KVH Industries, Inc., (Nasdaq:KVHI) reported financial results for
the quarter ended September 30, 2017 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 2017 Highlights
- Revenue for the third quarter of 2017 was $40.4 million, a
decrease of 12% from $45.8 million in the third quarter of
2016.
- Strong inertial measurement unit (IMU) sales drove fiber optic
gyro (FOG) product revenue higher by 25% and contracted engineering
service revenue doubled in the third quarter of 2017 compared to
the third quarter of 2016.
- mini-VSAT Broadband Airtime revenue grew $0.3 million, or 2%,
compared to the third quarter of 2016.
- AgilePlans by KVH, our new Connectivity as a Service Program
for the commercial maritime sector, increased to 45% of total
commercial VSAT shipments.
- Net loss in the third quarter of 2017 was $2.4 million, or
$0.15 per share, compared to net income of $2.9 million, or $0.18
per share, in the third quarter of 2016.
- Non-GAAP net income in the third quarter of 2017 was $0.3
million, or $0.02 per share, compared to $4.3 million, or $0.27 per
share in the third quarter of 2016.
- Non-GAAP adjusted EBITDA in the third quarter of 2017 was $1.6
million compared to $6.7 million in the third quarter of 2016.
- Significant progress has been made in the development of a
photonic chip that will be a key component in the Company’s
development of a new, low cost FOG for the self-driving automobile
market.
Commenting on the quarter, Martin Kits van Heyningen, KVH’s
Chief Executive Officer, said “Our Airtime service revenues
continue to grow, even in a quarter where severe weather impacted
network usage by our subscribers. The three major hurricanes in the
Americas this quarter also affected sales of our VSAT and TV
products in Florida, the Gulf of Mexico, and the Caribbean. We are
pleased with both the initial acceptance and the potential of our
AgilePlans, which represented 45% of our commercial VSAT shipments
this quarter while the pipeline continued to grow. While our
confidence in our TACNAV business remains high, we have removed the
large international orders from our Q4 guidance since we expect to
receive these orders too late in the quarter for meaningful revenue
shipments. Looking forward, we are excited about the impact that
our new TracPhone V7-HTS product and high-speed network will have
on our airtime business. This new satellite communication solution,
which we introduced on Tuesday, is the most significant new product
for KVH in many years. With more than triple the data speeds and
better global coverage than today’s product, we expect this to
significantly improve our competitive position in most of our
maritime markets.”
The company operates in two segments, mobile connectivity and
inertial navigation. Net sales for the mobile connectivity segment
in the third quarter of 2017 decreased $3.7 million, or 10%, as
compared to the third quarter of 2016 due to lower mini-VSAT
Broadband product sales due in part to the fact that, under our
AgilePlans program, we do not recognize revenue from products upon
delivery to customers, as well as the impact of very severe weather
in the Americas region this quarter. Net sales for our inertial
navigation segment in the third quarter of 2017 decreased $1.7
million, or 18%, compared to the third quarter of 2016, driven by a
$3.0 million decrease in TACNAV sales, due to a large order that
occurred in the third quarter of 2016. This decrease was partially
offset by an increase in FOG product sales and contracted
engineering services.
Financial Highlights (in millions, except per
share data)
|
|
|
|
|
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
GAAP
Results |
|
|
|
|
|
|
|
|
Revenue |
|
$ |
40.4 |
|
|
$ |
45.8 |
|
|
$ |
121.1 |
|
|
$ |
132.2 |
|
Net (loss) income |
|
$ |
(2.4 |
) |
|
$ |
2.9 |
|
|
$ |
(9.3 |
) |
|
$ |
(0.7 |
) |
Net (loss) income per
share |
|
$ |
(0.15 |
) |
|
$ |
0.18 |
|
|
$ |
(0.57 |
) |
|
$ |
(0.05 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP
Results |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
0.3 |
|
|
$ |
4.3 |
|
|
$ |
(0.6 |
) |
|
$ |
4.9 |
|
Net income (loss) per
share |
|
$ |
0.02 |
|
|
$ |
0.27 |
|
|
$ |
(0.04 |
) |
|
$ |
0.31 |
|
Adjusted EBITDA |
|
$ |
1.6 |
|
|
$ |
6.7 |
|
|
$ |
2.9 |
|
|
$ |
11.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For more information regarding our non-GAAP financial measures,
see the tables at the end of this release.
