- Quarterly Revenue of $19.7 Million, Up 13% Year-over-Year
MIDDLETOWN, R.I., Feb. 7 /PRNewswire-FirstCall/ -- KVH Industries,
Inc., (NASDAQ:KVHI) today reported financial results for the fourth
quarter and full year ended December 31, 2007. Revenue for the
fourth quarter of 2007 was $19.7 million, up 13% from the fourth
quarter ended December 31, 2006. Net income for the quarter was
$1.0 million or $0.06 on a per-diluted share basis. During the same
period last year the company reported net income of $0.1 million,
or $0.01 on a per-diluted share basis. For the year ended December
31, 2007, revenue was $80.9 million, compared to $79.0 million for
the year ended December 31, 2006. KVH reported net income of $2.5
million or $0.17 on a per-diluted share basis for the 2007 period,
versus net income of $3.7 million or $0.25 on a per-diluted share
basis in the year-ago period. "We closed out 2007 on a very strong
note, with increasing sales and profits. These improvements are the
result of the hard work we put in over the course of the year,
including a complete update to our mobile satellite product line
and the launch of two new maritime communication solutions," said
Martin Kits van Heyningen, KVH's chief executive officer. In the
fourth quarter of 2007, mobile communications revenue was $14.1
million, up 16% on a year-over-year basis. "Marine revenue rose 35%
over the same quarter last year, propelled by a 56% increase in
international sales and by initial shipments of our new
TracPhone(R) V7," Mr. Kits van Heyningen continued. "We are
currently supporting broadband connections throughout Europe, the
North Atlantic, and the Americas and are moving ahead with plans to
expand the mini-VSAT Broadband coverage area significantly in 2008
and 2009. Our goal is to ultimately support vessels in the Pacific
Ocean; throughout Asia; the Indian Ocean including shipping routes
to the Gulf; and the Middle East. "Within the land mobile market,
quarterly revenue was down 10% due primarily to a year-over-year
decline in sales to the automotive market. We are taking steps to
strengthen our land sales channel, most notably with the recent
addition of Coast Distribution, which offers a new channel into the
RV marketplace both in the United States and Canada." Turning to
the defense business, Mr. Kits van Heyningen remarked, "Fourth
quarter sales were strong thanks to solid TACNAV(R) sales and
increased shipments of our TG-6000 inertial measurement unit. We
continue to aggressively pursue the opportunity to supply fiber
optic gyros (FOGs) for stabilized remote weapons programs and are
expanding our production capacity in preparation for increasing
demand." Defense-related guidance and stabilization sales,
including those for KVH's fiber optic gyro solutions and TACNAV
military navigation systems, were approximately $5.6 million in the
fourth quarter of 2007, up 7% on a year-over-year basis. For the
full year ended December 31, 2007, mobile communications revenue
was up 8% and defense-related guidance and stabilization revenue
was down 11%, compared to the prior year. Commenting on the
company's financial results for the fourth quarter, Patrick Spratt,
KVH's chief financial officer, said, "The fourth quarter exceeded
our expectations for both the top and bottom lines due in part to
solid sales of relatively higher-margin defense products. Gross
margin was above expectations at almost 41%, and we kept operating
expenses in check. For the first time in two years we did not incur
any patent litigation expenses, following the favorable resolution
of that issue in August. Our total cash balance decreased
sequentially by $2.9 million, driven by our ongoing stock
repurchase program and by growth in accounts receivable. "Looking
forward, we believe 2008 will be a year of solid growth for revenue
and earnings. We expect that first quarter revenue will be in the
range of $23 to $25 million, up 13% to 23% year over year. This
sales level should yield earnings for the quarter in the range of
$0.08 to $0.12 per share, compared to a breakeven result for the
prior year. For the full year, we expect that revenue will grow in
the range of 14% to 20%, compared to fiscal year 2007. For the
year, EPS is projected to be in the range of $0.36 to $0.44. The
full year guidance is based on several key assumptions with respect
to future business development. Among these are the expectation
that we will win additional meaningful orders for our fiber optic
gyros in support of remote weapons station applications and that
our new mini-VSAT product and service offering will be widely
accepted in leisure and commercial markets." Recent Operational
Highlights: -- February 5, 2008 - KVH receives $1.4 million in
orders for TACNAV components for a U.S. prime contractor. --
February 4, 2008 - Coast Distribution joins KVH's North American
