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To: Roy F who wrote (389)4/19/2000 9:22:00 AM
From: dvdw©
   of 6936
 
KVHI TRACKVISION in widely read Stereo Review Sound and Vision Magazine pg 28.
This is the first time I've seen Trackvision advertising in such a horizontel publication as Stereo Review.

It's on News stands NOW.

BTW I've seen an Aegis class destroyer where our Fog sensors will be employed and it seems like a perfect fit.

The Gun they are retrofitting puts out a wall of lead that is unbelievable. Targets are toast when approaching a ship equipped with Aegis / KVHI Fog Stabilizers!

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To: dvdw© who wrote (390)4/20/2000 8:22:00 AM
From: Roy F
   of 6936
 
KVH Announces 1st Quarter 2000 Results
Communications Sales Up 71 Percent


Middletown, RI, April 20, 2000  KVH Industries, Inc. (NASDAQ:KVHI) today announced that it ended the company’s first quarter of 2000 with yet another dramatic growth in communications sales. In addition to increasing 71 percent over the 1999 first quarter, combined revenues from the company’s satellite television and telephony sales in 2000 were up more than 44 percent over the preceding 1999 fourth quarter.

“We continue to see sales of our TracVision© land and marine systems exceeding our expectations as new products are introduced,” said Martin Kits van Heyningen, president and CEO. “Our land vehicle product line expanded during the quarter when we added a system for stationary use to the highly popular mobile system introduced last year. Our marine product line also advanced during the quarter, leapfrogging our competitors with two new systems that automatically deliver signals from both Digital Video Broadcasting and Digital Satellite System satellites. Consumer response to our products is providing clear evidence that the demand for mobile communications is increasing exponentially.”

Total revenues for the first quarter were $5.7 million compared to $6.0 million in the 1999 period. The decline in overall revenues was due primarily to a $1.7 million decline in military orders, which resulted in lower overall navigation sales than expected. Cost of sales was flat at $3.8 million in both the 2000 and 1999 first quarters. Gross profits declined during the quarter to $1.9 million from $2.2 million and gross margin as a percentage of net sales decreased to 33 percent from 37 percent in 1999. Total operating expenses increased to $3.0 million from $2.6 million and the operating loss increased to $1.1 million from a $0.4 million loss in 1999. The net loss for the 2000 quarter was $0.9 million or $.12 a share compared to a net loss of $0.2 million or $.02 per share in 1999.
-more-
“We are beginning to see signs of recovery in our military and fiber optic sales,” said Kits van Heyningen. “In the first quarter, we received a $1.4 million repeat order for our TACNAV™ TLS systems, and yesterday we announced that two major defense companies have ordered $1.2 million in fiber optic gyros. We anticipate that momentum in both these markets will increase as the military begins spending to upgrade its forces and as we increase the visibility of our fiber optic products in multiple OEM markets.”

According to Richard Forsyth, chief financial officer, “We improved direct costs as a percentage of net sales during the quarter by four percent for communications systems and two percent for navigation products. Our increase in operations expense during the quarter is attributable in part to research and development efforts that we are supporting primarily with company funds. In addition, the number of new products we introduced during the first quarter required greater sales and marketing expenditures. The decrease in gross profit is related to increased manufacturing overheads and the shift in our product revenue mix, where communication sales are dominating higher-margin military sales.”

KVH is webcasting its first quarter 2000 conference call live at 11:30 a.m. Eastern time today through the company’s web site at kvh.com. The audio also will be archived at the company web site within three hours after the call is completed.

KVH Industries utilizes its proprietary fiber optic, autocalibration and sensor technologies to produce navigation and mobile satellite communications systems for commercial, military and marine applications. The company has headquarters in Middletown, RI, (USA) with offices in Illinois, Florida and Denmark.





