Part I [Business](index=5&type=section&id=Item%201.%20Business) The company operates as a single segment focused on mobile connectivity, having divested non-core businesses to concentrate on maritime markets and hybrid solutions - In 2022, KVH sold its inertial navigation business to EMCORE Corporation and its subsidiary KVH Media Group Entertainment Limited, **shifting its focus to its core mobile connectivity business**[17](index=17&type=chunk)[51](index=51&type=chunk) - The company introduced its **TracNet H-series hybrid terminals** (VSAT, 5G/LTE, Wi-Fi) in July 2022 and began offering **Starlink terminals** as a companion solution in March 2023 to enhance its connectivity offerings[25](index=25&type=chunk)[34](index=34&type=chunk) - The company's **AgilePlans**, a Connectivity as a Service (CaaS) model, provides hardware and services for a monthly fee without a long-term contract, where KVH retains ownership of the equipment[42](index=42&type=chunk) - As of December 31, 2022, the company had 397 team members, with a **global turnover rate of 18%** in 2022, excluding reductions from business sales and restructuring[77](index=77&type=chunk)[80](index=80&type=chunk)[82](index=82&type=chunk) Consolidated Net Sales Breakdown (2021-2022) | Revenue Source | 2022 Percentage | 2021 Percentage | | :--- | :--- | :--- | | Airtime Service | 74% | 69% | | Product Sales | 19% | 22% | | Content Services | 4% | 6% | [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from its history of losses, intense competition from LEO networks, reliance on key suppliers, and international trade complexities - The company has a **history of substantial losses** from continuing operations and may incur future losses due to investments in satellite capacity and R&D, alongside supply chain constraints[92](index=92&type=chunk) - **Competition is intensifying**, particularly from new non-geostationary satellite orbit (NGSO) services like **Starlink and OneWeb**, which could impact the commercial maritime business[126](index=126&type=chunk)[128](index=128&type=chunk) - The business **relies on third-party satellite services** from providers like Intelsat, Sky Perfect-JSAT, and Inmarsat; any disruption could significantly harm sales and operations[106](index=106&type=chunk)[107](index=107&type=chunk) - The company **depends on sole or limited source suppliers** for key components and has experienced product delivery delays and increased costs due to global chip shortages and supply chain constraints[133](index=133&type=chunk) - The sale of the inertial navigation business **reduces the company's revenue base**, magnifying the impact of fixed overhead costs and making the company solely reliant on its mobile connectivity business[122](index=122&type=chunk) - **International operations account for a majority of revenue (62% in 2022)** and expose the company to risks including tariffs, trade restrictions, foreign currency fluctuations, and complex regulatory environments[117](index=117&type=chunk)[140](index=140&type=chunk)[142](index=142&type=chunk) [Unresolved Staff Comments](index=27&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[149](index=149&type=chunk) [Properties](index=27&type=section&id=Item%202.%20Properties) The company's principal facilities include two owned properties in Rhode Island and a leased European headquarters in Denmark Principal Facilities as of December 31, 2022 | Location | Type | Principal Uses | Square Footage | Ownership | | :--- | :--- | :--- | :--- | :--- | | Middletown, RI | Office | Corp. HQ, R&D, Sales, Admin | 75,000 | Owned | | Middletown, RI | Plant/Warehouse | Manufacturing & Warehousing | 75,300 | Owned | | Kokkedal, Denmark | Office/Warehouse | European HQ, Sales, Support | 11,000 | Leased | [Legal Proceedings](index=27&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine litigation that is not expected to have a material adverse effect on the business - The company is involved in routine litigation but **does not expect any current proceedings to materially harm its business**, financial condition, or results of operations[151](index=151&type=chunk)[444](index=444&type=chunk) [Mine Safety Disclosures](index=28&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[152](index=152&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=28&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "KVHI", and it has never paid cash dividends, retaining earnings for operations - The company's common stock trades on the **Nasdaq Global Select Market under the symbol "KVHI"**[154](index=154&type=chunk) - KVH has **never declared or paid cash dividends** and has no plans to do so, intending to retain future earnings to finance operations[155](index=155&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, net sales from continuing operations grew 4%, while the sale of the inertial navigation business drove a reported net income of $24.1 million [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Net sales rose 4% to $138.9 million in 2022, driven by service sales, while net income reached $24.1 million due to a gain from discontinued operations - The increase in service sales was primarily due to a **$10.4 million rise in VSAT service sales**, while the decrease in product sales was mainly from a **$3.1 million decline in VSAT product sales** due to lower unit volume[176](index=176&type=chunk)[177](index=177&type=chunk) - General and administrative expenses **decreased by $4.1 million (14%)**, primarily due to a $3.4 million decrease in professional fees related to a 2021 proxy contest and a $0.9 million contra-expense from the Transition Services Agreement with EMCORE[184](index=184&type=chunk) Net Sales Performance (2022 vs. 2021) | Sales Category | 2022 (in thousands) | 2021 (in thousands) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Product sales | $26,970 | $30,012 | $(3,042) | (10)% | | Service sales | $111,908 | $103,899 | $8,009 | 8% | | **Net