KVH Industries, Inc., (Nasdaq: KVHI) today reported its results for
the third quarter ended September 30, 2006. Revenue for the quarter
was $19.3 million, up 15% from $16.7 million for the third quarter
ended September 30, 2005. Net income for the quarter was $0.6
million, or $0.04 per diluted share. Net income for the quarter
included a non-cash charge of approximately $0.4 million, or $0.02
per diluted share, related to the company�s adoption of SFAS No.
123(R), �Share Based Payment,� which requires the expensing of
stock options and other equity compensation. During the same period
last year the company reported net income of $0.7 million, or $0.05
per diluted share. For the nine months ended September 30, 2006,
revenue was $61.5 million, up 15% from $53.4 million for the nine
months ended September 30, 2005. KVH reported net income of $3.6
million or $0.24 per diluted share for the 2006 period, versus net
income of $1.9 million or $0.13 per diluted share in the year ago
period. Net income for the 2006 period included a stock-based
compensation charge under SFAS No. 123(R) of approximately $0.8
million, or $0.06 per diluted share. �Maintaining our momentum from
the first six months, we increased sales in each of our major
business areas, achieved strong revenue growth, and sustained
profitability during the third quarter,� said Martin Kits van
Heyningen, KVH�s president and chief executive officer. �We are now
seeing the benefits of the product line overhaul that we launched a
year ago. Demand for our maritime TracVision M3 satellite TV system
remains strong, generating incremental sales in support of our
established, larger antennas. We saw our second consecutive quarter
of year-over-year sales growth in the recreational vehicle market,
driven by our new TracVision� R-series systems. Our defense
business grew on a year-over-year basis, led by record sales of our
fiber optic gyro (FOG) products. At the same time, we continued our
new product development efforts. During the third quarter, we began
shipping our TracNet� 100 mobile Internet system as well as the new
TracVision A7, which brings national and local channels from
DIRECTV to automobiles. In addition, we unveiled our new military
convoy communication system, demonstrating it for the first time at
a military trade show in early October. We also actively pursued an
acquisition opportunity, but we ultimately terminated the process.
This effort caused us to incur approximately $0.3 million, or $0.02
per share in extraordinary expenses during the period.� In the
third quarter of 2006, mobile communication revenue was $12.9
million, up 18% on a year-over-year basis. Defense-related sales,
including those for KVH�s TACNAV� military navigation systems and
FOG solutions, were approximately $6.4 million, up 10% on a
year-over-year basis. Commenting on the company�s financial results
and expectations for the remainder of the year, Pat Spratt, KVH�s
chief financial officer, remarked, �Based on our performance to
date and expectations for the fourth quarter, we anticipate that
revenue for the year will be in the range of $80 - $81 million, up
approximately 13% year-over-year, and in line with previous
guidance. Adjusting our previous bottom line guidance for the
effect of the merger and acquisition activity during the third
quarter, we now expect GAAP EPS of $0.29. This full year projection
also includes approximately $0.07 per share of stock option
expenses. We expect that EPS for the fourth quarter will be
approximately $0.05, including approximately $0.02 per share of
stock option expenses. This 2006 guidance assumes a sequential
decline in tactical navigation sales, coupled with solid fourth
quarter year over year growth for mobile communications and fiber
optic gyro products.� Recent Operational Highlights: � October 9,
2006 � During the conference of the Association of the U.S. Army,
KVH showed its new intra-convoy communication system, which is
being developed under the auspices of a U.S. Army development
contract. The intra-convoy communication system has since entered
formal testing and evaluation by the U.S. Army. � August 23, 2006 �
KVH introduced and began shipping its new TracVision A7 automotive
satellite TV system. With integrated GPS and a new mobile receiver
developed in cooperation with DIRECTV, the TracVision A7 is the
first mobile satellite TV system capable of receiving local
channels in addition to national programming. � August 22, 2006 �
KVH began shipping the TracNet 100 mobile Internet system with MSN�
TV service to marine, RV, and automotive retailers nationwide. KVH
is webcasting its third 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. 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,
Inc., is a premier manufacturer of systems to provide access to
live mobile media ranging from satellite TV to telephone and
high-speed Internet for vehicles and vessels as well as a leading
source of navigation, pointing, and guidance solutions for
maritime, defense, and commercial applications. The company�s
products are based on its proprietary mobile satellite antenna and
fiber optic technologies. An ISO 9001-certified company, KVH is
based in Middletown, Rhode Island. For more information, visit
http://www.kvh.com. This press release contains forward-looking
statements that involve risks and uncertainties. For example,
forward-looking statements include statements regarding our
