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To: Roy F who wrote (877)7/21/2001 8:55:57 AM
From: robert b furman
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Hi Roy,

Now all we need to have happen is a bump up in the stock price.You can tell it is a lousey market out there.This kind of news in a normal market would be good for a huge pop.Actually Kvhi has been a rock given the environment overall.


Thanks for the update.

These guys are really good !!!

Bob

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To: david james who started this subject7/21/2001 6:07:33 PM
From: voop
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heard a tidbit on conference call that satellite infrastructure needed to be upgraded for two way mobile broadband internet. Martin answered that they are negotiating to use a current satellite system that is in place.

Speculating that this could be for GSTRF satellites?

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To: Roy F who wrote (877)7/23/2001 1:01:52 AM
From: Roadkill
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Hi, Roy. Just wanted to make a quick comment not directed to you, but to the board generally. I have heard several times from several sources that the current sensor market is a $450 MM annual opportunity. We all should keep in mind that KVHI's product will be considerably cheaper than existing products, which decreases the revenue size of the addressable market. Say, if KVHI's product is 1/2 the price of existing products, and KVHI is able to capture 10% of the market in 2002, that equates to about $20-25 MM in annual revenue for KVHI the first year. Despite the size of KVHI's partner, for us to hope for any more than 10% market share in the first year seems overly optimistic (and, in fact, some will argue even the 10% projection is pie-in-the-sky). Frankly, even at 10% market share, KVHI's stock price would increase dramatically IMHO, and that's not even including the affect of the fiber products and satellite antennae products.

As you know, I'm a long-time holder, and continue to hold my position. I just want to keep the board's expectations grounded, which is in fact difficult for me to do personally given the extraordinary opportunities presented to this little company.

RK

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To: Roadkill who wrote (880)7/23/2001 1:54:38 AM
From: akmike
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Hello RK,

I believe that the intent of your post was to dampen over-optimistic expectations for the current sensor business. If so, you may have inadvertently added fuel to the fire of optimism that is engulfing some of us. The current sensor market for KVH will consist of new high voltage power stations and a replacement of old iron-core sensors. It might be reasonable to assume that the demand for replacement would be favorably impacted by your assumption of lower prices. Let's assume, however, that your lower revenue of 20 mil. is attained. At a 60% gross margin, nominal selling costs, a provision for R & D in line with guidance for 2002 and a tax provision of 39%, we calculate that after-tax margins on this product will be 28%. This means after-tax profits of 5.6 mil or over 50 cents per share from the current sensor alone.
Needham is projecting total company eps in 2002 of .13 and they have rated the stock a BUY. If they buy into your 20 mil. of current sensor revenue, they will need to adjust upward the total of 8.4 mil. they have projected for all the fiber revenues. (Presumably they have some of the ActiveFiber revenues from the optic modulator in that total)
When the existing FOG revenues are factored in, they must add 15-16 mil. in revenues and .40-.43 to eps. Maybe they will raise us up to STRONG BUY?? <gg>

The above demonstrates the considerable leverage for KVHI from just this one product initiative. As Martin pointed out in the cc, by selling the product to one customer only, there will be the highest operating margins in the company attained. When I heard that the only thing left to do to bring the product to market is to complete the software compatibility to the partner's sub-station equipment, I was a little taken aback, for it was the first time I realized that the current sensor was going to be marketed as part of a package and not as a stand-alone product. When I did some industry checking I was floored by the size of the overall market that the "package" will be sold to. If we can eventually attain 20-25% of this market, the resultant profits will exceed today's entire revenues.
Martin has told us that he expects the fiber products to be the largest of the market segments for the company. Needham projects that communication sales will be 23.4 mil in 2002 and growing rapidly. For fiber to exceed that in the future from a base of 1.7 mil. last year, this will prove to be a rewarding investment.

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To: Roadkill who wrote (880)7/23/2001 6:09:33 AM
From: Roy F
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RK! Hi,

On the CC, near the end there's a number of questions regarding the size of the market and KVH's potential share. Around the 47 minute mark, Martin states that the size of the market, if KVH had 100% of it, would be $450mm (in KVH $$).

The price of the unit, which is basically a FOG, will be $2K - $3K, replacing units that cost $3-4K, but doing a much better job... smaller... et al. They do eventually expect to dominate the market over time...

Regards,

Roy

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To: Roy F who wrote (882)7/23/2001 8:06:23 AM
From: robert b furman
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To Thread,

Say you run an electric company.Last night you just experienced a huge lightning storm.Two transformers took voltage spikes and need to be replaced.

Do you:

Send out two trained workers in a company car with a 20 pound fog current sensor or do you call for a crane and h.d. trailer.Send them to a storage yard with a team for operating the crane and a team for installing the transformer(described by Martin as the size of a truck).

The fog sensor can be placed inside the building, the transformer is isolated out on a cement perch which undoubtedly must be reinforced by rebar to support it's weight. Once the transformer that is damaged is removed - it would be prudent to inspect the isolation perch as well as all of the wires that go to and from the transformer. You begin to see the cost picture (all at union labor rate scales).

So as a component manufacture - the cost of the component could be very equivalent and yet the statement that the fog current sensor is much cheaper to use can very credibly be made.

Martin has differentiated the cost savings as within a $1000.However it seems to me, he left the door open for higher margins on the higher voltage sensors - in that they require more associated costs.These are just perceptions - but I think they hold water. JMHO

It wouldn't take much of a rocket scientist to see which product makes life easier - the fact that it also cuts down on manpower requirements and initial inventory dollar levels and speed of application/recovery all add up to what should be a slam dunk towards quick implementation - even in the stodgy utility industry.



I too want to keep this thread's expectation realistic.However if you told me how to do something better ,faster and all at a lower cost - it would take me about a heart beat to get behind such a program.These are the purposes of conventions and industry groups.I think they will spread the word much faster than expected.

Afterall in some states electric companies compete for business.This moves electric companies to be efficient providers. Cost savers aren't looked down on they are looked for.

This is not every where and it is a new concept.I got a phone call saturday from Shell energy asking me to grab my power bill for a savings analysis.This product is coming to the market just perfectly, as the industry evolves into a competitive marketplace.

The power of this force has yet to be determined and is reason for optimism. JMHO

Bob

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To: david james who started this subject8/7/2001 4:36:06 PM
From: Roy F
   of 6936
 
OUCH... I hate to say it, but I wish summer was over... gg

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To: Roy F who wrote (884)8/11/2001 1:17:24 PM
From: robert b furman
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Hi Roy and all on thread:

I don't know how often you go to KVHI's website,but I am excited to tell you that a picture of the 40 Gbit/ced modulator is in the photonic section.

In fact the whole Optic Presentation is excellent.http://www.photonicfiber.com/

This stock is a deal at 5.25 - especially since three funds paid 19.85 million at 6.50/ share. This is a "blue light" special.

Better buy now it won't last long. hehehehe

Bob

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To: david james who started this subject8/15/2001 3:48:47 PM
From: Roy F
   of 6936
 
New S-8 filing... seems to be employee options...

ragingbull.lycos.com

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To: Sector Investor who wrote (848)8/20/2001 10:48:41 AM
From: Bridge Player
   of 6936
 
Any news re: KVHI and their products from the recent July and August conferences, conventions, and meetings scheduled?

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