MIDDLETOWN, R.I., March 06, 2025 (GLOBE NEWSWIRE) -- KVH Industries, Inc., (Nasdaq: KVHI), reported financial results for the quarter and full year ended December 31, 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. Fourth Quarter 2024 Highlights Total revenues decreased by 14% in the fourth quarter of 2024 to $26.9 millio ...

Company Overview - KVH Industries, Inc. is a global leader in maritime and mobile connectivity, operating through the KVH ONE network [3] - The company was founded in 1982 and is headquartered in Middletown, RI, with research, development, and manufacturing operations also located in Middletown, RI, and over a dozen offices worldwide [3] - KVH provides connectivity solutions for various sectors including commercial maritime, leisure marine, military/government, and land mobile applications, featuring product lines such as TracNet, TracPhone, and TracVision [3] Financial Results Announcement - KVH Industries will announce its financial results for the fourth quarter and fiscal year ending December 31, 2024, on March 6, 2025 [1] - An investor conference call will be held at 9:00 a.m. ET, hosted by CEO Brent Bruun and CFO Anthony Pike [1] Investor Engagement - A live broadcast of the conference call will be available online at investors.kvh.com, with an audio replay accessible for at least two weeks post-call [2] - Investors can submit questions during or after the call via email to IR@kvh.com [2]

Core Viewpoint - KVH Industries, Inc. has announced the sale of its Rhode Island office and factory, expecting to generate approximately $12 million for working capital and strategic opportunities, while also initiating a share repurchase program of up to $10 million [2][5]. Group 1: Property Sales - KVH has entered into a purchase and sale agreement with Knight Capital LLC to sell its property at 75 Enterprise Center, Middletown, Rhode Island, for $8.5 million, including related buildings and assets [2][4]. - The company will remain a tenant under a triple-net lease for an initial term of six months, with the option to extend for an additional three months as it transitions to a new headquarters [3]. - A second agreement was made with 50 Enterprise LLC, a subsidiary of Seacorp, Inc., to sell its property at 50 Enterprise Center for $4.5 million, also including related buildings and assets [4]. Group 2: Share Repurchase Program - The Board of Directors has authorized a share repurchase program allowing the company to buy back up to $10 million of its common stock [5]. - The repurchase may occur through various means, including open market purchases and privately negotiated transactions, with management having discretion over the timing and volume [6]. - The program does not obligate KVH to repurchase a minimum number of shares and can be modified or terminated at any time [6].

Core Insights - KVH Industries, Inc. has launched TracNet Coastal and TracNet Coastal Pro terminals, enhancing its maritime connectivity portfolio with a cellular/Wi-Fi system [1][2] - TracNet Coastal offers connectivity in 135 countries, utilizing KVH Fusion eSIM technology for high-performance communication [1][3] - The demand for faster and more reliable connectivity at sea is increasing, with TracNet Coastal providing cellular speeds up to 300 Mbps and data costs as low as $1 per gigabyte [2][3] Product Features - TracNet Coastal is a standalone hybrid communication system that can also enhance existing VSAT and low earth orbit (LEO) services [1][2] - The system features intelligent hybrid switching, allowing automatic switching to marina Wi-Fi when in port, thus saving data costs [2][3] - TracNet Coastal is available in two configurations: a standalone system and a more advanced Pro version that supports additional WAN connections [3] Technology and Innovation - The exclusive KVH Fusion eSIM technology enables seamless global cellular service without the need for physical SIM cards [3] - TracNet Coastal supports Wi-Fi calling and integrates with various WAN connections, including Starlink and OneWeb, providing flexibility for users [3] - The system is designed for easy installation with a single cable and optional mounting brackets, making it user-friendly for maritime applications [2][3] Market Position - KVH Industries is positioned as a global leader in maritime and mobile connectivity, serving various sectors including commercial maritime and leisure marine [5] - The introduction of TracNet Coastal and Pro terminals aims to meet the growing expectations for high-speed connectivity in coastal waters and ports [2][3]

Earnings Overview - KVH Industries held its Q3 2024 earnings conference call on November 7, 2024, with key participants including CFO Anthony Pike and CEO Brent Bruun [1][2][3] - The earnings release for Q3 2024 was published earlier on the same day, and a recording of the call will be available on the company's website [3][4] Financial Metrics - The company discussed adjusted EBITDA, a non-GAAP financial measure, with definitions and reconciliations provided in the press release [5] Forward-Looking Statements - The conference call included forward-looking statements subject to assumptions and uncertainties, which may cause actual results to differ from those expressed [4]