financial goals for 2006, 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: seasonal
declines in demand for our mobile communication and television
products; the unpredictability of the emerging market, as well as
consumer and automotive manufacturer demand, for mobile
communication products in automobiles; the emergence of alternative
technology that may compete with or displace wireless mobile
Internet services with regard to range and cost; changes in
customer response to new product introductions; the
unpredictability of purchasing schedules and priorities of the
relatively small number of customers for our defense products; the
risk of order cancellations or unexercised options, particularly
for longer-term defense orders; potential reductions in our overall
gross margins in the event of a general shift in product mix toward
our mobile communication products; the impact of increases in fuel
prices on the sale and use of motor vehicles and marine vessels;
our dependence on third-party satellite networks for programming
and satellite services; 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
August 9, 2006. 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, TracVision, TracNet, and
TACNAV are official trademarks of KVH Industries, Inc. All 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 Nine Months Ended September 30, September 30,
2006� 2005� 2006� 2005� � Net sales $ 19,291� $ 16,742� $ 61,548� $
53,442� Cost of goods sold � 11,717� � 9,642� � 36,559� � 31,454�
Gross Profit 7,574� 7,100� 24,989� 21,988� � Operating expenses:
Research and development 1,627� 1,783� 5,770� 5,659� Sales and
marketing 3,441� 3,377� 10,714� 10,347� General and administrative
� 2,447� � 1,556� � 6,132� � 4,322� � Income from operations 59�
384� 2,373� 1,660� Other income, net 599� 303� 1,542� 513� Income
tax expense � (32) � (13) � (349) � (246) Net income $ 626� $ 674�
$ 3,566� $ 1,927� � Net income per common share Basic and diluted $
0.04� $ 0.05� $ 0.24� $ 0.13� � Weighted average common shares
outstanding Basic � 14,827� � 14,596� � 14,762� � 14,555� Diluted �
14,937� � 14,765� � 14,884� � 14,740� KVH INDUSTRIES, INC. AND
SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands,
unaudited) � September 30, December 31, 2006� 2005� ASSETS � Cash,
cash equivalents and marketable securities $ 54,681� $ 50,090�
Accounts receivable, net 10,585� 12,283� Inventories 8,134� 6,564�
Other assets 1,354� 1,233� Total current assets 74,754� 70,170� �
Property and equipment, net 9,658� 8,663� Deferred income taxes
3,334� 3,334� Other non-current assets � 91� � 163� Total assets $
87,837� $ 82,330� � LIABILITIES AND STOCKHOLDERS' EQUITY Accounts
payable and accrued expenses $ 8,107� $ 8,442� Current portion of
long-term debt 120� 115� Total current liabilities 8,227� 8,557� �
Deferred revenue 104� 128� Long-term debt, excluding current
portion 2,190� 2,282� Stockholders' equity � 77,316� � 71,363� �
Total liabilities and stockholders' equity $ 87,837� $ 82,330� KVH
Industries, Inc., (Nasdaq: KVHI) today reported its results for the
third quarter ended September 30, 2006. Revenue for the quarter was
$19.3 million, up 15% from $16.7 million for the third quarter
ended September 30, 2005. Net income for the quarter was $0.6
million, or $0.04 per diluted share. Net income for the quarter
included a non-cash charge of approximately $0.4 million, or $0.02
per diluted share, related to the company's adoption of SFAS No.
123(R), "Share Based Payment," which requires the expensing of
stock options and other equity compensation. During the same period
last year the company reported net income of $0.7 million, or $0.05
per diluted share. For the nine months ended September 30, 2006,
revenue was $61.5 million, up 15% from $53.4 million for the nine
months ended September 30, 2005. KVH reported net income of $3.6
million or $0.24 per diluted share for the 2006 period, versus net
income of $1.9 million or $0.13 per diluted share in the year ago
period. Net income for the 2006 period included a stock-based
compensation charge under SFAS No. 123(R) of approximately $0.8
million, or $0.06 per diluted share. "Maintaining our momentum from
the first six months, we increased sales in each of our major
business areas, achieved strong revenue growth, and sustained
profitability during the third quarter," said Martin Kits van
Heyningen, KVH's president and chief executive officer. "We are now
seeing the benefits of the product line overhaul that we launched a
year ago. Demand for our maritime TracVision M3 satellite TV system
remains strong, generating incremental sales in support of our
established, larger antennas. We saw our second consecutive quarter
of year-over-year sales growth in the recreational vehicle market,
driven by our new TracVision(R) R-series systems. Our defense
business grew on a year-over-year basis, led by record sales of our
fiber optic gyro (FOG) products. At the same time, we continued our
new product development efforts. During the third quarter, we began
shipping our TracNet(TM) 100 mobile Internet system as well as the
new TracVision A7, which brings national and local channels from
DIRECTV to automobiles. In addition, we unveiled our new military
convoy communication system, demonstrating it for the first time at
a military trade show in early October. We also actively pursued an
acquisition opportunity, but we ultimately terminated the process.
