By David Ortiz
PBN Staff Writer
MIDDLETOWN – KVH Industries Inc. (Nasdaq: KVHI) today posted a first-quarter profit of $1.6 million, a 28-fold increase from the year-ago period’s $57,000, on revenue that rose 13 percent to $23.1 million. Earnings per diluted share increased to 11 cents from the break-even level of the 2007 first quarter.
Strong sales of the Middletown-based contractor’s new TracPhone V7 satellite communications system were a key contributor to the strong financial performance, the company said.
“We’ve started 2008 on a very strong note, with record first-quarter sales and a significant year-over-year increase in profits,” said CEO Martin Kits van Heyningen. “What is especially gratifying is that we achieved this excellent performance in a tough economic environment.”
Mobile communications revenue rose 13 percent year-over-year to $18.1 million, led by the marine mobile market, in which sales grew “23 percent over the same quarter last year, driven in large part by our new TracPhone V7,” Kits van Heyningen said, adding: “Within the land mobile market, quarterly revenue was down 9 percent, due primarily to a year-over-year decline in sales to the automotive market. Sales of our products into the recreational vehicle market remained on par with last year, despite a reported 33-percent decline in sales of new Class A motorhomes during the first quarter."
Defense-related sales rose 17 percent year-over-year to $5.1 million, “spurred by a substantial increase in TACNAV navigation system sales,” he said. “Throughout the first quarter, we continued to aggressively pursue opportunities for our fiber optic gyros in stabilized remote weapon systems. These efforts were rewarded recently when we received a $6 million order from Kongsberg Defence & Aerospace for our DSP-3100 FOGs, which are expected to start shipping in the third quarter for use in the Protector family of remote weapon stations. This initial order [announced this week] calls for a rapid ramp of product output, and should be substantially complete by the end of this year.”
KVH achieved three significant milestones in the first quarter, Kits van Heyningen said: The company received a major new order for its fiber-optic gyros (FOGs). It entered the in-flight satellite TV entertainment market for commercial airliners, receiving a $20 million antenna development and production contract (READ MORE). And, perhaps most significantly, KVH’s marine revenue rose 23 percent over the same quarter last year, driven in large part by the company’s new TracPhone V7 mini-satellite communications system.
“Demand for this compact, powerful satellite communications system continues to be strong, and we are meeting both our sales and production goals,” Kits van Heyningen said. “With every TracPhone V7, we also enjoy the benefit of the hardware sale along with the recurring monthly airtime service revenue. Based on initial activations, the revenue stream driven by mini-VSAT Broadband airtime is very promising.”
KVH Industries Inc. (Nasdaq: KVHI) is a maker of live mobile media systems and of navigation and guidance systems for defense and civilian use. Additional information is available at www.kvh.com.
