KVH Industries Reports Third Quarter 2018 Results
MIDDLETOWN, RI, October 31, 2018 — KVH Industries, Inc., (Nasdaq: KVHI) reported financial results for the quarter ended September 30, 2018 today. The company will hold a conference call to discuss these results at 10:30 a.m. ET today, which can be accessed at investors.kvh.com. Following the call, a replay of the webcast will be available through the company’s website.
Third Quarter 2018 Highlights
• Shipments of VSAT units increased more than 125% compared to the third quarter of 2017.
• AgilePlans subscription service, our Connectivity as a Service Program for the commercial maritime sector, amounted to 64% of total commercial maritime VSAT shipments, and 54% of the total VSAT shipments for the quarter. Installations for the quarter increased 27% compared to the second quarter of 2018.
• Fiber optic gyro (FOG) product sales grew 53% compared to the third quarter of 2017, the seventh consecutive quarter of double-digit growth.
• Our mini-VSAT Broadband installed base of subscribers increased 9% compared
• Total revenue increased in the third quarter of 2018 to $43.5 million from $40.4 million in the third quarter of 2017, driven primarily by an increase in FOG product sales and an increase in mini-VSAT Broadband airtime revenue. Revenue increased even though revenue is not recognized immediately on AgilePlans shipments as revenues under the AgilePlans program are recognized over time.
• Net loss in the third quarter of 2018 was $1.2 million, or $0.07 per share, compared to a net loss of $2.4 million, or $0.15 per share in the third quarter of 2017.
• Non-GAAP net income in the third quarter of 2018 was $0.7 million, or $0.04 per share, compared to $0.4 million, or $0.02 per share in the third quarter of 2017.
• Non-GAAP adjusted EBITDA in the third quarter of 2018 was $3.2 million, compared to $1.8 million in the third quarter of 2017.
• On October 30, 2018, we amended and restated our existing credit agreement. As part of the new, three-year agreement, we repaid approximately $17.0 million of outstanding borrowings, increased the amounts available under our revolving facility to $20.0 million, and changed certain covenant requirements to be less restrictive. At the closing of the transaction, we borrowed $5.0 million under the revolver.
Commenting on the quarter, Martin Kits van Heyningen, KVH’s chief executive officer, said, “Our third quarter results reflect a continuation of the strong momentum that drove the first half of our year. Our VSAT shipments were a third quarter record for us, growing more than 125% compared to the third quarter of 2017. Our VSAT shipments through the first nine months of the year have already surpassed our shipments for all of 2017 by more than 40%. Our AgilePlans Connectivity as a Service Program was a significant driver of this growth, but traditional shipments of our VSAT products increased almost 45% as well. Our airtime subscribers again grew by 9%. Our pace of AgilePlans installations increased 27% compared to the second quarter of 2018. In our inertial navigation segment, our FOG revenue increased by over 50% in the most recent quarter, our seventh consecutive quarter of double digits growth. The development of our photonic chip-based FOG continues on track, and we continue to expect to provide test units to customers by the end of this year.”
The company operates in two segments, mobile connectivity and inertial navigation. Net sales for the mobile connectivity segment increased $0.7 million, or 2%, compared to the third quarter of 2017 due to a $1.1 million increase in our mini-VSAT Broadband airtime revenue and a $0.5 million increase in marine mobile connectivity product sales, partially offset by a $0.9 million decrease in content and training revenue. Net sales for our inertial navigation segment increased $2.4 million, or 31%, compared to the third quarter of 2017, due to a $2.7 million increase in FOG sales and a $0.5 million increase in contracted engineering service sales, partially offset by a $0.9 million decrease in TACNAV sales.
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• See the whole report for 3rd Quarter and 9 month financial summaries and tables
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Fourth Quarter 2018 and Full Year 2018 Outlook Our guidance for the fourth quarter and full year of 2018 is below. We expect that our full-year 2018 VSAT shipments will almost double compared to 2017, largely as a result of the popularity of our AgilePlans program among our commercial customers. We have reduced our full year guidance for revenues and earnings, partly as a result of the continued success of our AgilePlans program which, to some extent, negatively impacts the amount of revenues we are able to record in a particular period. The reduction in our full year revenue and earnings forecast also reflects lower than expected TACNAV orders, attributable somewhat to the recent political tensions in certain international markets, and higher operating expenses associated with the launch of our new TracPhone V3-HTS antenna along with our continuing investment in long-term initiatives such as our new photonic chip-based FOG. |
