SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1998
Commission file number: 0-28082
KVH Industries, Inc.
(Exact name of Registrant as Specified in its Charter)
Delaware 05-0420589
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 Enterprise Center, Middletown, RI. 02842
(Address of principal executive offices)
(401) - 847 - 3327
(Registrant' telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No __
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date.
Date Class Outstanding shares
October 7, 1998 Common Stock, par value $0.01 per, share 7,075,067
KVH INDUSTRIES, INC. AND SUBSIDIARY
INDEX
Page No.
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheets as of September 30, 1998 and
December 31, 1997 ....................................... 3
Consolidated Statements of Operations for the three and
nine months ended September 30, 1998 and 1997 ........... 4
Consolidated Statements of Cash Flows for the
nine months ended September 30, 1998 and 1997 ........... 5
Notes to Consolidated Financial Statements .............. 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS ........... 7
PART II.OTHER INFORMATION ....................................... 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ........................ 11
SIGNATURES ...................................................... 11
Part I. Financial Information
Item 1. Financial Statements.
KVH INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
September 30, 1998 December 31, 1997
(Unaudited) (Audited)
Assets:
Current assets:
Cash and cash equivalents $ 960,654 4,757,614
Accounts receivable, net 4,951,349 4,338,992
Contract receivables -- 156,777
Costs and estimated earnings in excess of billings
on uncompleted contracts 1,057,056 406,014
Inventories 4,645,177 4,751,792
Prepaid expenses and other deposits 346,521 222,015
Deferred income taxes 1,077,414 387,567
---------- ----------
Total current assets 13,038,171 15,020,771
---------- ---------
Property and equipment, net 7,149,278 5,974,635
Other assets, less accumulated amortization 892,964 731,000
Deferred income taxes 78,535 78,535
---------- ----------
Total assets $21,158,948 21,804,941
=========== ==========
Liabilities and stockholders' equity:
Current liabilities:
Current lease obligation -- 7,278
Accounts payable 1,781,858 1,618,295
Accrued expenses 985,890 960,488
Customer deposits -- 25,068
---------- ----------
Total current liabilities 2,767,748 2,611,129
---------- ----------
Stockholders' equity:
Common stock 71,494 70,860
Additional paid-in capital 15,381,224 15,298,558
Retained earnings 2,938,482 3,824,394
---------- ----------
Total stockholders' equity 18,391,200 19,193,812
---------- ----------
Total liabilities and stockholders' equity $21,158,948 21,804,941
=========== ==========
See accompanying notes to consolidated
financial statements.
Item 1. Financial Statements.
KVH INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
---------------- ---------------- --------------- ----------------
Net sales $ 5,307,323 7,025,976 15,906,164 18,712,814
Cost of sales 3,142,975 3,479,079 10,221,027 9,908,852
---------------- ---------------- --------------- ----------------
Gross profit 2,164,348 3,546,897 5,685,137 8,803,962
Operating expenses:
Research & development 908,266 826,906 2,941,186 2,068,127
Sales & marketing 883,193 866,709 3,158,416 2,596,449
Administration 433,999 492,537 1,697,951 1,338,760
---------------- ---------------- --------------- ----------------
(Loss) income from operations (61,110) 1,360,745 (2,112,416) 2,800,626
Other (expense) income:
Other (expense) income (39,487)
102,897 5,890 92,778
Interest income -
84,156 47,673 270,431
Foreign currency gain
67,393 47,664 176,475 54,125
---------------- ---------------- --------------- ----------------
(Loss) income before income tax
(benefit) expense (33,204) 1,595,462 (1,882,378) 3,217,960
Provision for income tax (benefit)
expense (291,293) 576,663 (996,466) 1,193,001
================ ================ =============== ================
Net income (loss) $ 258,089 1,018,799 (885,912) 2,024,959
================ ================ =============== ================
Per share information:
Income (loss) per share
Basic $ 0.04 0.14 (0.12) 0.29
Diluted $ 0.04 (0.12)
0.14 0.27
Number of shares used in per share calculation:
Basic 7,143,916 7,054,040 7,113,545 6,996,681
Diluted
7,304,790 7,523,790 7,113,545 7,466,596
See accompanying notes to consolidated financial
statements.