Third Quarter Financial Summary
Revenue was $40.4 million for the third quarter of 2017, a
decrease of 12% compared to the third quarter of 2016.
Product revenues for the third quarter of 2017 were $14.1
million, 26% lower than the prior year quarter, due to a decrease
in mobile connectivity product sales of $2.9 million and a $2.0
million decrease in our inertial navigation product sales. Mobile
connectivity product sales decreased primarily due to a $2.3
million decrease in marine product sales and a $0.6 million
decrease in land product sales. The decrease was partly due to the
timing of a particularly large order received in the prior year
quarter, as well as the impact of the new AgilePlans subscription
service. Inertial navigation product sales decreased due to a $3.0
million decrease in TACNAV sales, due to a large order that
occurred in the prior year quarter. This was partially offset by a
$1.0 million increase in FOG product sales.
Service revenues for the third quarter were $26.3 million, a
decrease of 2% compared to the prior year quarter. Airtime service
revenues, which include mini-VSAT Broadband airtime revenues,
increased 2%. Content and training revenues, which include our
entertainment, eLearning, and safety content decreased by 10%,
primarily due to a decrease in fleet subscribers and a large film
contract that occurred in the third quarter of 2016. Our
engineering service revenues in the third quarter of 2017 increased
by $0.4 million compared to the third quarter of 2016 as a result
of a substantial contract that began in the first quarter of 2017
and was completed in the third quarter of 2017.
Our operating expenses increased $1.0 million year-over-year to
$19.3 million.
Nine Months Ended September 30 Financial
Summary
Revenue was $121.1 million for the nine months ended September
30, 2017, a decrease of 8%, compared to the nine months ended
September 30, 2016. The British Pound negatively impacted
consolidated revenue in 2017 by $1.9 million, or 2%.
Product revenues for the nine months ended September 30, 2017
were $43.3 million, which was 21% lower than the comparable period
last year, due to a decrease in mobile connectivity product sales
of $6.6 million and a $4.6 million decrease in our inertial
navigation product sales. Mobile connectivity product sales
decreased primarily due to the decrease in the third quarter
described above. Inertial navigation product sales decreased due to
a $6.5 million decrease in TACNAV sales, due to a large order that
shipped in the second and third quarter of 2016, which was
partially offset by a $1.9 million increase in FOG product sales in
the current period.
Service revenues for the nine months ended September 30, 2017
were $77.8 million, which was approximately 1% higher than the
comparable period last year. Airtime service revenues, which
include mini-VSAT Broadband airtime revenues, increased 5%. Content
and training revenues, which include our entertainment, eLearning,
and safety content, decreased by 11%. Weakness in the British Pound
negatively impacted content and training revenues by $1.9 million,
or 7%. Our engineering service revenues in the nine months ended
September 30, 2017 increased by $1.5 million compared to the nine
months ended September 30, 2016 as a result of a substantial
contract that began in the first quarter of 2017 and was completed
in the third quarter of 2017.
Our operating expenses increased $0.8 million year-over-year to
$59.6 million.
