KVH Revenue Growth Reduces 1Q Net Loss|
April 22, 1999 04:02 PM
MIDDLETOWN, R.I.--(BUSINESS WIRE)--April 22, 1999--KVH Industries, Inc. KVHI today announced that the company achieved record first-quarter revenues due to strong growth in communications product sales and a resurgence in defense navigation revenues during the three months ending March 31, 1999. Total revenues for the 1999 quarter increased 45 percent to $6.0 million from $4.1 million in the 1998 quarter. Communications revenues in the 1999 first quarter increased 60 percent to $2.4 million from $1.5 million in the comparable 1998 period. A 35 percent increase in total navigation revenues to $3.5 million in 1999 from $2.6 million in 1998 is attributable primarily to a $1.8 million TACNAV order that increased overall quarter-to-quarter military sales by $1.5 million.
Gross margin as a percentage of sales rose to 37 percent in the 1999 first quarter from 27 percent in the same 1998 period on gross profits of $2.2 million and $1.1 million, respectively. Operating expenses remained flat in the 1999 first quarter at $2.6 million. The resulting operating loss for the 1999 first quarter was $.4 million compared to a $1.5 million loss in the 1998 quarter. The company's net loss for the 1999 quarter was $.1 million or $.02 a share compared to a 1998 quarterly loss of $.9 million or $.13 per share.
"We launched two new products during the first quarter, TracVision(R)(LM) and TracVision 3, that contributed significant revenues to our overall gain in communications sales," said Martin Kits van Heyningen, president and CEO. "TracVision (LM), which we designed for mobile television reception by RVs, motor coaches, mini-vans and other vehicles, has exceeded our initial sales expectations. Based on the initial positive feedback that we are getting from customers and our strong competitive position in the land mobile market, we believe that TracVision (LM) has the potential to contribute significant future revenues. We also are excited by the enthusiastic response to TracVision 3, an upgrade of our award-winning TracVision II system for mobile marine television reception. TracVision 3 now offers navigation and other features that we believe make our system the premiere choice for mariners in North America."
According to Richard Forsyth, chief financial officer, "During the first quarter, we successfully launched new products and advanced product research while achieving a 10 percent decline in administration costs and incurring only a 2 percent increase in engineering expenses and a 5 percent increase in sales and marketing costs. In addition to important gains in manufacturing and operations efficiencies, we moved both our ISO 9001 certification effort and our new computer installation closer to completion during the quarter."
KVH anticipates that communications sales will continue to accelerate while defense sales will remain moderate during 1999 and that OEM fiber optic gyro (FOG) sales may begin to recover late in the year. The company is allocating substantial research and development funds to accelerate fiber optic technology integration into its defense products during 1999. These costs in combination with fixed FOG operating costs and new product marketing costs are expected to adversely affect the company's financial results with losses anticipated during the remaining 1999 quarters.
The company is continually extending its competitive edge to maintain growth in communications sales by designing advanced features into its products while further improving reliability and identifying new, profitable markets. To enhance navigation revenues, the company is combining its advanced fiber optic technology with its tactical navigation systems for military applications that the company believes offer significant long-term sales potential. The company also is aggressively pursuing new OEM sales opportunities for its FOGs.
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.
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