KVH Industries, Inc (KVHI) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $2.86 million, or $ 0.18 a share in the quarter, against a net loss of $0.46 million, or $0.03 a share in the last year period. On an adjusted basis, net profit for the quarter was $4.32 million, when compared with $1.84 million in the last year period.
Revenue during the quarter grew 3.13 percent to $45.85 million from $44.46 million in the previous year period. Gross margin for the quarter expanded 202 basis points over the previous year period to 46.39 percent. Total expenses were 93.43 percent of quarterly revenues, down from 99.54 percent for the same period last year. This has led to an improvement of 611 basis points in operating margin to 6.57 percent.
Operating income for the quarter was $3.01 million, compared with $0.21 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $6.70 million compared with $4.17 million in the prior year period. At the same time, adjusted EBITDA margin improved 524 basis points in the quarter to 14.62 percent from 9.38 percent in the last year period.
“Overall we are pleased with our results for the third quarter, with revenue coming in at the high end of our guidance range, and net income and EPS exceeding our guidance. Our TACNAV® products provided KVH with a strong revenue stream during the quarter and helped to offset the negative impact on revenues of our UK operations, which were adversely affected by the weakness of the British Pound,” said Martin Kits van Heyningen, KVH’s Chief Executive Officer. “Given that we don’t have the anticipated TACNAV orders for Q4 in backlog yet, we are removing them from our Q4 guidance. We still expect these to be awarded and we continue to do work so that we can deliver promptly when we receive the orders.”
For the fourth-quarter, KVH Industries, Inc expects revenue to be in the range of $42 million to $44 million. KVH Industries, Inc expects revenue to be in the range of $174 million to $176 million for financial year 2016. The company projects diluted loss per share to be in the range of $0.01 to $0.06 for the fourth-quarter. For financial year 2016, the company projects diluted loss per share to be in the range of $0.06 to $0.11. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.05 to $0.10 for the fourth-quarter. For financial year 2016, the company projects diluted earnings per share to be in the range of $0.36 to $0.41 on adjusted basis.
Working capital increases marginally
KVH Industries, Inc has recorded an increase in the working capital over the last year. It stood at $69.98 million as at Sep. 30, 2016, up 4.93 percent or $3.29 million from $66.69 million on Sep. 30, 2015. Current ratio was at 2.58 as on Sep. 30, 2016, up from 2.31 on Sep. 30, 2015.
Days sales outstanding went down to 70 days for the quarter compared with 79 days for the same period last year.
Days inventory outstanding has decreased to 40 days for the quarter compared with 76 days for the previous year period.
Debt comes down
KVH Industries, Inc has recorded a decline in total debt over the last one year. It stood at $60.02 million as on Sep. 30, 2016, down 9.38 percent or $6.22 million from $66.24 million on Sep. 30, 2015. Total debt was 28.09 percent of total assets as on Sep. 30, 2016, compared with 28.66 percent on Sep. 30, 2015. Debt to equity ratio was at 0.54 as on Sep. 30, 2016, down from 0.58 as on Sep. 30, 2015. Interest coverage ratio improved to 8.54 for the quarter from 0.57 for the same period last year.
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