Fourth Quarter 2017 and Full Year 2017
Outlook
2017 will be an important year due to the strategic investments
in key initiatives that we believe have the potential to result in
significant revenue growth in 2018 and beyond. We have reduced our
revenue and earnings outlook for the remainder of 2017 as we have
not yet received the anticipated international TACNAV orders and
due to the lower third quarter VSAT bookings in the Mobile
Connectivity segment, which will lower the growth rate for fourth
quarter airtime revenues. Our guidance for the fourth quarter of
2017 is as follows:
|
|
|
|
|
(in millions,
except per share data) |
|
Expected Range for theFourth
Quarter |
|
Expected Range for theFull
Year |
|
|
From |
|
To |
|
From |
|
To |
Revenue |
|
$ |
39.0 |
|
|
$ |
42.0 |
|
|
$ |
160.0 |
|
|
$ |
163.0 |
|
GAAP EPS |
|
$ |
(0.24 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.81 |
) |
|
$ |
(0.75 |
) |
Non-GAAP EPS |
|
$ |
0.02 |
|
|
$ |
0.06 |
|
|
$ |
(0.02 |
) |
|
$ |
0.02 |
|
Non-GAAP Adjusted
EBITDA |
|
$ |
1.1 |
|
|
$ |
2.1 |
|
|
$ |
4.0 |
|
|
$ |
5.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Recent Announcements
- KVH Launches New High-speed Maritime Network on Intelsat EpicNG
Satellites
- New KVH TracPhone V7-HTS System Delivers Maritime Broadband at
Triple Previous Speeds for a New Era of Digital Life at Sea
- KVH and Ocean Exploration Trust Announce Partnership Enabling
Nautilus Research Crew to have Internet and Daily News Content at
Sea
- National Marine Electronics Association Recognizes KVH Marine
Satellite Systems with 2017 Product Excellence Awards
- Moving Map Display for Military Vehicles Provides Critical
Navigation Information on Touchscreen
- KVH Introduces Videotel Performance Manager, a Breakthrough
Solution for Maritime Training
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, including
constant-currency revenue, non-GAAP net income, non-GAAP diluted
EPS, and non-GAAP adjusted EBITDA, as a supplement to the condensed
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 and (only in the case of
non-GAAP adjusted EBITDA) liquidity. 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. The
company generally uses these non-GAAP financial measures to
facilitate management’s financial and operational decision-making,
including evaluation of the company’s 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 the
company’s 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, certain discrete tax
items, acquisition-related compensation, and other discrete
charges.
- Non-GAAP adjusted EBITDA represents net income (loss) before
interest income, interest expense, income taxes, depreciation,
amortization, stock-based compensation, acquisition-related
compensation and other discrete charges.
Other companies, including companies in our industry, may
calculate these non-GAAP financial measures differently or not at
all, which will reduce their usefulness as a comparative
measure.
Future Non-GAAP Adjustments
Future GAAP diluted EPS may be affected by changes in ongoing
assumptions and judgments, and may also be affected by
non-recurring, unusual or unanticipated charges, expenses or gains,
which are excluded in the calculation of our non-GAAP diluted EPS
guidance as described in this press release.
Because non-GAAP financial measures exclude the effect of items
that will 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 is a leading manufacturer of solutions that
provide global high-speed Internet, television, and voice services
via satellite to mobile users at sea and on land and is a leading
news, music, entertainment, and training content provider to many
industries including maritime, retail, and leisure. KVH Industries
is also a premier manufacturer of high-performance sensors and
integrated inertial systems for defense and commercial guidance and
stabilization applications. KVH is based in Middletown, RI, with
research, development, and manufacturing operations in Middletown,
RI, and Tinley Park, IL. The company’s global presence includes
offices in Belgium, Brazil, Cyprus, Denmark, Hong Kong, India,
Japan, the Netherlands, Norway, the Philippines, Singapore, and the
United Kingdom.
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 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
forward-looking statements made in this press release. Factors that
might cause these differences include, but are not limited to: the
uncertain duration of the adverse impact on our overall revenues of
our new AgilePlans, under which we recognize no revenues for
product sales, either at the time of shipment or over the contract
term; 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 implement our new initiatives
without unanticipated additional expenses; 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-IP 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 (including the potential impact of recent hurricanes),
seasonal, and other factors, particularly with respect to the
TracPhone V-IP series, including with respect to new pricing
models; recent increases in airtime termination rates and lower
unit sales in our mobile business; increased price and service
competition in the mobile connectivity market; potential increased
expenses associated with investments in new technology, including
for our new high throughput satellite service; exposure for
potential intellectual property infringement; potential additional
litigation expenses; fluctuations in interest rates; 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
Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on August 4, 2017. 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, CommBox, TACNAV, IP-MobileCast, Videotel,
mini-VSAT Broadband, NEWSlink, KVH OneCare, and AgilePlans by KVH.