distribution network for RV products. -- January 25, 2008 - Rexhall
Industries selects KVH's TracVision SlimLine products as its
exclusive satellite TV solution. -- January 25, 2008 - Courts
approve final settlement of 2004 securities class action and
related derivative lawsuits. -- January 11, 2008 - KVH announces
that the TracPhone V7 and mini-VSAT Broadband service are now
available for European leisure yachts. -- January 10, 2008 -
General Dynamics Land Systems-Canada names KVH "Supplier of the
Year". -- November 16, 2007 - KVH announces that it will receive
$730,000 in research funds from the U.S. military to fund the
development of a lower-cost fiber optic gyro-based northfinder. --
October 25, 2007 - KVH introduces two new TracPhone satellite
communication systems compatible with Inmarsat's new FleetBroadband
service. -- October 23, 2007 - The 14" TracVision M3ST satellite TV
system wins KVH's 10th consecutive Industry Award from the National
Marine Electronics Association. KVH is webcasting its fourth
quarter/year-end 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 leading
manufacturer of systems to provide mobile access to satellite TV,
communication, and high-speed Internet, as well as navigation,
pointing, and guidance solutions for 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 2008, 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: competition presented by alternative
maritime satellite communication products and services; delays or
an inability to expand coverage of the mini-VSAT Broadband service
to new regions; seasonal declines in demand for our mobile
communication and television products; the unpredictability of
purchasing schedules and priorities of the relatively small number
of customers for our defense products; the risk of delays in the
placement of timely orders for ongoing defense contracts; 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; potential continued softness in the U.S.
market for leisure marine products; the unpredictability of the
emerging market, as well as consumer and automotive manufacturer
demand, for mobile communication products in automobiles; changes
in customer response to new product introductions; the impact of
increases in fuel prices on the sale and use of motor vehicles and
marine vessels; declines 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 9, 2007.
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. KVH INDUSTRIES, INC. AND SUBSIDIARY SELECTED FINANCIAL
INFORMATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in
thousands, except per share amounts, unaudited) Three Months Ended
Year Ended December 31, December 31, -------------------
------------------- 2007 2006 2007 2006 --------- ---------
--------- --------- Net sales $19,705 17,426 80,915 78,973 Cost of
sales 11,684 10,610 48,449 47,168 --------- --------- ---------
--------- Gross profit 8,021 6,816 32,466 31,805 Operating
expenses: Research and development 2,279 1,950 9,265 7,720 Sales,
marketing and support 4,078 3,674 15,402 14,387 General and
administrative 1,438 1,710 7,538 7,841 --------- ---------
--------- --------- Income (loss) from operations 226 (518) 261
1,857 Other income, net 542 626 2,482 2,168 Income tax benefit
(expense) 194 - (244) (350) --------- --------- --------- ---------
Net income $962 $108 $2,499 $3,675 ========= ========= =========
========= Net income per common share Basic and Diluted $0.06 $0.01
$0.17 $0.25 ========= ========= ========= ========= Weighted
average common shares outstanding Basic 14,928 14,860 14,964 14,787
========= ========= ========= ========= Diluted 14,932 14,979
14,983 14,915 ========= ========= ========= ========= KVH
INDUSTRIES, INC. AND SUBSIDIARY SELECTED FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, unaudited)
December 31, December 31, 2007 2006 ---------- ---------- ASSETS
Cash, cash equivalents and marketable securities $53,305 $54,739
Accounts receivable, net 12,826 10,556 Inventories 9,313 9,043
Other assets 1,017 1,028 ---------- ---------- Total current assets
76,461 75,366 Property and equipment, net 11,739 9,569 Deferred
income taxes 3,334 3,334 Other non-current assets 36 155 ----------
---------- Total assets $91,570 $88,424 ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued
expenses $8,344 $8,248 Current portion of long-term debt 132 123
---------- ---------- Total current liabilities 8,476 8,371
Deferred revenue 298 99 Long-term debt, excluding current portion
2,026 2,158 Stockholders' equity 80,770 77,796 ----------
---------- Total liabilities and stockholders' equity $91,570
$88,424 ========== ========== DATASOURCE: KVH Industries, Inc.
CONTACT: Patrick Spratt of KVH Industries, +1-401-847-3327; or
Christine Mohrmann of Financial Dynamics, +1-212-850-5600, for KVH
Industries, Inc. Web site: http://www.kvh.com/
http://investors.kvh.com/
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