Here's the press release: To cut to the chase, .08/share is right in line with expectations. Margins rose and operating expenses fell in terms of percent of revenue, but rose in absolute dollars. Sounds like a solid quarter for a solid company. Now, if we can ever get back a set of market conditions that values growth over liquidity, we'll be all set.
KVH Industries, Inc. Announces First Quarter Results -- Revenue Rises 24%; Earnings Per Share Increases
Thursday, April 17, 1997 4:16 PM
MIDDLETOWN, R.I., April 17 /PRNewswire/ -- KVH Industries, Inc. announced today that revenue grew 24% to $5.9 million for the first quarter ended March 31, 1997 from $4.8 million in the same period of 1996.
Net income more than tripled to $604,000 or $0.08 per share for the first quarter of 1997, compared with $188,000 or $0.03 per share for the first quarter of 1996. Weighted average shares outstanding during the March 1997 quarter grew 31% to 7.5 million from 5.7 million during the first quarter of 1996, as a result of KVH's initial public offering, which was completed on April 8, 1996.
"We've gotten off to a good start this year, and we're pleased by the pace of business thus far," said Martin Kits van Heyningen, President and Chief Executive Officer. "Sales of our navigation products in the military market is well ahead of last year with the recent shipments of our TACNAV military navigation systems to the Swedish, Canadian and U.S. governments. Also we're seeing strong interest in our two new satellite communications products."
KVH introduced two new mobile satellite communication products this quarter, the Inmarsat Tracphone for worldwide phone and fax communications from vessels and the TracVision II, the smallest satellite antenna for DIRECTV programming aboard moving boats. KVH also announced a marketing agreement with satellite telecommunications giant Station 12, one of the largest Inmarsat service providers in the world.
"From a financial point of view, the first quarter was a solid one," commented Richard Forsyth, Chief Financial Officer. "Revenue growth year- over-year was on track, and our profitability improved significantly."
Gross margin increased to 46% in the first quarter of 1997, compared with 44% in the comparable period last year. Total first quarter operating expenses rose modestly in absolute dollars, but declined substantially as a percentage of total revenue to 31% from 37% last year, primarily driven by better leverage of sales and marketing expenditures. As a result of these efficiencies, operating margin increased to 15% for the first quarter from 6% last year.
KVH Industries produces digital navigation systems and mobile satellite communications products for use in commercial, military and marine applications. Based on advanced sensor technology, KVH products precisely measure the direction and orientation of moving platforms, including vessels, vehicles and aircraft. KVH's stabilized satellite antennas enable mobile customers to use the most demanding high gain, high bandwidth geostationary satellite applications and emerging digital satellite links operating at high transmission frequencies (Ka band). As bandwidth demands increase, KVH's products are positioned to address these requirements via mobile satellite links for voice, fax, video and high-speed Internet access.
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, those discussed in the Company's Annual Report on Form 10K filed with the Securities and Exchange Commission on March 27, 1997. Copies are available from the Company's Investor Relations Department.
KVH INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three months ended
March 31,
1997 1996
Net sales $5,916,329 $4,780,659
Cost of sales 3,179,029 2,692,389
Gross profit 2,737,300 2,088,270
Operating expenses:
Research & development 605,946 609,721
Sales & marketing 779,099 858,221
Administration 476,551 316,135
Income from operations 875,704 304,193
Other income (expense):
Other income (expense) (7,040) 1,251
Interest (income) 86,486 0
Foreign currency gain (loss) (3,874) 7,166
Income before income taxes 951,276 312,610
Provision for income taxes 347,287 125,042
Net earnings $603,989 $187,568
Per share information:
Income per share $0.08 $0.03
Number of shares used in per
share calculation 7,492,614 5,736,812
KVH INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
March 31, 1997 December 31, 1996
(Unaudited) (Audited)
Assets:
Current assets:
Cash and cash equivalents $7,967,580 $7,005,682
Accounts receivable, net 4,907,307 6,130,567
Contract receivables 56,943 29,226
Costs and estimated earnings in
excess of billings on uncompleted
contracts 994,762 835,720
Inventories 3,347,568 3,242,270
Prepaid expenses and other
deposits 81,760 179,705
Deferred income taxes 134,552 134,552
Total current assets 17,490,472 17,557,722
Property and equipment, net 4,015,673 3,881,088
Other assets, less accumulated
amortization 16,236 25,978
Deferred income taxes 88,861 88,862
Total assets $21,611,242 $21,553,650
Liabilities and stockholders'
equity:
Current liabilities:
Current lease obligation $46,924 $57,676
Accounts payable 1,373,309 1,031,309
Accrued expenses 1,014,077 1,371,193
Customer deposits 1,975,413 2,527,500
Total current liabilities 4,409,723 4,987,678
Obligations under capital leases,
excluding current installments 0 3,341
Total liabilities 4,409,723 4,991,019
Stockholders' equity:
Preferred stock 0 0
Common stock 70,421 69,932
Additional paid-in capital 14,919,216 14,884,806
Accumulated earnings (deficit) 2,211,882 1,607,893
Total stockholders' equity 17,201,519 16,562,631
Total liabilities and
stockholders' equity $21,611,242 $21,553,650
ACTIVITY RATIOS
Receivables turnover - trade 4.82 Times 4.19 Times
Inventory turnover - manufacturing 3.80 Times 4.51 Times
Total asset turnover - annualized 1.10 Times 1.19 Times
Current ratio 3.97 To 1 3.52 To 1
Total debt to equity 0.26 To 1 0.30 To 1 SOURCE KVH Industries, Inc.
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