Other trademarks are the property of their respective
companies.
|
KVH INDUSTRIES, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in thousands, except per share amounts,
unaudited) |
|
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Sales: |
|
|
|
|
|
|
|
|
Product |
|
$ |
14,169 |
|
|
$ |
19,020 |
|
|
$ |
43,355 |
|
|
$ |
54,464 |
|
Service |
|
26,281 |
|
|
26,826 |
|
|
77,755 |
|
|
77,728 |
|
Net sales |
|
40,450 |
|
|
45,846 |
|
|
121,110 |
|
|
132,192 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
Costs of
product sales |
|
9,578 |
|
|
11,001 |
|
|
29,412 |
|
|
34,660 |
|
Costs of
service sales |
|
13,374 |
|
|
13,576 |
|
|
39,736 |
|
|
39,826 |
|
Research
and development |
|
3,990 |
|
|
3,940 |
|
|
11,698 |
|
|
11,760 |
|
Sales,
marketing and support |
|
8,234 |
|
|
7,978 |
|
|
25,098 |
|
|
25,870 |
|
General
and administrative |
|
7,075 |
|
|
6,338 |
|
|
22,805 |
|
|
21,130 |
|
Total costs and expenses |
|
42,251 |
|
|
42,833 |
|
|
128,749 |
|
|
133,246 |
|
(Loss) income from
operations |
|
(1,801 |
) |
|
3,013 |
|
|
(7,639 |
) |
|
(1,054 |
) |
Interest
income |
|
166 |
|
|
130 |
|
|
491 |
|
|
353 |
|
Interest
expense |
|
379 |
|
|
353 |
|
|
1,081 |
|
|
1,081 |
|
Other
(expense) income, net |
|
(141 |
) |
|
(56 |
) |
|
(321 |
) |
|
11 |
|
(Loss) income before income tax expense
(benefit) |
|
(2,155 |
) |
|
2,734 |
|
|
(8,550 |
) |
|
(1,771 |
) |
Income tax expense
(benefit) |
|
283 |
|
|
(129 |
) |
|
799 |
|
|
(1,037 |
) |
Net (loss) income |
|
$ |
(2,438 |
) |
|
$ |
2,863 |
|
|
$ |
(9,349 |
) |
|
$ |
(734 |
) |
Net (loss)
income per common share: |
|
|
|
|
|
|
|
|
Basic and
diluted |
|
$ |
(0.15 |
) |
|
$ |
0.18 |
|
|
$ |
(0.57 |
) |
|
$ |
(0.05 |
) |
Weighted
average number of common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
16,469 |
|
|
15,845 |
|
|
16,393 |
|
|
15,798 |
|
Diluted |
|
16,469 |
|
|
15,915 |
|
|
16,393 |
|
|
15,798 |
|
|
KVH INDUSTRIES, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(in thousands, unaudited) |
|
|
|
September 30, 2017 |
|
December 31,2016 |
ASSETS |
|
|
|
|
Cash,
cash equivalents and marketable securities |
|
$ |
43,672 |
|
|
$ |
52,134 |
|
Accounts
receivable, net |
|
29,062 |
|
|
31,152 |
|
Inventories |
|
21,650 |
|
|
20,745 |
|
Other
current assets |
|
5,056 |
|
|
4,801 |
|
Total current assets |
|
99,440 |
|
|
108,832 |
|
Property
and equipment, net |
|
42,603 |
|
|
36,586 |
|
Goodwill |
|
33,674 |
|
|
31,343 |
|
Intangible assets, net |
|
16,047 |
|
|
17,838 |
|
Other
non-current assets |
|
5,891 |
|
|
5,134 |
|
Non-current deferred income taxes |
|
25 |
|
|
24 |
|
Total assets |
|
$ |
197,680 |
|
|
$ |
199,757 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Accounts
payable and accrued expenses |
|
$ |
31,628 |
|
|
$ |
25,082 |
|
Deferred
revenue |
|
9,218 |
|
|
6,661 |
|
Current
portion of long-term debt |
|
2,479 |
|
|
7,900 |
|
Total current liabilities |
|
43,325 |
|
|
39,643 |
|
Other
long-term liabilities |
|
26 |
|
|
326 |
|
Non-current deferred tax liability |
