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Technology Stocks : KVH Industries, Inc.
KVHI 7.030+1.2%3:59 PM EST
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To: Greg h2o who wrote (704)2/8/2001 2:13:46 PM
From: akmike  Read Replies (1) of 7249
 
It looks to me like here is a business with a 40 mil. revenue base in the core (with 40% gross margins) which is profitable and growing and capitalized in the market for about 70 mil. The current sensor alone should be capable of producing that much in revenues in 2002, growing at a faster pace, with better gross margins, and (with the business model of partnering which they have pursued) with very little in terms of sales, marketing, and administrative expenses to carry. What is the current sensor business worth? (probably quite a bit more than 70 mil., I suspect)
Trying to put a value on the photonic fiber segment of the business is a more esoteric exercise, but exciting in terms of potential.
I view the broadband antenna initiative as a natural extension of the core business and don't think there is anything in the current price for that either.
I believe that the acknowledgment that time-to-market issues for the new initiatives is causing an acceleration in R & D expense, which in turn could temporarily take the company into the red, will cause some investors to lose patience or just to believe that their funds will be better somewhere else for a period of time. IMO this will present a last chance to accumulate in the single digits. I don't think that the slippage into the red will be very deep or last very long. I would expect that EBITDA will be positive for 2001 and earnings significantly positive thereafter.
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