MIDDLETOWN, R.I., Aug. 02, 2017 (GLOBE NEWSWIRE) -- KVH Industries, Inc., (Nasdaq:KVHI) reported financial results for the
quarter ended June 30, 2017 today. The company will hold a conference call to discuss these results at 10:30 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 2017 Highlights
- Revenue for the second quarter of 2017 was $40.5 million, a decrease of 12%, from $46.0 million in the second quarter of
2016. On a constant currency basis, revenue decreased 10%.
- In the second quarter of 2017, mini-VSAT Broadband Airtime revenue grew $1.0 million, or 6%, compared to the second quarter
of 2016. Likewise, the number of airtime subscribers also increased 6% for this period. Usage-based airtime plans grew to 60% for
all airtime plans, helping increase airtime gross margin to a record 39%.
- AgilePlans, our new Connectivity as a Service Program, for the commercial maritime sector, launched successfully in the
quarter, representing 20% of all mini-VSAT Broadband shipments. The revenue recognized from AgilePlans was not significant due to
the time between shipments and activation.
- Strong inertial measurement unit (IMU) sales drove fiber optic gyro (FOG) product revenue higher by 11% and contracted
engineering service revenue almost doubled in the second quarter of 2017 compared to the second quarter of 2016.
- Net loss in the second quarter of 2017 was $2.0 million, or $0.12 per share, compared to net loss of $0.8 million, or $0.05
per share, in the second quarter of 2016.
- Non-GAAP net income in the second quarter of 2017 was $0.5 million, or $0.03 per share, compared to $1.2 million, or $0.08
per share in the second quarter of 2016.
- Non-GAAP adjusted EBITDA in the second quarter of 2017 was $2.1 million compared to $3.5 million in the second quarter of
2016.
Commenting on the quarter, Martin Kits van Heyningen, KVH’s Chief Executive Officer, said, “We continue to be
pleased with the growth in our Airtime service revenues and margins. We recorded another quarter of solid airtime and
subscriber growth, and achieved record airtime gross margins of 39%. In addition, we launched our new subscription-based
Connectivity as a Service Program, AgilePlans, this quarter and the feedback we have received so far continues to be very
positive. AgilePlans represented over 38% of TracPhone V7-IP and V11-IP maritime shipments in the second quarter.”
The company operates in two segments, mobile connectivity and inertial navigation. Net sales for the mobile connectivity segment in
the second quarter of 2017 decreased $2.8 million, or 8%, as compared to the second 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
delivered to customers, and lower content and training revenues driven primarily by the weakness in the British Pound, partially
offset by higher airtime revenues. Net sales for our inertial navigation segment in the second quarter of 2017 decreased $2.7
million, or 30%, compared to the second quarter of 2016, driven by a $3.5 million decrease in TACNAV sales, due to a large order
that occurred in the second 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)
| |
|
Quarter Ended
June 30, |
|
Six Months Ended
June 30, |
| |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| GAAP Results |
|
|
|
|
|
|
|
|
| Revenue |
|
$ |
40.5 |
|
|
$ |
46.0 |
|
|
$ |
80.7 |
|
|
$ |
86.4 |
|
| Net loss |
|
$ |
(2.0 |
) |
|
$ |
(0.8 |
) |
|
$ |
(6.9 |
) |
|
$ |
(3.6 |
) |
| Net loss per share |
|
$ |
(0.12 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.42 |
) |
|
$ |
(0.23 |
) |
| |
|
|
|
|
|
|
|
|
| Non-GAAP Results |
|
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
0.5 |
|
|
$ |
1.2 |
|
|
$ |
(0.9 |
) |
|
$ |
0.6 |
|
| Net income (loss) per share |
|
$ |
0.03 |
|
|
$ |
0.08 |
|
|
$ |
(0.05 |
) |
|
$ |
0.04 |
|
| Adjusted EBITDA |
|
$ |
2.1 |
|
|
$ |
3.5 |
|
|
$ |
1.3 |
|
|
$ |
4.5 |
|
For more information regarding our non-GAAP financial measures, see the tables at the end of this
release.
Second Quarter Financial Summary
Revenue was $40.5 million for the second quarter of 2017, a decrease of 12%, compared to the second quarter of
2016. The British Pound negatively impacted consolidated revenue in 2017 by $0.8 million, or 2%.
Product revenues for the second quarter of $14.3 million were 29% lower than the prior year quarter, due to a
decrease in mobile connectivity product sales of $2.7 million and a $3.0 million decrease in our inertial navigation product sales.