sales** | **$138,878** | **$133,911** | **$4,967** | **4%** | Profitability Summary (2022 vs. 2021) | Metric (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Loss from operations | $(5,654) | $(19,595) | | Net loss from continuing operations | $(3,924) | $(11,546) | | Income from discontinued operations, net of tax | $28,025 | $1,783 | | **Net Income (loss)** | **$24,101** | **$(9,763)** | [Discontinued Operations](index=33&type=section&id=Discontinued%20Operations) The divested inertial navigation business is classified as discontinued operations, contributing $28.0 million to 2022 net income after tax Results for Discontinued Operations (2022 vs. 2021) | Metric (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Sales from discontinued operations | $16,721 | $37,856 | | Gain on sale of discontinued operations before tax | $30,763 | $— | | **Income from discontinued operations, net of tax** | **$28,025** | **$1,783** | [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company held $76.7 million in cash and equivalents at year-end 2022, bolstered by divestiture proceeds, and believes it has sufficient liquidity - The company's primary liquidity sources in recent years have been **proceeds from business sales**, cash from operations, and bank financings[193](index=193&type=chunk) - **Net cash provided by operating activities was $8.9 million** in 2022, an increase from $2.9 million in 2021, primarily due to higher net income and favorable changes in accounts payable[199](index=199&type=chunk) - **Net cash provided by investing activities was $0.4 million** in 2022, a significant shift from $6.7 million used in 2021, driven by **$55.0 million in proceeds** from the inertial navigation business sale[200](index=200&type=chunk) - On August 9, 2022, the company **terminated its 2018 Credit Agreement** with Bank of America, at which time no borrowings were outstanding[203](index=203&type=chunk) Key Liquidity Metrics (as of Dec 31, 2022) | Metric | Amount (in millions) | | :--- | :--- | | Cash, cash equivalents, and marketable securities | $76.7 | | Working capital | $92.3 | [Controls and Procedures](index=36&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls, procedures, and internal control over financial reporting were effective as of year-end 2022 - Based on an evaluation as of December 31, 2022, the CEO and CFO concluded that the company's **disclosure controls and procedures were effective**[212](index=212&type=chunk) - Management assessed the effectiveness of internal control over financial reporting using the COSO framework and concluded that **it was effective** as of December 31, 2022[213](index=213&type=chunk)[214](index=214&type=chunk) - The independent registered public accounting firm, Grant Thornton LLP, issued a report stating that the company maintained, in all material respects, **effective internal control over financial reporting** as of December 31, 2022[215](index=215&type=chunk)[220](index=220&type=chunk) - **No changes in internal control** over financial reporting occurred during the fourth quarter of 2022 that have materially affected, or are reasonably likely to materially affect, internal controls[216](index=216&type=chunk) Part III Information for Part III is incorporated by reference from the company's definitive proxy statement for its 2023 annual meeting of stockholders [Directors, Executive Officers and Corporate Governance](index=39&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Required information is incorporated by reference from the company's 2023 proxy statement - The required information is **incorporated by reference** to the company's 2023 proxy statement[231](index=231&type=chunk) [Executive Compensation](index=39&type=section&id=Item%2011.%20Executive%20Compensation) Required information is incorporated by reference from the company's 2023 proxy statement - The required information is **incorporated by reference** to the company's 2023 proxy statement[233](index=233&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=39&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Required information is incorporated by reference from the company's 2023 proxy statement - The required information is **incorporated by reference** to the company's 2023 proxy statement[234](index=234&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=39&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Required information is incorporated by reference from the company's 2023 proxy statement - The required information is **incorporated by reference** to the company's 2023 proxy statement[235](index=235&type=chunk) [Principal Accountant Fees and Services](index=39&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Required information is incorporated by reference from the company's 2023 proxy statement - The required information is **incorporated by reference** to the company's 2023 proxy statement[236](index=236&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=40&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section contains the consolidated financial statements, the independent auditor's report, and a list of exhibits filed with the Form 10-K - This section includes the **Report of Independent Registered Public Accounting Firm** and the Consolidated Financial Statements[239](index=239&type=chunk) - **No financial statement schedules were filed**[240](index=240&type=chunk) - A list of exhibits is provided, including the **Asset Purchase Agreement** for the inertial navigation business sale, the Stockholder Rights Agreement, and various executive employment agreements[240](index=240&type=chunk)[241](index=241&type=chunk) [Form 10-K Summary](index=43&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K summary was provided - None[245](index=245&type=chunk)

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: September 30, 2022 OR ☐ 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) (State or Other Jurisdiction of Incorporati ...