Financial Data and Key Metrics Changes - Third quarter airtime and service revenue was $24.4 million, down $5 million from the third quarter of 2023 [7] - Total revenue for the quarter was $28.9 million, roughly a 13% decrease from a year earlier [8] - Airtime gross margin was 36.5%, up from 36.0% in the prior quarter [17] - Adjusted EBITDA for the quarter was $2.9 million, with capital expenditures of $1.5 million, resulting in adjusted EBITDA less CapEx of $1.4 million [20] - Ending cash balance was $49.8 million, up approximately $0.5 million from the beginning of the quarter [20] Business Line Data and Key Metrics Changes - The company increased its subscribing vessel count for the second consecutive quarter, reaching just below 6,800 vessels, a 2% increase from the prior quarter [19] - The company shipped a record number of communication antennas for the third consecutive quarter, driven by an increase in Starlink terminals and continued demand for VSAT units [8] - Shipments of the CommBox Edge Communications Gateway also increased for the second consecutive quarter [9] Market Data and Key Metrics Changes - Strong demand for mobile priority data service has led to the activation of more than 1,500 terminals since the start of the year [10] - The company is expanding beyond the maritime market with new priority plans for stationary use, including land-based applications in the U.S., Colombia, and Argentina [10] Company Strategy and Development Direction - The company is adapting to technological disruptions by expanding its portfolio of new technology and services, including the introduction of the OneWeb service [15][13] - The hybrid LEO/GEO deployments are increasing to meet the demands for leisure boaters and commercial fleets [16] - The company is focusing on a multichannel portfolio, including Starlink, to enhance communications for commercial and leisure subscribers worldwide [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges but expressed confidence in the path toward growth and profitability [16] - The company is responding to the U.S. Coast Guard's scaled-back airtime and VSAT terminal deployments as part of their annual renewal [13] - Management expects a good portion of prepaid commitments from Starlink to run off in 2025 [31] Other Important Information - The company is working on the final build-out of its manufacturing facility, which has led to an increase in inventories due to the procurement of raw materials [32] - Operating expenses for Q3 were $11.3 million, including a $1.1 million impairment charge related to the reclassification of the U.S. manufacturing facility [19] Q&A Session Summary Question: Follow-up on vessel count and growth between Starlink and VSAT units - Management clarified that while standalone VSAT units are contracting, many are being bundled with Starlink terminals, indicating a shift rather than a complete shedding of VSAT units [22][24] Question: Pipeline growth for Starlink - Management confirmed a robust pipeline for Starlink, with record terminal shipments and an expansion in the number of vessels potentially served [27] Question: Changes in distribution channels - Management stated that the distribution channels are robust and continuously adjusted to reach new potential subscribers, especially with the introduction of Starlink [28] Question: R&D investments outlook - Management indicated that the current R&D team is appropriately sized, and no major increases in R&D spending are anticipated [33] Question: Positioning of OneWeb relative to Starlink - Management noted that OneWeb will not be positioned directly against Starlink but rather as part of a hybrid service offering [36]

