KVH Industries, Inc. (Nasdaq: KVHI) reported financial results for
the quarter ended June 30, 2020 today. The company will hold a
conference call to discuss these results at 9:00 a.m. ET today,
which can be accessed at investors.kvh.com. Following the call, a
replay of the webcast will be available through the company’s
website.
Second Quarter 2020
Highlights
- Total revenues from continuing
operations were $36.9 million compared to $39.7 million in the
second quarter of 2019, a 7% decline.
- Revenues for AgilePlans, our
Connectivity as a Service program for the commercial maritime
sector, were up more than 72% compared to the second quarter of
2019.
- AgilePlans, amounted to 72% of
total commercial maritime mini-VSAT Broadband shipments, and 60% of
the total mini-VSAT Broadband shipments for the quarter. AgilePlans
now represent 32% of our mini-VSAT Broadband subscriber
base.
- Our mini-VSAT Broadband airtime
revenue increased $1.1 million, to $20.2 million, or 6%, in the
second quarter of 2020 compared to the second quarter of 2019,
driven primarily by a 6% increase in subscribers and the continuing
success of our AgilePlans and HTS airtime services.
- TACNAV product sales increased $0.8
million in the second quarter of 2020 compared to the second
quarter of 2019 while fiber optic gyro (FOG) product and OEM sales
decreased $0.2 million, or 3% in the second quarter of
2020.
- Net loss from continuing operations
in the second quarter of 2020 was $3.6 million, or $0.20 per share,
compared to a net loss of $3.3 million, or $0.19 per share, in the
second quarter of 2019.
- Non-GAAP net loss from continuing
operations in the second quarter of 2020 was $1.6 million, or $0.09
per share, compared to $1.7 million, or $0.10 per share, in the
second quarter of 2019.
- Non-GAAP adjusted EBITDA from
continuing operations in the second quarter of 2020 was break even,
compared to a loss of $0.9 million in the second quarter of
2019.
Commenting on the quarter, Martin Kits van
Heyningen, KVH’s chief executive officer, said “We made very good
progress on both our core business and strategic initiatives,
despite the ongoing financial and other challenges presented by
COVID-19. We recently introduced and began shipping the P-1775
inertial measurement unit (IMU), the first of our inertial systems
featuring KVH’s new photonic integrated chip (PIC) technology. We
also announced that we received a new international military order
with a net value of more than $10 million for our TACNAV tactical
navigation systems, with all hardware deliveries for the order
scheduled to take place in 2020. Our mobile connectivity subscriber
base and AgilePlans revenues continued to expand, and our airtime
margins improved significantly. In addition, we launched the new
Remote Expert Intervention service as part of KVH Watch target the
growing demand for IoT solutions.
“As was the case for most companies, we entered
the second quarter with significant uncertainty resulting from the
unprecedented global pandemic. We are happy to say, however, that
while we anticipated and prepared for a range of scenarios, both of
our business segments held up well in the face of the global health
and economic challenges. Our mini-VSAT Broadband shipments remained
strong, our airtime revenue continued to grow, our FOG and TACNAV
sales were healthy, our gross margins expanded, and our operating
expenses decreased. As a result, we were able to improve our
adjusted earnings before interest, taxes, depreciation and
amortization. However, the impact of the pandemic on the global
economy remains uncertain. Therefore, we continue to proceed very
cautiously, monitor the overall health of our business closely, and
maintain the cost discipline that we implemented at the end of the
first quarter. At the same time, we continue to execute on the
strategic initiatives that we expect will be the foundation for our
revenue and earnings growth in 2021 and beyond.”
The company has classified the results of the
Videotel business sold in 2019 as a discontinued operation and
therefore Videotel is excluded from the segment information
below.
The company operates in two segments, mobile
connectivity and inertial navigation. In the second quarter of
2020, net sales for the mobile connectivity segment decreased by
$2.3 million compared to the second quarter of 2019. Mobile
connectivity sales decreased primarily due to a $1.5 million
decrease in TracVision product sales, a $0.9 million decrease in
our content service sales, a $0.5 million decrease in our contract
engineering service revenue and a $0.2 million decrease in land
mobile product sales. These decreases were offset in part by a $1.1
million increase in mini-VSAT Broadband airtime revenue. In the
second quarter of 2020, net sales for our inertial navigation
segment decreased by $0.5 million, or 6%, compared to the second
quarter of 2019. Inertial navigation service sales decreased
primarily due to a $1.1 million decrease in contracted engineering
revenue. Partially offsetting this decrease was a $0.6 million
increase in inertial navigation product sales, primarily as a
result of a $0.8 million increase in TACNAV product sales,
partially offset by a $0.2 million decrease in FOG and OEM product
sales.
