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Technology Stocks : KVH Industries, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: akmike who wrote (406)	4/21/2000 3:54:00 PM
From: Sector Investor	Read Replies (1) \| Respond to of 7249

OK. Let's try a little crystal ball peering into the future here. KVH has finally provided enough details to attempt this. They said: 1) Communication revenues will continue increasing significantly each quarter 2) Military revenues are on the rebound starting with Q2. 3) FOG sales are just now beginning 4) backlog is $4.3 million, spread equally across the 3 areas 5) GMs have been depressed by lagging Military and FOG sales, but can rise to the low 40%s as these revs increase. 6) additional military orders are imminent. 7) R&D should begin to decline in absolute dollars. 8) S&M will continue to rise in absolute dollars, but decline as a percent of revenues. 9) Administrative expenses will remain about flat. 10) Return to profitability in the 2nd half. 11) Good chance of full year profitability. 12) Communications sales alone should cover profitability in 2001 From these, we can make some judgement calls, pop the data into a spreadsheet and see what happens. Here are my assumptions, which I tried to fit to the CC comments, but stay conservative. 1) A smaller loss in Q2. 2) Communication revenues to grow 25% Q-Q. 3) I jumped military (nav) revs by 50% in Q2 (1/2 the backlog) and 20% each quarter after that for the rest of 2000. I think they can see that far anyway. 4) I started FOG sales at 1/2 the backlog in Q2 and grew 20% each quarter after that. This is the weakest of the assumptions. 5) I raised GMs to 35% in Q2, and increased them 2% each quarter after that. 6) I reduced R&D by 2% each quarter. 7) I grew S&M by 3% each quarter. 8) I left Admin and Other Income/(expense) constant 9) I didn't try to estimate the effect of taxes, as there is no data to support this. Keep in mind that these are just numbers that I made up based on the statements in the CC. The future is never certain. This does show that once break even is reached, profitability can increase dramatically going forward. As an acid test. I tried Q4 2000 and Q1 2001 using only the projected Communications revenues. I get a small loss in Q4 and a small profit in Q1 2001, so I think these growth numbers are reasonable. I hope everyone realizes that this is just an honest attempt to project out what was said in the conference call, and I am not trying to hype the stock in any way. I do this kind of thing for myself anyway as part of my ongoing DD, but this time I will share it. Comments appreciated. Q4 1999 Q1 2000 Q2 2000 Q3 2000 Q4 2000 PCT (000) omitted est est est chng Net Sales 5.54 5.70 8.35 10.28 12.67 Communications 2.90 4.20 5.25 6.56 8.20 1.25 Navigation 2.54 1.60 2.40 2.88 3.46 1.20 FOG 0.70 0.84 1.01 1.20 Cost of Sales 3.69 3.82 5.43 6.48 7.73 Gross Profit 1.86 1.88 2.92 3.80 4.94 Gross Margin 34% 33% 35% 37% 39% R&D exp 1.13 1.07 1.05 1.03 1.01 0.98 S&M exp 1.69 1.42 1.46 1.50 1.55 1.03 Admin exp 0.54 0.53 0.53 0.53 0.53 1.00 Inc/(Loss) (1.50) (1.14) (0.12) 0.74 1.85 from ops Other Income (0.01) (0.21) (0.21) (0.21) (0.21) Income/(Loss) before Taxes (1.51) (1.35) (0.33) 0.53 1.64

To: akmike who wrote (406)	4/21/2000 5:23:00 PM
From: rascalbythesea	Respond to of 7249

Hi Mike: Glad to see I have some familiar company in GSTRF. My understanding is Soros and his group did sell some but supposedly they still have 10%. While Soros was reducing, the C.O.B. Bernie Schwartz was accumulating another 375 thousand shares around the Sep-Oct period. I think that gives him about 1 Million now. Schwartz has not been a seller as of now. His faith is unshakeable. This may not be a fast trade but as they build subscriber base and make some positive announcements, this stock could fly. It did run from under 10 this year to 53 3/4 and ran back down to 35 to accommodate the 8 million share secondary at 35. It has since slid back to 10 due to market conditions and the failure of Iridium. They should be picking up Iridiums 55,000 subscribers which should be a great beginning. Good luck on KVHI, MRVC and now GSTRF RASCAL