KVH Industries, Inc., (Nasdaq: KVHI), a leading provider of
innovative, technology-driven connectivity and navigation
solutions, today reported financial results for the fourth quarter
and full year ended December 31, 2020. 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 2020 Highlights
- Total revenues from continuing
operations increased by 4% year-over-year to $44.1 million.
- Revenues for AgilePlans, our
all-inclusive Connectivity as a Service program for the commercial
maritime sector, were up more than 53% compared to the fourth
quarter of 2019.
- AgilePlans amounted to 73% of total
commercial maritime mini-VSAT Broadband shipments, and 58% of the
total mini-VSAT Broadband shipments for the quarter. AgilePlans now
represent 38% of our mini-VSAT Broadband subscriber base.
- Our mini-VSAT Broadband airtime
revenue increased $1.2 million to $20.3 million, or 6%
year-over-year, driven primarily by a 4% increase in
subscribers.
- TACNAV product sales increased
$3.7 million to $7.2 million in the fourth quarter of 2020
compared to the fourth quarter of 2019, and fiber optic gyro (FOG)
product and OEM product sales decreased $1.3 million, or
17%, in the fourth quarter of 2020 compared to the fourth quarter
of 2019.
- We recorded an aggregate impairment
charge of $10.5 million to goodwill and intangible assets for our
KVH Media Group reporting unit, which has been particularly
impacted due to the global reduction in travel resulting from the
pandemic.
- Taking into account the impact of
this $10.5 million goodwill and intangible asset impairment charge,
net loss from continuing operations in the fourth quarter of 2020
was $11.6 million, or $0.65 per share, compared to a net loss
of $2.9 million, or $0.17 per share, in the fourth quarter of
2019.
- Non-GAAP net income from continuing
operations in the fourth quarter of 2020 was $1.3 million, or $0.07
per share, compared to a net loss of $0.5 million, or $0.03 per
share, in the fourth quarter of 2019.
- Non-GAAP adjusted EBITDA from
continuing operations in the fourth quarter of 2020 was
$3.5 million, compared to $0.7 million in the fourth quarter
of 2019.
Commenting on the quarter, Martin Kits van
Heyningen, KVH’s chief executive officer, said “Like many
businesses around the world, we continued to face challenges from
the pandemic, but ended our year positively, reporting overall
revenue growth and an increase in adjusted EBITDA for the fourth
quarter. I am proud of our team’s ability to continue to deliver
value for our customers. Our revenues grew 4%, despite the
headwinds related to the pandemic, particularly in our Media group
as a result of the ongoing shutdown of cruise ship operations, and
our adjusted EBITDA increased to $3.5 million. Our continued focus
on cost containment, combined with healthy TACNAV revenues and
temporary savings from pandemic-related restrictions, allowed us to
report one of the strongest fourth quarter results from continuing
operations in the past five years. For the full year, although we
reported an increase in GAAP net loss of $5.9 million, which was
largely attributable to the $10.5 million non-cash impairment
charge, we reported an increase in adjusted EBITDA of more than
$7.0 million compared to last year. Against the backdrop of global
economic uncertainty, we are pleased with our overall financial
results for the year and with the positive momentum we are carrying
into the first quarter of 2021.
“In addition to our solid financial results, we
continued to make progress on our key initiatives this year. We
commercialized our photonic integrated chip technology for use
across our FOG products. KVH Watch, our IoT Connectivity as a
Service solution, has developed a growing ecosystem of Watch
Solution Partners, and our AgilePlans program continues to excel,
with record VSAT shipments and steady airtime revenue growth. Our
HTS network now serves a majority of our total subscriber base and
we are working to convert the remainder of our legacy customers to
this new network by the end of 2021. We continue to invest in
longer term opportunities as well, including the autonomous
everything market where our new PIC-based gyros offer needed
precision at a competitive price. We believe these are the
initiatives that will fuel our growth in 2021 and beyond, and we
are confident that the progress we are making now will deliver
sustainable, long-term value to our shareholders. While there
remains significant uncertainty in our markets, we expect the
trends we saw in the fourth quarter to continue. Assuming that the
pandemic continues to recede, and we see a return to more normal
consumer behavior starting in July, we expect the second half of
the year to show stronger growth in both of our markets. As a
result, we anticipate full year revenues to increase by mid-to high
single digits on an annual basis and adjusted EBITDA to grow at a
faster rate than revenue for the full year.”
