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

To: robert b furman who wrote (1489)	10/18/2002 10:49:20 AM
From: Roy F	Respond to of 7249

Hi Bob, Now Pratt is a newbie and I'm sure he wants to start out a sandbagger.After all his first full webcast is a breakthrough event by returning to profitability.He's got to be smart enough to lowball the numbers and surprised to the top side. I was left with the same thought, although only time will tell. Solid quarter, but with a different view of the future. Disconcerting for some. KVH is growing up. It's nice to see the tree begin to bear fruit. Regards, Roy

To: robert b furman who wrote (1489)	10/18/2002 2:27:46 PM
From: Sector Investor	Read Replies (3) \| Respond to of 7249

<< If KVHI can bottom line10 -15 % of the increased sales over Q3 they will add 80,000 to 120,000 on top of the 150,000 that the 12.4 revenue resulted in. This gives a profit of 230,000 to 270,000.That results in a .02 cent profit range basic/diluted using the high range or low range of extrapolated earnings.>> Robert, let's think about that a bit. KVH is now in a profit situation. That means all the fixed "overhead" expenses have been covered - including R&D and Admin. So, beyond that, only variable costs should be incurred for the most part. There is no reason to assume that KVH will INCREASE R&D because of those increased sales. I think they will budget a certain amount, which will need a certain top line and GM to cover it. More of the sales after that will flow to the bottom line. For example, if you use the Q3 numbers, we know $12.2M yields $0.01 earnings. If you freeze the R&D, S&M, and Admin at those Q3 levels, and increase the top line (GMs at 45%) you get: $12.5M = $0.02 $12.7M = $0.03 $12.9M = $0.04 $13.2M = $0.05 Now say they drop expenses about $300K (If all R&D, it's still 14.7% of sales). Earnings zoom to $0.08. Taxes are covered by the tax benefit they have built up over the years. So you see, they could report just about any number in this range they want just by loosening or tightening the R&D reins.