KVH profit plummets in 2011

By Kimberley Donoghue
PBN Web Editor
Twitter: @kdonog

MIDDLETOWN – KVH Industries Inc.’s net income plummeted to $860,000 in 2011, or 6 cents per diluted share, from $8.3 million, or 56 cents per diluted share, a year earlier.

The manufacturer of broadband, sensor, and guidance and stabilization systems said its revenue for the year increased slightly to $112.5 million from $112.2 million a year earlier.

“We will continue to be cautious with respect to expectations for growth in leisure markets, due to ongoing challenges in global economies. We see a decline in TACNAV sales because of the unusually large volume of shipments in the fourth quarter of 2011, and the fact that we have not yet received certain foreign military orders,” said Patrick Spratt, KVH’s chief financial officer, in a news release Monday.

“With this context, we expect total top line growth for the year to be in the range of 10 percent to 15 percent, and we expect to achieve a full year operating margin of approximately 5 percent,” he said, while noting that in the first half of 2012, the company expects to launch the new TracPhone V11 and global C-band airtime service. “This will put some additional pressure on margins during the first half of the year, but we expect them to begin to recover once product shipments begin. We project our effective tax rate could be 38 percent or higher, and as always, could be subject to the effect of unforeseen discrete events.”

KVH also reported fourth-quarter results, during which revenue increased to $31.9 million, up 18 percent when compared with the fourth quarter 2010. Net income was $1.6 million, or 11 cents per diluted share, compared with $200,000, or 2 cents per diluted share.