kvhi-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

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 Incorporation or Organization)			(I.R.S. Employer Identification Number)

50 Enterprise Center, Middletown, RI 02842

(Address of Principal Executive Offices) (Zip Code)

(401) 847-3327

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on which Registered
		The Nasdaq Stock Market LLC
Common Stock, par value $0.01 per share	KVHI	(Nasdaq Global Select Market)

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Date	Class	Outstanding shares
July 29, 2024	Common Stock, par value $0.01 per share	19,714,086

KVH INDUSTRIES, INC. AND SUBSIDIARIES

Form 10-Q

INDEX


		Page No.
PART I. FINANCIAL INFORMATION
ITEM 1.	INTERIM FINANCIAL STATEMENTS
	Consolidated Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023	3
	Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023 (unaudited)	4
	Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended June 30, 2024 and 2023 (unaudited)	5
	Consolidated Statements of Stockholders' Equity for the three and six months ended June 30, 2024 and 2023 (unaudited)	6
	Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	8
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	22
ITEM 4.	CONTROLS AND PROCEDURES	29
PART II. OTHER INFORMATION

ITEM 1A.	RISK FACTORS	30

ITEM 6.	EXHIBITS	43
SIGNATURE		44

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

KVH INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)


	June 30, 2024		December 31, 2023
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	10,357	$	11,294
Marketable securities	38,903		58,477
Accounts receivable, net of allowance for credit losses of $1,131 and $1,168 as of June 30, 2024 and December 31, 2023, respectively	27,326		25,670
Inventories	22,715		19,046
Prepaid expenses and other current assets	19,191		4,331


Total current assets	118,492		118,818
Property and equipment, net	44,784		47,680
Intangible assets, net	1,014		1,194

Right of use assets	1,396		1,068
Other non-current assets	2,996		3,618

Deferred income tax asset	221		256

Total assets	$	168,903	$	172,634
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,618	$	4,780
Accrued airtime	976		5,508
Accrued compensation and employee-related expenses	5,052		4,466
Accrued loss on future firm purchase commitments	2,961		3,569
Accrued other	2,597		2,588
Accrued product warranty costs	636		828

Deferred revenue	1,586		1,774
Current operating lease liability	964		786
Liability for uncertain tax positions	712		673

Total current liabilities	25,102		24,972

Long-term operating lease liability	421		289


Deferred income tax liability	2		1

Total liabilities	$	25,525	$	25,262
Commitments and contingencies (Notes 2, 11, and 16)
Stockholders’ equity:
Preferred stock, $0.01 par value. Authorized 1,000,000 shares; none issued	—		—
Common stock, $0.01 par value. Authorized 30,000,000 shares; 21,170,195 and 21,066,899 shares issued at June 30, 2024 and December 31, 2023, respectively; and 19,714,086 and 19,610,790 shares outstanding at June 30, 2024 and December 31, 2023, respectively	212		211
Additional paid-in capital	166,490		165,140
Accumulated deficit	(7,243)		(1,704)
Accumulated other comprehensive loss	(3,991)		(4,185)
	155,468		159,462
Less: treasury stock at cost, common stock, 1,456,109 shares as of June 30, 2024 and December 31, 2023	(12,090)		(12,090)
Total stockholders’ equity	143,378		147,372
Total liabilities and stockholders’ equity	$	168,903	$	172,634

See accompanying Notes to Unaudited Consolidated Financial Statements.