Revenue Performance - Net sales decreased by $4.2 million, or 13%, for the three months ended September 30, 2024, compared to the same period in 2023, primarily due to a $4.6 million decrease in airtime service sales [118]. - Service sales decreased by $5.0 million, or 17%, to $24.4 million for the three months ended September 30, 2024, driven by a decline in VSAT-only subscribers [118]. - Net sales decreased by $14.0 million, or 14%, for the nine months ended September 30, 2024, with service sales down 15% to $74.1 million and product sales down 9% to $12.8 million [131]. Cost Management - Costs of sales decreased by $1.1 million, or 5%, to $19.7 million for the three months ended September 30, 2024, compared to $20.7 million in the same period in 2023 [121]. - Costs of service sales decreased by $1.3 million, or 8%, to $15.0 million for the three months ended September 30, 2024, primarily due to a decrease in airtime costs [122]. - Costs of sales decreased by $5.1 million, or 8%, to $58.8 million for the nine months ended September 30, 2024, with costs of sales as a percentage of net sales increasing to 68% from 63% [133]. Product and Service Sales - Product sales increased by $0.8 million, or 20%, to $4.6 million for the three months ended September 30, 2024, primarily due to a $1.2 million increase in Starlink product sales [120]. - For the three months ended September 30, 2024, costs of product sales increased by $0.2 million, or 5%, to $4.7 million from $4.5 million in the same period of 2023, with costs of product sales as a percentage of product sales decreasing to 103% from 119% [123]. Research and Development - Research and development expense for the three months ended September 30, 2024 decreased by $1.0 million, or 41%, to $1.4 million from $2.4 million for the same period in 2023, representing 5% of net sales compared to 7% in 2023 [124]. - Research and development expense for the nine months ended September 30, 2024 decreased by $0.6 million, or 8%, to $6.8 million, representing 8% of net sales compared to 7% in 2023 [137]. Operating Expenses - Sales, marketing, and support expense for the three months ended September 30, 2024 increased by $0.1 million, or 2%, to $4.9 million, with the expense as a percentage of net sales rising to 17% from 15% [126]. - Sales, marketing, and support expense remained flat at $15.7 million for the nine months ended September 30, 2024, with the expense as a percentage of net sales increasing to 18% from 16% [138]. - General and administrative expense for the three months ended September 30, 2024 decreased by $0.6 million, or 13%, to $3.8 million, maintaining 13% of net sales for both periods [127]. Cash Flow and Financing - As of September 30, 2024, the company had $49.8 million in cash, cash equivalents, and marketable securities, with $108.1 million in working capital [143]. - Net cash used in operations was $13.6 million for the nine months ended September 30, 2024, compared to $2.7 million for the same period in 2023, primarily due to increased cash outflows related to prepaid expenses and other current assets [145]. - Net cash provided by financing activities decreased to $0.1 million for the nine months ended September 30, 2024, down from $2.3 million for the same period in 2023, representing a decrease of $2.2 million [147]. - The decrease in net cash provided by financing activities was primarily due to a $2.5 million decrease in cash inflows from the exercise of stock options and employee stock purchase plan purchases [147]. - Cash outflows related to the repurchase of common stock decreased by $0.2 million, which partially offset the overall decrease in cash inflows [147]. Strategic Changes - The company expects continued decline in quarterly revenues from VSAT service sales due to competition from LEO satellite service providers [119]. - The company announced a staged wind-down of its product manufacturing operations, reducing headcount by approximately 75 employees, or 20% of its total workforce [109]. - The company prepaid $17.0 million for access to a large block of Starlink Mobile Priority data at favorable rates, enhancing flexibility in developing custom airtime plans [110]. - The company plans to continue facilitating customer transitions to third-party hardware products compatible with its mobile satellite communications services [108]. - An impairment charge of $1.1 million was recorded for the property at 75 Enterprise Center, as its carrying value exceeded fair value less costs to sell [111].

Financial Performance - Total revenues decreased by 13% in Q3 2024 to $29.0 million from $33.2 million in Q3 2023[2] - Airtime revenue decreased by $4.6 million, or 17%, to $22.8 million in Q3 2024 compared to Q3 2023[2] - Net loss in Q3 2024 was $1.2 million, or $0.06 per share, compared to a net loss of $4.4 million, or $0.23 per share, in Q3 2023[3] - Non-GAAP adjusted EBITDA was $2.9 million in Q3 2024, down from $4.4 million in Q3 2023[4] - Service revenues for Q3 2024 were $24.4 million, a decrease of $5.0 million compared to Q3 2023[8] - Product revenues for Q3 2024 were $4.6 million, an increase of 20% compared to Q3 2023, driven by a $1.2 million increase in Starlink product sales[9] - Net sales for the three months ended September 30, 2024, were $28,971,000, a decrease of 12.5% compared to $33,195,000 for the same period in 2023[24] - Service sales decreased to $24,410,000, down 17.5% from $29,397,000 year-over-year, while product sales increased to $4,561,000, up 20.1% from $3,798,000[24] - The net loss for the three months ended September 30, 2024, was $1,199,000, compared to a net loss of $4,369,000 for the same period in 2023, representing a 72.6% improvement[24] - Non-GAAP adjusted EBITDA for the three months ended September 30, 2024, was $2,932,000, compared to $4,385,000 for the same period in 2023, reflecting a decrease of 33.1%[28] - The company reported a loss from operations of $1,991,000 for the three months ended September 30, 2024, compared to a loss of $5,150,000 for the same period in 2023[24] Expenses and Assets - Operating expenses decreased by $6.3 million to $11.3 million in Q3 2024 compared to $17.6 million in Q3 2023[10] - Total costs and expenses for the three months ended September 30, 2024, were $30,962,000, a decrease of 19.1% compared to $38,345,000 in the same period last year[24] - Cash, cash equivalents, and marketable securities decreased to $49,765,000 as of September 30, 2024, down from $69,771,000 at December 31, 2023[26] - Total current assets increased to $131,666,000 as of September 30, 2024, compared to $118,818,000 at December 31, 2023, marking an increase of 10.8%[26] - Stockholders' equity decreased to $142,698,000 as of September 30, 2024, down from $147,372,000 at December 31, 2023, a decline of 3.7%[26] Strategic Developments - KVH expanded its Starlink maritime options and achieved a new subscriber milestone in August 2024[15] - The company is adapting to technological disruptions and increasing hybrid LEO/GEO deployments to meet customer demands[5] - KVH plans to sell its warehouse building and surface parking lot in Middletown, Rhode Island, leading to non-cash impairment charges of $1.1 million[3] Shareholder Information - The weighted average number of common shares outstanding for the three months ended September 30, 2024, was 19,433,000, compared to 19,231,000 for the same period in 2023[24]