The company has classified the results of the
Videotel business sold in 2019 as a discontinued operation and
therefore Videotel is excluded from the segment information
below.
The company operates in two segments, mobile
connectivity and inertial navigation. In the fourth quarter of
2020, net sales for the mobile connectivity segment remained flat
compared to the fourth quarter of 2019. mini-VSAT Broadband airtime
revenue increased by $1.2 million. The increase was offset
primarily by a $0.7 million decrease in our content service
sales and a $0.2 million decrease in mobile connectivity
product sales. In the fourth quarter of 2020, net sales for our
inertial navigation segment increased by $1.7 million, or 13%,
compared to the fourth quarter of 2019. Inertial navigation sales
increased primarily due to a $3.7 million increase in TACNAV
product sales. This increase was offset in part by a
$1.3 million decrease in FOG and OEM product sales and a
$0.9 million decrease in contracted engineering revenue.
Financial Highlights - From Continuing
Operations (in millions, except per share data)
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
GAAP
Results |
|
|
|
|
|
|
|
|
Revenue |
|
$ |
44.1 |
|
|
|
$ |
42.5 |
|
|
|
$ |
158.7 |
|
|
|
$ |
157.9 |
|
|
Net loss |
|
$ |
(11.6 |
) |
|
|
$ |
(2.9 |
) |
|
|
$ |
(21.9 |
) |
|
|
$ |
(16.0 |
) |
|
Net loss per share |
|
$ |
(0.65 |
) |
|
|
$ |
(0.17 |
) |
|
|
$ |
(1.24 |
) |
|
|
$ |
(0.92 |
) |
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Results |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
1.3 |
|
|
|
$ |
(0.5 |
) |
|
|
$ |
(3.5 |
) |
|
|
$ |
(8.2 |
) |
|
Net income (loss) per
share |
|
$ |
0.07 |
|
|
|
$ |
(0.03 |
) |
|
|
$ |
(0.20 |
) |
|
|
$ |
(0.47 |
) |
|
Adjusted EBITDA |
|
$ |
3.5 |
|
|
|
$ |
0.7 |
|
|
|
$ |
3.1 |
|
|
|
$ |
(4.2 |
) |
|
For more information regarding our non-GAAP
financial measures, see the tables at the end of this release.
Fourth Quarter Financial Summary
Revenue was $44.1 million for the fourth
quarter of 2020, an increase of 4% compared to $42.5 million
in the fourth quarter of 2019.
Product revenues for the fourth quarter of 2020
were $20.9 million, an increase of 12% compared to the prior
year quarter, primarily due to a $2.4 million increase in
inertial navigation product sales, partially offset by a
$0.2 million decrease in mobile connectivity product sales.
Inertial navigation product sales increased primarily as a result
of a $3.7 million increase in TACNAV product sales, which was
partially offset by a $1.3 million decrease in FOG and OEM
product sales. The decrease in mobile connectivity product sales
was primarily due to a $0.3 million decrease in TracVision
product sales and a $0.2 million decrease in land mobile
product sales. The decrease in TracVision and land mobile product
sales was primarily due to a decline in leisure sales. These
decreases were partially offset by a $0.2 million increase in
mini-VSAT Broadband products and accessories sales.
Service revenues for the fourth quarter of 2020
were $23.2 million, a decrease of 2% compared to the fourth
quarter of 2019, primarily due to a $0.8 million decrease in
inertial navigation service sales. Inertial navigation service
sales decreased primarily due to lower contract engineering service
revenue. This was partially offset by a $0.2 million increase
in mobile connectivity service sales. Mobile connectivity service
sales increased primarily due to a $1.2 million increase in
our mini-VSAT Broadband service sales, which resulted in part from
a 4% increase in subscribers, primarily as a result of AgilePlans.
Partially offsetting this increase was a $0.7 million decrease
in our content service sales.
Primarily as a result of the impairment charges
for our KVH Media business unit of $10.5 million, our operating
expenses increased $9.2 million to $28.4 million for the
fourth quarter of 2020 compared to $19.2 million for the
fourth quarter of 2019. This increase was partially offset by a
$0.5 million decrease in marketing expenses, a $0.5 million
decrease in warranty expense and a $0.4 million decrease in travel
expenses.