Financial Highlights - From Continuing
Operations (in millions, except per share data)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
GAAP
Results |
|
|
|
|
|
|
|
Revenue |
$ |
36.9 |
|
|
$ |
39.7 |
|
|
$ |
73.5 |
|
|
$ |
76.1 |
|
Net loss |
$ |
(3.6 |
) |
|
$ |
(3.3 |
) |
|
$ |
(9.8 |
) |
|
$ |
(9.8 |
) |
Net loss per share |
$ |
(0.20 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.56 |
) |
|
$ |
(0.56 |
) |
|
|
|
|
|
|
|
|
Non-GAAP
Results |
|
|
|
|
|
|
|
Net loss |
$ |
(1.6 |
) |
|
$ |
(1.7 |
) |
|
$ |
(5.9 |
) |
|
$ |
(5.5 |
) |
Net loss per share |
$ |
(0.09 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.32 |
) |
Adjusted EBITDA |
$ |
0.0 |
|
|
$ |
(0.9 |
) |
|
$ |
(3.8 |
) |
|
$ |
(3.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For more information regarding our non-GAAP
financial measures, see the tables at the end of this release.
Second Quarter Financial Summary
Revenue was $36.9 million for the second quarter
of 2020, a decrease of 7% compared to $39.7 million in the second
quarter of 2019.
Product revenues for the second quarter of 2020
were $13.9 million, 8% lower than the prior year quarter due to a
$1.9 million decrease in mobile connectivity product sales and a
$0.6 million increase in inertial navigation product sales. The
decrease in mobile connectivity product sales was primarily due to
a $1.5 million decrease in TracVision product sales. Inertial
navigation product sales increased $0.6 million, primarily as a
result of a $0.8 million increase in TACNAV product sales,
partially offset by a $0.2 million decrease in FOG and OEM product
sales.
Service revenues for the second quarter of 2020
were $23.0 million, a decrease of 6% compared to the second quarter
of 2019, primarily due to a $1.1 million decrease in inertial
navigation service sales and a $0.4 million decrease in mobile
connectivity service sales. Inertial navigation service sales
decreased primarily due to the timing of performance under an
engineering and services development contract from a major U.S.
defense contractor, which began in the fourth quarter of 2018 and
will continue through January 2021. Mobile connectivity service
sales decreased primarily due to a $0.9 million decrease in our
content service sales and a $0.5 million decrease in our contract
engineering service revenue. Partially offsetting these decreases
was a $1.1 million increase in our mini-VSAT Broadband service
sales, which resulted in part from a 6% increase in subscribers,
primarily as a result of AgilePlans.
Our operating expenses decreased $2.0 million to
$16.4 million for the second quarter of 2020 compared to $18.4
million for the second quarter of 2019. This decrease resulted
primarily from a $0.5 million decrease in warranty expense, a $0.4
million decrease in travel expenses, a $0.4 million decrease in
marketing expenses, a $0.4 million decrease in external commissions
and a $0.4 million decrease in expensed materials, partially offset
by a $0.3 million increase in bad debt expense.
Six Months Ended June 30 Financial
Summary
Revenue was $73.5 million for the six months
ended June 30, 2020, a decrease of 3% compared to $76.1 million for
the six months ended June 30, 2019.
Product revenues for the six months ended June
30, 2020 were $27.0 million, which was 5% lower than the six months
ended June 30, 2019 primarily due to a decrease in mobile
connectivity product sales of $2.7 million, partially offset by an
increase in inertial navigation product sales of $1.3 million. The
mobile connectivity product sales decreased due to a $2.3 million
decrease in marine mobile connectivity product sales, which was
primarily driven by a decrease in TracVision product sales. In
addition, there was a $0.4 million decrease in land mobile product
sales. Inertial navigation product sales increased primarily due to
a $1.2 million increase in TACNAV product sales.