Mobile connectivity product sales decreased 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 under which we do not recognize revenue from product
sales. We believe inclement weather, particularly in the U.S. East Coast region, also impacted our marine business as boat owners
delayed the seasonal retrofitting of their vessels. Inertial navigation product sales decreased due to a $3.5 million decrease in
TACNAV sales, due to a large order which occurred in the prior year quarter, partially offset by a $0.5 million increase in FOG
product sales.
Service revenues for the second quarter were $26.2 million, an increase of 1% compared to the prior year quarter.
Airtime service revenues, which include mini-VSAT Broadband airtime revenues, increased 6%. Content and training revenues, which
include our entertainment, e-Learning, and safety content decreased by 9%; however, on a constant-currency basis, these revenues
increased by 1%. Weakness in the British Pound negatively impacted content and training revenues by $0.8 million, or 10%. Our
engineering service revenues in the second quarter of 2017 increased by $0.4 million compared to the second quarter of 2016 as a
result of a substantial contract which began in the first quarter and is expected to be completed in the third quarter of 2017.
Our operating expenses decreased $1.0 million year-over-year to $19.4 million, primarily due to a decrease in
commissions and a decrease in unfunded engineering costs, partially offset by an increase in consulting, salaries, and associated
compensation expenses due to increased headcount to support our strategic initiatives.
Six Months Ended June 30 Financial Summary
Revenue was $80.7 million for the six months ended June 30, 2017, a decrease of 6%, compared to the six months
ended June 30, 2016. The British Pound negatively impacted consolidated revenue in 2017 by $1.8 million, or 2%.
Product revenues for the six months ended June 30, 2017 were $29.2 million which was 18% lower than the comparable
period last year, due to a decrease in mobile connectivity product sales of $3.7 million and a $2.6 million decrease in our
inertial navigation product sales. Mobile connectivity product sales decreased primarily due to the decrease in the second quarter
described above. Inertial navigation product sales decreased due to a $3.5 million decrease in TACNAV sales, due to a large order
which occurred in the second quarter of 2016 and was partially offset by a $0.9 million increase in FOG product sales in the
current period.
Service revenues for the six months ended June 30, 2017 were $51.5 million, an increase of 1% compared to the year
ago period. Airtime service revenues, which include mini-VSAT Broadband airtime revenues, increased 6%. Content and training
revenues, which include our entertainment, e-Learning, and safety content, decreased by 11% and were relatively flat on a
constant-currency basis. Weakness in the British Pound negatively impacted content and training revenues by $1.8 million, or 12%.
Our engineering service revenues in the six months ended June 30, 2017 increased by $1.1 million compared to the six months ended
June 30, 2016 as a result of a substantial contract which began in the first quarter and is expected to be completed in the third
quarter of 2017.
Our operating expenses decreased $0.2 million year-over-year to $40.3 million, primarily due to a decrease in
commission expense and a decrease in unfunded engineering costs partially offset by an increase in consulting, salaries, and
associated compensation expenses due to increased headcount to support our strategic initiatives.
Third Quarter 2017 and Full Year 2017 Outlook
We continue to expect that 2017 will be an important year of strategic investment in certain initiatives that we
believe have the potential to result in significant revenue growth in 2018 and beyond. We are tightening our revenue guidance,
which is now $170 million to $184 million. Our full year guidance for EPS and EBITDA remains unchanged from the guidance provided
earlier in the year as we have aligned our costs to offset the impact of the modest reduction in the high end of our revenue range.
Furthermore, while we remain optimistic that the large anticipated orders for our TACNAV systems will be received in 2017 with a
limited number shipping this year, we have not received those orders at this point. We now expect the 2017 installment on those
orders to be shipped in the fourth quarter. Specifically, our guidance for the third quarter and full year of 2017 is as
follows:
| (in millions, except per share data) |
|
Expected Range for the
Third Quarter |
|
Expected Range for the
Full Year |
| |
|
From |
|
To |
|
From |
|
To |
| Revenue |
|
$ |
41.0 |
|
|
$ |
43.0 |
|
|
$ |
170.0 |
|
|
$ |
184.0 |
|
| GAAP EPS |
|
$ |
(0.21 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.69 |
) |
|
$ |
(0.38 |
) |
| Non-GAAP EPS |
|
$ |
0.01 |
|
|
$ |
0.04 |
|
|
$ |
0.07 |
|
|
$ |
0.27 |
|
| Non-GAAP Adjusted EBITDA |
|
$ |
1.2 |
|
|
$ |
1.9 |
|
|
$ |
8.5 |
|
|
$ |
13.5 |
|
Other Recent Announcements
- KVH Announces CHARTlink for ChartCo, Delivering Charts and Publications to Vessels at Sea Seamlessly
- KVH Announces YOURlink for Delivering Corporate Videos to Vessels at Sea
- KVH Videotel Launches Extensive Training Suite to Address Gaps in Seafarer Engineering Knowledge
- Smit Lamnalco Selects KVH Maritime Solution for Connectivity and Network Management Services on its Offshore Vessels
Please review the corresponding press releases for more details regarding these developments.
