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SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 |
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Delaware
(State or Other Jurisdiction of Incorporation) |
0-28082
(Commission File Number) |
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05-0420589 |
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50 Enterprise Center
Middletown, RI (Address of Principal Executive Offices) |
02842
(Zip Code) |
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Registrant’s
telephone number, including area code: (401) 847- 3327
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We are filing this amended Form 8-K/A to reclassify information previously reported on Form 8-K dated October 16, 2003 under Item 5, "Other Events," as information reportable under Item 12, "Results of Operations and Financial Condition." The information reported under Item 12 shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section unless we specifically incorporate that information by reference in a later filing. ITEM 5. OTHER EVENTS None. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The information in this Current Report on Form 8-K/A, including the attached press release, is being furnished, and not filed, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. The information in this Current Report on Form 8-K/A is not subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended. KVH Industries, Inc. does not intend the information in this Current Report on Form 8-K/A to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing. This Current Report on Form 8-K/A includes forward-looking statements that reflect the registrant's current expectations about its future performance, including statements concerning market investments, sales and earnings. These forward-looking statements rely on a number of assumptions and estimates that could be inaccurate and which are subject to risks and uncertainties. Actual results could vary materially from those anticipated or expressed in any forward-looking statement made by the registrant. Please refer to the registrant's most recent Annual Report on Form 10-K and subsequent filings for a further discussion of these risks and uncertainties. The registrant disclaims any obligation or intent to update the forward-looking statements in order to reflect events or circumstances after the date of this Current Report on Form 8-K/A. The following exhibit is furnished with this report on Form 8-K/A: Exhibit No. Description 99 Press Release SIGNATURES Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| Date: October 21, 2003 |
BY: /S/ Patrick J. Spratt
—————————————— Patrick J. Spratt Chief Accounting & Financial Officer |
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FOR IMMEDIATE RELEASE
PRESS RELEASE
KVH Industries Contact: Pat Spratt, Chief Financial Officer
401-847-3327
Investor Relations Contact: Financial Dynamics
Jolinda Taylor, 617-747-3600
Paul Johnson, 212-850-5600
KVH INDUSTRIES ANNOUNCES RESULTS FOR THE THIRD QUARTER
- - Quarterly Revenues of $13.5 Million; Loss of $0.01 Per Share
- - Satellite Communications Revenues Up 44%
MIDDLETOWN, RI - October 16, 2003 - KVH Industries Inc., (Nasdaq: KVHI), a
leading provider of mobile satellite communications products and defense-related
navigation and guidance systems, today reported its results for the third
quarter ended September 30, 2003. Revenue for the period was $13.5 million, up
9% from $12.4 million for the third quarter ended September 30, 2002. Net loss
for the period was ($0.16) million, or ($0.01) per share. By comparison, KVH
recorded a net profit of $0.15 million, or $0.01 per diluted share, during the
same period last year.
For the nine months ended September 30, 2003, revenue increased 18% to $41.0
million from $34.7 million for the nine months ended September 30, 2002. KVH
also reported a net profit of $0.5 million or $0.04 per diluted share for the
period, versus a net loss of ($1.8) million, or ($0.16) per share in the prior
year.
"During the third quarter, sales in our existing satellite markets were strong
while our overall growth was moderate," explained Martin Kits van Heyningen,
KVH's president and chief executive officer. "A delayed military order from an
existing customer led to a greater-than-anticipated decline in military sales
and a drop in margins and earnings. Even so, KVH strengthened its competitive
and strategic position in each of its markets through new product
introductions."
Overall, the company's satellite products generated year-over-year revenue
growth of 44% for the third quarter, with revenue of $9.1 million. Sales of
defense-related solutions declined 40% compared to the same period last year on
revenue of $2.6 million. Year over year, third quarter sales of fiber optic
products were up 1% on revenue of $1.2 million while sales of KVH's legacy
products, which include OEM sensors and marine navigation systems, declined
approximately 7% for the quarter on revenue of $0.6 million.