Full Year Financial Summary
Revenue was $158.7 million for the year
ended December 31, 2020, an increase of 1% compared to $157.9
million for the year ended December 31, 2019.
Product revenues for the year ended December 31,
2020 were $64.6 million, an increase of 4% compared to the
year ended December 31, 2019, which resulted primarily from an
increase of $6.5 million in inertial navigation product sales,
partially offset by a decrease in mobile connectivity product sales
of $3.8 million. The increase in inertial navigation product sales
was due to a $6.1 million increase in TACNAV product sales and
a $0.3 million increase in FOG and OEM product sales. The
decrease in mobile connectivity product sales was due to a
$3.0 million decrease in marine mobile connectivity product
sales, which was primarily driven by a decrease in TracVision
product sales. In addition, there was a $0.8 million decrease
in land mobile product sales. The decrease in TracVision and land
mobile product sales was primarily due to a decline in leisure
sales.
Service revenues for the year ended December 31,
2020 were $94.1 million, a decrease of 2% compared to the year
ended December 31, 2019 primarily due to a decrease of
$3.1 million in inertial navigation service sales, partially
offset by an increase in mobile connectivity service sales of
$1.2 million. The decrease in inertial navigation service
sales was due to a decrease in our contract engineering service
revenue. The increase in mobile connectivity service sales was
primarily due to a $5.0 million increase in our mini-VSAT
Broadband service sales, which resulted in part from a 4% increase
in subscribers, primarily as a result of AgilePlans, and a $0.9
million one-time amount relating to a favorable resolution of a
contractual matter with a particular customer. Partially offsetting
this increase was a $2.7 million decrease in content service
sales, a $0.7 million decrease in our contract engineering
service revenue and a $0.4 million decrease in service repair
revenue.
Primarily as a result of the impairment charges
for our KVH Media business unit of $10.5 million, our operating
expenses increased $5.7 million to $80.5 million in the year
ended December 31, 2020 compared to $74.8 million in the year ended
December 31, 2019. This increase was partially offset by a $1.6
million decrease in travel expense, a $1.1 million decrease in
warranty expense, a $1.0 million decrease in marketing expense and
a $0.9 million decrease in salaries and employee benefits. A
portion of these cost savings were attributable to pandemic-related
travel restrictions and other measures, and we expect that these
expenses will begin to normalize as the pandemic recovery
progresses.
Other Recent Announcements
- KVH Partners with TechBinder for
KVH Watch Maritime IoT Solution.
- KVH Partners with GreenSteam for
KVH Watch Maritime IoT Solution.
- KVH Partners with Kilo Marine for
KVH Watch Maritime IoT Solution.
- KVH Partners with ioCurrents for
KVH Watch Maritime IoT Solution.
- KVH Partners with TMS Maritime
Solutions for KVH Watch Maritime IoT Solution.
- KVH Expands Maritime Network
Coverage for Hudson Bay and North Atlantic.
- Furuno Offers KVH AgilePlans
Maritime VSAT Connectivity in Japan.
Please review the corresponding press releases
for more details regarding these developments.
Conference Call Details
KVH Industries will host a conference call today
at 9:00 a.m. ET through the company’s website. The conference call
can be accessed at investors.kvh.com and listeners are welcome to
submit questions pertaining to the earnings release and conference
call to ir@kvh.com. The audio archive will be available on the
company website within three hours of the completion of the
call.
Non-GAAP Financial Measures
This release provides non-GAAP financial
information, which may include constant-currency revenue, non-GAAP
net income (loss), non-GAAP diluted EPS, and non-GAAP adjusted
EBITDA, as a supplement to our condensed consolidated financial
statements, which are prepared in accordance with generally
accepted accounting principles (“GAAP”). Management uses these
non-GAAP financial measures internally in analyzing financial
results to assess operational performance. Constant-currency
revenue is calculated on the basis of local currency results, using
foreign currency exchange rates applicable to the earlier
comparative period, and management believes that presenting
information on a constant-currency basis helps management and
investors to isolate the impact of changes in those rates from
other factors. The presentation of this financial information is
not intended to be considered in isolation or as a substitute for
the financial information prepared in accordance with GAAP. The
non-GAAP financial measures used in this press release adjust for
specified items that can be highly variable or difficult to
predict. Management generally uses these non-GAAP financial
measures to facilitate financial and operational decision-making,
including evaluation of our historical operating results,
comparison to competitors’ operating results, and determination of
management incentive compensation. These non-GAAP financial
measures reflect an additional way of viewing aspects of our
operations that, when viewed with GAAP results and the
reconciliations to corresponding GAAP financial measures, may
provide a more complete understanding of factors and trends
affecting our business.