Item 1. Financial Statements.
KVH INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
1998 1997
----------------- ----------------
Cash flow from operations:
Net (loss) income $ (885,912) 2,024,959
Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities:
Depreciation and amortization 571,051 525,042
Provision for deferred taxes (689,847) -
Decrease (increase) in accounts and contract receivables (455,580) 2,541,761
(Increase) decrease in costs and estimated earnings in
excess of billings on uncompleted contracts (651,042) 152,919
Decrease in inventories 106,615
220,174
Increase in prepaid expenses and other deposits (124,506) (12,232)
Increase (decrease) in accounts payables 163,563 (5,686)
Increase (decrease) in accrued expenses 25,402 (253,518)
Decrease in customer deposits (25,068) (2,527,500)
----------------- ----------------
Net cash (used in) provided by operating activities (1,965,324) 2,665,919
----------------- ----------------
Cash flow from investing activities:
Capital expenditures (1,653,815) (1,800,446)
Increase in other assets (253,843) -
----------------- ----------------
Net cash (used in) investing activities: (1,907,658) (1,800,446)
----------------- ----------------
Cash flow from financing activities:
Repayments of obligations under capital lease (7,278) (42,680)
Proceeds from exercise of stock options 83,300 76,730
----------------- ----------------
Net cash provided by financing activities 76,022 34,050
----------------- ----------------
Net (decrease) increase in cash and cash equivalents (3,796,960) 899,523
----------------- ----------------
Cash and cash equivalents beginning of period 4,757,614 7,005,682
Cash and cash equivalents end of period $ 960,654 7,905,205
================= ================
Supplement disclosure of cash flow information
Cash paid during the period for interest
$ 867 6,972
Cash paid during the period for income tax $ 137,297 1,512,049
See the accompanying notes to consolidated
financial statements.
Item 1. Financial Statements.
KVH INDUSTRIES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
September 30, 1998 and 1997
(Unaudited)
(1.) The accompanying consolidated financial statements of KVH Industries,
Inc. and subsidiary (the "Company") for the three-and nine-month
periods ended September 30, 1998 and 1997 have been prepared in
accordance with generally accepted accounting principles and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. The
consolidated financial statements presented have not been audited by
independent public accountants, but include all adjustments
(consisting of only normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the
financial condition, results of operations and cash flows for such
periods. These consolidated financial statements do not include all
disclosures associated with annual financial statements and
accordingly should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's
Annual Report on Form 10-K dated March 25, 1998 as filed with the
Securities and Exchange Commission, a copy of which is available from
the Company upon request. The results for the three and nine months
ended September 30, 1998 are not necessarily indicative of the
operating results for the remainder of the year.
(2.) Inventories at September 30, 1998 and December 31, 1997 include the
costs of material, labor and factory overhead. Inventories are stated
at the lower of cost (first-in, first-out) or market and consist of
the following (in thousands of dollars):
1998 1997
---- ----
Raw materials $ 3,110 $3,243
Work in process 325 356
Finished goods 1,210 1,153
----- ------
$4,645 $4,752
====== ======
Defense project inventories are included in the balance sheet caption
"Costs and estimated earnings in excess of billings on uncompleted
contracts." Defense project inventories amounted to $344,879 and
$39,408 at September 30, 1998 and December 31, 1997, respectively.
Defense contracts provide for project costs reimbursement as costs are
incurred, through monthly invoicing of vouchers or progress billings.
(3.) The third quarter provision for income taxes includes a $433,163 tax
benefit resulting from the realization of research and development tax
credits not previously recognized. The tax refund receivable is
included in the accounts receivable caption appearing on the balance
sheet. Excluding the effect of this benefit, the Company's effective
tax rate for the nine months ended September 30, 1998 is approximately
30%. The difference between the Company's effective tax rate and the
statutory tax rate is due primarily to local statutory restrictions on
the utilization of net operating losses.