This press release may contain certain forward-looking statements that involve risks and uncertainties. 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 develop and market fiber optic products; lack of reliable vendors, service providers and outside products; continued poor 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 Annual Report on Form 10K filed with the Securities and Exchange Commission on March 27, 2000. Copies are available through the company’s Investor Relations Department or web site.
KVH Industries, Inc. and Subsidiary
Consolidated Statements of Operations
(Unaudited)


Three months ending
March 31,
2000 1999

Net sales $ 5,696,515 5,973,170
Cost of sales 3,818,276 3,769,758

Gross profit 1,878,239 2,203,412

Operating expenses:

Research and development 1,074,442 869,541
Sales and marketing 1,418,388 1,152,731
Administration 527,734 569,183

Total operating expense 3,020,564 2,591,455

Loss from operations (1,142,325 ) (388,043 )

Other expense (income) 207,541 (15,616 )

Loss before income taxes (1,349,866 ) (372,427 )

Income tax benefit 483,619 226,810

Net loss $ (866,247 ) (145,617 )


Per share information:

Loss per share - basic $ (0.12 ) (0.02 )

Weighted average number of shares outstanding, basic
7,435,915
7,205,928


KVH Industries, Inc. and Subsidiary
Consolidated Balance Sheets


March 31, 2000
(Unaudited) December 31, 1999
(Audited)

Assets:
Current assets:

Cash and cash equivalents $ 1,524,315 2,047,838
Accounts receivable, net 4,066,031 3,362,390
Costs and estimated earnings
in excess of billings on uncompleted contracts
472,665
444,492
Inventories 3,257,743 3,672,269
Prepaid expenses and other deposits 386,978 292,793
Deferred income taxes 376,628 376,628

Total current assets 10,084,360 10,196,410

Property and equipment, net 7,063,955 7,227,778
Other assets, less accumulated amortization 805,945 839,113
Deferred income taxes 2,055,101 1,571,409

Total assets $ 20,009,361 19,834,710

Liabilities and stockholders’ equity:

Current liabilities:
Current portion long term debt $ 77,378 75,643
Accounts payable 1,800,423 1,599,770
Accrued expenses 1,152,963 792,086

Total current liabilities 3,030,764 2,467,499

Long term debt 2,851,769 2,865,232

Total liabilities 5,882,533 5,332,731

Stockholders’ equity:
Common stock 75,981 72,969
Additional paid-in capital 16,055,964 15,567,880
Accumulated deficit (2,005,117 ) (1,138,870 )

Total stockholders’ equity 14,126,828 14,501,979

Total liabilities and stockholders’ equity $ 20,009,361 19,834,710

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To: Roy F who wrote (391)4/20/2000 11:19:00 AM
From: Sector Investor
   of 6936
 
Repost of the Q1 2000 data in fixed font format so the tables come out clean.

KVH Announces 1st Quarter 2000 Results Communications Sales
Up 71 Percent

MIDDLETOWN, R.I.--(BUSINESS WIRE)--April 20, 2000--KVH
Industries, Inc. (NASDAQ: KVHI) today announced that it
ended the company's first quarter of 2000 with yet another
dramatic growth in communications sales. In addition to
increasing 71 percent over the 1999 first quarter, combined
revenues from the company's satellite television and
telephony sales in 2000 were up more than 44 percent over
the preceding 1999 fourth quarter.

"We continue to see sales of our TracVision(R) land and
marine systems exceeding our expectations as new products
are introduced," said Martin Kits van Heyningen, president
and CEO. "Our land vehicle product line expanded during the
quarter when we added a system for stationary use to the
highly popular mobile system introduced last year. Our
marine product line also advanced during the quarter,
leapfrogging our competitors with two new systems that
automatically deliver signals from both Digital Video
Broadcasting and Digital Satellite System satellites.
Consumer response to our products is providing clear
evidence that the demand for mobile communications is
increasing exponentially."

Total revenues for the first quarter were $5.7 million
compared to $6.0 million in the 1999 period. The decline in
overall revenues was due primarily to a $1.7 million decline
in military orders, which resulted in lower overall
navigation sales than expected. Cost of sales was flat at
$3.8 million in both the 2000 and 1999 first quarters. Gross
profits declined during the quarter to $1.9 million from
$2.2 million and gross margin as a percentage of net sales
decreased to 33 percent from 37 percent in 1999. Total
operating expenses increased to $3.0 million from $2.6
million and the operating loss increased to $1.1 million
from a $0.4 million loss in 1999. The net loss for the 2000
quarter was $0.9 million or $.12 a share compared to a net
loss of $0.2 million or $.02 per share in 1999.

