![](/cdn/assets/images/search/clock.png)
We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
KVH Industries Inc | NASDAQ:KVHI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.08 | -1.76% | 4.46 | 4.45 | 4.47 | 4.66 | 4.42 | 4.58 | 15,652 | 18:44:31 |
|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
05-0420589
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
(I.R.S. Employer
Identification Number)
|
50 Enterprise Center, Middletown, RI 02842
(Address of Principal Executive Offices) (Zip Code) |
|
(401) 847-3327
(Registrant’s Telephone Number, Including Area Code)
|
|
Large accelerated filer
|
o
|
Accelerated filer
|
ý
|
Non-accelerated filer
|
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
Date
|
Class
|
Outstanding shares
|
November 5, 2013
|
Common Stock, par value $0.01 per share
|
15,612,024
|
|
|
Page No.
|
|
||
ITEM 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
|
||
|
||
ITEM 1.
|
||
ITEM 1A.
|
||
ITEM 2.
|
||
ITEM 6.
|
||
|
September 30,
2013 |
|
December 31,
2012 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
9,213
|
|
|
$
|
8,978
|
|
Marketable securities
|
48,364
|
|
|
29,307
|
|
||
Accounts receivable, net of allowance for doubtful accounts of approximately $1,252 as of September 30, 2013 and $929 as of December 31, 2012
|
25,731
|
|
|
27,654
|
|
||
Inventories
|
18,133
|
|
|
16,203
|
|
||
Prepaid expenses and other assets
|
3,891
|
|
|
3,264
|
|
||
Deferred income taxes
|
712
|
|
|
1,146
|
|
||
Total current assets
|
106,044
|
|
|
86,552
|
|
||
Property and equipment, less accumulated depreciation of $35,153 as of September 30, 2013 and $31,657 as of December 31, 2012
|
36,706
|
|
|
36,733
|
|
||
Intangible assets, less accumulated amortization of $1,633 as of September 30, 2013 and $826 as of December 31, 2012
|
15,181
|
|
|
1,684
|
|
||
Goodwill
|
18,086
|
|
|
4,712
|
|
||
Other non-current assets
|
4,972
|
|
|
4,363
|
|
||
Deferred income taxes
|
38
|
|
|
3,524
|
|
||
Total assets
|
$
|
181,027
|
|
|
$
|
137,568
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
7,930
|
|
|
$
|
7,086
|
|
Accrued compensation and employee-related expenses
|
5,490
|
|
|
6,785
|
|
||
Accrued other
|
6,969
|
|
|
4,595
|
|
||
Accrued product warranty costs
|
1,010
|
|
|
814
|
|
||
Deferred revenue
|
5,468
|
|
|
1,892
|
|
||
Current portion of long-term debt
|
1,044
|
|
|
138
|
|
||
Total current liabilities
|
27,911
|
|
|
21,310
|
|
||
Other long-term liabilities
|
1,121
|
|
|
140
|
|
||
Line of credit
|
30,000
|
|
|
7,000
|
|
||
Long-term debt, excluding current portion
|
6,407
|
|
|
3,414
|
|
||
Total liabilities
|
65,439
|
|
|
31,864
|
|
||
Commitments and contingencies (notes 3 and 9)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value. Authorized 1,000,000 shares; none issued
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value. Authorized 30,000,000 shares; 16,886,063 and 16,563,836 shares issued at September 30, 2013 and December 31, 2012; and 15,227,072 and 14,904,845 shares outstanding at September 30, 2013 and December 31, 2012, respectively
|
169
|
|
|
166
|
|
||
Additional paid-in capital
|
115,970
|
|
|
111,514
|
|
||
Retained earnings
|
12,205
|
|
|
7,307
|
|
||
Accumulated other comprehensive income (loss)
|
394
|
|
|
(133
|
)
|
||
Less: treasury stock at cost, common stock, 1,658,991 shares as of September 30, 2013 and December 31, 2012
|
(13,150
|
)
|
|
(13,150
|
)
|
||
Total stockholders’ equity
|
115,588
|
|
|
105,704
|
|
||
Total liabilities and stockholders’ equity
|
$
|
181,027
|
|
|
$
|
137,568
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Sales:
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
20,331
|
|
|
$
|
24,529
|
|
|
$
|
71,433
|
|
|
$
|
62,653
|
|
Service
|
19,885
|
|
|
14,293
|
|
|
51,907
|
|
|
34,916
|
|
||||
Net sales
|
40,216
|
|
|
38,822
|
|
|
123,340
|
|
|
97,569
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Costs of product sales
|
11,780
|
|
|
13,297
|
|
|
39,999
|
|
|
37,026
|
|
||||
Costs of service sales
|
11,909
|
|
|
10,035
|
|
|
33,019
|
|
|
22,659
|
|
||||
Research and development
|
3,334
|
|
|
2,949
|
|
|
9,534
|
|
|
9,148
|
|
||||
Sales, marketing and support
|
6,344
|
|
|
6,360
|
|
|
20,828
|
|
|
17,239
|
|
||||
General and administrative
|
4,774
|
|
|
3,040
|
|
|
13,084
|
|
|
8,906
|
|
||||
Total costs and expenses
|
38,141
|
|
|
35,681
|
|
|
116,464
|
|
|
