0001007587false00010075872024-11-072024-11-07

 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 7, 2024
KVH Industries, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware
0-28082
05-0420589
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.) 

50 Enterprise Center, Middletown, RI 02842
(Address of Principal Executive Offices) (Zip Code)

(401) 847-3327
(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on which Registered
The Nasdaq Stock Market LLC
Common Stock, par value $0.01 per shareKVHI
(Nasdaq Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
     Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On November 7, 2024, we issued a press release announcing our financial results for the third quarter ended September 30, 2024 and forward-looking statements. The press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

The information in this Item 2.02 of Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (or the Securities Act), or the Exchange Act, regardless of any general incorporation language in such filing.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d)Exhibits
Exhibit
No.		Description
99.1
November 7, 2024 press release entitled "KVH Industries Reports Third Quarter 2024 Results" (furnished pursuant to Item 2.02)


SIGNATURES
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 hereunto duly authorized.
KVH INDUSTRIES, INC.
Date: November 7, 2024BY:/s/    Anthony F. Pike  
Anthony F. Pike
Chief Financial Officer


EXHIBIT INDEX
Exhibit
No.		Description
November 7, 2024 press release entitled "KVH Industries Reports Third Quarter 2024 Results" (furnished pursuant to Item 2.02)


Exhibit 99.1
FOR IMMEDIATE RELEASE
 
Contact:KVH Industries, Inc.
Chris Watson
401-845-2441
IR@kvh.com
KVH Industries Reports Third Quarter 2024 Results

MIDDLETOWN, RI, November 7, 2024 — KVH Industries, Inc. (Nasdaq: KVHI), reported financial results for the quarter ended September 30, 2024 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.
Third Quarter 2024 Highlights

•Total revenues decreased by 13% in the third quarter of 2024 to $29.0 million from $33.2 million in the third quarter of 2023.

•Airtime revenue decreased $4.6 million, to $22.8 million, or 17%, in the third quarter of 2024 compared to the third quarter of 2023.

•Non-cash impairment charges of $1.1 million were taken against long-lived assets for the Mobile Broadband reporting unit as the company commenced a plan to sell the warehouse building and surface parking lot located at 75 Enterprise Center in Middletown, Rhode Island.

•Net loss in the third quarter of 2024 was $1.2 million, or $0.06 per share, compared to net loss of $4.4 million, or $0.23 per share, in the third quarter of 2023.

•Non-GAAP adjusted EBITDA was $2.9 million in the third quarter of 2024, compared to $4.4 million in the third quarter of 2023.

Commenting on the company’s third quarter results, Brent C. Bruun, KVH’s Chief Executive Officer, said, “KVH, together with the rest of the maritime industry, continues to adapt to significant technological disruptions. We continue to feel the impact of these changes, illustrated by the U.S. Coast Guard’s anticipated shift to LEO-based communication on its smaller cutters. However, we have reacted decisively to this fundamental shift by expanding our portfolio of new technology, delivering the products and services our customers desire, and making the decisions necessary to reconfigure our business operations. As a result, our hybrid LEO/GEO deployments are increasing, we are meeting the demands from leisure boaters and commercial fleets for LEO technology and sophisticated value-added services, and we are establishing a solid pipeline for ongoing growth in service activations.

“While third quarter airtime gross margins declined slightly versus the same period last year due to a shift in our airtime subscriber base, airtime margins increased sequentially versus the second quarter. This improvement was driven by increased margin contribution from Starlink data subscriptions, now sold through our bulk data purchase agreement, which went into effect on July 1, 2024. At the same time, we increased our subscribing vessel count for the second consecutive quarter, shipped a record number of communication antennas for the third straight quarter, and increased CommBox Edge shipments for the second consecutive quarter. Challenges remain, but I believe we have laid out a path forward toward growth and profitability.”

1

Financial Highlights - (in millions, except per share data)
 
 Three Months EndedNine Months Ended
September 30,September 30,
 2024202320242023
GAAP Results
Revenue$29.0 $33.2 $86.9 $100.9 
Loss from operations$(2.0)$(5.2)$(8.7)$(5.1)
Net loss$(1.2)$(4.4)$(6.7)$(3.2)
Net loss per share$(0.06)$(0.23)$(0.35)$(0.17)
Non-GAAP Adjusted EBITDA$2.9 $4.4 $7.5 $12.1 
Third Quarter Financial Summary
Revenue was $29.0 million for the third quarter of 2024, a decrease of 13% compared to $33.2 million in the third quarter of 2023.