(4.) Net income (loss) per common share. The computation of the diluted
loss per share for the nine-month period ended September 30, 1998
excludes the conversion of potential common stock, as the effect would
be antidilutive. See Exhibit 11 for a reconciliation of the weighted
average number of shares outstanding used in the computation of the
basic earnings (loss) and diluted earnings (loss) per common share.
(5.) During the first quarter of 1998 the Company adopted two new
accounting pronouncements, SFAS No. 130 and No. 131. The Financial
Accounting Standards Board ("FASB") recently issued SFAS No. 130,
"Reporting Comprehensive Income." This statement establishes standards
for reporting and display of comprehensive income and its components
in a full set of general-purpose financial statements. This statement
is effective for fiscal years beginning after December 15, 1997, and
requires classification of the financial statements for earlier
periods provided for comparative purposes. The effect of the adoption
of SFAS No. 130 did not have a material impact on the Company's
financial condition, results of operations or cash flows. The
Financial Accounting Standards Board recently issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information."
This statement establishes standards for the way that public business
enterprises report information about operating segments in annual
financial statements and requires that those enterprises report
selected information about operating segments in interim financial
reports issued to shareholders. This statement supercedes SFAS No. 14,
"Financial Reporting for Segments of a Business," but retains the
requirement to report information about major customers. This
statement also amends SFAS No. 94, "Consolidation of Majority-Owned
Subsidiaries." This statement is effective for financial statements
for periods beginning after December 31, 1997 and requires that
comparative information for earlier years be restated for comparative
purposes. The effect of the adoption of SFAS No. 131 did not have a
material impact on the Company's financial condition, results of
operations or cash flows.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
"Safe Harbor" statement under the Private Securities Litigation Reform Act
of 1995.
With the exception of historical information, the matters discussed in
this Quarterly Report on Form 10-Q include certain forward-looking
statements that are subject to certain risks and uncertainties that could
cause actual results to differ materially from those stated. These
forward-looking statements reflect management's opinions only as of the
date hereof, and KVH Industries, Inc. (the Company) assumes no obligation
to update this information. Risks and uncertainties include, but are not
limited to, those discussed in the section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Forward Looking Statements - `Risk Factors.'" Shareholders of the Company
are cautioned not to place undue reliance on forward-looking statements
made in the Quarterly Report on Form 10-Q. This report should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K dated March 25, 1998
and Quarterly Reports on Form 10-Q for the first and second fiscal
quarters of 1998 ended March 31, 1998 and June 30, 1998, respectively.
These reports are filed with the Securities and Exchange Commission and
copies are available from the Company upon request and through the
Company's web site at http://www.kvh.com.
Results of Operations
Overview - The Company develops manufactures and markets digital
navigation, fiber optic sensor and mobile satellite communications
products for commercial, military and recreational marine applications.
Products developed by the Company provide accurate, real-time heading,
orientation and position data and are based on the Company's proprietary
sensor technology and autocalibration and applications software. At its
inception in 1982, the Company introduced the world's first commercial
digital fluxgate compass. The Company focused primarily on commercial
marine navigation product development until 1985 when the U.S. military
first used its compasses. In 1991, the Company combined its sensor and
autocalibration technologies to create a tactical navigation system for
U.S. land military vehicles in the Persian Gulf War. The Company entered
the mobile satellite communications market in 1993 with the introduction
of an active-stabilized antenna-aiming system that delivers mobile
reception of television services covering North America and Europe and
fax, voice and data communications worldwide via Inmarsat-3 mini-M
satellites. The Company markets its integrated communications systems
directly to end-users in a shift from its earlier emphasis on sales to
systems integrators such as American Mobile Satellite Corporation
("AMSC"). Recognizing that the need for new market opportunities required
advanced technology capabilities, the Company acquired the assets of
Andrew Corporation's fiber optic research group in 1997. As a result of
the acquisition, the Company is expanding its markets, selling OEM fiber
optic gyroscopes (FOGs) and integrating FOGs with existing product lines,
particularly in defense navigation, to create enhanced systems with
broader market potential.