Some limitations of non-GAAP net income (loss),
non-GAAP diluted EPS, and non-GAAP adjusted EBITDA, include the
following:
- Non-GAAP net income (loss) and
diluted EPS exclude amortization of intangibles, stock-based
compensation expense, goodwill impairment charge, intangible asset
impairment charge, transaction-related and other non-recurring
legal fees, non-recurring inventory reserve, other non-recurring
costs, foreign exchange transaction gains and losses, the tax
effect of the foregoing and certain discrete tax charges, including
changes in our valuation allowance and other tax adjustments.
- Non-GAAP adjusted EBITDA represents
net income (loss) before interest income, net, income taxes,
depreciation, amortization, stock-based compensation expense,
goodwill impairment charge, intangible asset impairment charge,
transaction-related and other non-recurring legal
fees, non-recurring inventory reserves, other non-recurring
costs and foreign exchange transaction gains and losses.
Other companies, including companies in KVH’s
industry, may calculate these non-GAAP financial measures
differently or not at all, which will reduce their usefulness as a
comparative measure.
Because non-GAAP financial measures exclude the
effect of items that increase or decrease our reported results of
operations, management strongly encourages investors to review our
consolidated financial statements and publicly filed reports in
their entirety. Reconciliations of the non-GAAP financial measures
to the most directly comparable GAAP financial measures are
included in the tables accompanying this release.
About KVH Industries, Inc.
KVH Industries, Inc., (Nasdaq: KVHI), is a
global leader in mobile connectivity and inertial navigation
systems, with innovative technology designed to enable a mobile
world. A market leader in maritime VSAT, KVH designs, manufactures,
and provides connectivity and content services globally. KVH is
also a premier manufacturer of high-performance sensors and
integrated inertial systems for defense and commercial
applications. Founded in 1982, the company is based in Middletown,
RI, with research, development, and manufacturing operations in
Middletown, RI, and Tinley Park, IL, and more than a dozen offices
around the globe.
This press release contains forward-looking
statements that involve risks and uncertainties. For example,
forward-looking statements include statements regarding our
financial goals for future periods, the success of our new
initiatives, our investment plans, our development goals, our
anticipated revenue and earnings, and the impact of our future
initiatives on revenue, competitive positioning, profitability, and
product orders. Actual results could differ materially from the
results projected in or implied by the forward-looking statements
made in this press release. Factors that might cause these
differences include, but are not limited to: the adverse impact of
the COVID-19 pandemic, as well as governmental, business and other
responses thereto and any resulting economic slowdown, on our
revenues, results of operations and financial condition, which
could be material (particularly for our media and other
travel-related businesses); adverse changes in our business,
prospects, financial condition or results of operations that may
necessitate staffing or compensation reductions beyond those
contemplated by the loan forgiveness provisions of the paycheck
protection program (PPP), as a result of which we may not be
