KVH losses higher than expected
MIDDLETOWN, R.I. – Preliminary indications are that KVH Industries, Inc., (Nasdaq: KVHI) will report revenue of approximately $18 million for the first quarter of 2009, ended March 31, compared to revenue of $23.1 million in the year earlier period, the company reported in a recent statement.
Due to the revenue shortfall, the company’s preliminary estimate is that it will report a loss of roughly $0.18 per share for the first quarter, below its original expectations of a more modest loss. In the first quarter of 2008, KVH reported net income of $1.6 million or $0.11 on a per-diluted share basis.
The company’s prior guidance anticipated that first quarter 2009 revenue would be approximately 10-percent lower than the same period last year. However, the declining macro-economic conditions during the first quarter and their impact on sales of boats, cars and recreational vehicles affected the sale of KVH’s mobile satellite television products to the leisure markets, the company stated.
The reduction in sales of KVH’s TracVision products for new leisure vessels and vehicles accounted for the majority of the decline in company revenues, it said. Illustrating the challenges faced in the leisure market, two leading recreational vehicle manufacturers that sold KVH products as factory-installed options declared bankruptcy during the first quarter, the company pointed out. Sales of the TracPhone V7 and mini-VSAT Broadband service to the commercial maritime market along with sales of military products appear to have met the company’s expectations for the quarter, according to KVH.
Recently, the company also received significant orders for its military and commercial products, much of which are expected to begin shipping in the second quarter, KVH reported. Taking these orders into account along with the company’s prior backlog, the company expects that its second quarter results will be sequentially better than those for the first quarter of 2009. Nevertheless, economic conditions continue to be a significant challenge and make it a difficult environment in which to project performance, the company stated.
The company expects to release its first quarter 2009 results on April 23.
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