KVH Announces 1998 Financial Results|
February 25, 1999 04:05 PM
MIDDLETOWN, R.I.--(BUSINESS WIRE)--Feb. 25, 1999--KVH Industries, Inc. KVHI today announced financial results for the company's fourth quarter and fiscal year ending December 31, 1998. During the 1998 fourth quarter, a 14 percent growth in communications sales was offset by a 42 percent decline in navigation sales and total quarterly revenues of $4.7 million were down 31 percent from $6.9 million in the 1997 fourth quarter. The net loss for the quarter was $1.4 million or 19 cents a share compared to a profit of $191,000 or 3 cents a share in the 1997 quarter.
Total revenues for fiscal 1998 were $20.6 million, a 19 percent decrease from $25.6 million in 1997. Communications sales increased 27 percent in 1998 to $6.6 million over $5.2 million in 1997 as growth in direct sales of turnkey mobile satellite systems continued to supplant previous non-recurring OEM sales. This growth is particularly notable because 1998 is the first full year of direct sales to this market and the company's 1997 communications revenues included $3.0 million in sales to American Mobile Satellite Corporation, a major OEM customer. Navigation sales for the 12 months decreased 31 percent in 1998 to $14.0 million from $20.3 million in 1997. The drop in navigation revenues is attributable to a decline in military orders. Net loss for fiscal 1998 of $2.3 million or 32 cents a share compared with a profit of $2.2 million or 30 cents a share in 1997.
"We are experiencing a short-term, adverse impact on our financial results due to a number of constructive changes instituted in 1998 to build long-term market share for both our current and new products," said Martin Kits van Heyningen, president and CEO. "However, I am pleased to report that we already have significant improvements from our re-engineering, including operations improvements and new products with good revenue potential."
The company is investing major funds to integrate fiber optic technology into existing product lines, develop new FOG products and expand FOG manufacturing capabilities. Fiber optic development is a key element in the company's new strategy and the ongoing investment is designed to position KVH long term for competing in the core markets where its sensor products compete. The company believes that fiber optic-based product revenues will begin to accelerate in late 1999 and contribute to improving earnings results.
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 contains 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: competing products and technologies; implementation of mobile satellite communications technology; market potential and penetration; reliability of outside vendors, service providers and products; regulatory issues; maintaining appropriate inventory levels; disparities between forecast and realized sales; and design delays and defects. Additional factors are discussed in the company's Annual Report on Form 10K filed with the Securities and Exchange Commission on March 25, 1998. Copies are available from the company's Corporate Communications Department.