entitled to any forgiveness; possible SBA determination that all or
a portion of our PPP loan is not eligible for forgiveness;
unanticipated changes or disruptions in our markets; increased
competition; technological breakthroughs by competitors; changes in
customer priorities or preferences; potential customer
terminations; unanticipated liabilities; the potential that
competitors will design around or invalidate our intellectual
property rights; a history and expectation of continuing losses as
we increase investments in various initiatives; continued
fluctuations in quarterly results; the uncertain duration of the
initial adverse impact on our overall revenues of our AgilePlans
and KVH Watch, under which we recognize no revenue for product
sales, either at the time of shipment or over the contract term;
potential delays in the development of a market for our IoT
services; the need to develop an ecosystem of applications for our
new IoT services; higher costs arising from maintaining both the
HTS network and our legacy network; potential challenges or delays
in the transition of customers from our legacy network to our HTS
network, which could result in a material loss of revenue; costs
arising from the termination of our legacy network; the uncertain
impact of federal budget deficits, Congressional deadlock and the
change in administration; the uncertain impact of changes in trade
policy, including actual and potential new or higher tariffs and
trade barriers, as well as trade wars with other countries;
unanticipated obstacles in our photonic chip and other product and
service development, cost engineering and manufacturing efforts;
delays in anticipated orders for our products and services,
including significant orders for TACNAV products, or the potential
failure of such orders to occur; adverse impacts of currency
fluctuations; our ability to successfully commercialize our new
initiatives without unanticipated additional expenses or delays;
potential reduced sales to companies in or dependent upon the
turbulent oil and gas industry; continued substantial fluctuations
in military sales, including to foreign customers; the
unpredictability of defense budget priorities as well as the order
timing, purchasing schedules, and priorities for defense products,
including possible order cancellations; the uncertain impact of
potential budget cuts by government customers; the impact of
extended economic weakness on the sale and use of marine vessels
and recreational vehicles; the potential inability to increase or
maintain our market share in the market for airtime services; the
need to increase sales of the TracPhone V-HTS series products and
related services to maintain and improve airtime gross margins; the
need for, or delays in, qualification of products to customer or
regulatory standards; potential declines or changes in customer
demand, due to economic, weather-related, seasonal, and other
factors, particularly with respect to the TracPhone V-HTS series,
including with respect to new pricing models; increased price and
service competition in the mobile connectivity market; exposure for
potential intellectual property infringement; changes in tax and
accounting requirements or assessments; and export restrictions,
delays in procuring export licenses, and other international risks.
These and other factors are discussed in more detail in our
Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on October 29, 2020. Copies are available
through our Investor Relations department and website,