"We are beginning to see signs of recovery in our military
and fiber optic sales," said Kits van Heyningen. "In the
first quarter, we received a $1.4 million repeat order for
our TACNAV(TM) TLS systems, and yesterday we announced that
two major defense companies have ordered $1.2 million in
fiber optic gyros. We anticipate that momentum in both these
markets will increase as the military begins spending to
upgrade its forces and as we increase the visibility of our
fiber optic products in multiple OEM markets."

According to Richard Forsyth, chief financial officer, "We
improved direct costs as a percentage of net sales during
the quarter by four percent for communications systems and
two percent for navigation products. Our increase in
operations expense during the quarter is attributable in
part to research and development efforts that we are
supporting primarily with company funds. In addition, the
number of new products we introduced during the first
quarter required greater sales and marketing expenditures.
The decrease in gross profit is related to increased
manufacturing overheads and the shift in our product revenue
mix, where communication sales are dominating higher-margin
military sales."

KVH is webcasting its first quarter 2000 conference call
live at 11:30 a.m. Eastern time today through the company's
web site at kvh.com. The audio also will
be archived at the company web site within three hours after
the call is completed.

KVH Industries utilizes its proprietary fiber optic,
autocalibration and sensor technologies to produce
navigation and mobile satellite communications systems for
commercial, military and marine applications. The company
has headquarters in Middletown, RI, (USA) with offices in
Illinois, Florida and Denmark.


This press release may contain certain forward-looking
statements that involve risks and uncertainties. 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
develop and market fiber optic products; lack of reliable
vendors, service providers and outside products; continued
poor 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 Annual Report on Form
10K filed with the Securities and Exchange Commission on
March 27, 2000. Copies are available through the company's
Investor Relations Department or web site.

KVH Industries, Inc. and Subsidiary
Consolidated Statements of Operations
(Unaudited)

Three months ending
March 31,
2000 1999

Net sales $5,696,515 5,973,170
Cost of sales 3,818,276 3,769,758
Gross profit 1,878,239 2,203,412
Operating expenses:
Research and development 1,074,442 869,541
Sales and marketing 1,418,388 1,152,731
Administration 527,734 569,183
Total operating expense 3,020,564 2,591,455
Loss from operations (1,142,325) (388,043)
Other expense (income) 207,541 (15,616)
Loss before income taxes (1,349,866) (372,427)
Income tax benefit 483,619 226,810
Net loss $(866,247) (145,617)
Per share information:
Loss per share - basic $(0.12) (0.02)
Weighted average number of shares
outstanding, basic 7,435,915 7,205,928

KVH Industries, Inc. and Subsidiary
Consolidated Balance Sheets

March 31, 2000 Dec. 31, 1999
Unaudited) (Audited)

Assets:
Current assets:
Cash and cash equivalents $1,524,315 2,047,838
Accounts receivable, net 4,066,031 3,362,390
Costs and estimated earnings
in excess of billings on
uncompleted contracts 472,665 444,492
Inventories 3,257,743 3,672,269
Prepaid expenses and other deposits 386,978 292,793
Deferred income taxes 376,628 376,628
Total current assets 10,084,360 10,196,410
Property and equipment, net 7,063,955 7,227,778
Other assets, less
accumulated amortization 805,945 839,113
Deferred income taxes 2,055,101 1,571,409
Total assets $20,009,361 19,834,710
Liabilities and stockholders' equity:
Current liabilities:
Current portion long term debt $77,378 75,643
Accounts payable 1,800,423 1,599,770
Accrued expenses 1,152,963 792,086
Total current liabilities 3,030,764 2,467,499
Long term debt 2,851,769 2,865,232
Total liabilities 5,882,533 5,332,731
Stockholders' equity:
Common stock 75,981 72,969
Additional paid-in capital 16,055,964 15,567,880
Accumulated deficit (2,005,117 (1,138,870
Total stockholders' equity 14,126,828 14,501,979
Total liabilities and
stockholders' equity $20,009,361 19,834,710


Contact:

KVH Industries, Inc.
Richard Forsyth, Chief Financial Officer
or Alice Andrews, Director, Corporate Communications
401/847-3327

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To: Sector Investor who wrote (392)4/20/2000 1:56:00 PM
From: Roy F
   of 6936
 
So SI, have you listened to the CC? Comments?