|
3,406 |
|
|
3,133 |
|
Long-term
debt, excluding current portion |
|
45,193 |
|
|
50,153 |
|
Stockholders’ equity |
|
105,730 |
|
|
106,502 |
|
Total liabilities and stockholders’
equity |
|
$ |
197,680 |
|
|
$ |
199,757 |
|
|
KVH INDUSTRIES, INC. AND
SUBSIDIARIES |
RECONCILIATION OF GAAP NET (LOSS) INCOME TO
NON-GAAP NET INCOME (LOSS) |
(in thousands, except per share amounts,
unaudited) |
|
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Net (loss)
income - GAAP |
|
$ |
(2,438 |
) |
|
$ |
2,863 |
|
|
$ |
(9,349 |
) |
|
$ |
(734 |
) |
|
Amortization of intangibles |
|
1,096 |
|
|
1,145 |
|
|
3,266 |
|
|
3,678 |
|
|
Stock-based compensation expense |
|
809 |
|
|
911 |
|
|
2,621 |
|
|
2,792 |
|
|
Tax
effect on the foregoing |
|
(489 |
) |
|
(309 |
) |
(a) |
(1,534 |
) |
|
(949 |
) |
(a) |
Discrete
tax expense, net (b) |
|
1,278 |
|
|
(286 |
) |
|
4,401 |
|
|
(255 |
) |
|
Acquisition-related compensation |
|
— |
|
|
— |
|
|
— |
|
|
358 |
|
|
Net income
(loss) - Non-GAAP |
|
$ |
256 |
|
|
$ |
4,324 |
|
|
$ |
(595 |
) |
|
$ |
4,890 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per common share - Non-GAAP: |
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
$ |
0.02 |
|
|
$ |
0.27 |
|
|
$ |
(0.04 |
) |
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
16,469 |
|
|
15,845 |
|
|
16,393 |
|
|
15,798 |
|
|
Diluted |
|
16,649 |
|
|
15,915 |
|
|
16,393 |
|
|
15,928 |
|
|
|
|
(a) In 2016, consistent with the historical presentation, this
does not include the tax effect of the amortization expense related
to our intangible assets, which were principally acquired in
connection with our United Kingdom acquisition with such operations
having a statutory tax rate of 20%.
(b) Represents a change in the valuation allowance on United
States net operating losses, a state research and development tax
credit, uncertain tax position adjustments, and
penalties.
|
KVH INDUSTRIES, INC. AND
SUBSIDIARIES |
RECONCILIATION OF GAAP NET (LOSS) INCOME TO
NON-GAAP |
EBITDA AND NON-GAAP ADJUSTED
EBITDA |
(in thousands, unaudited) |
|
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
GAAP net (loss)
income |
|
$ |
(2,438 |
) |
|
$ |
2,863 |
|
|
$ |
(9,349 |
) |
|
$ |
(734 |
) |
Income
tax expense (benefit) |
|
283 |
|
|
(129 |
) |
|
799 |
|
|
(1,037 |
) |
Interest
expense, net |
|
213 |
|
|
223 |
|
|
590 |
|
|
728 |
|
Depreciation and amortization |
|
2,745 |
|
|
2,835 |
|
|
8,222 |
|
|
9,090 |
|
Non-GAAP
EBITDA |
|
803 |
|
|
5,792 |
|
|
262 |
|
|
8,047 |
|
Stock-based compensation expense |
|
809 |
|
|
911 |
|
|
2,621 |
|
|
2,792 |
|
Acquisition-related compensation |
|
— |
|
|
— |
|
|
— |
|
|
358 |
|
Non-GAAP
adjusted EBITDA |
|
$ |
1,612 |
|
|
$ |
6,703 |
|
|
$ |
2,883 |
|
|
$ |
11,197 |
|
|
KVH INDUSTRIES, INC. AND
SUBSIDIARIES |
THIRD QUARTER TO DATE AND YEAR TO DATE REVENUE
AND OPERATING INCOME BY SEGMENT |
(in millions except for percentages,
unaudited) |
|
Segment Net Sales |
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Mobile
connectivity sales |