http://investors.kvh.com. We do not assume any obligation to update
our forward-looking statements to reflect new information and
developments.
KVH Industries, Inc., has used, registered, or applied to
register its trademarks in the USA and other countries around the
world, including but not limited to the following marks: KVH,
TracVision, TracPhone, TACNAV, YOURlink, KVH Watch, mini-VSAT
Broadband, and AgilePlans. Other trademarks are the property of
their respective companies.
|
|
|
|
|
Contact: |
|
KVH Industries, Inc.Brent
Bruun401-845-8194bbruun@kvh.com |
|
FTI ConsultingChristine
Mohrmann212-850-5600 |
KVH INDUSTRIES, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except per share amounts,
unaudited)
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Sales: |
|
|
|
|
|
|
|
|
Product |
|
$ |
20,926 |
|
|
|
$ |
18,713 |
|
|
|
$ |
64,619 |
|
|
|
$ |
61,925 |
|
|
Service |
|
23,201 |
|
|
|
23,763 |
|
|
|
94,114 |
|
|
|
95,968 |
|
|
Net sales |
|
44,127 |
|
|
|
42,476 |
|
|
|
158,733 |
|
|
|
157,893 |
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
Costs of product sales |
|
11,996 |
|
|
|
11,131 |
|
|
|
41,608 |
|
|
|
42,887 |
|
|
Costs of service sales |
|
15,069 |
|
|
|
15,475 |
|
|
|
59,517 |
|
|
|
61,256 |
|
|
Research and development |
|
4,098 |
|
|
|
3,933 |
|
|
|
15,799 |
|
|
|
15,926 |
|
|
Sales, marketing and support |
|
7,385 |
|
|
|
8,734 |
|
|
|
29,811 |
|
|
|
33,434 |
|
|
General and administrative |
|
6,439 |
|
|
|
6,528 |
|
|
|
24,445 |
|
|
|
25,486 |
|
|
Goodwill impairment charge |
|
8,732 |
|
|
|
— |
|
|
|
8,732 |
|
|
|
— |
|
|
Intangible asset impairment charge |
|
1,758 |
|
|
|
— |
|
|
|
1,758 |
|
|
|
— |
|
|
Total costs and
expenses |
|
55,477 |
|
|
|
45,801 |
|
|
|
181,670 |
|
|
|
178,989 |
|
|
Loss from
operations |
|
(11,350 |
) |
|
|
(3,325 |
) |
|
|
(22,937 |
) |
|
|
(21,096 |
) |
|
Interest income |
|
237 |
|
|
|
377 |
|
|
|
996 |
|
|
|
2,003 |
|
|
Interest expense |
|
9 |
|
|
|
4 |
|
|
|
18 |
|
|
|
1,020 |
|
|
Other (expense) income, net |
|
(778 |
) |
|
|
(821 |
) |
|
|
193 |
|
|
|
101 |
|
|
Loss from continuing operations before income tax (benefit)
expense |
|
(11,900 |
) |
|
|
(3,773 |
) |
|
|
(21,766 |
) |
|
|
(20,012 |
) |
|
Income tax (benefit)
expense |
|
(263 |
) |
|
|
(863 |
) |
|
|
174 |
|
|
|
(4,003 |
) |
|
Net loss from continuing operations |
|
$ |
(11,637 |
) |
|
|
$ |
(2,910 |
) |
|
|
$ |
(21,940 |
) |
|
|
$ |
(16,009 |
) |
|
|
|
|
|
|
|
|
|
|
(Loss) income from
discontinued operations, net of tax |
|
— |
|
|
|
(573 |
) |
|
|
— |
|
|
|
49,264 |
|
|
Net (loss) income |
|
$ |
(11,637 |
) |
|
|
$ |
(3,483 |
) |
|
|
$ |
(21,940 |
) |
|
|
$ |
33,255 |
|
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations per common share: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.65 |
) |
|
|
$ |
(0.17 |
) |
|
|
$ |
(1.24 |
) |
|
|
$ |
(0.92 |
) |
|
Net (loss) income from
discontinued operations per common share: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
0.00 |
|
|
|
$ |
(0.03 |
) |
|
|
$ |
0.00 |
|
|
|
$ |
2.82 |
|
|
Net (loss) income per
common share |
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.65 |
) |
|
|
$ |
(0.20 |
) |
|
|
$ |
(1.24 |
) |
|
|
$ |
1.90 |
|
|
Weighted average
number of common shares outstanding: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
17,772 |
|
|
|
17,548 |
|
|
|
17,669 |
|
|
|
17,459 |
|
|
KVH INDUSTRIES, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands, unaudited)
|
|
December 31,2020 |
|
December 31,2019 |
ASSETS |