Service revenues for the third quarter were $24.4 million, a decrease of $5.0 million compared to the third quarter of 2023. The decrease in service sales was primarily due to a $4.6 million decrease in our airtime service sales.

Product revenues for the third quarter were $4.6 million, an increase of 20% compared to the third quarter of 2023. The increase in product sales was primarily due to a $1.2 million increase in Starlink product sales and a $0.2 million increase in VSAT Broadband product sales, partially offset by a $0.5 million decrease in accessory product sales and a $0.3 million decrease in TracVision product sales.

Our operating expenses decreased by $6.3 million to $11.3 million for the third quarter of 2024 compared to $17.6 million for the third quarter of 2023. This decrease was primarily due to a $4.9 million decrease in aggregate non-cash impairment charges against goodwill and long-lived assets. During the third quarter of 2024, impairment charges of $1.1 million were taken against long-lived assets as the company commenced a plan to sell the warehouse building and surface parking lot located at 75 Enterprise Center in Middletown, Rhode Island. During the third quarter of 2023, impairment charges of $6.0 million were taken against goodwill and long-lived assets, which was driven by the significant decline in our stock price that followed the August 9, 2023 announcement of our financial results for the second quarter of 2023. In addition to the decrease in non-cash impairment charges, there was a $1.4 million decrease in salaries, benefits and taxes, which was driven by the reduction in force resulting from the staged wind-down of our manufacturing activities in our facility in Middletown, Rhode Island.

Nine Months Ended September 30 Financial Summary

Revenue was $86.9 million for the nine months ended September 30, 2024, a decrease of 14% compared to $100.9 million for the nine months ended September 30, 2023.

Service revenues for the nine months ended September 30, 2024 were $74.1 million, a decrease of 15% compared to the nine months ended September 30, 2023. The decrease in service sales was primarily due to a $12.0 million decrease in our airtime services sales.

Product revenues for the nine months ended September 30, 2024 were $12.8 million, a decrease of 9% compared to the nine months ended September 30, 2023. The decrease in product sales was primarily due to a $2.2 million decrease in VSAT Broadband product sales, a $1.7 million decrease in TracVision product sales and a $1.2 million decrease in accessory and service product sales, partially offset by a $3.8 million increase in Starlink product sales and a $0.4 million increase in CommBox Edge product sales.

2

Our operating expenses decreased $5.4 million to $36.8 million in the nine months ended September 30, 2024, compared to $42.2 million in the nine months ended September 30, 2023. This decrease was primarily due to the previously mentioned $4.9 million decrease in aggregate non-cash impairment charges against goodwill and long-lived assets, a $1.3 million decrease in salaries, benefits and taxes, excluding costs related to the previously mentioned reduction in workforce, a $1.0 million decrease in professional fees, a $0.4 million decrease in external commissions and a $0.3 million decrease in computer expenses. These decreases in expenses were partially offset by $2.0 million of costs related to the reduction in our workforce begun in February 2024 and concluded in June 2024 and a $0.7 million reduction in reimbursements made by EMCORE for expenses incurred under the transition services agreement relating to the sale of the inertial navigation business in August 2022.

Other Recent Announcements

•November 4, 2024 – KVH and Pacific Basin Completing Hybrid Connectivity and Network Management Upgrade
•September 24, 2024 – National Marine Electronics Association Names KVH TracVision UHD7 Its 2024 Satellite TV Product of Excellence
•September 1, 2024 – KVH Introduces MAILlink+ Email Service Available for Commercial Vessels and Fleets
•September 1, 2024 – KVH Launches New Delivery Methods for Award-Winning Crew Content Service
•August 1, 2024 – KVH Expands Starlink Maritime Options, Flexibility with New Plans, Value-added Services while Achieving New Subscriber Milestone
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 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. 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 and comparison to competitors’ operating results. 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 adjusted EBITDA include the following: non-GAAP adjusted EBITDA represents net income (loss) from continuing operations before, as applicable, interest income, net, income tax expense (benefit), depreciation, amortization, stock-based compensation expense, goodwill impairment charges, long-lived assets impairment charges, charges for disposal of discontinued projects, loss on unfavorable future contracts, employee termination and other variable costs, executive separation costs, transaction-related and other variable legal and advisory fees, irregular inventory write-downs, excess purchase order obligations, gains and losses on sale of subsidiaries, 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.

