April 19, 2007: KVH
Industries, Inc., (Nasdaq: KVHI) reported quarterly revenue
$20.4 million, slightly above the $20.3 million Q1/06 level.
Despite the growth in revenue, the company's income was just
at break even point reflecting the transition the company is
making into broader, system-wide product lines. Defense-related
sales, including those for KVH’s TACNAV
military navigation systems and fiber optic gyro (FOG) solutions,
were approximately $4.3 million, down 27% on a year-over-year
continued to build our long-term military business with a major
increase in the value of our multi-year contracts,” said
Martin Kits van Heyningen, KVH’s president
and chief executive officer. “Sales of our fiber optic
gyro products remained very strong, up 53% compared to the same
period last year, though overall, our defense-related sales
were down significantly due to an anticipated decline in TACNAV
navigation system sales on a year-over-year basis.
In the last 90 days, however, we have added more than $20 million
in new TACNAV contracts along with approximately $3 million
in FOG contracts that will contribute to our revenue stream
in 2007 and later years,” he concluded. Patrick
Spratt, KVH’s chief financial officer indicated
that the company's rebuilding its military navigation backlog
and introduction of new products contributed to achieving only
a modest level of profit. "Gross margin was impacted by
new product start-up expenses, some product mix changes within
the quarter, and the conversion to more advanced component technology
- these factors are mostly specific to the first quarter"
Said Spratt, indicating that a healthy improvement in gross
margin is expected for the second quarter this year. "We
believe that we have strengthened our position in our markets
and anticipate improvement in net profit in the quarters ahead."