PART I. FINANCIAL INFORMATION [Item 1. Interim Financial Statements](index=3&type=section&id=ITEM%201.%20INTERIM%20FINANCIAL%20STATEMENTS) Presents KVH Industries, Inc.'s unaudited consolidated financial statements for Q2 and H1 2022 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Summarizes the company's financial position as of June 30, 2022, detailing changes in assets, liabilities, and equity Consolidated Balance Sheets (in thousands) | | June 30, 2022 (unaudited) | December 31, 2021 | | :--- | :--- | :--- | | **Total current assets** | $85,014 | $87,830 | | **Total assets** | **$162,316** | **$168,794** | | **Total current liabilities** | $33,061 | $33,882 | | **Total liabilities** | **$38,288** | **$39,817** | | **Total stockholders' equity** | **$124,028** | **$128,977** | | **Total liabilities and stockholders' equity** | **$162,316** | **$168,794** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2022 net loss was **$1.4 million** on **$41.8 million** sales, showing improvement from prior year, with similar H1 trends Consolidated Statements of Operations (in thousands, except per share amounts) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2022** | **2021** | **2022** | **2021** | | **Net sales** | $41,837 | $43,363 | $82,931 | $85,655 | | Product Sales | $13,579 | $17,269 | $27,949 | $35,701 | | Service Sales | $28,258 | $26,094 | $54,982 | $49,954 | | **Loss from operations** | $(2,332) | $(5,802) | $(7,040) | $(9,409) | | **Net loss** | **$(1,444)** | **$(5,673)** | **$(6,136)** | **$(9,701)** | | **Net loss per share (Basic & Diluted)** | **$(0.08)** | **$(0.31)** | **$(0.33)** | **$(0.54)** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) H1 2022 net cash used in operations was **$3.2 million**, a shift from **$4.8 million** provided in H1 2021, mainly due to increased inventories Consolidated Statements of Cash Flows (in thousands) | | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2022** | **2021** | | **Net cash (used in) provided by operating activities** | $(3,234) | $4,815 | | **Net cash provided by (used in) investing activities** | $2,328 | $(10,457) | | **Net cash provided by financing activities** | $201 | $2,311 | | **Net decrease in cash and cash equivalents** | $(981) | $(3,355) | | **Cash and cash equivalents at end of period** | $10,395 | $9,223 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Details accounting policies and financial components, noting CEO retirement, workforce reduction, subsidiary sale, and the **$55 million** inertial navigation business sale - The company operates in two segments: mobile connectivity (satellite communication products and services) and inertial navigation (FOG-based systems for commercial and defense)[25](index=25&type=chunk)[28](index=28&type=chunk)[30](index=30&type=chunk) - In March 2022, the company restructured operations, reducing its workforce by approximately **10%** and incurring **$2.1 million** in related costs in the first half of the year[36](index=36&type=chunk) - On April 29, 2022, the company sold its subsidiary KVH Media Group Entertainment Limited for net cash proceeds of **$2.4 million**, recording a gain of approximately **$0.6 million**[37](index=37&type=chunk) - Subsequent to the quarter end, on August 9, 2022, the company sold its entire inertial navigation business to EMCORE Corporation for gross proceeds of **$55 million**[124](index=124&type=chunk) - The company's PPP loan of **$6.9 million** was fully forgiven by the SBA in September 2021[73](index=73&type=chunk)[200](index=200&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Q2 and H1 2022 financial performance, covering the inertial navigation business sale, management changes, restructuring, segment results, and liquidity [Overview and Key Events](index=25&type=section&id=Overview%20and%20Key%20Events) Key events include the **$55 million** inertial navigation business sale, a **$2.4 million** subsidiary sale, new CEO appointment, and a **10%** workforce reduction - On August 9, 2022, the company sold its inertial navigation business to EMCORE Corporation for **$55 million** and terminated its credit agreement with Bank of America[129](index=129&type=chunk)[130](index=130&type=chunk) - In