3

About KVH Industries, Inc.

KVH Industries, Inc. is a global leader in maritime and mobile connectivity delivered via the KVH ONE network. The company, founded in 1982, is based in Middletown, RI, with research, development, and manufacturing operations in Middletown, RI, and more than a dozen offices around the globe. KVH provides connectivity solutions for commercial maritime, leisure marine, military/government, and land mobile applications on vessels and vehicles, including the TracNet, TracPhone, and TracVision product lines, the KVH ONE OpenNet Program for non-KVH antennas, AgilePlans Connectivity as a Service (CaaS), and the KVH Link crew wellbeing content service.
______________________________________________________________________________________________________
This press release contains forward-looking statements that involve risks and uncertainties. For example, forward-looking statements include statements regarding projected financial results, the anticipated benefits of our restructuring and other initiatives, anticipated cost savings, our investment plans, our development goals, and the potential impact of our future initiatives on revenue, competitive positioning, profitability, and 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: continued increasing competition, particularly from lower-cost providers, low earth orbit satellite systems and other telecommunications systems, especially in the global leisure market, which is reducing demand for geosynchronous satellite services, including ours; the impact of anticipated lower revenue from the U.S. Coast Guard; potentially lower product and service margins from reseller arrangements; the risk that sales of Starlink terminals will slow down or decrease; potential hardware and software competition for our new CommBox product offerings; unanticipated obstacles to implementation of our manufacturing wind-down; unanticipated costs and expenses arising from the wind-down; unanticipated effects of the wind-down on our ongoing business; the risks associated with increased customer reliance on third-party hardware; the lack of future product differentiation; new service offerings from hardware providers; potential customer delays in selecting our services; the uncertain impact of continuing industry consolidation; the risk that our OpenNet program will lead to further reductions in sales of our satellite products; the risk that our current and future non-exclusive arrangements with Starlink and OneWeb will not provide material benefits; uncertainty regarding customer responses to new product and service introductions; challenges and potential additional expenses in retaining our employees, particularly in the current competitive labor market characterized by rising wages; the challenges of meeting customer expectations with a smaller employee base; uncertainties created by our new business strategy, which may impact customer recruitment and retention; the uncertain impact of ongoing disruptions in our supply chain and associated increases in our costs; the uncertain impact of inflation, particularly with respect to fuel costs, and fears of recession; the uncertain impact of the wars in Ukraine and the Middle East and international tensions in Asia; unanticipated changes or disruptions in our markets; technological breakthroughs by competitors; changes in customer priorities or preferences; potential customer terminations; unanticipated liabilities, charges and write-offs; the potential that competitors will design around or invalidate our intellectual property rights; a history of losses; continued fluctuations in quarterly results; the uncertain impact of changes in trade policy, including actual and potential new or higher tariffs and trade barriers, as well as trade wars with other countries, all of which could change materially under a new presidential administration or a change in control of Congress; unanticipated obstacles in our product and service development, cost engineering and manufacturing efforts; adverse impacts of currency fluctuations; 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; 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 risk that declining sales of the TracNet H-series and TracPhone V-HTS series products and related services will reduce airtime gross margins; the risk that reduced product sales will continue to erode product gross margins and lead to increased losses; potential declines or changes in customer demand, due to economic, weather-related, seasonal, and other factors, particularly with respect to the TracNet H-series and TracPhone V-HTS series; exposure for potential intellectual property infringement; changes in tax and accounting requirements or assessments; and export restrictions, delays in procuring export licenses, and other international risks. These and other factors are discussed in more detail in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 1, 2024. Copies are available through our Investor Relations department and website, 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, KVH ONE, TracPhone, TracVision, AgilePlans, CommBox, and TracNet. Other trademarks are the property of their respective companies.
4