Service revenues for the six months ended June
30, 2020 were $46.5 million, a decrease of 3% compared to the six
months ended June 30, 2019 primarily due to a decrease in inertial
navigation service sales of $1.6 million, partially offset by an
increase in mobile connectivity service sales of $0.4 million. The
decrease in inertial navigation service sales was due to the timing
of performance under an engineering and services development
contract. The increase in mobile connectivity service sales was
primarily due to a $2.0 million increase in our mini-VSAT Broadband
service sales. Partially offsetting this increase was a $1.0
million decrease in content service sales and a $0.5 million
decrease in our contract engineering service revenue.
Our operating expenses decreased $1.5 million to
$35.8 million in the six months ended June 30, 2020 compared to
$37.3 million in the six months ended June 30, 2019. The key
drivers were a $0.6 million decrease in travel expenses, a $0.5
million decrease in warranty expense, a $0.4 million decrease in
external commissions, a $0.4 million decrease in marketing expenses
and a $0.3 million decrease in consulting fees, partially offset by
a $0.6 million increase in bad debt expense.
Other Recent Announcements
- KVH appoints Danelle M. Barrett to the Board of
Directors.
- KVH Receives $10 Million Order for TACNAV Tactical Navigation
Systems.
- KVH Launches New Inertial Sensor with Photonic Integrated Chip
Technology.
- KVH Watch Offers Remote Expert Intervention for Real-time
Support at Sea Using High-speed Satellite Connectivity.
Please review the corresponding press releases
for more details regarding these developments.
Conference Call Details
KVH Industries will host a conference call today
at 9:00 a.m. ET through the company’s website. The conference call
can be accessed at investors.kvh.com and listeners are welcome to
submit questions pertaining to the earnings release and conference
call to ir@kvh.com. The audio archive will be available on the
company website within three hours of the completion of the
call.
Non-GAAP Financial Measures
This release provides non-GAAP financial
information, which may include constant-currency revenue, non-GAAP
net income (loss), non-GAAP diluted EPS, and non-GAAP adjusted
EBITDA, as a supplement to our condensed consolidated financial
statements, which are prepared in accordance with generally
accepted accounting principles (“GAAP”). Management uses these
non-GAAP financial measures internally in analyzing financial
results to assess operational performance. Constant-currency
revenue is calculated on the basis of local currency results, using
foreign currency exchange rates applicable to the earlier
comparative period, and management believes that presenting
information on a constant-currency basis helps management and
investors to isolate the impact of changes in those rates from
other factors. The presentation of this financial information is
not intended to be considered in isolation or as a substitute for
the financial information prepared in accordance with GAAP. The
non-GAAP financial measures used in this press release adjust for
specified items that can be highly variable or difficult to
predict. Management generally uses these non-GAAP financial
measures to facilitate financial and operational decision-making,
including evaluation of our historical operating results,
comparison to competitors’ operating results, and determination of
management incentive compensation. These non-GAAP financial
measures reflect an additional way of viewing aspects of our
operations that, when viewed with GAAP results and the
reconciliations to corresponding GAAP financial measures, may
provide a more complete understanding of factors and trends
affecting our business.
Some limitations of non-GAAP net income (loss),
non-GAAP diluted EPS, and non-GAAP adjusted EBITDA, include the
following:
- Non-GAAP net income (loss) and diluted EPS exclude amortization
of intangibles, stock-based compensation expense,
transaction-related and other non-recurring legal fees,
non-recurring inventory reserve, other non-recurring costs, foreign
exchange transaction gains and losses, the tax effect of the
foregoing and certain discrete tax charges, including changes in
our valuation allowance and other tax adjustments.
- Non-GAAP adjusted EBITDA represents net income (loss) before
interest income, net, income taxes, depreciation, amortization,
stock-based compensation, transaction-related and other
non-recurring legal fees, non-recurring inventory reserves,
other non-recurring costs and foreign exchange transaction gains
and losses.
Other companies, including companies in KVH’s
industry, may calculate these non-GAAP financial measures
differently or not at all, which will reduce their usefulness as a
comparative measure.
Because non-GAAP financial measures exclude the
effect of items that increase or decrease our reported results of
operations, management strongly encourages investors to review our
consolidated financial statements and publicly filed reports in
their entirety. Reconciliations of the non-GAAP financial measures
to the most directly comparable GAAP financial measures are
included in the tables accompanying this release.