"The third quarter of this year marked a major strategic achievement for KVH as
we began shipping our TracVision A5 satellite TV antenna," Mr. Kits van
Heyningen said. "KVH is the first company in the world to develop, produce, and
ship a low-profile in-motion phased array antenna that brings live satellite TV
to consumers in SUVs and mini-vans nationwide. As the first to market, we have
an excellent opportunity to secure a strong and lasting competitive position in
the automotive multimedia market."
Commenting on the company's defense-related business, Mr. Kits van Heyningen
remarked, "Achieving the `M100 Ground Mobility Enhanced Navigation System'
standard Army designation for our TACNAV Light system is invaluable to our
efforts to equip U.S. and allied forces with the precision vehicle navigation
necessary on the modern field of battle. At the same time, the acceptance of our
new TG-6000 IMU for production in the U.S. Navy Mark 54 torpedo illustrates how
we have successfully applied our fiber optic technology for use in
high-performance, integrated systems like smart munitions. These two systems are
already enabling us to pursue a variety of new business opportunities."
With regard to the company's financial results, Pat Spratt, chief financial
officer, said, "The third quarter was a period of significant transition for the
company. We continued to see operating improvements in our core businesses and
in overall asset utilization. The low level of defense revenue and the
introduction of the TracVision A5, however, presented some financial challenges.
Gross margin for the quarter declined to 43%, down from 45% last year. The
delayed military order and the high startup and early volume production costs
for the TracVision A5 contributed to this greater-than-anticipated decline.
Operating expenses, measured as a percentage of quarterly revenue, rose to 45%
compared to 43% in the third quarter of 2002. This reflects the effect of
variable sales and marketing expenses associated with the very strong satellite
communications sales growth and the initial steps to launch the TracVision A5.
Inventory was $2.2 million higher than at the end of the second quarter of 2003
primarily to support the startup of TracVision A5 production. As a result,
inventory turns were approximately six per year. Cash declined $0.8 million
during the quarter."
The company recorded a one-time net tax adjustment of approximately $235,000 to
reflect a benefit for the recovery of prior taxes paid that resulted from the
favorable outcome of an IRS audit of the company's income tax returns for the
periods 1996-1998.
Mr. Spratt cautioned, "Our expectations for the fourth quarter are based upon
the presumption that we will book and ship a variety of military business, a
substantial percentage of which is not yet in-hand. However, as we just
experienced in the third quarter, the timing of new orders is always subject to
procurement issues and shifts in near-term military priorities."
Mr. Kits van Heyningen concluded, "Looking ahead to the fourth quarter, I
believe that we will see strong year-over-year revenue growth in the range of
30% to 50% for the quarter, driven largely by sales of the TracVision A5 and our
other satellite products. We expect fourth quarter earnings to show only a small
profit, as a result of both the continuing lower percentage of military sales
and the low initial TracVision A5 margins. Those margins should improve over the
next several quarters as a result of a detailed program already underway that is
designed to bring the cost of the TracVision A5 in line with our existing land
mobile satellite products."
RECENT HIGHLIGHTS:
o On September 4, 2003, U.S. Army Special Operations Command certified
the KVH TACNAV Light tactical navigation system as a standard Army
system and assigned it the designation "M100 Ground Mobility Enhanced
Navigation System". This paves the way for the M100 to be fielded by
any U.S. Army vehicle program.
o On September 24, 2003, KVH began retail shipments of its TracVision A5
low-profile, in-motion satellite TV system for SUVs and mini-vans. A
network of more than 740 retailer locations nationwide will provide
sales, installation, and support for the TracVision A5.
o On October 7, 2003, KVH announced that it had received the first
production order for its new fiber optic-based inertial measurement
unit (IMU). The order was placed by Raytheon Integrated Defense
Systems, which expects to use a variant of KVH's recently introduced
TG-6000 IMU as part of the guidance system in the U.S. Navy's
next-generation Mark 54 lightweight torpedoes.
KVH is webcasting its third quarter conference call live at 10:30 a.m. Eastern
Time today through the company's web site. The conference call can be accessed
at http://www.kvh.com/InvRelations. The audio archive also will be available on
the company web site within three hours of the completion of the call.
KVH Industries, Inc., designs and manufactures products that enable mobile
communication, navigation, and precision pointing through the use of its
proprietary mobile satellite antenna and fiber optic technologies. The company
is developing next-generation systems with greater precision, durability, and
versatility for communications, navigation, and industrial applications. 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.
