KVH Industries reports sales, profit increases in fourth quarter

KVH INDUSTRIES Inc. reported increases in sales and profit for the fourth quarter. / COURTESY KVH INDUSTRIES
KVH INDUSTRIES Inc. reported increases in sales and profit for the fourth quarter. / COURTESY KVH INDUSTRIES

MIDDLETOWN – KVH Industries reported increases in sales and profit for the fourth quarter, but while sales improved in 2014 compared with 2013, profit fell for the entire year.
KVH, a provider of guidance and Internet systems for the maritime and defense industries, reported sales of $50.4 million in the fourth quarter, an increase of 29.5 percent compared with the 2013 fourth quarter, and 2014 sales of $172.6 million, an increase of 6.3 percent compared with 2013’s sales of $162.3 million.
Profit for the fourth quarter was $958,000, or 6 cents per diluted share, an improvement over the fourth quarter 2013 loss of $365,000, or 2 cents per diluted share. Profit for 2014 was $41,000, or 0 cents per diluted share, compared with profit of $4.5 million, or 30 cents per diluted share, a year earlier.
The company highlighted several initiatives in its earnings release, including growth of Videotel, its subscription-based service, which represented 47 percent of total revenue in the fourth quarter, an increase from 43 percent a year ago.
“We delivered a strong finish to fiscal 2014 which led to top line performance at the high end
of our fourth-quarter guidance range,” Martin Kits van Heyningen, KVH’s CEO, said in a statement. “The investments we’ve made across our business to develop innovative solutions continued to bear fruit in the fourth quarter.”

The company said service revenue in the fourth quarter was $25.2 million, an increase of 25 percent compared with the fourth quarter of 2013, and featured $5.1 million in revenue from the July acquisition of Videotel. Airtime service revenue, which includes mini-VSAT broadband airtime revenue, rose 14 percent in the fourth quarter year over year. Content and services revenue, including Videotel entertainment and new e-learning and safety content, increased 44 percent in the fourth quarter compared with the last three months of 2013.

For the year, KVH said airtime service revenue increased 21 percent year over year, while content and service revenue rose 40 percent, reflecting the addition of Videotel and a full-year contribution from KVH Media Group, which was offset by a decline in services to support the Saudi Arabian National Guard program, completed in early 2014.

Looking ahead, the company said it expects continued growth and more profitability. KVH said it expects “solid growth” in its marine VSAT business and “relatively flat defense business.” It also said that because a portion of revenue and costs are denominated in pounds, earnings could be affected, due to recent fluctuations in the currency movement relative to the U.S. dollar.

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Revenue projections for 2015 are between $190 million and $210 million, and first-quarter revenue is expected to be between $40 million and $44 million.

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