March 2022, the company restructured, reducing its workforce by **~10%** and incurring **~$2.2 million** in related costs for the six months ended June 30, 2022[133](index=133&type=chunk) - Brent C. Bruun was appointed President and CEO on June 15, 2022, following the retirement of Martin Kits van Heyningen[132](index=132&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Q2 2022 net sales decreased **4%** YoY to **$41.8 million**, with product sales down but service sales up, and operating loss narrowed due to lower G&A Net Sales Comparison (in thousands) | Period | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | **Q2 Net Sales** | $41,837 | $43,363 | (4%) | | Q2 Product Sales | $13,579 | $17,269 | (21%) | | Q2 Service Sales | $28,258 | $26,094 | 8% | | **H1 Net Sales** | $82,931 | $85,655 | (3%) | | H1 Product Sales | $27,949 | $35,701 | (22%) | | H1 Service Sales | $54,982 | $49,954 | 10% | - Q2 2022 operating expenses decreased across the board compared to Q2 2021: R&D down **17%**, Sales & Marketing down **12%**, and G&A down **21%**. The G&A decrease was primarily due to lower professional fees related to a 2021 stockholder proxy contest[160](index=160&type=chunk)[161](index=161&type=chunk)[163](index=163&type=chunk) [Segment Discussion](index=33&type=section&id=Segment%20Discussion) Mobile Connectivity net sales grew **2%** to **$34.6 million** in Q2 2022, while Inertial Navigation net sales fell **24%** to **$7.3 million**, resulting in an operating loss Q2 2022 vs Q2 2021 Segment Performance (in thousands) | Segment | Net Sales 2022 | Net Sales 2021 | Change (%) | Operating Income (Loss) 2022 | Operating Income (Loss) 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Mobile Connectivity** | $34,553 | $33,755 | 2% | $4,525 | $580 | | **Inertial Navigation** | $7,284 | $9,608 | (24%) | $(1,289) | $645 | - Mobile connectivity service sales increased **9%** in Q2 2022, driven by a **$2.7 million** increase in mini-VSAT service sales[169](index=169&type=chunk) - Inertial navigation product sales decreased **25%** in Q2 2022, primarily due to a **$1.3 million** decrease in TACNAV product sales and a **$1.0 million** decrease in FOG and OEM product sales[172](index=172&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2022, the company held **$15.6 million** in cash, with **$3.2 million** net cash used in H1 2022 operations, and its **$15 million** credit facility terminated - As of June 30, 2022, the company had **$15.6 million** in cash, cash equivalents, and marketable securities, and **$52.0 million** in working capital[201](index=201&type=chunk) - The **$8.0 million** negative swing in cash from operations YoY was primarily due to an **$8.7 million** increase in cash outflows for inventories[202](index=202&type=chunk) - The company's **$15 million** revolving credit facility was terminated on August 9, 2022, after the sale of the inertial navigation business. No amounts were outstanding at termination[125](index=125&type=chunk)[206](index=206&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were effective as of June 30, 2022, with no material changes to internal control over financial reporting in Q2 2022 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2022[213](index=213&type=chunk) - No changes were identified in internal control over financial reporting during Q2 2022 that have materially affected, or are reasonably likely to materially affect, internal controls[215](index=215&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is not party to any lawsuit or proceeding likely to materially affect its business, financial condition, or operations - The company is not party to any lawsuit or proceeding that is likely to materially harm its business, results of operations, financial condition, or cash flows[219](index=219&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=ITEM%201A.