Net (loss) income and diluted (loss) earnings per share - Net income
(loss) and diluted earnings (loss) per share for the three-and nine-month
periods ended September 30, 1998 and 1997 were $258,089 and ($885,912) or
$0.04 and $(0.12) per share, respectively, in 1998 and $1,018,799 and
$2,024,959 or $0.14 and $0.27 per share, respectively, in 1997. The
Company's operating losses, to a large extent, result from the Company's
decision to withdraw from the FOG-based vehicle navigation market to focus
on markets that the Company believes have greater revenue potential.
Withdrawal from the vehicle navigation market and an unexpected lag in OEM
sales relative to internal forecasts combined to produce lower FOG product
revenues
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
and higher operating losses than anticipated for the quarter. The Company
believes that there is a strong demand for high-accuracy, FOG-based
products in the military sector and is continuing to spend research and
development funds to accelerate the integration of fiber optic technology
into its defense product offerings. The Company anticipates that reduced
FOG revenues and fixed FOG operating costs over the next 9 to 12 months
will continue to adversely affect financial results, and with the
restructuring of FOG operations not yet complete, the Company cannot
quantify the total costs associated with this acquisition and integration
at this time. The steps that the Company has taken to reduce the financial
impact of this intense research and development effort include, but are
not limited to: staff reductions and reallocations; outside sourcing
evaluations; improved operational efficiencies; inventory reduction;
recruiting key personnel and implementing cost controls. As a result of
staff reductions and other cost savings instituted by the Company to
reduce losses, operating spending decreased from the second quarter of
1998 by 25% or $760,594. The Company will continue to explore all avenues
for cost savings to further reduce spending from current levels.
Net sales - Quarterly net sales were $5,307,323, a 24% decrease when
compared with last year's third quarter revenues of $7,025,976. Nine-month
1998 sales amounted to $15,906,164, a decrease of 15% from the comparable
period of the prior year. The 1998 third-quarter and the year-to-date
sales decreases were due to a forecast defense sales decline of over 40%,
the withdrawal from the vehicle navigation market and lower than
anticipated communication product sales. Year-to-date sales declines were
offset somewhat by an 9% year-to-year growth in communications product
sales. Communications sales growth was less than anticipated because the
Company temporarily suspended development of TracVision Galaxy and
projected revenues from the system did not occur. Field testing of
TracVision Galaxy revealed that satellite service to the targeted South
American market did not meet expectations and the Company determined that
market potential was significantly reduced.
Gross profit - Gross profit is comprised of revenues less the cost of
materials, direct labor, manufacturing overheads and warranty costs. Gross
profit decreased by $1,382,549 and $3,118,825 in the third quarter and for
the first nine months of 1998, respectively, when compared with the three-
and nine-month periods of 1997. Third quarter 1998 gross profit as a
percentage of net sales was 41%, a decrease from 50% of net sales in the
third quarter of 1997. Nine-month 1998 gross profit as a percentage of net
sales was 36% while in the comparable period of 1997 gross profit
represented 47% of net sales. Gross profit decreases as a percentage of
sales are the result of three factors: the impact of lower sales volumes,
a sales shift towards lower margin communications products and the
addition of fixed fiber-optic sensor manufacturing overhead spending in a
period of declining fiber optic sales.
Operating expenses - Research and development expense increased to
$908,266 and $2,941,186 in the three- and nine-month periods ended
September 30, 1998, representing increases of 10% and 42%, respectively,
over comparable periods of the prior year. Research spending increases are
due to the addition of fiber optic research costs associated with the
integration of FOG sensors into the Company's military products. Sales and
marketing expense increased to $883,193 and $3,158,416 in the third
quarter and first nine months of 1998, respectively, a 2% and 22% increase
from comparable periods of 1997. The growth in marketing and sales costs
is due to the launch of new products, staffing increases and international
marketing costs. General and administrative expense decreased $58,538 and
increased $359,191 in the third quarter and first nine months of 1998,
respectively, when compared with the same periods in 1997. General and
administrative cost decreases reflect staff reductions and increases are
attributable to higher-than-anticipated FOG patent fees. Despite
year-to-year cost increases, overall operating expenses decreased in the
recent third quarter to $2,225,458 from $2,986,052 in the 1998 second
quarter, with reductions of 25% and 31% in sales and marketing and
administration, respectively.