|
|
|
|
|
|
|
|
Product |
|
$ |
7.2 |
|
|
$ |
10.1 |
|
|
$ |
25.9 |
|
|
$ |
32.5 |
|
Service |
|
25.6 |
|
|
26.4 |
|
|
75.2 |
|
|
76.2 |
|
Net sales |
|
$ |
32.8 |
|
|
$ |
36.5 |
|
|
$ |
101.1 |
|
|
$ |
108.7 |
|
|
|
|
|
|
|
|
|
|
Inertial
navigation sales |
|
|
|
|
|
|
|
|
Product |
|
$ |
6.9 |
|
|
$ |
8.9 |
|
|
$ |
17.4 |
|
|
$ |
22.0 |
|
Service |
|
0.7 |
|
|
0.4 |
|
|
2.6 |
|
|
1.5 |
|
Net sales |
|
$ |
7.6 |
|
|
$ |
9.3 |
|
|
$ |
20.0 |
|
|
$ |
23.5 |
|
|
|
|
|
|
Operating
(Loss) Income |
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Mobile
connectivity |
|
$ |
2.0 |
|
|
$ |
4.6 |
|
|
$ |
5.3 |
|
|
$ |
8.2 |
|
Inertial
navigation |
|
0.4 |
|
|
2.1 |
|
|
0.7 |
|
|
2.8 |
|
|
|
2.4 |
|
|
6.7 |
|
|
6.0 |
|
|
11.0 |
|
Unallocated |
|
(4.2 |
) |
|
(3.7 |
) |
|
(13.6 |
) |
|
(12.1 |
) |
(Loss) income from operations |
|
$ |
(1.8 |
) |
|
$ |
3.0 |
|
|
$ |
(7.6 |
) |
|
$ |
(1.1 |
) |
|
|
|
|
|
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Mobile
Connectivity Revenue Components |
|
|
|
|
|
|
|
|
Product
Sales |
|
18 |
% |
|
22 |
% |
|
21 |
% |
|
25 |
% |
mini-VSAT
Broadband Airtime |
|
42 |
% |
|
37 |
% |
|
41 |
% |
|
36 |
% |
Content
and Training |
|
20 |
% |
|
19 |
% |
|
20 |
% |
|
20 |
% |
Inertial
Navigation Revenue Components |
|
|
|
|
|
|
|
|
FOG-based
G&S products |
|
13 |
% |
|
9 |
% |
|
12 |
% |
|
9 |
% |
Tactical
Navigation products |
|
4 |
% |
|
10 |
% |
|
3 |
% |
|
7 |
% |
|
KVH INDUSTRIES, INC. AND
SUBSIDIARIES |
NON-GAAP EPS GUIDANCE |
(unaudited) |
|
|
|
Fourth
QuarterFiscal 2017 (Projected) |
|
Full
YearFiscal 2017 (Projected) |
Net loss per common
share |
|
$(0.24) - $(0.18) |
|
$(0.81) - $(0.75) |
|
|
|
|
|
Estimated amortization
of intangibles (a) |
|
$0.07 |
|
$0.27 |
Estimated stock-based
compensation expense |
|
$0.06 |
|
$0.22 |
Estimated tax
effect |
|
$(0.03) |
|
$(0.12) |
Discrete tax
adjustments (b) |
|
$0.16 - $0.14 |
|
$0.42- $0.40 |
|
|
|
|
|
Non-GAAP net income
(loss) per common share |
|
$0.02 - $0.06 |
|
($0.02) - $0.02 |
|
(a) Includes amortization of intangible assets resulting from
acquisitions.
(b) Represents incremental forecasted valuation allowance that
we expect to record against additional deferred tax assets
generated in 2017.
|
|
KVH INDUSTRIES, INC. AND
SUBSIDIARIES |
NON-GAAP ADJUSTED EBITDA GUIDANCE |
(in millions, unaudited) |
|
|
|
Fourth
QuarterFiscal 2017 (Projected) |
|
Full
YearFiscal 2017 (Projected) |
GAAP net loss |
|
$(4.0) - $(3.0) |
|
$(13.3) - $(12.3) |
|
|
|
|
|
Estimated income tax
provision |
|
$0.6 |
|
$1.4 |
Estimated interest
expense, net |
|
$0.2 |
|
$0.8 |
Estimated depreciation
and amortization |
|
$3.3 |
|
$11.5 |
Estimated stock-based
compensation expense |
|
$1.0 |
|
$3.6 |
|
|
|
|
|
Non-GAAP adjusted
EBITDA |
|
$1.1 - $2.1 |
|
$4.0 - $5.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact: |
|
|
|
KVH Industries,
Inc.Donald W. Reilly401-608-8977dreilly@kvh.com |
|
|
|
FTI ConsultingChristine
Mohrmann212-850-5600 |
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