to the tier one suppliers, to the OEMs and eventually to the OEMs directly. We see that as a three step process, where you start After Market, then go to tier one suppliers, and that also includes optional equipment that can be installed by the dealership, and then eventually to the OEMs directly.

Q. OK. Sort of like a series of layers that you will be trying to attack, and not necessarily going directly to a major auto manufacturer, and doing like an exclusive deal with them?

A. That's correct. We see this product as having a broad appeal, and we would like to start selling it immediately, and the automotive sales cycles are very long. So we can be doing that in parallel. And carmakers also like to see demand from consumers, and that can be demonstrated by after market sales, so we will get some pull from our customers, hopefully.

30:30
Q. For instance, companies like Harmon, which does a significant amount of business with the auto area in terms of stereo equipment? Would that be a type of potential customer?
A. It could be. There is an opportunity possibly for private labeling the product to a major brand that already has video equipment sales into that market, but initially our strategy is to roll it out under the TracVision brand, and to penetrate the market as quickly as we can, in the After market.
Q. OK. Thank you very much

Chin Yu - Foreign tech technical research

Q. One question is you mentioned you have OEM agreement to put your antenna on the RVs. Is that the Ultra-low profile antenna, or just the regular ones.
A. Just the regular ones. Just one of our standard products.
Q. OK. Two small questions. Why increase on expense side. What's your rate for your debt? You have a high cash balance. Why pay interest?
A. [Dick] The only interest we are paying right now is on a mortgage note. We entered into that a couple of years ago, it's $7% fixed rate, and that's the only debt we have today.
Q. So going forward we should think that $22K per quarter, that's about I mean $25K per quarter of interest expense?
A. Well I think when you look at Interest Expense, you are looking at a net number that's net of Interest income. On a quarterly basis we normally would pay out about $34,000.
Q. Yes, that's why I wondered. Last quarter you had $65,000 on the positive side of interest income.
A. Well one of the reasons for that is that we were investing our money. We have a sweep on our accounts and that is all swept into overnight, and, given our bylaws, we are only allowed to invest in government securities. So, as you know, the rates on that paper have gone down dramatically. If we see 1.8% today, we are really pleased with it. In overnights, the rates are very, very low, so there has been a big decrease in interest income this quarter to last.
Q. OK. The other question is you have a good improvement in Gross Margin, and also you are guiding the Gross Margin will grow steadily over the year. Can you give us some number by the 4th quarter, I mean by the end of this year what would GM look like?
A. As I said in the call, we are projecting GMs roughly comparable to Q1, and that improvement is made up of two factors. The improvement in our product direct costs, or material costs are going down with our volumes, and we are negotiating more aggressive deals with our suppliers. At the same time I talked about methods improvements. We are doing a lot more with a lot less. We have had some real changes on our production lines, and because we are pumping out more volume, our fixed costs/unit in our overhead pool is going down. So it is really a combination of those two factors.
Q. So by the end of the year, the GM still around 44 or 45%?
A. That's our current projection.

35:00 Pierre Maccagno - Needham& Co.

Q. How are you doing on the engineering program for lowering the costs for the Low- profile antenna?
A. That's going very well. One of the challenges that you and I have spoken about in the past, is not merely to make the thing small, but to get into the retail prices that we discussed earlier and we have been successful in that. The projected parts cost is right in line with our original objectives, so we are in very good shape as far as that goes.
Q OK. And you expect to roll that out by the end of the year?
A. Right. We expect to be in production by the end of the year and we'll be introducing it, at some venue to be determined towards the end of the summer, so it will be a probably summer launch, fall rollout and delivery. Obviously we will be at CES in January, which is a big consumer show.
36:40
Q What growth are you expecting for the year in your communications group at this point?
A. Well it's been surprisingly strong, and I think one of the reasons that we are seeing such strong growth, is that we've had very good performance by our distributors in the land mobile area, companies like Stag Parkway, Camping World, our biggest customers are doing extremely well. The RV market itself has recovered. In other words, sales of RVs are up, so that is helping us. And also I think that, we've introduced this TracNet product, which is a high-speed Internet option for the standard antennas. I think that's really helped us in terms of both our competitive position against our competition, where they don't have this feature. We can offer customers, if they buy our TV product, they can either add immediately, or at some time in the future, high-speed Internet. And that's been a powerful sales tool for our prospective customers, for our sales force with our customers, so that they can use that to sell our existing product. And I think that's really shown up, not only as sales of TracNet itself, but also as increased sales of our TracVision products. So, the overall revenue growth, we've talked about in the 30-40% range, a big chunk of that is coming from the growth in the communications area.
Q. OK. Within Navigation, do you have a breakdown, TacNav, Engineering research and Marine OEMs?
A. Right. We break down our revenues a couple different ways. I'll let Dick answer the question in terms of the detail, you know we had $2.2 million in defense shipments, which is what we normally call our TacNav products, and the communications were $5.9 million, FOG $500K, and the balance was Marine and other navigation products.
A. [Dick] Pierre, the military component is generally 70%+ of that category, so that's the driver on that line, in the Navigation category.
Q. How are the TacNav products that were previously pushed out? How are they selling this quarter? Were they supposed to be selling this quarter, or were they supposed to be pushed out for a couple of quarters? 39:30
A. As we mentioned, we have a shippable backlog in Q2 of just under $3 million, and those are firm orders. The orders that we were talking about would be on top of that, and whether those are shipped in Q2 or Q3, depends on when we get them.
Q. OK. And finally within Fiber, how are those fiber $3.9 million orders, which were for TacNav products. How are those selling this quarter?
A. The TacNav FOG is selling well, and that's part of the military line. We did, as Dick mentioned in his part of the call, have some putout on a couple of specific orders for the FOG group, and that issue has since been resolved, and they are producing now, so I think we should see a recovery in the FOG revenues in the current quarter.
Q. OK Good. Thank you very much.