|
|
|
|
Cash, cash equivalents and marketable securities |
|
$ |
37,719 |
|
|
$ |
48,272 |
|
Accounts receivable, net |
|
33,687 |
|
|
32,891 |
|
Inventories, net |
|
24,674 |
|
|
23,465 |
|
Other current assets and contract assets |
|
4,980 |
|
|
4,646 |
|
Total current
assets |
|
101,060 |
|
|
109,274 |
|
Property and equipment, net |
|
56,273 |
|
|
53,584 |
|
Goodwill |
|
6,592 |
|
|
15,408 |
|
Intangible assets, net |
|
2,254 |
|
|
4,943 |
|
Right of use assets |
|
6,893 |
|
|
6,286 |
|
Other non-current assets and contract assets |
|
10,446 |
|
|
9,851 |
|
Deferred income tax asset |
|
73 |
|
|
45 |
|
Total assets |
|
$ |
183,591 |
|
|
$ |
199,391 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
27,525 |
|
|
$ |
31,116 |
|
Contract liabilities |
|
4,445 |
|
|
4,443 |
|
Current portion of long-term debt |
|
4,992 |
|
|
— |
|
Current operating lease liability |
|
3,826 |
|
|
2,831 |
|
Total current
liabilities |
|
40,788 |
|
|
38,390 |
|
Other long-term liabilities |
|
674 |
|
|
1,292 |
|
Long-term operating lease liability |
|
3,204 |
|
|
3,482 |
|
Long-term contract liabilities |
|
4,688 |
|
|
5,476 |
|
Deferred income tax liability |
|
418 |
|
|
762 |
|
Long-term debt, excluding current portion |
|
1,935 |
|
|
— |
|
Stockholders’ equity |
|
131,884 |
|
|
149,989 |
|
Total liabilities and
stockholders’ equity |
|
$ |
183,591 |
|
|
$ |
199,391 |
|
KVH INDUSTRIES, INC. AND
SUBSIDIARIESRECONCILIATION OF GAAP NET LOSS FROM
CONTINUING OPERATIONSTO NON-GAAP NET INCOME (LOSS)
FROM CONTINUING OPERATIONS(in thousands, except
per share amounts, unaudited)
|
|
Three months ended December 31, |
|
Year endedDecember 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net loss from continuing operations - GAAP |
|
$ |
(11,637 |
) |
|
|
$ |
(2,910 |
) |
|
|
$ |
(21,940 |
) |
|
|
$ |
(16,009 |
) |
|
Amortization of intangibles |
|
264 |
|
|
|
248 |
|
|
|
1,004 |
|
|
|
980 |
|
|
Stock-based compensation expense |
|
1,003 |
|
|
|
1,140 |
|
|
|
3,462 |
|
|
|
4,159 |
|
|
Goodwill impairment charge |
|
8,732 |
|
|
|
— |
|
|
|
8,732 |
|
|
|
— |
|
|
Intangible asset impairment charge |
|
1,758 |
|
|
|
— |
|
|
|
1,758 |
|
|
|
— |
|
|
Transaction-related and other non-recurring legal fees |
|
— |
|
|
|
— |
|
|
|
201 |
|
|
|
224 |
|
|
Non-recurring inventory reserve |
|
— |
|
|
|
122 |
|
|
|
— |
|
|
|
2,259 |
|
|
Other non-recurring costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
216 |
|
|
Foreign exchange transaction loss |
|
707 |
|
|
|
988 |
|
|
|
48 |
|
|
|
181 |
|
|
Tax effect on the foregoing |
|
(736 |
) |
|
|
(502 |
) |
|
|
(1,270 |
) |
|
|
(1,664 |
) |
|
Change in valuation allowance and other tax adjustments (a) |
|
1,226 |
|
|
|
456 |
|
|
|
4,513 |
|
|
|
1,504 |
|
|
Net income (loss) from
continuing operations - Non-GAAP |
|
$ |
1,317 |
|
|
|
$ |
(458 |
) |
|
|
$ |
(3,492 |
) |
|
|
$ |
(8,150 |
) |
|
|
|
|
|
|
|
|
|
|
Net income (loss) from
continuing operations per common share - Non-GAAP |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.07 |
|
|
|
$ |
(0.03 |
) |
|
|
$ |
(0.20 |
) |
|
|
$ |
(0.47 |
) |
|
Diluted |
|
$ |
0.07 |
|
|
|
$ |
(0.03 |
) |
|
|
$ |
(0.20 |
) |
|
|
$ |
(0.47 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
17,772 |
|
|
|
17,548 |
|
|
|
17,669 |
|
|
|
17,459 |
|
|
Diluted |
|
17,972 |
|
|
|
17,548 |
|
|
|
17,669 |
|
|
|
17,459 |
|
|
(a) Represents a change in the
valuation allowance on current year United States net operating
losses, research and development tax credits and uncertain tax
position adjustments.
