July 23, 2008
Knobias Clip Report (07-22-2008) KVHI
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Submitted By Knobias ClipReport
KVHI: Management Discusses Q2 Results and FY08 Expectations
By Fain Hughes, fhughes@knobias.com
Shares of KVH Industries, Inc. (KVHI) were weaker on Tuesday after the Company reported financial results for the second quarter ended June 30, 2008. Revenue for the second quarter of 2008 was $22.3 million, down 4% from the second quarter ended June 30, 2007. Net income for the quarter was a record $2.0 million or $0.14 per share. During the same period last year the Company reported net income of $1.5 million, or $0.10 per share. Analysts had expected net income of $0.11 per share.
KVH’s President and CEO, Martin Kits van Heyningen, commented in a conference call today, “Despite challenging economic conditions, we achieved solid top line results and earned record profits during the second quarter, as our long term strategic growth drivers began to hit their stride. Emerging revenue sources enabled us to meet or beat our expectations despite challenges in some markets.”
CFO Patrick Spratt, added, “These financial results were gratifying given the economic conditions. Revenue in Q3 should grow nicely year-over-year and be in the approximate range of $19 million to $20.5 million. We expect gross margins between 38%-39%. Q3 operating expenses should be at or below Q2. We expect Q3 EPS of approximately $0.01 to $0.05 per share. For FY08, we have lowered our revenue expectations to growth of about 10%. This is a direct result of much lower expectations for satellite TV system sales into land markets and a more cautious outlook for leisure marine TV sales. We expect full year gross margins to be slightly above 40% and operating margins between 5% and 6%. We expect this to result in FY08 EPS of $0.36, which would be more than double the 2007 earnings per diluted share of $0.17.”
Mr. Kits van Heyningen concluded, “We are well-positioned for the future. Growth in our strategic business areas is allowing us to ‘weather’ the current economic climate. We are looking forward to new revenue streams having an increasingly positive impact as we move through the second half of 2008. We see revenue growth accelerating with earnings growth following suit in the second half of this year.”
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