Other income (expense) - Other income (expense) is made up of interest
income and expense, other income and expense and foreign currency
translation gains and losses.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Income tax expense (benefit) - The third-quarter income tax includes a
$433,163 benefit resulting from the realization of research and
development tax credits available to the company.
Liquidity and capital resources
Working Capital - Working capital decreased by approximately $2,139,219 in
the first nine months of 1998 from December 31, 1997. Cash and cash
equivalents were $960,654 and $4,757,614 at September 30, 1998 and
December 31, 1997, respectively. The decrease in capital resources
reflects the net operating loss experienced in the first nine months of
1998, additions to leasehold improvements and the purchase of a year
2000-compliant computer system.
On September 29, 1998, the Company renewed a $2.5 million revolving line
of credit facility with its bank that requires the Company to meet certain
operating requirements as of December 31, 1998, and June 30, 1999. At June
30, 1999 the bank credit facility will be eligible for renegotiation and
renewal consideration. If the operating requirements are not met, it is
possible that the bank may adversely alter the terms of the line of
credit. The Company also has access to cash flow by mortgaging or selling
the corporate headquarters land and building located in Middletown, RI,
and it is actively exploring these options.
Capital expenditures - Fixed assets purchases amounted to $1,653,815 in
the first nine months of 1998. Fixed asset acquisitions are primarily
leasehold improvements to meet the specialized demands of FOG
manufacturing and the purchase of a year 2000-compliant computer system.
The Company believes that existing cash balances and amounts available
under its revolving bank borrowing facility will be sufficient to fund
operations and planned capital expenditures.
Other Matters
Year 2000 - The Company has evaluated the impact of the year 2000 issue as
it relates to its navigation and communications products,and has concluded
that products sold or, yet to be sold, are not affected by the year 2000
issue. The Company has assessed all systems, both software and computer
systems ensuring that its computer software and hardware are year 2000
compliant. The most significant element of this process is the
upgrading of its enterprise resource planning system at a cost estimated
at less that one million dollars, of which $324,865 has been spent to
date. The Company is contacting its customers, suppliers, and financial
institutions, with which it does business, to ensure that any year 2000
issue is resolved. While there can be no assurance that the systems of
other companies will be year 2000 compliant, the Company has no knowledge
of any such third party year 2000 issues that would result in a material
adverse affect on its operations. Should the Company become aware of any
such situation, contingency plans will be developed. The Company estimates
that its own computer systems will be substantially year 2000 compliant by
the first quarter of 1999. The Company believes that the cost of becoming
a year 2000 compliant company will not adversely effect the Company's
financial condition, results of operations or liquidity. The Company
could be adversely affected should the Company or other companies with
which the Company does business be unsuccessful in completing year 2000
modifications in a timely manner.
Inflation - The Company believes that inflation has not had a material
effect on the results of its operations.
Recent Accounting Pronouncements - The Financial Accounting Standards
Board ("FASB") recently issued Statement of Financial Standards Number 133
("SFAS 133"), "Accounting for Derivative Instruments and Hedging
Activities." This statement establishes accounting and reporting standards
for derivative instruments and hedging, requiring recognition of all
derivatives as either assets or liabilities in the statement of financial
position measured at fair value. This statement is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. The effect
of adopting SFAS 133 is not expected to have a material impact on the
Company's financial condition, results of operations or cash flows.
