KVH reports revenue increase, profit decline in 2Q

KVH INDUSTRIES Inc. reported a 10 percent increase in revenue, but a 33 percent decline in profit, in the second quarter that ended June 30.
KVH INDUSTRIES Inc. reported a 10 percent increase in revenue, but a 33 percent decline in profit, in the second quarter that ended June 30.

MIDDLETOWN – KVH Industries Inc. reported a 10 percent increase in revenue, but a 33 percent decline in profit in the second quarter that ended June 30.
The company, a provider of guidance and Internet systems for the maritime, retail, leisure and defense industries, reported revenue of $44.9 million compared with revenue of $40.9 million during the year-ago quarter. Profit fell to $37,000 from $55,000 a year ago.
“Overall we are very pleased with our financial results in the second quarter, beating our guidance for both EPS and adjusted EBITDA and recording revenue at the high end of our guidance range,” Martin Kits van Heyningen, KVH’s CEO, said in a statement.
He said that the company continues to see “solid demand” in its maritime VSAT market.
But the company said second-quarter product revenue of $17.9 million was 15 percent lower than the prior year quarter, mostly due to an 85 percent year-over-year decline in its TACNAV (tactical navigation system) revenue.
In comparison, service revenue grew 35 percent to $26.9 million, including $5.8 million in revenue from Videotel, acquired in July 2014. Airtime service revenue, including mini-VSAT broadband airtime revenue, increased 8 percent year over year, and content and service revenue, including entertainment and new e-Learning and safety content, as well as $5.8 million of Videotel revenue, rose 117 percent year over year.
Non-GAAP net income was $2.1 million, or 13 cents per diluted share, in the second quarter, compared with non-GAAP net income of $1.9 million, or 12 cents per diluted share.
KVH said non-GAAP financial measures are “useful to investors because they allow for greater transparency with respect to key financial metrics used in operating decisions and because its investors and analysts use them to help assess the health of its business.”
KVH said revenue for the full year is projected to be $185 million to $205 million. Earnings per share for the full year also are expected to between 20 cents and 30 cents, while on a non-GAAP measure, it is projected to be between 75 cents and 85 cents.
“Overall KVH expects continued growth and improving profitability as we progress throughout the year. We expect solid growth in our marine-VSAT business while we expect our defense business to remain flat. The vast majority of our TACNAV revenues this year are projected for the fourth quarter,” KVH said in its earnings release.

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