About KVH Industries, Inc.
KVH Industries, Inc., is a global leader in
mobile connectivity and inertial navigation systems, innovating to
enable a mobile world. The market leader in maritime VSAT, KVH
designs, manufactures, and provides connectivity and content
services globally. KVH is also a premier manufacturer of
high-performance sensors and integrated inertial systems for
defense and commercial applications. Founded in 1982, the company
is based in Middletown, RI, with research, development, and
manufacturing operations in Middletown, RI, and Tinley Park, IL,
and more than a dozen offices around the globe.
This press release contains forward-looking
statements that involve risks and uncertainties. For example,
forward-looking statements include statements regarding our
financial goals for future periods, the success of our new
initiatives, our investment plans, our development goals, our
anticipated revenue and earnings, and the impact of our future
initiatives on revenue, competitive positioning, profitability, and
product orders. Actual results could differ materially from the
results projected in or implied by the forward-looking statements
made in this press release. Factors that might cause these
differences include, but are not limited to: the adverse impact of
the COVID-19 pandemic, as well as governmental, business and other
responses thereto and the resulting economic slowdown, on our
revenues, results of operations and financial condition, which
could be material (particularly for our media and other
travel-related businesses); decreased profitability and cash flow
resulting from the sale of our Videotel business; a history and
expectation of continuing losses as we increase investments in
various initiatives, including the photonic chip and KVH Watch
technology; increased costs arising from our new AgilePlans dealer
incentive program; increased advisory and other costs arising in
connection with potential shareholder activism; potential
liabilities arising from our sale of Videotel; the uncertain
duration of the initial adverse impact on our overall revenues of
our new AgilePlans and KVH Watch, under which we recognize no
revenue for product sales, either at the time of shipment or over
the contract term; increased costs arising from the HTS network;
potential challenges or delays in the transition of customers from
our legacy network to our HTS network; the impact of recent changes
in revenue recognition and lease accounting standards, including
potential changes in the interpretation of those standards;
potential adverse events arising out of accounting errors and the
correction thereof, including adverse reactions from investors,
research analysts, regulators and others, including adverse changes
in our projected financial performance; the uncertain impact of tax
reform, and federal budget deficits, government shutdowns and
Congressional deadlock; the uncertain impact of changes in trade
policy, including actual and potential new or higher tariffs, and
trade barriers and sanctions, as well as trade wars with other
countries; unanticipated obstacles in our photonic chip and other
product and service development efforts; delays in the receipt of
anticipated orders for our products and services, including
significant orders for TACNAV products, or the potential failure of
such orders to occur at all; continued adverse impacts of currency
fluctuations, particularly the British Pound; risks associated with
the impact of Brexit on sales and operations in the U.K. and Europe
and on the overall global economy; our ability to successfully
commercialize our new initiatives without unanticipated additional
expenses or delays; potential reduced sales to companies in or
dependent upon the turbulent oil and gas industry; continued
substantial fluctuations in military sales, including to foreign
customers; the unpredictability of defense budget priorities as
well as the order timing, purchasing schedules, and priorities for
defense products, including possible order cancellations; the
uncertain impact of potential budget cuts by government customers;
the impact of extended economic weakness on the sale and use of
marine vessels and recreational vehicles; the potential inability
to increase or maintain our market share in the market for airtime
services; the need to increase sales of the TracPhone V-HTS series
products and related services to maintain and improve airtime gross
margins; the need for, or delays in, qualification of products to
customer or regulatory standards; potential declines or changes in
customer demand, due to economic, weather-related, seasonal, and
other factors, particularly with respect to the TracPhone V-HTS
series, including with respect to new pricing models; increased
price and service competition in the mobile connectivity market;
increased competition for content services; ongoing fluctuations in
engineering service revenues, which can vary significantly from
period to period; exposure for potential intellectual property
infringement; potential additional litigation expenses; potential
changes in tax and accounting requirements or assessments,
including management’s assessment of the probability and effect of
future events; stock price volatility; and export restrictions,
delays in procuring export licenses, and other international risks.