KVH INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
(Unaudited)
September 30, 2003 December 31, 2002
--------------------------- ----------------------
Assets:
Current assets:
Cash and cash equivalents $ 7,572,996 7,239,255
Accounts receivable, net 9,523,479 9,716,292
Costs and estimated earnings
in excess of billings on uncompleted contracts 438,971 377,058
Inventories 6,401,177 3,947,207
Prepaid expenses and other deposits 585,726 587,647
Deferred income taxes 552,871 616,877
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Total current assets 25,075,220 22,484,336
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Property and equipment, net 8,739,411 7,384,888
Other assets, less accumulated amortization 346,707 441,225
Deferred income taxes 2,238,430 2,238,430
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Total assets $ 36,399,768 32,548,879
================ ================
Liabilities and stockholders' equity:
Current liabilities:
Current portion long-term debt $ 96,574 93,262
Accounts payable 4,486,200 2,321,104
Accrued expenses 2,288,895 2,007,470
Customer deposits 31,230 91,665
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Total current liabilities 6,902,899 4,513,501
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Long-term debt 2,531,238 2,603,885
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Total liabilities 9,434,137 7,117,386
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Stockholders' equity:
Common stock 115,297 111,498
Additional paid-in capital 36,208,567 35,134,093
Accumulated deficit (9,358,233 ) (9,818,025 )
Accumulated other comprehensive income - 3,927
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Total stockholders' equity 26,965,631 25,431,493
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Total liabilities and stockholders' equity $ 36,399,768 32,548,879
================ ================
- more -
KVH INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
2003 2002 2003 2002
----------------- ----------------- ----------------- -------------------
Net sales $ 13,514,792 12,435,313 41,017,886 34,718,070
Cost of sales 7,712,109 6,837,186 22,680,578 19,515,902
----------------- ----------------- ----------------- -------------------
Gross profit 5,802,683 5,598,127 18,337,308 15,202,168
Operating expenses:
Research & development 2,140,144 2,230,457 6,565,708 6,996,668
Sales & marketing 2,917,349 2,316,560 8,150,129 7,410,575
Administration 1,082,699 850,191 3,162,317 2,383,123
----------------- ----------------- ----------------- -------------------
Profit (loss) from operations (337,509) 200,919 459,154 (1,588,198)
Other expense:
Other expense (21,892) (16,398) (68,361) (47,054)
Interest expense, net (37,053) (34,578) (115,288) (87,212)
----------------- ----------------- ----------------- -----------------
Profit (loss) before income taxes (396,454) 149,943 275,505 (1,722,464)
Income tax expense (benefit) (235,293) - (184,287) 86,100
----------------- ----------------- ----------------- -------------------
Net profit (loss) $ (161,161) 149,943 459,792 (1,808,564)
================= ================= ================= ===================
Per share information:
Profit (loss) per share
================= ================= ================= ===================
Basic $ (0.01) 0.01 0.04 (0.16)
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Diluted $ (0.01) 0.01 0.04 (0.16)
================= ================= ================= ===================
Number of shares used in per share
calculation
Basic 11,487,900 11,056,374 11,352,489 11,017,596
================= ================= ================= ===================
Diluted 11,487,900 11,356,194 11,845,942 11,017,596
================= ================= ================= ===================
This press release contains certain forward-looking statements that involve
risks and uncertainties. For example, the statements regarding the company's
financial and product development goals for 2003 are forward-looking statements.
The actual results realized by the company could differ materially from the
statements made herein. Factors that might cause such differences include, but
are not limited to: failure to develop and market new products successfully;
lack of reliable vendors, service providers, and outside products; uneven
military sales cycles; unforeseen changes in competing technologies and
products; worldwide economic variances; delays in product cost reduction
efforts, and poor or delayed research and development results. Additional
factors are discussed in the company's 2002 Form 10-K filed with the Securities
and Exchange Commission on March 26, 2003. Copies are available through the
company's Investor Relations department and web site, www.kvh.com. KVH assumes
no obligation to update its forward-looking statements to reflect new
information and developments.
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