Conference Call Details
KVH Industries will host a conference call today at 10:30 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: 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; the uncertain 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; 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, 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 Annual Report on Form
10-K filed with the Securities and Exchange Commission on March 9, 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 Ended
June 30, |
|
Six Months Ended
June 30, |
| |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| Sales: |
|
|
|
|
|
|
|
|
| Product |
|
$ |
14,323 |
|
|
$ |
20,062 |
|
|
$ |
29,186 |
|
|
$ |
35,444 |
|
| Service |
|
26,126 |
|
|
25,904 |
|
|
51,474 |
|
|
50,902 |
|
| Net sales |
|
40,449 |
|
|
45,966 |
|
|
80,660 |
|
|
86,346 |
|
| Costs and expenses: |
|
|
|
|
|
|
|
|
| Costs of product sales |
|
9,295 |
|
|
12,989 |
|
|
19,834 |
|
|
23,659 |
|
| Costs of service sales |
|
13,094 |
|
|
13,259 |
|
|
26,362 |
|
|
26,250 |
|
| Research and development |
|
3,761 |
|
|
4,037 |
|
|
7,708 |
|
|
7,820 |
|
| Sales, marketing and support |
|
8,124 |
|
|
9,234 |
|
|
16,864 |
|
|
17,892 |
|
| General and administrative |
|
7,543 |
|
|
7,140 |
|
|
15,730 |
|
|
14,792 |
|
| Total costs and expenses |
|
41,817 |
|
|
46,659 |
|
|
86,498 |
|
|
90,413 |
|
| Loss from operations |
|
(1,368 |
) |
|
(693 |
) |
|
(5,838 |
) |
|
(4,067 |
) |
| Interest income |
|
159 |
|
|
118 |
|
|
325 |
|
|
223 |
|
| Interest expense |
|
349 |
|
|
353 |
|
|
702 |
|
|
728 |
|
| Other (expense) income, net |
|
(112 |
) |
|
144 |
|
|
(180 |
) |
|
67 |
|
| Loss before income tax expense (benefit) |
|
(1,670 |
) |
|
(784 |
) |
|
(6,395 |
) |
|
(4,505 |
) |
| Income tax expense (benefit) |
|
356 |
|
|
22 |
|
|
516 |
|
|
(908 |
) |
| Net loss |
|
$ |
(2,026 |
) |
|
$ |
(806 |
) |
|
$ |
(6,911 |
) |
|
$ |
(3,597 |
) |
| Net loss per common share: |
|
|
|
|
|
|
|
|
| Basic and diluted |
|
$ |
(0.12 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.42 |
) |
|
$ |
(0.23 |
) |
| Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
|
| Basic and diluted |
|
16,446 |
|
|
15,825 |
|
|
16,354 |
|
|
15,774 |
|
| KVH INDUSTRIES, INC. AND
SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE
SHEETS |
| (in thousands,
unaudited) |
| |
| |
|
June 30,
2017 |
|
December 31,
2016 |
| ASSETS |
|
|
|
|
| Cash, cash equivalents and marketable securities |
|
$ |
44,202 |
|
|
$ |
52,134 |
|
| Accounts receivable, net |
|
27,068 |
|
|
31,152 |
|
| Inventories |
|
23,412 |
|
|
20,745 |
|
| Other current assets |
|
4,863 |
|
|
4,801 |
|
| Total current assets |
|
99,545 |
|
|
108,832 |
|
| Property and equipment, net |
|
41,754 |
|
|
36,586 |
|
| Goodwill |
|
32,802 |
|
|
31,343 |
|
| Intangible assets, net |
|
16,657 |
|
|
17,838 |
|
| Other non-current assets |
|
5,751 |
|
|
5,134 |
|
| Non-current deferred income taxes |
|
24 |
|
|
24 |
|
