KVH loses $1.3M in 1Q

Posted 5/2/12

MIDDLETOWN – KVH Industries Inc. lost $1.3 million, or 9 cents per diluted share during the three months ended March 31, compared to a net loss of $1.5 million or 10 cents per diluted share a year earlier, the company announced Friday, April 27.

Year-over-year, the manufacturer of broadband, sensor, and guidance and stabilization systems saw a 10 percent rise in net revenue in its first quarter 2012 to $26.7 million from $24.4 million during the same period 2011.

“We had a great quarter in our satellite business,” Martin Kits van Heyningen, KVH’s chief executive officer said in prepared remarks.

“Revenue from the mini-VSAT business grew 61 percent compared to the first quarter last year, and unit sales increased 120 percent,” added Kits van Heyningen. “Our mini-VSAT Broadband airtime revenue for the quarter was close to $7 million, and the related gross margin increased to approximately 28 percent from only 4 percent one year ago.”

In the first quarter of 2012, total mobile communications revenue was up 33 percent to $20.8 million year-over-year.

Sales of marine communications products and services other that VSAT increased 9 percent from 2011 to 2012. This included a 19 percent increase in maritime satellite TV systems.

“Sales of TACNAV systems were down 44 percent year-over-year, in line with expectations, following a very strong 2011,” said Kits van Heyningen. “Looking ahead in 2012, we are optimistic that additional TACNAV orders that are in the prospect pipeline will be received and begin to contribute to a more stable future base of revenue for these products.”

“We had also anticipated a decline in our fiber optic gyro sales this quarter, but the results were below our expectations, with FOG revenues down 50 percent year-over-year,” added Kits van Heyningen.

Patrick Spratt, KVH’s chief financial officer said, “The first quarter top and bottom line results were in the range of expectations that we had provided. Gross margin for the quarter, at 37.2 percent, reflected the impact of the relatively low levels of FOG and TACNAV product sales.”

During the quarter, the company completed the move to its new Middletown manufacturing and warehouse facility. The facility is “fully operational and contributing to production efficiencies,” according to Spratt.

“We remain confident in our long-term growth plans and objectives,” said Kits van Heyningen.

The company’s CEO added that he expected “total company sales to more than double over the next four to five years, and for operating margins to increase to 15 percent or greater over that period.”

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