%20RISK%20FACTORS) Details significant risks including historical losses, inertial navigation business sale impact, mobile connectivity reliance, competition, supply chain, cybersecurity, and economic factors [Risks related to financial performance and operations](index=41&type=section&id=Risks%20related%20to%20financial%20performance%20and%20operations) The company has a history of losses and may not regain profitability, facing operational risks from CEO transition, workforce reduction, and maintaining service margins - The company has a history of losses and may continue to incur them due to investments in satellite capacity, business model shifts, and restructuring expenses[221](index=221&type=chunk) - Risks associated with the recent management transition and a **10%** reduction in force include loss of experience, potential for further attrition, and challenges in attracting new talent[226](index=226&type=chunk)[227](index=227&type=chunk) [Risks related to the sale of our inertial navigation business](index=47&type=section&id=Risks%20related%20to%20the%20sale%20of%20our%20inertial%20navigation%20business) The inertial navigation business sale presents risks including potential liabilities, reduced operating margins, and sole reliance on mobile connectivity - The sale of the inertial navigation business will reduce operating and profit margins, as public company overhead costs will be spread over a smaller revenue base[254](index=254&type=chunk) - The company is now solely reliant on its mobile connectivity business and faces potential liabilities and disruptions arising from the sale transaction[251](index=251&type=chunk)[254](index=254&type=chunk) [Risks related to industry, technology, and supply chain](index=44&type=section&id=Risks%20related%20to%20industry,%20technology,%20and%20supply%20chain) The company faces intense competition, reliance on third-party satellite services and sole suppliers, supply chain disruptions, cybersecurity threats, and IP protection challenges - The mobile connectivity market is highly competitive, with pressure on pricing from competitors like Intellian, Cobham SATCOM, and Inmarsat[258](index=258&type=chunk)[259](index=259&type=chunk) - The company depends on third-party satellite providers (e.g., Intelsat, Sky Perfect-JSAT, Inmarsat, Iridium) and is vulnerable to service disruptions or lack of capacity[237](index=237&type=chunk)[238](index=238&type=chunk) - Dependence on sole or limited-source suppliers and global supply chain constraints (e.g., chip shortages) have delayed product delivery and increased costs. In Q2 2022, an estimated **$2.7 million** in orders could not be filled due to component shortages[262](index=262&type=chunk) [Risks related to economic, regulatory, and other factors](index=46&type=section&id=Risks%20related%20to%20economic,%20regulatory,%20and%20other%20factors) The business is exposed to economic turmoil, political events, COVID-19 impacts, foreign currency fluctuations, trade policy, international regulations, tax liabilities, and stock price volatility - Economic turmoil, the COVID-19 pandemic, and related supply chain issues have adversely impacted and are expected to continue to impact revenues and financial condition[244](index=244&type=chunk) - With **63%** of revenue from international sales in H1 2022, the company is exposed to risks from foreign currency exchange rates, tariffs, and complex foreign regulations[248](index=248&type=chunk)[270](index=270&type=chunk) - The company is subject to various regulations, including FCC rules, USF contributions, and data privacy laws like GDPR, which could increase costs and create liability[272](index=272&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk) [Item 6. Exhibits](index=53&type=section&id=ITEM%206.%20EXHIBITS) Lists exhibits filed with Form 10-Q, including new executive employment agreements and required CEO and CFO certifications - Exhibits filed include executive employment agreements for key officers and certifications by the principal executive and financial officers[281](index=281&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q1 2022 was $41.1 million, a 3% decrease from $42.3 million in Q1 2021, primarily due to the absence of a large TACNAV order [9][33] - Net loss for Q1 2022 was $4.7 million, or $0.25 per share, compared to a net loss of $4.0 million, or $0.22 per share, in the same quarter last year [10][47] - Adjusted EBITDA for Q1 2022 was $1.9 million, an increase of $800,000 from $1.1 million in Q1 2021 [10][48] Business Line Data and Key Metrics Changes - Mobile connectivity