KVH INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except earnings per share amounts, unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Sales:
Service	$	24,674	$	28,746	$	49,712	$	57,486
Product	3,999		4,840		8,228		10,243
Net sales	28,673		33,586		57,940		67,729
Costs and expenses:
Costs of service sales	15,469		15,534		29,513		31,610
Costs of product sales	4,299		6,218		9,607		11,531
Research and development	2,326		2,416		5,364		4,981
Sales, marketing and support	5,334		5,124		10,718		10,832
General and administrative	4,134		4,122		9,425		8,772


Total costs and expenses	31,562		33,414		64,627		67,726
(Loss) income from operations	(2,889)		172		(6,687)		3
Interest income	876		885		1,787		1,663

Other expense, net	(366)		(238)		(564)		(462)
(Loss) income before income tax (benefit) expense	(2,379)		819		(5,464)		1,204
Income tax (benefit) expense	(3)		46		75		64


Net (loss) income	$	(2,376)	$	773	$	(5,539)	$	1,140









Net (loss) income per common share
Basic	$	(0.12)	$	0.04	$	(0.29)	$	0.06
Diluted	$	(0.12)	$	0.04	$	(0.29)	$	0.06

Weighted average number of common shares outstanding:
Basic	19,381		19,153		19,333		19,018
Diluted	19,381		19,275		19,333		19,161

See accompanying Notes to Unaudited Consolidated Financial Statements.

KVH INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands, unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Net (loss) income	$	(2,376)	$	773	$	(5,539)	$	1,140
Other comprehensive income, net of tax:
Unrealized (loss) gain on available-for-sale securities	—		(1)		—		12
Foreign currency translation adjustment	(35)		77		194		143
Other comprehensive income, net of tax(1)	(35)		76		194		155
Total comprehensive (loss) income	$	(2,411)	$	849	$	(5,345)	$	1,295

(1) Tax impact was nominal for all periods.

See accompanying Notes to Unaudited Consolidated Financial Statements.

KVH INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, unaudited)



	Common Stock			Additional Paid-in Capital		Retained Deficit		Accumulated Other Comprehensive Loss		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount								Shares	Amount
Balance at March 31, 2024	21,205	$	212	$	165,768	$	(4,867)	$	(3,956)	(1,456)	$	(12,090)	$	145,067
Net loss	—	—		—		(2,376)		—		—	—		(2,376)
Other comprehensive loss	—	—		—		—		(35)		—	—		(35)
Stock-based compensation	—	—		722		—		—		—	—		722






Exercise of stock options and issuance of restricted stock awards, net of forfeitures	(35)	—		—		—		—		—	—		—

Balance at June 30, 2024	21,170	$	212	$	166,490	$	(7,243)	$	(3,991)	(1,456)	$	(12,090)	$	143,378



	Common Stock			Additional Paid-in Capital		Retained Deficit		Accumulated Other Comprehensive Loss		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount								Shares	Amount
Balance at December 31, 2023	21,067	$	211	$	165,140	$	(1,704)	$	(4,185)	(1,456)	$	(12,090)	$	147,372
Net loss	—	—		—		(5,539)		—		—	—		(5,539)
Other comprehensive income	—	—		—		—		194		—	—		194
Stock-based compensation	—	—		1,244		—		—		—	—		1,244
Issuance of common stock under employee stock purchase plan	24	—		95		—		—		—	—		95

Exercise of stock options and issuance of restricted stock awards, net of forfeitures	79	1		11		—		—		—	—		12

Balance at June 30, 2024	21,170	$	212	$	166,490	$	(7,243)	$	(3,991)	(1,456)	$	(12,090)	$	143,378



	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount								Shares	Amount
Balance at March 31, 2023	20,826	$	208	$	161,779	$	14,085	$	(4,031)	(1,456)	$	(12,090)	$	159,951
Net income	—	—		—		773		—		—	—		773
Other comprehensive income	—	—		—		—		76		—	—		76
Stock-based compensation	—	—		578		—		—		—	—		578


Exercise of stock options and issuance of restricted stock awards, net of forfeitures	143	2		1,333		—		—		—	—		1,335

Balance at June 30, 2023	20,969	$	210	$	163,690	$	14,858	$	(3,955)	(1,456)	$	(12,090)	$	162,713



	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount								Shares	Amount
Balance at December 31, 2022	20,631	$	206	$	160,475	$	13,718	$	(4,110)	(1,433)	$	(11,851)	$	158,438
Net income	—	—		—

SEC Form 10-Q filed by KVH Industries Inc.