Backlog for the Quarter Totals $14.6 Million versus $4.6 Million for the First Quarter of 2001
MIDDLETOWN, RI – July 19, 2001 – KVH Industries (Nasdaq: KVHI), a leading provider of high-bandwidth communications products, tactical navigation systems, and fiber optic products, today reported its results for the second quarter ended June 30, 2001. Revenue for the period was $7.8 million with a net loss of $2.0 million, or $0.19 per share. By comparison, KVH reported revenue of $8.0 million and a net loss of $0.2 million, or $0.02 per share for the second quarter ended June 30, 2000. The higher net loss on a quarterly basis reflects the Company’s ongoing research and development investments in its Photonic Fiber and Mobile Broadband projects. Backlog for the quarter totaled $14.6 million versus $4.6 million for the first quarter of 2001.
For the six months ended June 30, 2001, revenue increased 17% to $16.0 million from $13.6 million for the six months ended June 30, 2000. KVH also reported a net loss of
$3.5 million, or $0.37 per share for the six months ended June 30, 2001, versus $1.0 million or $0.14 per share in the prior year.
“Our quarterly satellite communication revenues rose 10% over the same period last year despite the difficult economic environment,” commented Martin Kits van Heyningen, President and Chief Executive Officer. “This marks the eighteenth consecutive posting of quarterly year-over-year growth in this market. We are clearly gaining market share in this sector of our business and are positioning the company for a market recovery in 2002.”
“We also grew bookings for our military markets with key orders coming from Australia, New Zealand, and France. While we did record a 58% decrease in military revenues for the quarter, we built a shippable military backlog of $11 million by quarter’s end. In addition, we saw strong sales growth in our fiber optic business with sales up 36% during the second quarter and 118% year-to-date,” Mr. Kits van Heyningen added.
In May, the company announced that it had completed the financing initiative it began at the end of 2000, raising a total of $19.5 million. KVH is directing these resources primarily toward the development of the company’s Photonic Fiber and Mobile Broadband initiatives.
KVH’s proposed photonic fiber will allow the company to build high-speed optical networking components directly within a strand of optical fiber, a fundamentally different concept from the planar optic chip-based approach used by others. In addition to its ongoing research, KVH has started construction on a chemical lab and a clean room at its Tinley Park, Illinois, fiber optic manufacturing plant. These new facilities will enable the company to manufacture both polymers and optical networking components, such as its proposed 40 gigabit per second modulator.
“Most significantly, we continue to develop research collaborations directed at developing polymer materials for use in these products,” remarked Mr. Kits van Heyningen. “Our goal is to develop and manufacture entirely proprietary material, securing our unique position in the industry and guaranteeing us a continuous source of polymer supply.”
The company has also made good progress with its Mobile Broadband initiative, which is intended to make in-motion satellite TV and broadband Internet reception available to the automotive market. The company engaged in testing of operational prototype designs during the second quarter and expects to remain on schedule and provide early customer demonstrations of the new antenna before the end of the year.
With regard to the company’s financial results, Richard Forsyth, Chief Financial Officer, said, “The Company’s net loss for the second quarter of 2001 was impacted by the rescheduling of a military order to the second half of 2001. However, we were able to curtail some spending during the second quarter to offset lower revenues. We also elected to fully reserve our quarterly income tax benefit, which increased our net loss by $867,164, or $0.08 per share. Last year’s second quarter tax benefit reduced our loss by $0.1 million or approximately $0.02 per share.”
Mr. Kits van Heyningen concluded, “Our original outlook for the year has been tempered by the challenging economic environment. As a result, we now believe that 2001 revenues will exceed 2000 revenues by approximately 15% to 20%.”
On June 4, 2001, KVH Industries announced a new working relationship with Atlanta-based STAGPARKWAY, the nation’s largest distributor of parts and accessories to the recreational vehicle aftermarket. Through this relationship, TracVision land-mobile satellite TV systems and accessories will be marketed to more than 3,000 RV and truck dealerships nationwide.
On May 31, 2001, KVH Industries announced that it completed its private equity-financing plan with a private placement of 615,384 common shares to an institutional investor on May 25, 2001. This sale brings the total additional equity raised by the company since December 2000 to $19.5 million. Proceeds of the placement will be used primarily to finance the company's Photonic Fiber and Mobile Broadband research and development projects.
On May 11, 2001, KVH Industries announced that it had received a contract from Giat Industries to provide the new TACNAV™ II tactical navigation system for integration with Giat Industries’ SIT-VI Battlefield Management System (BMS). KVH’s contract is worth more than $2.7 million if all of the options are exercised.
KVH is webcasting its second quarter 2001 conference call live at 11:30 a.m. Eastern Time today through the company’s web site at http://www.kvh.com/company. The audio also will be archived at the company web site within three hours following the completion of the call.
KVH Industries, Inc., is an international leader in developing and manufacturing innovative, mobile, high-bandwidth satellite communications systems, tactical navigation products, and fiber optic products. An ISO 9001-registered company, KVH has headquarters in Middletown, Rhode Island, with a fiber optic manufacturing facility in Tinley Park, Illinois, and a European sales, marketing, and support office in Hoersholm, Denmark.