KVH Provides Fourth Quarter Update

  
    
  
  
    
      KVH Industries, Inc., (Nasdaq: KVHI) announced today that preliminary, 
      unaudited results indicate the company will report revenue of 
      approximately $17.2-$17.4 million and roughly breakeven earnings for the 
      fourth quarter of 2006 as a result of slower than expected growth in the 
      company’s marine satellite systems in the 
      quarter as well as unexpected scheduling changes of confirmed military 
      orders, which are now expected to ship in 2007. The projected earnings 
      include approximately $0.02 per share impact from stock option expenses.
    
    
      Martin Kits van Heyningen, KVH’s president and 
      chief executive officer commented, “These 
      results are below our original expectations for the quarter. However, we 
      do not believe the factors involved are representative of any long-term 
      trends. While we were affected by an unexpected softness in the marine 
      market, marine sales in the fourth quarter were still up compared to 
      last year, and we believe that we are continuing to gain market share 
      with our new products. In fact, our overall mobile communications sales 
      were up more than 15% for the quarter compared to last year, reflecting 
      some growth in marine sales as well as a strong increase in sales to the 
      land market compared to the same period last year. Within our defense 
      business, the schedule changes added to an already large, anticipated 
      year-over-year decline for defense sales, which resulted in a larger 
      than expected decline in spite of positive growth in fiber optic gyro 
      product sales.
    
    
      “Looking ahead to 2007, we anticipate that 
      revenue will be approximately $87 to $92 million, or approximately 10% 
      to 17% above our expected 2006 full year revenue. We expect that GAAP 
      earnings will be between $0.40 to $0.48 per diluted share, up 
      approximately 67%-100% over fiscal year 2006, which we project to be 
      approximately $0.24 per diluted share. These expectations include a more 
      cautious outlook for the next few quarters in the marine business. We 
      also expect to see strengthening military sales and year-over-year 
      growth compared to 2006, especially in the second half of the year. ”
    
    
      KVH’s fourth quarter closed on December 31, 
      2006, and all statements in this release reflect a preliminary analysis 
      of the company’s quarterly financial results. 
      The company’s 2006 results are subject to the 
      completion of the year end audit. The company expects to release its 
      fourth quarter and full year results for 2006 by mid-February 2007.
    
    
      About KVH Industries, Inc.
    
    
      KVH Industries, Inc., is a premier manufacturer of systems to provide 
      access to live mobile media ranging from satellite TV to telephone and 
      high-speed Internet for vehicles and vessels as well as a leading source 
      of navigation, pointing, and guidance solutions for maritime, defense, 
      and commercial applications. The company’s 
      products are based on its proprietary mobile satellite antenna and fiber 
      optic technologies. An ISO 9001-certified company, KVH is based in 
      Middletown, Rhode Island.
    
    
      This press release contains certain forward-looking statements that 
      involve risks and uncertainties. For example, the statements regarding 
      the company’s financial results and 
      expectations for 2007 are forward-looking statements. The actual results 
      realized by the company could differ materially from the statements made 
      herein. Factors that might cause such differences include, but are not 
      limited to: uneven military sales cycles; unforeseen changes in 
      competing technologies and products; reliance upon third-party service 
      providers in the mobile satellite marketplace; delays in international 
      military shipments due to licensing and approval regulations; and 
      worldwide economic variances. Additional factors are discussed in the 
      company’s most recent annual report on Form 
      10-K and quarterly report on Form 10-Q filed with the SEC. Copies are 
      available through the company’s Investor 
      Relations department and website, www.kvh.com. 
      KVH does not assume any obligation to update its forward-looking 
      statements to reflect new information or developments.
    
    
      KVH is a registered trademark of KVH Industries, Inc.