- Record quarterly revenue of $26.3 million up 24% from prior year;
net income of $1.8 million or $0.13 per diluted share - Quarterly
fiber optic gyro revenues totaled $9.3 million MIDDLETOWN, R.I.,
Feb. 9 /PRNewswire-FirstCall/ -- KVH Industries, Inc.,
(NASDAQ:KVHI) today reported financial results for the fourth
quarter ended December 31, 2009. Revenue for the fourth quarter of
2009 was $26.3 million, up 24% from the quarter ended December 31,
2008. Net income for the period was $1.8 million, or $0.13 per
diluted share. During the same period last year the company
reported net income of $0.3 million or $0.02 per diluted share. For
the year ended December 31, 2009, revenue was $89.1 million, up 8%
compared to $82.4 million for the year ended December 31, 2008. KVH
reported a net loss of $0.1 million or $0.01 per share for 2009.
During the same period last year, the company reported net income
of $3.1 million or $0.21 per diluted share. "We are very pleased
with our strong finish to what has been a challenging year for most
companies. Our market and product diversity enabled us to grow the
top line for the company in 2009 and we believe we have positioned
the company appropriately to be successful as the economy
improves," said Martin Kits van Heyningen, KVH's chief executive
officer. "I believe that our strategic initiatives, including the
rollout of our global maritime broadband network and the expansion
of our fiber optic gyro (FOG) business, proved themselves over the
course of the year, and resulted in four consecutive quarters of
record FOG sales and the highest overall quarterly revenue in the
company's history. These initiatives are now major contributors to
our growth and I am confident that they will help KVH thrive in the
coming year." KVH's defense-related guidance and stabilization
revenue from the company's fiber optic gyro solutions, TACNAV®
military navigation systems, and related services was approximately
$12.3 million in the fourth quarter of 2009, up 21% on a
year-over-year basis. "Thanks to a 104% increase in sales, our
fiber optic gyro business was the primary contributor to the fourth
quarter's strong year-over-year growth compared to the same period
last year. Our fourth quarter fiber optic gyro sales actually
exceeded our total FOG sales for all of 2008. We also continued to
win new business, including a $6.4 million order from Raytheon for
our TG-6000 inertial measurement unit as well as a new $10.2
million order for FOGs to be used in remote weapon stations," said
Mr. Kits van Heyningen. In the fourth quarter of 2009, mobile
communications revenue from marine, land, and aeronautical products
and services was $14.0 million, up 26% on a year-over-year basis.
Mr. Kits van Heyningen commented, "The economic challenges remain
in our mobile satellite communications business, especially in our
leisure satellite TV markets. However, our aeronautical satellite
TV shipments and strong contributions from mini-VSAT Broadband
airtime subscriptions offset the declines in other areas during the
fourth quarter. It's worth noting that our VSAT business has
developed to the point where recurring airtime service revenues
exceed the quarterly level of product hardware sales. In fact,
fourth quarter revenue from mini-VSAT airtime services grew more
than $1.2 million compared to the same quarter in 2008. Other
services, including Inmarsat airtime, non-recurring engineering,
and repair services all declined on a year-over-year basis. "During
the fourth quarter, we also made significant progress in the
rollout and acceptance of our satellite communications network,
including preparations for the recent activation of the mini-VSAT
Broadband service in Africa, the deployment of the TracPhone V7 on
two classes of U.S. Coast Guard cutters, and the receipt of our
permanent license authority from the Federal Communications
Commission. When completed, the mini-VSAT Broadband network will
circle the globe, providing the only seamless multi-megabit global
network for ships and planes," concluded Mr. Kits van Heyningen.