These and other factors are discussed in more detail in our Annual
Report on Form 10-K filed with the Securities and Exchange
Commission on February 28, 2020. Copies are available through our
Investor Relations department and website,
http://investors.kvh.com. We do not assume any obligation to update
our forward-looking statements to reflect new information and
developments.
KVH Industries., Inc., has used, registered, or
applied to register its trademarks in the USA and other countries
around the world, including but not limited to the following marks:
KVH, TracVision, TracPhone, TACNAV, KVH Watch, mini-VSAT Broadband,
and AgilePlans. Other trademarks are the property of their
respective companies.
KVH INDUSTRIES, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except per share amounts,
unaudited)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Sales: |
|
|
|
|
|
|
|
Product |
$ |
13,949 |
|
|
$ |
15,189 |
|
|
$ |
27,043 |
|
|
$ |
28,404 |
|
Service |
22,977 |
|
|
24,541 |
|
|
46,451 |
|
|
47,702 |
|
Net sales |
36,926 |
|
|
39,730 |
|
|
73,494 |
|
|
76,106 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
Costs of product sales |
9,554 |
|
|
12,649 |
|
|
19,190 |
|
|
20,933 |
|
Costs of service sales |
14,378 |
|
|
15,379 |
|
|
29,573 |
|
|
30,752 |
|
Research and development |
3,866 |
|
|
3,798 |
|
|
8,153 |
|
|
7,666 |
|
Sales, marketing and support |
6,795 |
|
|
8,853 |
|
|
15,495 |
|
|
16,983 |
|
General and administrative |
5,769 |
|
|
5,730 |
|
|
12,167 |
|
|
12,685 |
|
Total costs and expenses |
40,362 |
|
|
46,409 |
|
|
84,578 |
|
|
89,019 |
|
Loss from operations |
(3,436 |
) |
|
(6,679 |
) |
|
(11,084 |
) |
|
(12,913 |
) |
Interest income |
217 |
|
|
1,000 |
|
|
530 |
|
|
1,175 |
|
Interest expense |
3 |
|
|
558 |
|
|
7 |
|
|
943 |
|
Other (expense) income, net |
(161 |
) |
|
339 |
|
|
1,341 |
|
|
242 |
|
Loss from continuing operations before income tax expense
(benefit) |
(3,383 |
) |
|
(5,898 |
) |
|
(9,220 |
) |
|
(12,439 |
) |
Income tax expense
(benefit) |
169 |
|
|
(2,604 |
) |
|
546 |
|
|
(2,648 |
) |
Net loss from continuing operations |
$ |
(3,552 |
) |
|
$ |
(3,294 |
) |
|
$ |
(9,766 |
) |
|
$ |
(9,791 |
) |
|
|
|
|
|
|
|
|
Income from discontinued
operations, net of tax |
— |
|
|
50,630 |
|
|
— |
|
|
50,873 |
|
Net (loss) income |
$ |
(3,552 |
) |
|
$ |
47,336 |
|
|
$ |
(9,766 |
) |
|
$ |
41,082 |
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations per common share: |
|
|
|
|
|
|
|
Basic and diluted (a) |
$ |
(0.20 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.56 |
) |
|
$ |
(0.56 |
) |
Net income from
discontinued operations per common share: |
|
|
|
|
|
|
|
Basic and diluted (a) |
$ |
0.00 |
|
|
$ |
2.90 |
|
|
$ |
0.00 |
|
|
$ |
2.93 |
|
Net (loss) income per
common share |
|
|
|
|
|
|
|
Basic and diluted (a) |
$ |
(0.20 |
) |
|
$ |
2.71 |
|
|
$ |
(0.56 |
) |
|
$ |
2.36 |
|
Weighted average
number of common shares outstanding: |
|
|
|
|
|
|
|
Basic and diluted |
17,648 |
|
|
17,463 |
|
|
17,588 |
|
|
17,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Earnings per share components for 2019 do not sum due to
rounding.