| Total assets |
|
$ |
196,533 |
|
|
$ |
199,757 |
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| Accounts payable and accrued expenses |
|
$ |
29,658 |
|
|
$ |
25,082 |
|
| Deferred revenue |
|
9,906 |
|
|
6,661 |
|
| Current portion of long-term debt |
|
2,477 |
|
|
7,900 |
|
| Total current liabilities |
|
42,041 |
|
|
39,643 |
|
| Other long-term liabilities |
|
33 |
|
|
326 |
|
| Non-current deferred tax liability |
|
3,302 |
|
|
3,133 |
|
| Long-term debt, excluding current portion |
|
45,815 |
|
|
50,153 |
|
| Stockholders’ equity |
|
105,342 |
|
|
106,502 |
|
| Total liabilities and stockholders’ equity |
|
$ |
196,533 |
|
|
$ |
199,757 |
|
| KVH INDUSTRIES, INC. AND
SUBSIDIARIES |
| RECONCILIATION OF GAAP NET LOSS TO NON-GAAP
NET INCOME (LOSS) |
| (in thousands, except per share amounts,
unaudited) |
| |
| |
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
| |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
| Net loss - GAAP |
|
$ |
(2,026 |
) |
|
$ |
(806 |
) |
|
$ |
(6,911 |
) |
|
$ |
(3,597 |
) |
|
| Amortization of intangibles |
|
1,102 |
|
|
1,250 |
|
|
2,170 |
|
|
2,533 |
|
|
| Stock-based compensation expense |
|
852 |
|
|
829 |
|
|
1,812 |
|
|
1,881 |
|
|
| Tax effect on the foregoing |
|
(634 |
) |
|
(283 |
) |
(a) |
(1,045 |
) |
|
(640 |
) |
(a) |
| Discrete tax expense, net (b) |
|
1,274 |
|
|
22 |
|
|
3,123 |
|
|
31 |
|
|
| Acquisition-related compensation |
|
— |
|
|
179 |
|
|
— |
|
|
358 |
|
|
| Net income (loss) - Non-GAAP |
|
$ |
568 |
|
|
$ |
1,191 |
|
|
$ |
(851 |
) |
|
$ |
566 |
|
|
| |
|
|
|
|
|
|
|
|
|
| Net income (loss) per common share - Non-GAAP: |
|
|
|
|
|
|
|
|
|
| Basic and diluted |
|
$ |
0.03 |
|
|
$ |
0.08 |
|
|
$ |
(0.05 |
) |
|
$ |
0.04 |
|
|
| |
|
|
|
|
|
|
|
|
|
| Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
| Basic |
|
16,446 |
|
|
15,825 |
|
|
16,354 |
|
|
15,744 |
|
|
| Diluted |
|
16,497 |
|
|
15,867 |
|
|
16,354 |
|
|
15,886 |
|
|
(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 TO
NON-GAAP |
| EBITDA AND NON-GAAP ADJUSTED
EBITDA |
| (in thousands,
unaudited) |
| |
| |
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
| |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| GAAP net loss |
|
$ |
(2,026 |
) |
|
$ |
(806 |
) |
|
$ |
(6,911 |
) |
|
$ |
(3,597 |
) |
| Income tax expense (benefit) |
|
356 |
|
|
22 |
|
|
516 |
|
|
(908 |
) |
| Interest expense, net |
|
190 |
|
|
235 |
|
|
377 |
|
|
505 |
|
| Depreciation and amortization |
|
2,716 |
|
|
3,066 |
|
|
5,477 |
|
|
6,255 |
|
| Non-GAAP EBITDA |
|
1,236 |
|
|
2,517 |
|
|
(541 |
) |
|
2,255 |
|
| Stock-based compensation expense |
|
852 |
|
|
829 |
|
|
1,812 |
|
|
1,881 |
|
| Acquisition-related compensation |
|
— |
|
|
179 |
|
|
— |
|
|
358 |
|
| Non-GAAP adjusted EBITDA |
|
$ |
2,088 |
|
|
$ |
3,525 |
|
|
$ |
1,271 |
|
|
$ |
4,494 |
|
| KVH INDUSTRIES, INC. AND
SUBSIDIARIES |
| NON-GAAP EPS GUIDANCE |
| (unaudited) |
| |
| |
|
Third Quarter
Fiscal 2017 (Projected) |
