KVH widens loss to $1.1M on declining military contracts
KVH INDUSTRIES Inc. reported a net loss of $1.1 million for the first quarter, widening the fourth-quarter 2013 net loss of $365,000 on continued poor performance in the company's guidance and stabilization segment.
MIDDLETOWN – KVH Industries Inc., a provider of guidance and Internet systems for the maritime and defense industries, posted a net loss of $1.1 million, or 7 cents per share, for the first quarter of 2014, reversing net income of $2 million, or 13 cents per share, reported for the same period last year.
The first-quarter loss widened the fourth-quarter 2013 net loss of $365,000, or 2 cents per share.
Revenue also declined during the three months ended March 31, dropping 7.4 percent to $36.9 million from $39.9 million for the first quarter of 2013.
The quarterly net loss was due largely to a 53 percent decline in the company’s guidance and stabilization segment revenue, which includes KVH’s fiber optic gyro products, military tactical navigation systems and related services, the company said in a statement. The drop was driven by the company’s large Saudi Arabian National Guard program contract for the first quarter of 2013, which was not renewed in 2014.
“The decline in our guidance and stabilization revenues reflects the importance of a relatively small number of large contracts, primarily in our TACNAV business,” said CEO Martin Kits van Heyningen, who added that the company expects a significant order from a customer in the Middle East within the next few months that will boost the segment’s revenue.
KVH’s mobile communications segment, including the company’s satellite television products and KVH Media Group’s operations, saw $29 million in total revenue for the first quarter of 2014, an increase of 27 percent year over year. Sales of KVH’s mini-VSAT Broadband airtime service – which provides phone service to mariners at sea – and its TracPhone terminals together amounted to $18.8 million in the first quarter, also 27 percent higher than the same period last year.
Maritime satellite TV sales decreased 9 percent year over year in the first quarter, primarily due to unseasonably cold spring weather that impacted marine recreational activities, KVH said, as well as a temporary component shortage for one of the company’s popular TracVision products.
“We continue to be encouraged with the progress we are making in building our mobile broadband business,” said Kits van Heyningen. “We have also just launched a new series of TracVision satellite TV products that are compatible with the next generation of TV satellites, which will begin shipping in the second quarter.”
For the second quarter, KVH projected revenue in the range of $41 million to $45 million, with net income between 3 cents and 8 cents per diluted share, compared with 10 cents per diluted share during the second quarter last year.