KVH INDUSTRIES, INC. AND
SUBSIDIARIESRECONCILIATION OF GAAP NET LOSS FROM
CONTINUING OPERATIONS TO NON-GAAPEBITDA AND
NON-GAAP ADJUSTED EBITDA FROM CONTINUING
OPERATIONS(in thousands, unaudited)
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
GAAP net loss from continuing operations |
|
$ |
(11,637 |
) |
|
|
$ |
(2,910 |
) |
|
|
$ |
(21,940 |
) |
|
|
$ |
(16,009 |
) |
|
Income tax (benefit) expense |
|
(263 |
) |
|
|
(863 |
) |
|
|
174 |
|
|
|
(4,003 |
) |
|
Interest income, net |
|
(228 |
) |
|
|
(373 |
) |
|
|
(978 |
) |
|
|
(983 |
) |
|
Depreciation and amortization |
|
3,386 |
|
|
|
2,594 |
|
|
|
11,663 |
|
|
|
9,778 |
|
|
Non-GAAP
EBITDA |
|
(8,742 |
) |
|
|
(1,552 |
) |
|
|
(11,081 |
) |
|
|
(11,217 |
) |
|
Stock-based compensation expense |
|
1,003 |
|
|
|
1,140 |
|
|
|
3,462 |
|
|
|
4,159 |
|
|
Goodwill impairment charge |
|
8,732 |
|
|
|
— |
|
|
|
8,732 |
|
|
|
— |
|
|
Intangible asset impairment charge |
|
1,758 |
|
|
|
— |
|
|
|
1,758 |
|
|
|
— |
|
|
Non-recurring inventory reserve |
|
— |
|
|
|
122 |
|
|
|
— |
|
|
|
2,259 |
|
|
Transaction-related and other non-recurring legal fees |
|
— |
|
|
|
— |
|
|
|
201 |
|
|
|
224 |
|
|
Other non-recurring costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
216 |
|
|
Foreign exchange transaction loss |
|
707 |
|
|
|
988 |
|
|
|
48 |
|
|
|
181 |
|
|
Non-GAAP adjusted
EBITDA from continuing operations |
|
$ |
3,458 |
|
|
|
$ |
698 |
|
|
|
$ |
3,120 |
|
|
|
$ |
(4,178 |
) |
|
KVH INDUSTRIES, INC. AND
SUBSIDIARIESREVENUE AND OPERATING INCOME (LOSS) BY
SEGMENT FROM CONTINUING OPERATIONS(in millions
except for percentages, unaudited)
Segment Net
Sales |
|
Three months ended December 31, |
|
Year ended December 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Mobile connectivity
sales |
|
|
|
|
|
|
|
|
Product |
|
$ |
7.3 |
|
|
$ |
7.6 |
|
|
$ |
27.9 |
|
|
$ |
31.6 |
|
Service |
|
22.6 |
|
|
22.4 |
|
|
91.6 |
|
|
90.4 |
|
Net sales |
|
$ |
29.9 |
|
|
$ |
30.0 |
|
|
$ |
119.5 |
|
|
$ |
122.0 |
|
|
|
|
|
|
|
|
|
|
Inertial navigation
sales |
|
|
|
|
|
|
|
|
Product |
|
$ |
13.6 |
|
|
$ |
11.1 |
|
|
$ |
36.8 |
|
|
$ |
30.3 |
|
Service |
|
0.6 |
|
|
1.4 |
|
|
2.5 |
|
|
5.6 |
|
Net
sales |
|
$ |
14.2 |
|
|
$ |
12.5 |
|
|
$ |
39.3 |
|
|
$ |
35.9 |
|
Operating (Loss)
Income |
|
Three months ended December 31, |
|
Year ended December 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Mobile connectivity |
|
$ |
(10.6 |
) |
|
$ |
(1.5 |
) |
|
$ |
(10.1 |
) |
|
$ |
(5.6 |
) |
Inertial
navigation |
|
4.1 |
|
|
3.0 |
|
|
4.8 |
|
|
3.0 |
|
|
|
(6.5 |
) |
|
1.5 |
|
|
(5.3 |
) |
|
(2.6 |
) |
Unallocated |
|
(4.8 |
) |
|
(4.8 |
) |
|
(17.7 |
) |
|
(18.5 |
) |
Loss from
operations |
|
$ |
(11.3 |
) |
|
$ |
(3.3 |
) |
|
$ |
(23.0 |
) |
|
$ |
(21.1 |
) |
(1) Mobile connectivity loss from operations for
the fourth quarter of 2020 includes a $10.5 million goodwill and
intangible asset impairment charge.
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
(percentage of total revenue) |
|
(percentage of total revenue) |
Mobile Connectivity
Revenue Components |
|
|
|
|
|
|
|
|
Product sales |
|
17 |
% |
|
18 |
% |
|
18 |
% |
|
20 |
% |
mini-VSAT Broadband airtime |
|
46 |
% |
|
45 |
% |
|
51 |
% |
|
48 |
% |
Content service |
|
4 |
% |
|
6 |
% |
|
5 |
% |
|
6 |
% |
Inertial Navigation
Revenue Components |
|
|
|
|
|
|
|
|
FOG-based products |
|
14 |
% |
|
18 |
% |
|
16 |
% |
|
16 |
% |
Tactical navigation products |
|
16 |
% |
|
8 |
% |
|
7 |
% |
|
3 |
% |
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