revenue increased by $2.6 million, with airtime revenue rising to $24 million, a 12% increase year-over-year [20][38] - Inertial navigation revenue decreased by $3.8 million year-over-year, with TACNAV sales dropping from $4.5 million in Q1 2021 to $700,000 in Q1 2022 [27][41] - AgilePlans revenue increased by approximately 48% year-over-year, indicating strong growth in the commercial market [24] Market Data and Key Metrics Changes - The mobile connectivity segment's gross margin improved to 39%, up 4 percentage points from the previous year [36] - Airtime gross margin increased to 41%, up 7 percentage points from a year ago, attributed to the shutdown of the legacy network [40] - The company entered Q2 with a $25 million backlog across mobile connectivity and inertial navigation businesses due to supply chain issues [11][28] Company Strategy and Development Direction - The company is focusing on core businesses and has refined its strategic goals for 2022 to drive profitability and shareholder value [14] - A recent divestiture of the retail radio business provided a $2.5 million cash benefit, aligning with the strategy to focus on core operations [15][50] - The company is committed to evaluating product prices and has implemented price increases in response to rising costs [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain challenges but expressed confidence in strong demand in core markets [11][19] - The restructuring efforts are expected to yield benefits by Q3 2022, with a focus on aligning operations with revenue expectations [12][19] - The company anticipates consolidated annual revenue growth between 2% and 5% and adjusted EBITDA between $11 million and $15 million, assuming supply chain issues do not worsen [51] Other Important Information - The company reported a backlog of $20 million for inertial sensors due to supply chain disruptions [28] - The first anniversary of the TracPhone V30 terminal was celebrated, marking it as the most successful VSAT product in company history [23] Q&A Session Summary Question: Clarification on the radio business sale - The net proceeds from the sale of the radio business were $2.5 million, not $25 million as initially misstated [52][53] Question: Evaluation of non-core asset sales - The company is continuously evaluating opportunities to enhance shareholder value but currently has no specific non-core assets targeted for sale [54][56] Question: Impact of recession on business performance - The airtime business model is based on recurring revenue, which has shown resilience during past economic downturns, although leisure hardware sales may be impacted [60][61] Question: Equipment margins outlook - Supply chain challenges have led to increased costs, prompting price increases, but the company expects continued pressure on equipment margins [62][64] Question: Update on CEO search - The board is actively continuing the search for a new CEO, working with an external recruiting firm [70] Question: Overview of the shipping market - The maritime industry faces challenges, but demand for communication services remains strong despite higher fuel costs [72][74] Question: Update on KVH Watch integration - KVH Watch will be integrated with core products, with further updates expected in Q2 2022 [80] Question: Autonomous trucking customer adoption timeline - Significant uptake in autonomous trucking is not expected until late 2023 [82]

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: March 31, 2022 OR ☐ 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) (State or Other Jurisdiction of Incorporation o ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ 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 ...

KVH Industries, Inc. (NASDAQ:KVHI) Q4 2021 Earnings Conference Call March 7, 2022 9:00 AM ET Company Participants Roger A. Kuebel - CFO Cathy-Ann Martine-Dolecki - Chairman Brent Bruun - Interim CEO Robert Balog - CTO Conference Call Participants Ric Prentiss - Raymond James Chris Quilty - Quilty Analytics Ryan Koontz - Needham & Company Operator Good day and welcome to the KVH Industries, Inc. Q4 2021 Year-End Earnings Conference Call. Today's conference is being recorded. At this time, I would like to tur ...