KVH INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts, unaudited)
 
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Sales:
Service$24,410 $29,397 $74,122 $86,883 
Product4,561 3,798 12,789 14,041 
Net sales28,971 33,195 86,911 100,924 
Costs and expenses:
Costs of service sales14,983 16,238 44,496 47,848 
Costs of product sales4,714 4,511 14,321 16,042 
Research and development1,407 2,398 6,771 7,379 
Sales, marketing and support4,932 4,841 15,650 15,673 
General and administrative3,789 4,367 13,214 13,139 
Goodwill impairment charge— 5,333 — 5,333 
Long-lived assets impairment charge1,137 657 1,137 657 
Total costs and expenses30,962 38,345 95,589 106,071 
Loss from operations(1,991)(5,150)(8,678)(5,147)
Interest income629 997 2,416 2,660 
Interest expense2 — 2 — 
Other income (expense), net216 (121)(348)(583)
Loss before income tax expense(1,148)(4,274)(6,612)(3,070)
Income tax expense51 95 126 159 
Net loss$(1,199)$(4,369)$(6,738)$(3,229)
Net loss per common share
Basic$(0.06)$(0.23)$(0.35)$(0.17)
Diluted$(0.06)$(0.23)$(0.35)$(0.17)
Weighted average number of common shares outstanding:
Basic19,433 19,231 19,367 19,090 
Diluted19,433 19,231 19,367 19,090 

5

KVH INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
 
September 30,
2024		December 31,
2023
ASSETS
Cash, cash equivalents and marketable securities$49,765 $69,771 
Accounts receivable, net24,757 25,670 
Inventories, net25,203 19,046 
Prepaid expenses and other current assets20,531 4,331 
Current assets held for sale11,410 — 
Total current assets131,666 118,818 
Property and equipment, net29,894 47,680 
Intangible assets, net922 1,194 
Right of use assets1,104 1,068 
Other non-current assets2,914 3,618 
Deferred income tax asset221 256 
Total assets$166,721 $172,634 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses$21,387 22,412 
Deferred revenue1,536 1,774 
Current operating lease liability692 786 
Total current liabilities23,615 24,972 
Long-term operating lease liability406 289 
Deferred income tax liability2 1 
Stockholders’ equity142,698 147,372 
Total liabilities and stockholders’ equity$166,721 $172,634 

6

KVH INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP
EBITDA AND NON-GAAP ADJUSTED EBITDA
(in thousands, unaudited)
 
Three months ended September 30,Nine months ended September 30,
 2024202320242023
Net loss - GAAP$(1,199)$(4,369)$(6,738)$(3,229)
Income tax expense51 95 126 159 
Interest income, net(627)(997)(2,414)(2,660)
Depreciation and amortization3,265 3,199 10,250 10,119 
Non-GAAP EBITDA1,490 (2,072)1,224 4,389 
Stock-based compensation expense385 559 1,629 1,433 
Goodwill impairment charge— 5,333 — 5,333 
Long-lived assets impairment charge1,137 657 1,137 657 
Employee termination and other variable costs(423)— 2,937 — 
Transaction-related and other variable legal and advisory fees
295 — 295 234 
Foreign exchange transaction loss (gain)48 (92)317 18 
Non-GAAP adjusted EBITDA$2,932 $4,385 $7,539 $12,064 
7
v3.24.3
Cover
Nov. 07, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 07, 2024
Entity Registrant Name KVH Industries, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 0-28082
Entity Tax Identification Number 05-0420589
Entity Address, Address Line One 50 Enterprise Center
Entity Address, City or Town Middletown
Entity Address, State or Province RI
Entity Address, Postal Zip Code 02842
City Area Code 401
Local Phone Number 847-3327
Security Exchange Name NASDAQ
Title of 12(b) Security Common Stock, par value $0.01 per share
Trading Symbol KVHI
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0001007587
Amendment Flag false
KVH Industries (NASDAQ:KVHI)
Historical Stock Chart
Von Okt 2024 bis Nov 2024 Click Here for more KVH Industries Charts.
KVH Industries (NASDAQ:KVHI)
Historical Stock Chart
Von Nov 2023 bis Nov 2024 Click Here for more KVH Industries Charts.