KVH INDUSTRIES, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands, unaudited)
|
June 30, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
Cash, cash equivalents and marketable securities |
$ |
43,941 |
|
|
$ |
48,272 |
|
Accounts receivable, net |
28,563 |
|
|
32,891 |
|
Inventories, net |
24,454 |
|
|
23,465 |
|
Other current assets and contract assets |
4,444 |
|
|
4,646 |
|
Total current assets |
101,402 |
|
|
109,274 |
|
Property and equipment, net |
55,269 |
|
|
53,584 |
|
Goodwill |
14,691 |
|
|
15,408 |
|
Intangible assets, net |
4,195 |
|
|
4,943 |
|
Right of use assets |
4,108 |
|
|
6,286 |
|
Other non-current assets and contract assets |
10,281 |
|
|
9,851 |
|
Non-current deferred income taxes |
38 |
|
|
45 |
|
Total assets |
$ |
189,984 |
|
|
$ |
199,391 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Accounts payable and accrued expenses |
$ |
28,798 |
|
|
$ |
31,116 |
|
Contract liabilities |
4,438 |
|
|
4,443 |
|
Current portion of long-term debt |
2,682 |
|
|
— |
|
Current operating lease liability |
1,339 |
|
|
2,831 |
|
Total current liabilities |
37,257 |
|
|
38,390 |
|
Other long-term liabilities |
983 |
|
|
1,292 |
|
Long-term operating lease liability |
2,803 |
|
|
3,482 |
|
Long-term contract liabilities |
4,938 |
|
|
5,476 |
|
Non-current deferred tax liability |
770 |
|
|
762 |
|
Long-term debt, excluding current portion |
4,245 |
|
|
— |
|
Stockholders’ equity |
138,988 |
|
|
149,989 |
|
Total liabilities and stockholders’ equity |
$ |
189,984 |
|
|
$ |
199,391 |
|
|
|
|
|
|
|
|
|
KVH INDUSTRIES, INC. AND
SUBSIDIARIESRECONCILIATION OF GAAP NET LOSS FROM
CONTINUING OPERATIONSTO NON-GAAP NET LOSS FROM
CONTINUING OPERATIONS(in thousands, except per
share amounts, unaudited)
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net loss from continuing operations - GAAP |
$ |
(3,552 |
) |
|
$ |
(3,294 |
) |
|
$ |
(9,766 |
) |
|
$ |
(9,791 |
) |
Amortization of intangibles |
241 |
|
|
247 |
|
|
489 |
|
|
495 |
|
Stock-based compensation expense |
742 |
|
|
1,033 |
|
|
1,547 |
|
|
1,907 |
|
Transaction-related and other non-recurring legal fees |
58 |
|
|
— |
|
|
201 |
|
|
224 |
|
Non-recurring inventory reserve |
— |
|
|
2,137 |
|
|
— |
|
|
2,137 |
|
Other non-recurring costs |
— |
|
|
216 |
|
|
— |
|
|
216 |
|
Foreign exchange transaction loss (gain) |
28 |
|
|
(284 |
) |
|
(1,157 |
) |
|
(225 |
) |
Tax effect on the foregoing |
(211 |
) |
|
(705 |
) |
|
(224 |
) |
|
(996 |
) |
Change in valuation allowance and other tax adjustments (a) |
1,070 |
|
|
(1,020 |
) |
|
2,974 |
|
|
516 |
|
Net loss from
continuing operations - Non-GAAP |
$ |
(1,624 |
) |
|
$ |
(1,670 |
) |
|
$ |
(5,936 |
) |
|
$ |
(5,517 |
) |
|
|
|
|
|
|
|
|
Net loss from
continuing operations per common share - Non-GAAP |
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.09 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.32 |
) |
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding |
|
|
|
|
|
|
|
Basic and diluted |
17,648 |
|
|
17,463 |
|
|
17,588 |
|
|
17,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents a change in the valuation
allowance on current year United States net operating losses,
research and development tax credits and uncertain tax position
adjustments.