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To: Roy F who wrote (393)4/20/2000 6:49:00 PM
From: Sector Investor
   of 6936
 
I have now listened to the CC. I had to wait until I got home from work.

Here are my Q1 2000 CC notes. Items in quotes refer to actual words used in the CC or annual report. While I was hoping for stronger military sales in Q1 (and a smaller loss), what I heard in the CC was VERY positive. I think we are starting a series of strong quarters with increasing revenue, return to profitability later this year, and escalating profits next year.

I was also impressed by their prototype system tested in the Argiculture market - add who knows how many tractors to the potential mobile market. I had not considered those!

Everyone is encouraged to listen to the CC themselves, do their own DD and contribute to these threads. You can E-mail your questions to info@kvh.com and they will answer.

LONG TERM BUSINESS MODEL

They stated that their Long Term Business model is "far stronger than at any time in the company's history".

That is quite an impressive statement. Stop for a moment and think about that, and keep it in mind as you read the rest of my CC notes. Couple this with some market items like low price, low float and continuing accumulation, and I think people can see the value here long term.

COMMUNICATIONS SALES

These grew 71% Q1-Q1 and an astounding 44% quarter to quarter. In Q1, due to declining military sales, this area was over 3/4s of the revenue. This area has grown 70% or more in each of the last three years, with now 13 consecutive quarters with dramatic year over year growth, and they see the trend continuing going forward.

TRACVISION

Tracvision remains the "first choice of customers". New systems are being developed, including a new offering in Europe in Q2.


BACKLOG

The backlog growth was very encouraging. This from the company's 1999 Annual report:

"The Company's backlog at December 31 was $0.7 million in 1999 and $3.0 Million in 1998. The Company expects to ship all it's backlog at December 31, 1999, during 2000. The Company's total backlog at December 31, 1999 included $0.1 million in military navigation system orders, $0.5 million in mobile satellite communication and $0.1 million in FOG product orders. "

Compare that to the $4.3 million backlog at the end of Q1, which the company indicated was split "almost equally", or about $1.45 million each across it's three lines. In addition they said TWICE, that additional military orders are IMMINENT.

PROFITABILITY GOING FOREWARD

The company indicated a rebound in military and FOG sales in Q2, which they expect will be continuing all year. They anticipate military revenue for 2000 will end up SIGNIFICANTLY ahead of 1999, where they had navigation revenues (from the Q4 statement) of $11.4 million.

They indicate a return to profitability in the second half, and there is an excellent chance that they will have full year profitability.

Looking ahead to 2001, they said they expect a strong year, with profitability to continue and increase "substantially". They also stated that in 2001 Communication revenues ALONE should be sufficient to sustain profitability, changing the status of the lumpy military sales from a make-or-break quarterly situation to one of "incremental profitability".

GROSS MARGINS

While GMs declined from 37% to 33% in Q1, due to having to absorb fixed costs while not operating at or near capacity for FOG and military products. When not affected by this in the future, they indicated that their "comfort level" for GMs would be 42%-45%.

R&D, S&M and ADMIN EXPENSES

They indicated that they are pushing for more customer funded R&D, and they anticipate that R&D expenses will decline, both in real numbers and as a percentage of sales.

They anticipate S&M to continue to rise in real terms, but drop as a percentage of revenue going forward.

Administrative expenses should remain flatish and will decline as a percentage of sales going forward.

RE: DATRON

They refused to comment other than to say that DATRON has responded by pulling some products off the market, which was "public knowledge".

RE: TACNAV

They said they have products covering all segments of this market. With over one half million vehicles in this target market (with only 7,000 delivered at about $10K each), prospects for "DRAMATIC GROWTH in this sector are high". They are very confident in this area.



RE: ELECTRICAL CURRENT SENSORS

They are making progress here. While there is no long term contract in place yet, they delivered PART OF an "initial" order in Q1, and RECEIVED A NEW ORDER YESTERDAY for additional sensors and product customization. They are optimistic that the worldwide market for these sensors "could be extremely large". Responding to a question, they added that they intend to work with a major player, and they have some in mind, where they will be an OEM supplier.

