Edged into the black - Break even! GMs up to 40%. More customer funded R&D.
"We anticipate the positive sales trends that we experienced in the third quarter to continue into the fourth quarter of this year."
"Fiber projects are beginning to accelerate and we anticipate that R&D expense will return to historic levels beginning in the fourth quarter of 2000." "
Thursday October 19, 8:07 am Eastern Time
Press Release
KVH Announces 3rd Quarter 2000
Results Quarterly Sales Increase of
56% Drives Return to Profitability
MIDDLETOWN, R.I.--(BUSINESS WIRE)--Oct. 19,
2000--KVH Industries, Inc. (Nasdaq: KVHI - news) today
announced that the company generated net income of $18,238
for the third quarter ended September 30, 2000. The
company's return to profitability resulted from strong
growth in communications and military sales, improvements in
gross margin and lower operating expenses during the
quarter.
``We made significant investments in R&D over the past three
years and we are pleased to see those investments driving
sales growth and most importantly, producing profitable
results. Mobile Satellite product sales continued to
demonstrate strong growth and a rebound in military
navigation sales also contributed to our profitability,''
said Martin Kits van Heyningen, president and CEO.
Total revenues for the third quarter increased 56 percent to
$7.5 million from $4.8 million in the 1999 period. Quarterly
gross profits increased to $3.0 million from $1.5 million
and gross margin as a percentage of net sales improved to 40
percent from 31 percent in 1999. Total operating expenses
remained nearly flat at about $3.0 million in both the 2000
and 1999 third quarters. The 2000 third quarter operating
income was $86,361 compared to $1.6 million loss in 1999.
Net earnings for the 2000 third quarter of $18,238 or $0.00
per share compare to a net loss of $1.0 million or $0.14 per
share in 1999.
For the nine months ending September 30, 2000, total
revenues increased 22 percent to $21.1 million from $17.3
million in the 1999 period. Gross profits increased to $7.8
million from $5.9 million and gross margin as a percentage
of net sales increased to 37 percent from 34 percent.
Year-to-date total operating expenses increased to $9.1
million from $8.4 million in 1999. The year-to-date
operating loss declined to $1.4 million in 2000 from a $2.5
million loss in 1999. A net loss year-to-date of $1.0
million or $0.13 a share compares to a net loss of $1.5
million or $0.21 per share in 1999.
According to Chief Financial Officer Richard Forsyth, ``We
anticipate the positive sales trends that we experienced in
the third quarter to continue into the fourth quarter of
this year. We worked hard at controlling spending in the
third quarter and succeeded in decreasing quarterly
operating expenses as a percentage of revenues in every cost
category. We realized an R&D expense savings of 24 percent
over the prior year as we offset internal research spending
with customer funding. Current research efforts related to
our Mobile Broadband and Photonic Fiber projects are
beginning to accelerate and we anticipate that R&D expense
will return to historic levels beginning in the fourth
quarter of 2000.''
KVH is webcasting its third quarter 2000 conference call
live at 11:30 a.m. Eastern time today through the company's
web site at kvh.com. The audio also will
be archived at the company web site within three hours after
the call is completed.
KVH Industries, Inc., is a leading international provider of
innovative mobile, high-bandwidth satellite communications
systems and navigation products. Its award-winning products
address a variety of markets worldwide, including mobile
broadband satellite communications, tactical navigation, and
fiber optics. 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: 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; and
poor or delayed research and development results. Additional
factors are discussed in the company's Annual Report on Form
10K filed with the Securities and Exchange Commission on
March 27, 2000. Copies are available through the company's
Investor Relations Department or web site.
KVH Industries, Inc. and Subsidiary
Consolidated Statements of Operations
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
Net sales $ 7,461,492 4,781,389 21,109,261 17,280,203
Cost of sales 4,454,136 3,295,606 13,323,446 11,349,188
Gross profit 3,007,356 1,485,783 7,785,815 5,931,015
Operating expenses:
Research &
development 882,350 1,158,263 2,972,633 3,068,103
Sales & marketing 1,433,292 1,389,290 4,474,048 3,783,490
Administration 605,353 524,340 1,697,414 1,576,299
Total operating
expense 2,920,995 3,071,893 9,144,095 8,427,892
Income (loss) from
operations 86,361 (1,586,110) (1,358,280) (2,496,877)
Other (expense)
income (55,026) 6,017 (249,585) 53,672
Profit (loss) before
income taxes 31,335 (1,580,093) (1,607,865) (2,443,205)
Income tax (expense)
benefit (13,097) 538,509 590,214 948,884
Net income (loss) $ 18,238 (1,041,584) (1,017,651) (1,494,321)
Per share information:
Income (loss)
per share - basic $ 0.00 (0.14) (0.13) (0.21)
Income (loss)
per share -diluted $ 0.00 (0.14) (0.13) (0.21)
Shares - basic 7,677,043 7,262,510 7,578,471 7,223,215
Shares - diluted 8,127,286 7,262,510 7,578,471 7,223,215
KVH Industries, Inc. and Subsidiary
Consolidated Balance Sheets
September 30, 2000 December 31, 1999
(Unaudited) (Audited)
Assets:
Current assets:
Cash and cash
equivalents $ 841,196 2,047,838
Accounts receivable,
net 5,310,657 3,362,390
Costs and estimated
earnings in excess of
billings on uncompleted
contracts 686,149 444,492
Inventories 3,633,213 3,672,269
Prepaid expenses and
other deposits 341,620 292,793
Deferred income taxes 363,462 376,628
Total current assets 11,176,297 10,196,410
Property and equipment, net 6,805,686 7,227,778
Other assets, less accumulated
amortization 739,629 839,113
Deferred income taxes 2,169,690 1,571,409
Total assets $ 20,891,302 19,834,710
Liabilities and stockholders' equity:
Current liabilities:
Current portion
long term debt $ 75,961 75,643
Line of credit 1,354,647 --
Accounts payable 1,288,927 1,599,770
Accrued expenses 1,240,827 792,086
Total current liabilities 3,960,362 2,467,499
Long term debt 2,816,294 2,865,232
Total liabilities 6,776,656 5,332,731
Stockholders' equity:
Common stock 76,827 72,969
Additional paid-in capital 16,194,340 15,567,880
Accumulated deficit (2,156,521) (1,138,870)
Total stockholders' equity 14,114,646 14,501,979
Total liabilities and
stockholders' equity $ 20,891,302 19,834,710
-0-
Contact:
KVH Industries, Inc.
Richard Forsyth
401-847-3327 |