Core Points - KVH Industries, Inc. received the 2024 Product of Excellence Award for its TracVision® UHD7 satellite TV system at the 2024 NMEA Conference, marking the 27th consecutive year a KVH TracVision system has been recognized in the marine satellite TV category [1][2] Company Overview - KVH Industries, Inc. is a global leader in maritime and mobile connectivity, founded in 1982 and based in Middletown, RI, with operations in research, development, and manufacturing [4] - The company offers connectivity solutions for various sectors, including commercial maritime, leisure marine, military/government, and land mobile applications, featuring product lines such as TracNet™, TracPhone®, and TracVision [4]

Financial Data and Key Metrics Changes - Second quarter airtime revenue was $23.0 million, down $3.9 million from Q2 2023, with total revenue for the quarter at $28.7 million, representing a 15% decrease year-over-year [4] - Airtime gross margin decreased to 36.0% from 41.8% in the prior quarter, primarily due to churn in traditional VSAT vessels [9] - Adjusted EBITDA for the quarter was $2.6 million, with capital expenditures also at $2.6 million, resulting in adjusted EBITDA less CapEx of 0 [11] Business Line Data and Key Metrics Changes - The company experienced a slight increase in subscriber vessel count, reversing the decline from Q1, and shipped a record number of communication antennas for the second consecutive quarter [5] - Product gross profit for Q2 was negative $0.3 million, including $0.5 million in employee severance charges, but excluding these charges, product gross profit was positive $0.2 million compared to negative $1.4 million in Q1 of the previous year [10] Market Data and Key Metrics Changes - The maritime industry is undergoing significant changes due to the emergence of NGSO networks, impacting the company's service offerings and market positioning [4] - The company signed a bulk data distribution agreement with Starlink, enhancing its ability to develop and sell custom data plans [5] Company Strategy and Development Direction - The company has completed reorganization efforts aimed at repositioning for future growth, expecting annualized operating expense savings of approximately $5 million [4] - New product and service enhancements are underway, including the rollout of OneWeb service and expanded capabilities of CommBox Edge [7] Management's Comments on Operating Environment and Future Outlook - Management noted that the industry is changing rapidly, with a decline in stand-alone VSAT service subscriptions, but they are seeing growth in hybrid solutions [8] - The company anticipates subscriber growth in Q3 and is optimistic about achieving strategic, financial, and operational goals for 2024 [8] Other Important Information - The ending cash balance was $49.3 million, down approximately $17 million from the beginning of the quarter due to a payment related to the Starlink agreement [11] - The company expects 2024 revenue to be in the range of approximately $117 million to $127 million, with adjusted EBITDA expected between $6 million and $12 million [11] Q&A Session Summary Question: Clarification on cost savings - Management confirmed $5 million in annualized operating expense savings, correlating with previously mentioned figures [13] Question: Customer bundling trends - Existing customers are both swapping for Starlink and adding it to their existing VSAT services, with trends observed across leisure and commercial markets [14][15] Question: ARPU trends - ARPU is currently flat, with Starlink being a relatively small portion of the overall business [16][17] Question: Impact of maritime market dynamics - No significant negative impact from broader market dynamics, but Starlink is opening up new markets for both leisure and commercial vessels [19] Question: Status of OneWeb service - OneWeb service is currently in testing and expected to launch later this quarter [20] Question: Competitive landscape beyond Starlink - The next significant competitor expected is Amazon Kuiper, with OneWeb launching soon [26]