KVH Announces 2Q 1999 Financial Results
July 29, 1999 07:01 AM
MIDDLETOWN, R.I.--(BUSINESS WIRE)--July 29, 1999--KVH Industries, Inc. KVHI today announced financial results for the second quarter ending June 30, 1999. Revenues for the 1999 quarter increased slightly to just over $6.5 million from a little less than $6.5 million in the comparable 1998 quarter. Sales of mobile communications products increased 48% during the quarter to offset a 23% decrease in navigation sales that resulted from a drop in military and fiber optic gyro (FOG) sales. For the six months ended June 30, revenues increased 18% to $12.5 million in 1999 from $10.6 million in 1998 as communications sales rose 53% and navigation sales declined 1%.
"Once again we have achieved a significant growth in quarterly satellite communications sales," said Martin Kits van Heyningen, president and CEO. "In the second quarter this was attributable to ongoing growth in sales of TracVision(R) LM and TracVision 3. In addition, initial sales during the quarter of the low-cost TracVision Cruiser we just introduced were encouraging and bode well for future revenues. I'm also pleased to report that we have received our first TACNAV(TM) order from the United Kingdom (U.K.), which joins other NATO members Sweden, Canada and the U.S. in using the tactical navigation systems."
Net losses for the 1999 quarter were $307,120 or $.04 a share compared to $247,329 or $.03 a share in the 1998 quarter. Year-to-date net losses decreased to $452,737 in 1999 from $1.1 million in 1998.
Operating expenses declined in the 1999 quarter to $2.8 million from $3.0 million in the 1998 quarter. The quarterly decline and the six-month decline in operating expenses to $5.4 million from $5.6 million are due primarily to cost reductions the company began implementing in July 1998. KVH expects operating expenses to remain relatively flat or increase slightly as it continues to fund research and development efforts for new products.
"Our net results continue to reflect the impact of fixed manufacturing overhead costs for fiber optics and a shift in our revenue mix from high-margin military orders to lower-margin communications sales," said Richard C. Forsyth, CFO. "We have intensified efforts to expand our OEM customer base and increase FOG sales to a level that will offset these fixed costs. At the same time, we are continually improving operations to reduce costs throughout the company."
In June, KVH received ISO 9001 registration from KPMG Quality Registrar. The certification affirms for customers that KVH has implemented the appropriate controls to ensure the quality of its products and services. In addition to adding value for existing customers, the consistent quality system increases KVH's potential to enter new markets throughout the world.
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 Six months ended
June 30, June 30,
1999 1998 1999 1998
Net sales $ 6,525,644 6,470,240 12,498,814 10,598,841
Cost of sales 4,283,824 4,079,633 8,053,582 7,078,052
Gross profit 2,241,820 2,390,607 4,445,232 3,520,789
Operating expenses:
Research &
development 1,040,299 1,181,868 1,909,840 2,032,920
Sales & marketing 1,241,469 1,172,569 2,394,200 2,275,223
Administration 482,776 631,615 1,051,959 1,263,952
Total operating
expense 2,764,544 2,986,052 5,355,999 5,572,095
Loss from operations (522,724) (595,445) (910,767) (2,051,306)
Other income 32,039 172,556 47,655 202,132
Loss before
income taxes (490,685) (422,889) (863,112) (1,849,174)
Income tax benefit 183,565 175,560 410,375 705,173
Net loss $ (307,120) (247,329) (452,737) (1,144,001)
Per share information:
Loss per
share-basic $ (0.04) (0.03) (0.06) (0.16)
Loss per
share-diluted $ (0.04) (0.03) (0.06) (0.16)
Shares - basic 7,207,007 7,109,856 7,206,474 7,098,107
Shares - diluted 7,207,007 7,109,856 7,206,474 7,098,107
KVH Industries, Inc. and Subsidiary
Consolidated Balance Sheets
June 30, Dec. 31,
1999 1998
(Unaudited) (Audited)
Assets:
Current assets:
Cash and cash equivalents $ 3,906,950 1,239,227
Accounts receivable, net 4,713,175 4,168,908
Costs and estimated earnings in excess of
billings on uncompleted contracts 232,606 768,156
Inventories 3,832,117 3,390,787
Prepaid expenses and other deposits 380,694 360,346
Deferred income taxes 382,905 234,158
Total current assets 13,448,447 10,161,582
Property and equipment, net 7,400,838 7,186,539
Other assets, less accumulated amortization 904,308 972,365
Deferred income taxes 689,932 425,150
Total assets $22,443,525 18,745,636
Liabilities and stockholders' equity:
Current liabilities:
Current portion long term debt $ 71,368 --
Accounts payable 1,843,513 853,238
Accrued expenses 942,922 822,533
Total current liabilities 2,857,803 1,675,771
Long term debt 2,904,982 --
Total current liabilities 5,762,785 1,675,771
Stockholders' equity:
Common stock 72,622 72,059
Additional paid-in capital 15,502,470 15,439,421
Retained earnings 1,105,648 1,558,385
Total stockholders' equity 16,680,740 17,069,865
Total liabilities and stockholders' equity $22,443,525 18,745,636
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