KVH Announces 3Q 1999 Financial Results
October 21, 1999 07:02 AM
MIDDLETOWN, R.I.--(BUSINESS WIRE)--Oct. 21, 1999--KVH Industries, Inc. KVHI today announced financial results for the third quarter ending September 30, 1999. Revenues for the 1999 third quarter were $4.8 million, a 9% decline from $5.3 million in the comparable 1998 quarter. Gross margin declined to $1.5 million or 31% of sales in 1999 from $2.2 million or 41% of sales in 1998.
Operating expenses increased in the 1999 third quarter to $3.0 million and resulted in an operating loss of $1.6 million. This compares to operating expenses of $2.2 million and an operating loss of $61,000 in the same 1998 quarter. The company's net loss for the quarter was $1.0 million or $.14 a share compared to a profit of $258,000 or $.04 a share in 1998.
"I was pleased during the third quarter by a 104-percent growth in communications sales, led by significant orders for our land mobile satellite television system," said Martin Kits van Heyningen, president and CEO. "We also achieved a 67 percent increase in communications sales year-to-date and a 9 percent increase in total revenues for the year. For our navigation product lines, KVH has been selected to provide tactical systems for a range of military programs and has a number of fiber optic gyro (FOG) OEM orders in the pipeline. Also, I am pleased to announce that shortly after the end of our third quarter we received our first order for tactical navigation systems enhanced with our fiber optic gyro. Our investments in new development and marketing outreach are producing results, and we believe KVH is well positioned for growth with expectations of continued success for our mobile satellite systems and increased navigation product sales."
Revenues for the 1999 nine months increased to $17.3 million from $15.9 million in the 1998 period. Gross profit increased to $5.9 million from $5.7 million in 1998. Nine-month operating expenses were $8.4 million in 1999 compared to $7.8 million in 1998. The net loss of $1.5 million or $.21 a share for the 1999 year to date compares to a net loss of $886,000 or $.12 a share for the 1998 period.
"We have been experiencing a shift in product mix throughout 1999 with communications sales growing and a softness in high-margin military and FOG sales," said Kits van Heyningen. "Communications growth during the quarter was attributable primarily to our land mobile satellite television system, which has exceeded expectations since it was introduced. The land mobile system brought us additional recognition recently when it was named Best New Installation Product for 1999 by Camping World. A decline in navigation revenues that strongly affected our product mix during the quarter was due to unforeseen delays in finalizing contracts, both on military projects for which we have been selected and on FOG sales that are under negotiation. However, we expect these orders to ship during 2000."
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: volatility and uncertainties in communications and defense, the primary two industries targeted by the Company; 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; poor or delayed research and development results; and disparities between forecast and realized sales. Additional factors are discussed in the company's Annual Report on Form 10K filed with the Securities and Exchange Commission on March 24, 1999. Copies are available from the company's Corporate Communications Department.
KVH Industries, Inc. and Subsidiary
Consolidated Statements of Operations
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
1999 1998 1999 1998
Net sales $4,781,389 5,307,323 17,280,203 15,906,164
Cost of sales 3,295,606 3,142,975 11,349,188 10,221,027
Gross profit 1,485,783 2,164,348 5,931,015 5,685,137
Operating expenses:
Research
& development 1,158,263 908,266 3,068,103 2,941,186
Sales
& marketing 1,389,290 883,193 3,783,490 3,158,416
Administration 524,340 433,999 1,576,299 1,697,951
Total operating
expense 3,071,893 2,225,458 8,427,892 7,797,553
Loss from
operations (1,586,110) (61,110) (2,496,877) (2,112,416)
Other income 6,017 27,906 53,672 230,038
Loss before
income taxes (1,580,093) (33,204) (2,443,205) (1,882,378)
Income tax
benefit 538,509 291,293 948,884 996,466
Net (loss)
income $(1,041,584) 258,089 (1,494,321) (885,912)
Per share information:
Loss (income)
per share -basic $(0.14) 0.04 (0.21) (0.12)
Loss (income)
per share -diluted $(0.14) 0.04 (0.21) (0.12)
Shares - basic 7,262,510 7,143,916 7,223,215 7,113,545
Shares - diluted 7,262,510 7,304,790 7,223,215 7,113,545
KVH Industries, Inc. and Subsidiary
Consolidated Balance Sheets
September 30, December 31,
1999 1998
(Unaudited) (Audited)
Assets:
Current assets:
Cash and cash equivalents $ 3,276,345 1,239,227
Accounts receivable, net 3,357,046 4,168,908
Costs and estimated
earnings in excess of
billings on uncompleted contracts 690,766 768,156
Inventories 3,643,286 3,390,787
Prepaid expenses
and other deposits 347,073 360,346
Deferred income taxes 382,905 234,158
Total current assets 11,697,421 10,161,582
Property and equipment, net 7,489,025 7,186,539
Other assets, less
accumulated amortization 870,571 972,365
Deferred income taxes 1,227,091 425,150
Total assets $21,284,109 18,745,636
Liabilities and
stockholders' equity:
Current liabilities:
Current portion long term debt $71,368 --
Accounts payable 1,892,416 853,238
Accrued expenses 793,521 822,533
Total current liabilities 2,757,305 1,675,771
Long term debt 2,887,244 --
Total liabilities 5,644,549 1,675,771
Stockholders' equity:
Common stock 72,628 72,059
Additional paid-in capital 15,502,868 15,439,421
Retained earnings 64,064 1,558,385
Total stockholders'
equity 15,639,560 17,069,865
Total liabilities and
stockholders' equity $21,284,109 18,745,636
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