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: September 30, 2021 OR ☐ 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) (State or Other Jurisdiction of Incorporati ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited interim financial statements and management's discussion and analysis of financial condition and results of operations [Interim Financial Statements](index=3&type=section&id=ITEM%201.%20INTERIM%20FINANCIAL%20STATEMENTS) This section presents the unaudited consolidated financial statements for KVH Industries, Inc. as of June 30, 2021, and for the three and six-month periods then ended It includes the balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining the basis of presentation and significant accounting policies [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position, including assets, liabilities, and equity, at a specific point in time Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 (unaudited) | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $9,223 | $12,578 | | Total current assets | $94,939 | $101,060 | | Total assets | $176,552 | $183,591 | | **Liabilities & Equity** | | | | Total current liabilities | $42,701 | $40,788 | | Total liabilities | $49,676 | $51,707 | | Total stockholders' equity | $126,876 | $131,884 | | Total liabilities and stockholders' equity | $176,552 | $183,591 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss over specific periods Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $43,363 | $36,926 | $85,655 | $73,494 | | Loss from operations | $(5,802) | $(3,436) | $(9,409) | $(11,084) | | Net loss | $(5,673) | $(3,552) | $(9,701) | $(9,766) | | Net loss per common share (Basic and diluted) | $(0.31) | $(0.20) | $(0.54) | $(0.56) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities Consolidated Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Category | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $4,815 | $(2,886) | | Net cash (used in) provided by investing activities | $(10,457) | $326 | | Net cash provided by financing activities | $2,311 | $6,432 | | Net (decrease) increase in cash and cash equivalents | $(3,355) | $3,078 | | Cash and cash equivalents at end of period | $9,223 | $21,443 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the consolidated financial statements - The company operates through two reporting segments: the mobile connectivity segment and the inertial navigation segment[25](index=25&type=chunk)[30](index=30&type=chunk) - In May 2020, the company received a **$6.9 million loan** under the Paycheck Protection Program (PPP) The company plans to apply for forgiveness in August 2021[66](index=66&type=chunk)[68](index=68&type=chunk) Net Sales by Segment (in thousands) | Segment | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Mobile connectivity | $33,755 | $29,186 | $64,262 | $58,082 | | Inertial navigation | $9,608 | $7,740 | $21,393 | $15,412 | | **Consolidated net sales** | **$43,363** | **$36,926** | **$85,655** | **$73,494** | Operating Income (Loss) by Segment (in thousands) | Segment | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Mobile connectivity | $580 | $584 | $183 | $(1,715) | | Inertial navigation | $645 | $154 | $2,735 | $(667) | | Unallocated, net | $(7,027) | $(4,174) | $(12,327) | $(8,702) | | **Loss from operations** | **$(5,802)** | **$(3,436)** | **$(9,409)** | **$(11,084)** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=25&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial performance for the three and six months ended June 30, 2021 Net sales increased year-over-year for both periods, driven by growth in both the mobile connectivity and inertial navigation segments However, the company continued to report a net loss, partly due to increased operating expenses, including a significant rise in general and administrative costs related to a stockholder's nomination of a competing director slate The impact of the COVID-19 pandemic, particularly on the KVH Media Group, and the company's liquidity position, supported by a PPP loan, are also detailed [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This section analyzes the company's net sales, costs, and expenses, highlighting key changes between periods Comparison of Three Months Ended June 30, 2021 and 2020 | Metric | Q2 2021 | Q2 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $17.3M (Product), $26.1M (Service) | $13.9M (Product), $23.0M (Service) | +$3.3M, +$3.1M | +24%, +14% | | Costs of Sales | $28.0M | $23.9M | +$4.1M | +17% | | R&D Expense | $4.5M | $3.9M | +$0.6M | +17% | | G&A Expense | $8.7M | $5.8M | +$2.9M | +51% | - The **$2.9 million (51%) increase in General and Administrative expense** in Q2 2021 was primarily due to a $2.6 million increase in professional fees arising from a stockholder's nomination of a competing slate of directors[149](index=149&type=chunk) Comparison of Six Months Ended June 30, 2021 and 2020 | Metric | H1 2021 | H1 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $35.7M (Product), $50.0M (Service) | $27.0M (Product), $46.5M (Service) | +$8.7M, +$3.5M | +32%, +8% | | Costs of Sales | $54.7M | $48.8M | +$5.9M | +12% | | G&A Expense | $15.8M | $12.2M | +$3.7M | +30% | [Segment Discussion](index=32&type=section&id=Segment%20Discussion) This section provides a detailed analysis of the financial performance for each of the company's operating segments - **Mobile Connectivity (Q2 2021 vs Q2 2020):** **Net sales increased 16% to $33.8 million**, driven by a 20% rise in product sales (TracVision) and a 14% increase in service sales (mini-VSAT, from a 13% increase in subscribers) **Operating income was flat at $0.6 million**[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - **Inertial Navigation (Q2 2021 vs Q2 2020):** **Net sales grew 24% to $9.6 million**, primarily from a 27% increase in product