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, 2023 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 ...

Financial Data and Key Metrics Changes - The company's fourth quarter revenue was $36 million, a 2% increase year-over-year, with operating income of $600,000 compared to an operating loss of $3.9 million in Q4 2021, marking the first operating profit in over six years [8][38]. - Adjusted EBITDA for the quarter was $4.3 million, up from $700,000 in the fourth quarter of 2021 [17]. - Airtime revenue increased by 12% to $26.8 million, with a gross margin of 43.5%, up 9 percentage points from the prior year [14][15]. Business Line Data and Key Metrics Changes - Product revenue for Q4 was $7.2 million, a decrease of 13% from $8.2 million in the previous year, primarily due to a decline in VSAT product sales [15]. - Operating expenses for the quarter were $12 million, down 23% from the fourth quarter of 2021 [16]. Market Data and Key Metrics Changes - The total subscriber base reached almost 6,900, with continued expansion into India, where the company is shipping legacy systems and plans to shift to new products upon regulatory approval [27]. - The company is launching initiatives to convert VSAT antennas from other manufacturers to work on its network without hardware changes, enhancing service offerings [28]. Company Strategy and Development Direction - The company aims to focus on mobile connectivity and value-added services, having divested from inertial navigation and radio businesses [4]. - Future strategies include expanding the suite of value-added services and pursuing subscriber growth through hardware-agnostic approaches [32][33]. Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the company's turnaround and plans for sustained profitability, emphasizing the importance of innovation and superior service [11][33]. - The company recognizes the competitive landscape with emerging non-geostationary orbit services but believes its hybrid solutions will provide superior value [30][31]. Other Important Information - The company received industry recognition for its TracNet product, highlighting its innovative design and performance [9]. - The company expects to see a reduction in cash balance in the first quarter as accounts payable normalizes [40]. Q&A Session Summary Question: How does the technology evolution on the antenna side impact the company? - Management acknowledged the competitive landscape with new technologies but emphasized the importance of integrated solutions for reliability [23][46]. Question: What are the demand signals in the maritime market? - Management noted that demand is strengthening as COVID-19 restrictions ease, particularly in the maritime sector [47]. Question: How does Starlink impact overall reported margins? - Management indicated that while Starlink offers lower costs per bit, the company plans to offset potential margin erosion through bundled services [70][57]. Question: Is there sufficient capacity in the Indian market for new services? - Management confirmed that through partnerships, capacity concerns are addressed, and new capacity is expected to come online [63][64].

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 ...