Speaking about the company's financial results, Patrick Spratt,
KVH's chief financial officer, said, "We are pleased with our
performance in the fourth quarter and the year as a whole,
especially in light of the economic challenges. We continue to
enjoy the benefits of a diverse revenue model with an almost even
split between mobile satellite and guidance and stabilization
sales. The strong sales of the relatively higher margin guidance
and stabilization products helped us meet our target on the top
line while they, along with some tax credits, contributed to our
better-than-anticipated bottom line results. The balance sheet
remained strong and we were able to maintain our strong cash, cash
equivalents, and marketable securities position while continuing
the steady pace of investments for our strategic growth
initiatives. "While we do have slightly better visibility in some
areas and industry observers see some scattered signs of recovery
in the leisure markets, we are still cautious with regard to our
expectations for 2010. In the first quarter, we expect revenues to
grow by 40% or more compared to the first quarter last year, to
roughly $26 million. Bottom line results are expected to be in the
range of $0.03 to $0.07 per share, reflecting continued investments
as we enter the final phase of building out the global VSAT network
infrastructure. "Given the continuing state of economic
uncertainty, we do not think it would be prudent to provide
specific full year financial guidance at this time. However, we do
believe that we are positioned well to take advantage of any
strengthening of the economy. We expect 2010 to be a year of strong
top line growth and progressively improving bottom line performance
within the context of normal leisure market seasonality. We believe
that our fiber optic gyro sales should show solid year-over-year
growth but we do not expect a repeat of the more than 200%
year-over-year growth experienced in 2009. We expect significant
benefit in on-going sales and margin expansion following the
anticipated completion of the mini-VSAT Broadband infrastructure in
the second quarter. By the second half of the year we expect to be
in a position to more fully leverage the mini-VSAT infrastructure
on a global scale. One challenge that we will face is an unusual
shipment schedule to LiveTV for aeronautical antennas. To support
LiveTV's planned realignment of its inventory with its installation
schedule, we will ship systems to LiveTV during the first half of
2010, and then resume antenna shipments in the first quarter of
2011." Recent Operational Highlights: -- In February 2010, KVH
announced plans to open a new office in Singapore to support the
sales opportunities in the Pacific-Asia region and the overall
commercial market and also introduced a new dual-axis variant of
its DSP-1500 fiber optic gyro, the world's smallest precision FOG.
-- On January 19, 2010, KVH announced the activation of the
mini-VSAT Broadband service in Africa. -- During the fourth
quarter, KVH announced that the U.S. Federal Communications
Commission granted permanent "Earth Station onboard - Vessel" or
ESV license authority for KVH's mini-VSAT Broadband satellite
communications service and that the U.S. Coast Guard was deploying
the TracPhone V7 and mini-VSAT Broadband service on its 110-ft and
225-ft cutters. -- During the fourth quarter, KVH received multiple
FOG product orders, including a $6.4 million order for its TG-6000
inertial measurement units and a $10.2 million order for FOG to use
in remote weapon stations. -- On October 29, 2009, KVH unveiled its
new TracVision HD7, the first compact marine satellite TV antenna
capable of tracking three satellites simultaneously and offering
access to DIRECTV HD service via two Ka-band satellites and one
Ku-band satellite. KVH is webcasting its fourth quarter conference
call live at 10:30 a.m. Eastern time today through the company's
website. The conference call can be accessed via the company's
website at http://investors.kvh.com/ and listeners are welcome to
submit questions pertaining to the earnings release and conference
call to . The audio archive and an MP3 podcast will also be
available on the company website within three hours of the
completion of the call. About KVH Industries, Inc. KVH Industries
(http://www.kvh.com/) is a leading manufacturer of solutions that
provide global high-speed Internet, television and voice services
via satellite to mobile users at sea, on land, and in the air. KVH
is also a premier manufacturer of high performance sensors and
integrated inertial systems for defense and commercial guidance and
stabilization applications. The company is based in Middletown, RI,
with facilities in Tinley Park, IL, and Kokkedal, Denmark. This
press release contains forward-looking statements that involve
risks and uncertainties. For example, forward-looking statements
include statements regarding our financial goals for future
periods, anticipated revenue growth, anticipated profitability,
anticipated orders for our mobile communication and military
products, and anticipated improvements in our competitive position.
The actual results we achieve could differ materially from the
statements made in this press release. Factors that might cause
these differences include, but are not limited to: the impact of
extended economic weakness, such as availability of consumer credit
and increases in fuel prices, on the sale and use of motor vehicles
and marine vessels; the need to increase sales of the TracPhone V7
and related services to improve airtime gross margins; delays or an
inability to expand coverage of the mini-VSAT Broadband service to
new regions; the potential inability to secure adequate Ku-band
satellite capacity or the licenses necessary for any expansion of
the mini-VSAT Broadband network; risks associated with the delivery
or performance of critical hardware; the need for qualification of
products to customer or regulatory standards; delays in customers'
qualification processes for our products or other delays in
shipping; the risk that we may not receive expected orders;
competitors' products and services; unanticipated declines or
changes in customer demand, due to economic, seasonal and other
factors, particularly with respect to the TracPhone V7; the
unpredictability of military budget priorities as well as the order
timing, purchasing schedules and priorities for our defense
products; order cancellations or unexercised options, particularly
for longer-term defense orders; potential reductions in our overall
gross margins in the event of a shift in product mix; weakened
consumer demand for our products and services, especially at the
more price sensitive low end of our product offerings; changes in
interest rates; our dependence on third-party satellite networks
for programming and satellite services; delays in delivery arising
from supplier production constraints; poor or delayed research and
development results; currency fluctuations, export restrictions,
delays in procuring export licenses, and other international risks;
potential product liability claims; the difficulty in protecting
our proprietary technology; potential claims of intellectual
property infringement; expenses associated with corporate
governance requirements; and changes in our equity compensation
practices, including the impact of fluctuations in our stock price.