|
Full Year
Fiscal 2017 (Projected) |
| Net loss per common share |
|
$(0.21) - $(0.17) |
|
$(0.69) - $(0.38) |
| |
|
|
|
|
| Estimated amortization of intangibles (a) |
|
$0.07 |
|
$0.28 |
| Estimated stock-based compensation expense |
|
$0.05 |
|
$0.23 |
| Estimated tax effect |
|
$(0.03) |
|
$(0.13) |
| Discrete tax adjustments (b) |
|
$0.13 - $0.12 |
|
$0.38 - $0.27 |
| |
|
|
|
|
| Non-GAAP net income per common share |
|
$0.01 - $0.04 |
|
$0.07 - $0.27 |
(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) |
| |
| |
|
Third Quarter
Fiscal 2017 (Projected) |
|
Full Year
Fiscal 2017 (Projected) |
| GAAP net loss |
|
$(3.5) - $(2.8) |
|
$(11.1) - $(6.1) |
| |
|
|
|
|
| Estimated income tax provision |
|
$0.5 |
|
$1.6 |
| Estimated interest expense, net |
|
$0.2 |
|
$0.7 |
| Estimated depreciation and amortization |
|
$3.1 |
|
$13.6 |
| Estimated stock-based compensation expense |
|
$0.9 |
|
$3.7 |
| |
|
|
|
|
| Non-GAAP adjusted EBITDA |
|
$1.2 - $1.9 |
|
$8.5 - $13.5 |
| KVH INDUSTRIES, INC. AND
SUBSIDIARIES |
| QUARTER TO DATE AND YEAR TO DATE REVENUE AND
OPERATING INCOME BY SEGMENT |
| (in millions except for percentages,
unaudited) |
| |
| Segment Net Sales |
|
Quarter Ended
June 30, |
|
Six Months Ended
June 30, |
| |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| Mobile connectivity sales |
|
|
|
|
|
|
|
|
| Product |
|
$ |
8.9 |
|
|
$ |
11.6 |
|
|
$ |
18.7 |
|
|
$ |
22.4 |
|
| Service |
|
25.2 |
|
|
25.3 |
|
|
49.6 |
|
|
49.8 |
|
| Net sales |
|
$ |
34.1 |
|
|
$ |
36.9 |
|
|
$ |
68.3 |
|
|
$ |
72.2 |
|
| |
|
|
|
|
|
|
|
|
| Inertial navigation sales |
|
|
|
|
|
|
|
|
| Product |
|
$ |
5.4 |
|
|
$ |
8.4 |
|
|
$ |
10.5 |
|
|
$ |
13.1 |
|
| Service |
|
1.0 |
|
|
0.7 |
|
|
1.9 |
|
|
1.1 |
|
| Net sales |
|
$ |
6.4 |
|
|
$ |
9.1 |
|
|
$ |
12.4 |
|
|
$ |
14.2 |
|
| Operating (Loss) Income |
|
Quarter Ended
June 30, |
|
Six Months Ended
June 30, |
| |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| Mobile connectivity |
|
$ |
2.6 |
|
|
$ |
1.6 |
|
|
$ |
3.3 |
|
|
$ |
3.6 |
|
| Inertial navigation |
|
0.4 |
|
|
1.6 |
|
|
0.3 |
|
|
0.7 |
|
| |
|
3.0 |
|
|
3.2 |
|
|
3.6 |
|
|
4.3 |
|
| Unallocated |
|
(4.4 |
) |
|
(3.9 |
) |
|
(9.4 |
) |
|
(8.4 |
) |
| Loss from operations |
|
$ |
(1.4 |
) |
|
$ |
(0.7 |
) |
|
$ |
(5.8 |
) |
|
$ |
(4.1 |
) |
| |
|
Quarter Ended
June 30, |
|
Six Months Ended
June 30, |
| |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| Mobile Connectivity Revenue Components |
|
|
|
|
|
|
|
|
| Product Sales |
|
22 |
% |
|
25 |
% |
|
23 |
% |
|
26 |
% |
| mini-VSAT Broadband Airtime |
|
41 |
% |
|
35 |
% |
|
40 |
% |
|
35 |
% |
| Content and Training |
|
20 |
% |
|
19 |
% |
|
20 |
% |
|
20 |
% |
| Inertial Navigation Revenue Components |
|
|
|
|
|
|
|
|
|
|
|
|
| FOG based G&S products |
|
12 |
% |
|
9 |
% |
|
11 |
% |
|
10 |
% |
Contact: KVH Industries, Inc. Donald W. Reilly 401-608-8977 dreilly@kvh.com FTI Consulting Christine Mohrmann 212-850-5600