sales (FOG and TACNAV products) **Operating income increased significantly by 319% to $0.6 million from $0.2 million**[153](index=153&type=chunk)[157](index=157&type=chunk)[159](index=159&type=chunk) - **Mobile Connectivity (H1 2021 vs H1 2020):** **Net sales increased 11% to $64.3 million** The segment reported **operating income of $0.2 million compared to an operating loss of $1.7 million** in the prior year period[173](index=173&type=chunk)[174](index=174&type=chunk)[176](index=176&type=chunk) - **Inertial Navigation (H1 2021 vs H1 2020):** **Net sales rose 39% to $21.4 million**, driven by a 51% increase in product sales The segment **swung to an operating income of $2.7 million from an operating loss of $0.7 million**[173](index=173&type=chunk)[177](index=177&type=chunk)[179](index=179&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, sources of liquidity, and capital management strategies - As of June 30, 2021, the company had **$34.4 million in cash, cash equivalents, and marketable securities**[186](index=186&type=chunk) - **Net cash provided by operations was $4.8 million** for the first six months of 2021, a significant improvement from the **$2.9 million used in operations** in the same period of 2020[187](index=187&type=chunk) - The company received a **$6.9 million PPP loan** in May 2020 and plans to apply for forgiveness in August 2021[190](index=190&type=chunk)[192](index=192&type=chunk) - As of June 30, 2021, **no amounts were outstanding** under the 2018 Revolver, and the **full $15.0 million facility was available for borrowing**[194](index=194&type=chunk)[195](index=195&type=chunk) [Controls and Procedures](index=39&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2021 No material changes to internal control over financial reporting were identified during the second quarter of 2021 - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective as of June 30, 2021**[203](index=203&type=chunk) - **No changes in internal control over financial reporting were identified** during the second quarter of 2021 that have materially affected, or are reasonably likely to materially affect, internal controls[204](index=204&type=chunk) [PART II. OTHER INFORMATION](index=40&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, significant risk factors, and a list of exhibits filed with the report [Legal Proceedings](index=40&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company states that it is not a party to any lawsuit or proceeding that, in management's opinion, is likely to have a material adverse effect on its business, financial condition, or cash flows - In the ordinary course of business, the company is party to various legal proceedings and claims, but **none are expected to materially harm the company**[208](index=208&type=chunk) [Risk Factors](index=40&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section details significant risks to the company's business Key risks include a history of financial losses and uncertainty of future profitability, the operational and financial burden of transitioning from a legacy to an HTS satellite network, intense competition in both mobile connectivity and inertial navigation markets, dependence on third-party suppliers and satellite providers, and the potential adverse impact of the COVID-19 pandemic and global economic conditions - **Financial Performance:** The company has a **history of substantial losses and expects to incur further losses** due to investments in its HTS network and new product development, such as the photonic chip-based fiber optic gyro[211](index=211&type=chunk) - **Operations:** The company is incurring **significant additional costs** by operating both its new HTS and legacy satellite networks simultaneously It plans to terminate the legacy network by the end of 2021, which may result in the **loss of customers** who are unable or unwilling to convert[217](index=217&type=chunk)[218](index=218&type=chunk) - **Industry and Competition:** The company faces **intense competition**, notably from companies competing on price The emergence of competing small maritime VSAT antennas could **reduce the competitive advantage** of its TracPhone V-HTS series[247](index=247&type=chunk)[249](index=249&type=chunk) - **Dependence on Third Parties:** The business **relies on satellite services, gateway teleports, and terrestrial networks from third parties** (e.g., Intelsat, ViaSat), over which it has little control It also **depends on sole or limited source suppliers** for key components, **creating supply chain risk**[227](index=227&type=chunk)[251](index=251&type=chunk) - **Economic Conditions:** The COVID-19 pandemic has **adversely impacted the business**, particularly the KVH Media Group which depends on travel Global economic disruptions could continue to **negatively affect revenues, operations, and the supply chain**[234](index=234&type=chunk)[235](index=235&type=chunk) - **Government Regulation & Sales:** A substantial portion of inertial navigation sales are to government customers, which are subject to **unpredictable funding and potential termination** Exports of certain products are also **subject to complex U.S. export regulations** like ITAR[243](index=243&type=chunk)[265](index=265&type=chunk) [Exhibits](index=53&type=section&id=ITEM%206.%20EXHIBITS) This section lists all supplementary documents and certifications filed as part of the report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) For the transition period from to Commission File Number 0-28082 KVH Industries, Inc. (Exact Name of Registrant as Specified in its Charter) (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number) Delaware 05-0420589 50 Enterprise Center, Middletown, RI 02842 (Address of Principal Executive Of ices) (Zip Code) (401) 847-3327 (Registrant's Telephone Number, Including Are ...