These and other factors are discussed in more detail in our
Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on November 5, 2009. Copies are available
through our Investor Relations department and website,
http://investors.kvh.com/. We do not assume any obligation to
update our forward-looking statements to reflect new information
and developments. KVH Industries, Inc., has used, registered, or
applied to register its trademarks in the USA and other countries
around the world, including the following marks: KVH, KVH logo,
Azimuth, TracVision, TracPhone, TACNAV, DataScope and the DataScope
logo, Sailcomp, mini-VSAT Broadband and the mini-VSAT Broadband
logo, and the banded, dome-shaped housing of its satellite
antennas. Other trademarks are the property of their respective
companies. KVH Industries, Inc. and Subsidiary CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per
share amounts, unaudited)
-------------------------------------------------- Three Months
Ended Year Ended December 31, December 31, 2009 2008 2009 2008 ----
---- ---- ---- Sales: Product $22,878 $17,207 $75,191 $69,941
Service 3,408 4,009 13,869 12,463 ----- ----- ------ ------ Net
sales 26,286 21,216 89,060 82,404 ------ ------ ------ ------ Costs
and expenses: Costs of product sales 13,413 10,798 46,553 42,552
Costs of service sales 2,776 2,238 10,198 6,130 Research and
development 2,540 1,851 8,805 7,655 Sales, marketing and support
3,945 4,331 16,316 16,162 General and administrative 2,110 1,755
7,832 7,035 ----- ----- ----- ----- Total costs and expense 24,784
20,973 89,704 79,534 ------ ------ ------ ------ Income (loss) from
operations 1,502 243 (644) 2,870 Interest income 79 183 358 1,220
Interest expense 26 35 88 153 Other income (expense), net 1 5 (20)
(231) ----- --- ---- ----- Income (loss) before income tax expense
1,556 396 (394) 3,706 Income tax (benefit) expense (291) 90 (261)
648 ---- -- ---- --- Net income (loss) $1,847 $306 $(133) $3,058
====== ==== ===== ====== Net income (loss) per common share: Basic
and diluted $0.13 $0.02 $(0.01) $0.21 ===== ===== ====== =====
Weighted average number of common shares outstanding: Basic 14,043
14,111 13,996 14,373 ====== ====== ====== ====== Diluted 14,578
14,115 13,996 14,377 ====== ====== ====== ====== KVH Industries,
Inc. and Subsidiary CONDENSED CONSOLIDATED BALANCE SHEETS (in
thousands, unaudited) ------------------------- December 31,
December 31, 2009 2008 ---- ---- ASSETS Cash, cash equivalents and
marketable securities $41,304 $42,660 Accounts receivable, net
15,803 13,960 Inventories 13,387 15,484 Other current assets 1,632
807 ----- --- Total current assets 72,126 72,911 ------ ------
Property and equipment, net 15,777 13,286 Deferred income taxes
3,334 3,334 Other non-current assets 6,509 4,226 ----- ----- Total
assets $97,746 $93,757 ======= ======= LIABILITIES AND
STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $10,358
$12,296 Deferred revenue 961 366 Current portion of long- term debt
117 2,026 --- ----- Total current liabilities 11,436 14,688 ------
------ Other long-term liabilities 902 - Long-term debt, excluding
current portion 3,808 - Stockholders' equity 81,600 79,069 ------
------ Total liabilities and stockholders' equity $97,746 $93,757
======= ======= DATASOURCE: KVH Industries, Inc. CONTACT: Patrick
Spratt, KVH Industries, +1-401-847-3327, or Christine Mohrmann,
Financial Dynamics, +1-212-850-5600 Web Site: http://www.kvh.com/
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