They said their product was a new technology substantially replacing an older one. Their product is "smaller, safer (no electrical connections), faster (respond even to lightning strikes), lighter, cheaper and digital", with the digital capability allowing it to be integrated into computer controlled substations.

Even so, they said the power industry is conservative and moves slowly, but that they can work with it. They indicated that they anticipate that there will be competitors, but that KVH anticipates that it will be first to market with the product, and that they have some proprietary technology with multiple patents in several areas, including the fiber itself. They also indicated the market is "well defined" at close to $500 million per year.


PILOT PROJECT IN AGRICULTURE

Working in cooperation with a major agricultural equipment manufacturer, KVH "just delivered" a system that was an "integrated" flat panel display (no Lap Top or TV needed) with both TV and data displayed, while moving, from a vehicle with a single antenna. This system provides real time access to agricultural data, local weather, radar, commodities pricing, and entertainment, directly via satellite.

While this was just a prototype pilot (tested during the last weeks of Q1, with "excellent results"), and not their "key target" market, they think the market here is "surprisingly large". Two data providers, DBC and AdCav(sp?) have over 200,000 subscribers paying $100 per month for data feeds via satellite.


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To: Sector Investor who wrote (394)4/20/2000 7:30:00 PM
From: akmike
   of 6936
 
Good Summary, Sector-This is my first cc with KVHI and I was very impressed with the articulation of the plan and the progress in the execution. I didn't hear anything to subtract from the thesis that we are entering a phase of strong growth and commensurate profitability.
You covered it well, but I would like to re-emphasize that they firmly stated that the communications business alone would sustain profitability company-wide in 2001. (NEXT YEAR)
Military business is beginning to re-ramp and the fiber-optic gyro business is seeing good growth. The electrical current sensor product has some very exciting growth potential.(my seat-of-the-pants target is 100 million annually for KVHI from this alone within 3 years)
In short-What is not to like?

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To: akmike who wrote (395)4/20/2000 7:52:00 PM
From: Sector Investor
   of 6936
 
<<In short-What is not to like?>>

Besides the low price you mean? <g> Still, that makes for further good accumulating.

I forgot two areas mentioned in the Conference Call.

SATELLITE TV AND INTERNET VS TERESTRIAL FIXED WIRELESS

A question was asked to comment on this. They stated that the economics strongly favor satellites, and that it will be the "preferred technology" for the foreseeable future., where one satellite can cover an entire continent, providing 300 or 500 TV channels, without have to build out a terrestrial infrastructure. They said that terrestrial technology to match that is "virtually impossible". They said that satellite technology is just as viable, and is not subject to loss of coverage when you leave cellular zones. The current constraint is the service, not the hardware. KVH is looking to either provide the service themselves or combine with a service provider. They are not ruling out a Joint Venture with a service provider.

POTENTIAL IN THE AUTOMOTIVE MARKET

The question was asked if KVH might possibly be a player in the Onstar system with GM. The response was there is a possibility "not in the near term" but in the long term as part of a package that's available from the factory, like in the RV market. First through back seat video and onboard Internet Since Onstar is cellular based, it is not a fit not, but satellites can provide all the content that cellular based system can.

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To: Sector Investor who wrote (396)4/20/2000 8:21:00 PM
From: akmike
   of 6936
 
It is only you short-term tax-sheltered traders who worry about the current price level. <gg> We long-term investors must be careful to buy stocks which give us some time to accumulate and still realize capital gains. I really like what I see so far. I need to listen to the call again so that I better understand the "2-way high-speed MOBILE internet service" technology delivery. If I heard right there is a spread-sprectrum antenna utilized along with two satellites and a faster spectrum for downloading and a slower one for return. Help me out here oh techno-geek-not only do I need an understanding of the technology, but is it potentially as big as it sounds??

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To: akmike who wrote (397)4/20/2000 8:51:00 PM
From: Sector Investor
   of 6936
 
Mike, many of those details are in this key patent, the subject of the Datron lawsuit.

Here it is. I slugged through it once, but I will do it again to refresh myself.

164.195.100.11

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To: Sector Investor who wrote (398)4/20/2000 8:54:00 PM
From: akmike
   of 6936
 
Thanks,man

I now have my weekend assignment.<G>

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