This effort caused us to incur approximately $0.3 million, or $0.02
per share in extraordinary expenses during the period." In the
third quarter of 2006, mobile communication revenue was $12.9
million, up 18% on a year-over-year basis. Defense-related sales,
including those for KVH's TACNAV(R) military navigation systems and
FOG solutions, were approximately $6.4 million, up 10% on a
year-over-year basis. Commenting on the company's financial results
and expectations for the remainder of the year, Pat Spratt, KVH's
chief financial officer, remarked, "Based on our performance to
date and expectations for the fourth quarter, we anticipate that
revenue for the year will be in the range of $80 - $81 million, up
approximately 13% year-over-year, and in line with previous
guidance. Adjusting our previous bottom line guidance for the
effect of the merger and acquisition activity during the third
quarter, we now expect GAAP EPS of $0.29. This full year projection
also includes approximately $0.07 per share of stock option
expenses. We expect that EPS for the fourth quarter will be
approximately $0.05, including approximately $0.02 per share of
stock option expenses. This 2006 guidance assumes a sequential
decline in tactical navigation sales, coupled with solid fourth
quarter year over year growth for mobile communications and fiber
optic gyro products." Recent Operational Highlights: -- October 9,
2006 - During the conference of the Association of the U.S. Army,
KVH showed its new intra-convoy communication system, which is
being developed under the auspices of a U.S. Army development
contract. The intra-convoy communication system has since entered
formal testing and evaluation by the U.S. Army. -- August 23, 2006
- KVH introduced and began shipping its new TracVision A7
automotive satellite TV system. With integrated GPS and a new
mobile receiver developed in cooperation with DIRECTV, the
TracVision A7 is the first mobile satellite TV system capable of
receiving local channels in addition to national programming. --
August 22, 2006 - KVH began shipping the TracNet 100 mobile
Internet system with MSN(R) TV service to marine, RV, and
automotive retailers nationwide. KVH is webcasting its third
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. 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, Inc., is a premier manufacturer of
systems to provide access to live mobile media ranging from
satellite TV to telephone and high-speed Internet for vehicles and
vessels as well as a leading source of navigation, pointing, and
guidance solutions for maritime, defense, and commercial
applications. The company's products are based on its proprietary
mobile satellite antenna and fiber optic technologies. An ISO
9001-certified company, KVH is based in Middletown, Rhode Island.
For more information, visit http://www.kvh.com. This press release
contains forward-looking statements that involve risks and
uncertainties. For example, forward-looking statements include
statements regarding our financial goals for 2006, 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: seasonal declines in demand for our mobile
communication and television products; the unpredictability of the
emerging market, as well as consumer and automotive manufacturer
demand, for mobile communication products in automobiles; the
emergence of alternative technology that may compete with or
displace wireless mobile Internet services with regard to range and
cost; changes in customer response to new product introductions;
the unpredictability of purchasing schedules and priorities of the
relatively small number of customers for our defense products; the
risk of order cancellations or unexercised options, particularly
for longer-term defense orders; potential reductions in our overall
gross margins in the event of a general shift in product mix toward
our mobile communication products; the impact of increases in fuel
prices on the sale and use of motor vehicles and marine vessels;
our dependence on third-party satellite networks for programming
and satellite services; 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
August 9, 2006. 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, TracVision, TracNet, and
TACNAV are official trademarks of KVH Industries, Inc. All other
trademarks are the property of their respective companies. -0- *T
KVH INDUSTRIES, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except per share amounts,
unaudited) Three Months Ended Nine Months Ended September 30,
September 30, ------------------ ----------------- 2006 2005 2006
2005 --------- -------- -------- -------- Net sales $ 19,291
$16,742 $61,548 $53,442 Cost of goods sold 11,717 9,642 36,559
31,454 --------- -------- -------- -------- Gross Profit 7,574
7,100 24,989 21,988 Operating expenses: Research and development
1,627 1,783 5,770 5,659 Sales and marketing 3,441 3,377 10,714
10,347 General and administrative 2,447 1,556 6,132 4,322 ---------
-------- -------- -------- Income from operations 59 384 2,373
1,660 Other income, net 599 303 1,542 513 Income tax expense (32)
(13) (349) (246) --------- -------- -------- -------- Net income $
626 $ 674 $ 3,566 $ 1,927 ========= ======== ======== ======== Net
income per common share Basic and diluted $ 0.04 $ 0.05 $ 0.24 $
0.13 ========= ======== ======== ======== Weighted average common
shares outstanding Basic 14,827 14,596 14,762 14,555 =========
======== ======== ======== Diluted 14,937 14,765 14,884 14,740
========= ======== ======== ======== *T -0- *T KVH INDUSTRIES, INC.
AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands,
unaudited) September 30, December 31, 2006 2005 ----------------
---------------- ASSETS Cash, cash equivalents and marketable
securities $ 54,681 $ 50,090 Accounts receivable, net 10,585 12,283
Inventories 8,134 6,564 Other assets 1,354 1,233 --------------
------------- Total current assets 74,754 70,170 Property and
equipment, net 9,658 8,663 Deferred income taxes 3,334 3,334 Other
non-current assets 91 163 ---------------- ---------------- Total
assets $ 87,837 $ 82,330 ================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued
expenses $ 8,107 $ 8,442 Current portion of long-term debt 120 115
-------------- ------------- Total current liabilities 8,227 8,557
Deferred revenue 104 128 Long-term debt, excluding current portion
2,190 2,282 Stockholders' equity 77,316 71,363 ----------------
---------------- Total liabilities and stockholders' equity $
87,837 $ 82,330 ================ ================ *T
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