40:50 James Shay - Private investor

Q. Martin, you mentioned in one of the releases that this new DSP-5000 is in the Defense related application, representing an annual 2.7 Billion market - is this just for gyro or is this for all of the components that go into the system?
A. Just for gyro.
Q. And, since the existing gyros that are out there, have moving parts, do they have a finite life as opposed to yours, which will have no moving parts? FOGs have longer life?
A. Yes. Depending on the application they are either mechanical, like turret stabilization gyros are almost 100% mechanical, and they typically have a life that is measured in hours, like 400 hours, 800 hours, that type of thing.
Q. One other thing. You mentioned that your gyro is an Open loop system, and the others are Closed loop. Are there distinct advantages of one over the other? Can you please explain that in layman's terms?
A. Well, you are getting into a pretty high level of detail, but let me give it to you as clearly as I can. The primary difference, from a customer point of view, in the past was the Closed Loop gyros were much more expensive but they were more accurate. The Open Loop gyros tended to have less noise, but were not quite as accurate. With the new DSP technology, we have the performance of a Closed Loop gyro in terms of accuracy, but the low noise of an Open Loop gyro, and the low price of an Open Loop gyro.
Q. One last question Martin. I had to step away for a few minutes, but pertaining to that old order of that European Utility for the grid system? Can you bring us up on the status of that?
A. Yes, we've covered that already Jim. No big developments there. We've completed the DSP version of our optical Current Sensor, so we are essentially complete with our development now, and really business decisions need to be made as to what they would like to do.

43:45 Chin Yu - Foreign Tech Research

Q. I just checked. Last year your military sales were like $5.5 million. You are guiding like to double this number this year, which means $11 million this year?
A. That's correct.
Q. And for the current quarter is $2.2 million?
A. That's correct.

44:15 Richard Cabot. - Amertech Financial group

Q. You mentioned that you expect to become a standard component of some of the RVs out there. Is there a particular pricing segment of RVs that you would be targeting, the high-end RV's rather than the low end?
A. Right. Initially a class A RV is what we sell to normally. Within that group, the Diesel RVs are the higher end of that group. That's where we will be standard equipment first. And, as I've already mentioned, we are already optional equipment on some other vehicles, that go all the way down to the gasoline powered range, which are very low end vehicles. And what we're seeing is that the technology, and this is pretty typical, you can think about the automotive market, a nice new feature started out in a high-end car, like electric windows, and then eventually, you can't buy a car without it. So, we are really seeing the same thing. We started out very top tier and we are dropping down and down and down every year.
Q. On these Diesel class RVs. Do you have any idea how many are manufactured annually?
A Don't quote me on this, but my recollection is somewhere around 40,000 produced on an annual basis.
Q. OK. So it's a fairly significant market, just in itself.
A. Yes.

End of Q&A. Thanks for listening, and we will be available if you have any follow up.

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To: Sector Investor who wrote (1144)4/29/2002 9:32:44 AM
From: Sector Investor
   of 6936
 
This morning, Mahler one posted this on the MRVC thread.

Message 17394607

I gave a short reply and said I would reply further here,

Message 17396963

but since I just posted the full CC transcript, I think it says everything that needs to be said. What more could I add?

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To: Sector Investor who wrote (1144)4/29/2002 10:13:43 AM
From: Roy F
   of 6936
 
Sector,

Many thanks for your efforts on the transcript... I have a copy in my reading area.

Regards,

Roy

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To: Roy F who wrote (1146)4/29/2002 10:18:41 AM
From: Sector Investor
   of 6936
 
<<I have a copy in my reading area.>>

The throne? <ggggg>

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To: Sector Investor who wrote (1144)5/2/2002 12:08:03 PM
From: David Semoreson
   of 6936
 
great notes .... thanks so much.

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To: David Semoreson who wrote (1148)5/10/2002 8:10:34 AM
From: Sector Investor
   of 6936
 
KVH Industries' TracNet Hits the Road with High-speed Internet Access

ir.kvh.com

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