KVH INDUSTRIES, INC. AND
SUBSIDIARIESRECONCILIATION OF GAAP NET LOSS FROM
CONTINUING OPERATIONS TO NON-GAAPEBITDA AND
NON-GAAP ADJUSTED EBITDA FROM CONTINUING
OPERATIONS(in thousands, unaudited)
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
GAAP net loss from continuing operations |
$ |
(3,552 |
) |
|
$ |
(3,294 |
) |
|
$ |
(9,766 |
) |
|
$ |
(9,791 |
) |
Income tax expense (benefit) |
169 |
|
|
(2,604 |
) |
|
546 |
|
|
(2,648 |
) |
Interest income, net |
(214 |
) |
|
(442 |
) |
|
(523 |
) |
|
(232 |
) |
Depreciation and amortization |
2,752 |
|
|
2,361 |
|
|
5,402 |
|
|
4,702 |
|
Non-GAAP
EBITDA |
(845 |
) |
|
(3,979 |
) |
|
(4,341 |
) |
|
(7,969 |
) |
Stock-based compensation expense |
742 |
|
|
1,033 |
|
|
1,547 |
|
|
1,907 |
|
Non-recurring inventory reserve |
— |
|
|
2,137 |
|
|
— |
|
|
2,137 |
|
Transaction-related and other non-recurring legal fees |
58 |
|
|
— |
|
|
201 |
|
|
224 |
|
Other non-recurring costs |
— |
|
|
216 |
|
|
— |
|
|
216 |
|
Foreign exchange transaction loss (gain) |
28 |
|
|
(284 |
) |
|
(1,157 |
) |
|
(225 |
) |
Non-GAAP adjusted
EBITDA from continuing operations |
$ |
(17 |
) |
|
$ |
(877 |
) |
|
$ |
(3,750 |
) |
|
$ |
(3,710 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KVH INDUSTRIES, INC. AND
SUBSIDIARIESREVENUE AND OPERATING INCOME (LOSS) BY
SEGMENT FROM CONTINUING OPERATIONS(in millions
except for percentages, unaudited)
Segment Net
Sales |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Mobile connectivity
sales |
|
|
|
|
|
|
|
Product |
$ |
6.7 |
|
|
$ |
8.6 |
|
|
$ |
13.3 |
|
|
$ |
16.0 |
|
Service |
22.5 |
|
|
22.9 |
|
|
44.8 |
|
|
44.4 |
|
Net sales |
$ |
29.2 |
|
|
$ |
31.5 |
|
|
$ |
58.1 |
|
|
$ |
60.4 |
|
|
|
|
|
|
|
|
|
Inertial navigation
sales |
|
|
|
|
|
|
|
Product |
$ |
7.2 |
|
|
$ |
6.6 |
|
|
$ |
13.7 |
|
|
$ |
12.4 |
|
Service |
0.5 |
|
|
1.6 |
|
|
1.7 |
|
|
3.3 |
|
Net sales |
$ |
7.7 |
|
|
$ |
8.2 |
|
|
$ |
15.4 |
|
|
$ |
15.7 |
|
Operating Income
(Loss) |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Mobile
connectivity |
$ |
0.6 |
|
|
$ |
(2.4 |
) |
|
$ |
(1.7 |
) |
|
$ |
(3.8 |
) |
Inertial
navigation |
0.2 |
|
|
(0.2 |
) |
|
(0.7 |
) |
|
0.2 |
|
|
0.8 |
|
|
(2.6 |
) |
|
(2.4 |
) |
|
(3.6 |
) |
Unallocated |
(4.2 |
) |
|
(4.1 |
) |
|
(8.7 |
) |
|
(9.3 |
) |
Loss from operations |
$ |
(3.4 |
) |
|
$ |
(6.7 |
) |
|
$ |
(11.1 |
) |
|
$ |
(12.9 |
) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
(percentage of total revenue) |
|
(percentage of total revenue) |
Mobile Connectivity
Revenue Components |
|
|
|
|
|
|
|
Product sales |
18 |
% |
|
22 |
% |
|
18 |
% |
|
21 |
% |
mini-VSAT Broadband airtime |
55 |
% |
|
48 |
% |
|
54 |
% |
|
49 |
% |
Content service |
4 |
% |
|
6 |
% |
|
5 |
% |
|
7 |
% |
Inertial Navigation
Revenue Components |
|
|
|
|
|
|
|
FOG-based products |
16 |
% |
|
16 |
% |
|
15 |
% |
|
15 |
% |
Tactical navigation products |
3 |
% |
|
0 |
% |
|
3 |
% |
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Contact: |
|
KVH Industries, Inc.Brent Bruun401-845-8194bbruun@kvh.com |
|
FTI ConsultingChristine Mohrmann212-850-5600 |
|
|
|
|
|
KVH Industries (NASDAQ:KVHI)
Historical Stock Chart
From Jun 2024 to Jul 2024
KVH Industries (NASDAQ:KVHI)
Historical Stock Chart
From Jul 2023 to Jul 2024