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To: Roy F who wrote (219)8/3/1998 9:16:00 AM
From: Roy F
   of 6936
 
Correction of information in previous post:

Tracphone 25 sales up 465% Q/Q... up 21% overall.

Should read up 46%. Sorry.

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To: Roy F who wrote (219)8/17/1998 12:47:00 AM
From: Roadkill
   of 6936
 
Roy and Thread:

I read over Roy's CC notes again. In the first place, it was nice to hear that Alice Andrews supplied the CC tape. She has been very helpful the few times I have called. Much more helpful than the IR lady they used to have. The former IR lady once gave me the third degree just because I wanted to listen to the CC -- she wanted everything but my shoe size. Give me a break. Alice is much more helpful.

Anyway, based on Roy's notes, I did some spiffy analysis on a piece of scrap paper regarding 3Q 1998 earnings prospects. But I lost the paper on a plane coming home from Florida. I'll try to recreate the gist here:

1) Assuming (a) $6.4 MM in 3Q revenue (same as 2Q; I know too little about the industry to make a pithy guess about future revenue), (b) 3Q expenses are reduced 20%, and (c) gross margins remain at 37%, then we break even based on operating revenue (versus a $595K loss in 2Q). We might end up making a penny or so a share (not counting tax loss carry-forwards) based on interest income, etc., but that doesn't really count. BTW, it looks like someone at KVH has a future in currency hedging -- they made $107K on foriegn currency gains, and while the dollar was shooting through the roof! Maybe the company should open a hedging department on the side.

2) Assuming the same as above, but pushing gross margins to 40%, we would end up with about $200K in operating revenue in 3Q.

3) All this assumes that R&D remains at 18%. This is pretty darn high, but I don't mind. It shows that the company isn't trying to manufacture earnings today by sacrificing tomorrow's growth.

4) If we get any sort of revenue growth from 2Q to 3Q, things look better. Assume ~10% Q/Q growth, for 3Q revenue of $7 MM (I'm a round-numbers kind of guy). Figuring that the extra revenue will increase manufacturing efficiency somewhat, we'll go with 40% margins, for a gross profit of about $2.8MM. Assuming management can cut 2Q expenses 20% as promised, we end up with operating revenue of about $410K. Not bad.

Any thoughts on this?

RK

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To: Roadkill who wrote (221)8/17/1998 8:17:00 AM
From: Roy F
   of 6936
 
Roadkill:

I agree with your analysis regarding reduced expenses. I think expectations of a bread even quarter are not out of the question.

Consider also that the TRACNAV expectations and most other endeavors are growing at a fairly healthy rate. This should offset anything less than the 20% efficiency gains expected. After all, the 20% may not be achieved overnight.

R and D will remain high, most likely, but the efforts are more focused to areas where demand is perceived to be highest. This all bodes well for KVH, IMO.

Regards,

Roy

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To: david james who wrote ()8/20/1998 12:01:00 PM
From: Roy F
   of 6936
 
Two big blocks.... one 100K @ 2.25, one 148.3K @ 2.125

quote.com

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To: david james who wrote ()9/5/1998 9:31:00 AM
From: Roy F
   of 6936
 
Response from Alice Andrews at KVHI IR, 9/1/98:

As regards your question about the performance of KVHI stock:

The market volatility is, of course, affecting KVH as it is
everyone
else. I am astounded by today's performance so far, with a drop of

132 and an increase of 176 plus, and it isn't over yet. This isn't
a
roller coaster - it's more like a combination of bungee jumping and

scaling Mt. Everest, if you look at the graphs.

However, I know your concern is how KVH is performing in the 3rd
quarter rather than the current correction (which is what I insist
on
calling it until it's proven otherwise).

As you know, KVH has a policy of not providing financial
projections.
I can confirm, however, that we still anticipate there will be an
impact on earnings from our current R&D and marketing expenditures
during the 3rd and 4th quarters of 1998. At the same time we are
continuing development of new FOG products and expect to be
introducing them in 1999. As CFO Dick Forsyth noted in the 2nd
quarter conference call, we anticipate additional investments in
FOG
development and the time required to ramp-up FOG production will
result in lower product gross margins and R&D spending growth
throughout 1998. As he also noted, we "will further reduce costs
at
the company should opportunities arise."

Essentially, the company has maintained its development and
cost-reduction focus and is proceeding as planned with its
long-term
strategy. Meanwhile, we expect the short-term performance to be as

noted above with the additional impact on our stock price from
unpredictable and volatile markets, both here and worldwide. Given

the development stage KVH is in and the market uncertainties, it is

difficult for anyone to foresee with any accuracy what results will
be
over the next 12-18 months.

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To: Roy F who wrote (224)10/2/1998 12:05:00 AM
From: Roadkill
   of 6936
 
Am I misreading the chart or is this the 3d straight day of zero volume?
I've been watching KVHI since its IPO, and have never seen 3 straight
days with no trades. Literally zero selling pressure. It's probably
fair to say that all the weak hands have been shaken out. All we need
is a break even (or better!) quarter, and we have found bottom.

RK

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To: Roadkill who wrote (225)10/2/1998 7:31:00 AM
From: Roy F
   of 6936
 
RK, volume has definitely dried up. Usually a sign of a bottom... or a top. But which? Roy

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To: Roadkill who wrote (225)10/2/1998 8:19:00 AM
From: robert b furman
   of 6936
 
Hi Roadkill

You are reading it right - guess there are just the two of us left.If we haven't found a bottom here guess we'll have to pay the company dividends. <VLG>

I think that as stockholders the mgt. should give us "trac phone" then when this market turns we might have enough money to put the boat under it .HEE HAA

Hope you are riding this storm well and remember this too shall pass.


Bob

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To: robert b furman who wrote (227)10/2/1998 11:00:00 PM
From: Roadkill
   of 6936
 
>>If we haven't found a bottom here guess we'll have to pay the
company dividends.<<

LOL! As Roy said in the previous post, we're either at the bottom
or the top. Because I'm an optimist (a great way to lose a ton of
in the market, by the way), I think we're at the bottom. In any event,
I guarantee that we won't drop more than 2 points from here. :-)

By the way -- yet another day of zero volume. Very strange.

RK

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To: Roadkill who wrote (228)10/6/1998 3:58:00 PM
From: Roy F
   of 6936
 
RK, big volume (11K) today so far, after that 500 share block sold yesterday. They finally lower the ask to 2.00...

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