I listened in on the conference call today. It went well. A couple of things caught my interest.|
First, KVH has an order backlog of about $13 MM, which I believe is scheduled for delivery in the 3Q and 4Q 1997. Most of this backlog is for navigation equipment, which apparently has higher margins. Second, testing for TracVision II was just completed. Testing was very successful. The CEO (I can't spell his name without checking, so I'll just call him Martin) said that the product has drawn significant customer interest. It should begin shipping this quarter.
Second, testing for the INMARSET Tracphone continues, and has thus far been successful. Shipping should begin by the end of this quarter. The company looks forward to receiving revenue, as well as air-time residuals, from this product.
Third, the company announced a new TACNAV contract with Sweden, this one for $1.9 MM.
The company also announced a small contract with NEC Australia, but I forgot which product this contract involved. This is the Australian arm of the Japanese giant NEC. Although the contract is small, it offers a promising future connection.
Fourth, either Martin or Forsyth referred to R&D revenues the company is receiving from a large defense company to develop some sort of laser-based incoming fire system that would work with TACNAV. I kind of fell asleep during this part of the call, so I don't remember much.
Fifth, the digital gyro is doing well. Marine sales are "gaining momentum".
Finally, the company stressed that it is in a period of transition, from reliance on a major contract (AMSC) to numerous smaller contracts. KVH does not expect much more revenue from AMSC, at least at this time.
In short, it seems KVH is moving on from the AMSC contract in a nice fashion. I was concerned where KVH was going to find its revenue over this 2Q and the 3Q with the AMSC contract gone, and new products just being introduced. It appears that the company is bridging the gap just fine.
These notes are strictly from memory, and may not be totally accurate. I welcome any corrections.