MIDDLETOWN, R.I., Oct. 2 -- KVH Industries, Inc.,
(Nasdaq: KVHI) reported today that preliminary, unaudited results indicate the
company will report revenue in the range of approximately $15.6 million to $16
million for the third quarter of 2008 compared to revenues of $17.6 million in
the year earlier period. As a result of the lower revenue levels, the company
now anticipates that its bottom line results will be well below its original
expectations of $0.01 to $0.05 per share for the third quarter. In 2007, KVH
reported breakeven results of $0.00 per share for the third quarter.
Three key issues contributed to these estimated results being well below
the company's previously announced expectations of $19 million to $20.5
million in revenue for the third quarter. First, the final qualification
process for KVH's fiber optic gyros for use in remote weapon stations has
taken longer than expected, which prevented shipments during the third
quarter. Second, the company did not receive an anticipated follow-on order
during the quarter for its TG-6000 inertial measurement units, which are used
in the MK54 torpedo program, due to ongoing negotiations between the U.S. Navy
and the prime contractor. Finally, the challenging macroeconomic conditions,
especially in the recreational vehicle market, increasingly constrained sales
of KVH's mobile satellite products with a pronounced impact in the final weeks
of the quarter.
Looking ahead to the remainder of the year, larger-scale revenue shipments
of KVH's fiber optic gyros for use in remote weapon stations are expected to
begin in October. In addition, the company anticipates receiving the follow-on
order for TG-6000 systems and beginning shipments during the fourth quarter.
Although economic conditions will continue to be a challenge, the company
expects to see year-over-year revenue growth and profitable results for the
fourth quarter. The company's revenue expectations for the full year are now
lowered by the amount of the shortfall in the third quarter.
KVH's third quarter closed on September 30, 2008, and all statements in
this release reflect a preliminary analysis of the company's quarterly
financial results. The company expects to release its third quarter 2008
results on October 21, 2008.
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.
This press release contains forward-looking statements that involve risks
and uncertainties. For example, forward-looking statements include statements
regarding our financial goals for future periods, 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: further delays in customers' qualification processes for
our products or other delays in shipping; the risk that we may not receive
expected orders; competitors' products and services; delays or an inability to
expand coverage of the mini-VSAT Broadband service to new regions; the
unpredictability of order timing, purchasing schedules and priorities for our
defense products; order cancellations or unexercised options, particularly for
longer-term defense orders; weakened consumer demand for our products and
services, especially at the more price sensitive low end of our product
offerings; and the impact of worsening general economic conditions, such as
increases in fuel prices, on the sale and use of motor vehicles and marine
vessels. 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 8, 2008. 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
KVH is a registered trademark of KVH Industries, Inc.