Response from Alice Andrews at KVHI IR, 9/1/98:
As regards your question about the performance of KVHI stock:
The market volatility is, of course, affecting KVH as it is
everyone
else. I am astounded by today's performance so far, with a drop of
132 and an increase of 176 plus, and it isn't over yet. This isn't
a
roller coaster - it's more like a combination of bungee jumping and
scaling Mt. Everest, if you look at the graphs.
However, I know your concern is how KVH is performing in the 3rd
quarter rather than the current correction (which is what I insist
on
calling it until it's proven otherwise).
As you know, KVH has a policy of not providing financial
projections.
I can confirm, however, that we still anticipate there will be an
impact on earnings from our current R&D and marketing expenditures
during the 3rd and 4th quarters of 1998. At the same time we are
continuing development of new FOG products and expect to be
introducing them in 1999. As CFO Dick Forsyth noted in the 2nd
quarter conference call, we anticipate additional investments in
FOG
development and the time required to ramp-up FOG production will
result in lower product gross margins and R&D spending growth
throughout 1998. As he also noted, we "will further reduce costs
at
the company should opportunities arise."
Essentially, the company has maintained its development and
cost-reduction focus and is proceeding as planned with its
long-term
strategy. Meanwhile, we expect the short-term performance to be as
noted above with the additional impact on our stock price from
unpredictable and volatile markets, both here and worldwide. Given
the development stage KVH is in and the market uncertainties, it is
difficult for anyone to foresee with any accuracy what results will
be
over the next 12-18 months. |