Forward Looking Statements - "Risk Factors"
The Company's products target two industries that are subject to
volatility, risks and uncertainties. The communications industry is
experiencing rapid growth fueled by strong worldwide demand and buffeted
by competing formats and rapid, unpredictable technology changes. The
defense industry historically experience variability in supply and demand
related to international conditions, national politics, budget decisions
and technology changes, all of which are difficult or impossible to
predict. Factors in both industries could affect the Company's ability to
effectively meet prevailing market conditions. To position itself in these
uncertain industries, the Company has taken a number of steps that
include, but are not limited to: acquisition of the fiber optic technology
and development of new related products; ongoing analysis of potential
technology advances; staff reductions and reallocations; improved
operational efficiencies; inventory reduction; recruiting key personnel
and implementing cost controls. There can be no assurance that the
objectives of these development and cost-reduction activities will be
achieved.
Other factors that could cause actual results to differ materially from
the results anticipated by management include:
Dependence on New Products and the Marine Mobile Satellite Communications
Market - The Company's future sales growth will depend to a considerable
extent upon the successful introduction of new mobile satellite
communications products for use in marine and land applications, and those
introductions will be affected by a number of variables including, but not
limited to: market potential and penetration; reliability of outside
vendors; satellite communications service providers' financial abilities
and products; regulatory issues; maintaining appropriate inventory levels;
disparities between forecast and realized sales and design delays and
defects. The occurrence of any of these factors would have a material
adverse effect on the Company's business, financial condition and results
of operations.
FOG Acquisition - The additional personnel and operating expenses
associated with the FOG asset acquisition has added significant costs to
the Company's 1998 operations and will continue to do so in 1999. The
Company is in the process of designing FOG sensors into the company's
current product offerings and identifying new, untapped markets for
existing FOG products. Although these opportunities show great promise, to
date the Company has been successful in marketing only small quantities of
products and it does not anticipate that FOG-enhanced products will
provide significant revenues for the next 9 to 12 months. The Company is
designing its FOG-enhanced products to meet customer performance and price
criteria; however, at this early stage of product development and market
introduction the Company can provide no assurance that these objectives
will be met or that competing technologies will not be developed that may
supercede FOG technology. The occurrence of any of these factors would
have a material adverse effect on the Company's business, financial
condition and results of operations.
Variability of Quarterly Operating Results - The Company's quarterly
operating results have varied in the past and may vary significantly in
the future depending upon all the foregoing risk factors and including:
the size and timing of significant orders; the ability of the Company to
control costs; changes in Company strategy and the Company's ability to
attract and retain key personnel.
Competition - Competitors in the communications market include SeaTel
Corporation, Datron Corporation and Nera Corporation, any of which could
challenge the Company's pricing or technology platforms. The Company's
satellite phone products could be negatively impacted when Iridium,
Globalstar and ICO (all offering hand-held worldwide, satellite voice,
data and fax services) commence operations, scheduled from late 1998
through to 2000. The Company may be faced with increased competition from
the Hitachi Corporation's newly introduced FOG sensor that is targeted at
applications and market segments similar to those the Company is pursuing.
Possibility of Common Stock Price Volatility - The trading price of the
Company's Common Stock has been subject to wide fluctuations. The trading
price of the Company's Common Stock could be subject to wide fluctuations
in the future in response to quarterly variations in operating results,
announcement of new products by the Company or its competitors, changes in
the financial estimates by securities analysts and other events or
factors. In addition, the stock market has experienced volatility that has
affected the market price of many high technology companies that has often
been unrelated to the operating performance of such companies. These broad
market fluctuations may adversely affect the market price of the Company's
Common Stock.
Part II. Other Information
Item 1. Legal Proceedings.
None
Item 6. Exhibits and reports on Form 8-K.
1. Exhibit 11 - Computation of Earnings Per Common Share: Three and Nine
Months Ended September 30, 1998 and 1997.
2. Exhibit 27 - Financial Data Schedule: Nine Months Ended September 30, 1998.
3. Noreports on Form 8-K were filed during the quarter for which this
report was filed.
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, thereunto duly authorized.
KVH Industries, Inc.
By: /s/ Richard C. Forsyth
Richard C. Forsyth
(Chief Financial and Accounting Officer)
Date: October 23, 1998