94,978
|
|
||||
Income from operations
|
2,075
|
|
|
3,141
|
|
|
6,876
|
|
|
2,591
|
|
||||
Interest income
|
199
|
|
|
147
|
|
|
572
|
|
|
359
|
|
||||
Interest expense
|
189
|
|
|
76
|
|
|
450
|
|
|
243
|
|
||||
Other income, net
|
212
|
|
|
23
|
|
|
290
|
|
|
99
|
|
||||
Income before income tax expense
|
2,297
|
|
|
3,235
|
|
|
7,288
|
|
|
2,806
|
|
||||
Income tax expense
|
911
|
|
|
1,490
|
|
|
2,390
|
|
|
1,983
|
|
||||
Net income
|
$
|
1,386
|
|
|
$
|
1,745
|
|
|
$
|
4,898
|
|
|
$
|
823
|
|
Per share information:
|
|
|
|
|
|
|
|
||||||||
Net income per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.09
|
|
|
$
|
0.12
|
|
|
$
|
0.32
|
|
|
$
|
0.06
|
|
Diluted
|
$
|
0.09
|
|
|
$
|
0.12
|
|
|
$
|
0.32
|
|
|
$
|
0.05
|
|
Number of shares used in per share calculation:
|
|
|
|
|
|
|
|
||||||||
Basic
|
15,199,802
|
|
|
14,846,249
|
|
|
15,109,311
|
|
|
14,742,855
|
|
||||
Diluted
|
15,354,459
|
|
|
15,023,580
|
|
|
15,300,118
|
|
|
14,971,667
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net income
|
$
|
1,386
|
|
|
$
|
1,745
|
|
|
$
|
4,898
|
|
|
$
|
823
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on available-for-sale securities
|
37
|
|
|
1
|
|
|
4
|
|
|
(2
|
)
|
||||
Currency translation adjustment gain
|
1,592
|
|
|
327
|
|
|
357
|
|
|
336
|
|
||||
Unrealized gain (loss) on derivative instruments
|
100
|
|
|
(15
|
)
|
|
166
|
|
|
(57
|
)
|
||||
Other comprehensive income, net of tax
|
1,729
|
|
|
313
|
|
|
527
|
|
|
277
|
|
||||
Total comprehensive income
|
$
|
3,115
|
|
|
$
|
2,058
|
|
|
$
|
5,425
|
|
|
$
|
1,100
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2013
|
|
2012
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
4,898
|
|
|
$
|
823
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Provision for doubtful accounts
|
726
|
|
|
556
|
|
||
Depreciation and amortization
|
4,301
|
|
|
3,377
|
|
||
Deferred income taxes
|
923
|
|
|
1,697
|
|
||
(Gain) loss on derivative instruments
|
(73
|
)
|
|
95
|
|
||
Compensation expense related to stock-based awards and employee stock purchase plan
|
2,988
|
|
|
2,747
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
3,573
|
|
|
(3,197
|
)
|
||
Inventories
|
(1,831
|
)
|
|
778
|
|
||
Prepaid expenses and other assets
|
(84
|
)
|
|
(257
|
)
|
||
Other non-current assets
|
(387
|
)
|
|
(442
|
)
|
||
Accounts payable
|
278
|
|
|
467
|
|
||
Deferred revenue
|
796
|
|
|
(723
|
)
|
||
Accrued expenses
|
(117
|
)
|
|
3,493
|
|
||
Other long-term liabilities
|
982
|
|
|
(3
|
)
|
||
Net cash provided by operating activities
|
16,973
|
|
|
9,411
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(3,031
|
)
|
|
(5,240
|
)
|
||
Net cash paid for business acquired
|
(22,943
|
)
|
|
—
|
|
||
Purchases of marketable securities
|
(35,221
|
)
|
|
(13,106
|
)
|
||
Maturities and sales of marketable securities
|
16,166
|
|
|
12,361
|
|
||
Net cash used in investing activities
|
(45,029
|
)
|
|
(5,985
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repayments of long-term debt
|
(772
|
)
|
|
(98
|
)
|
||
Borrowings from long-term debt
|
4,671
|
|
|
—
|
|
||
Proceeds from stock options exercised and employee stock purchase plan
|
2,360
|
|
|
784
|
|
||
Payment of employee restricted stock withholdings
|
(828
|
)
|
|
(333
|
)
|
||
Repayments of line of credit borrowings
|
—
|
|
|
(2,000
|
)
|
||
Proceeds from line of credit borrowings
|
23,000
|
|
|
—
|
|
||
Payment of stock registration fee
|
(5
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
28,426
|
|
|
(1,647
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(135
|
)
|
|
(175
|
)
|
||
Net increase in cash and cash equivalents
|
235
|
|
|
1,604
|
|
||
Cash and cash equivalents at beginning of period
|
8,978
|
|
|
7,017
|
|
||
Cash and cash equivalents at end of period
|
$
|
9,213
|
|
|
$
|
8,621
|
|
|
Nine Months Ended
|
|
Nine Months Ended
|
||
|
September 30,
2013 |
|
September 30,
2012 |
||
Risk-free interest rate
|
1.06
|
%
|
|
0.72
|
%
|
Expected volatility
|
50.89
|
%
|
|
64.60
|
%
|
Expected life (in years)
|
4.24
|
|
|
4.22
|
|
Dividend yield
|
0
|
%
|
|
0
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Weighted average common shares outstanding—basic
|
15,199,802
|
|
|
14,846,249
|
|
|
15,109,311
|
|
|
14,742,855
|
|
Dilutive common shares issuable in connection with stock plans
|
154,657
|
|
|
177,331
|
|
|
190,807
|
|
|
228,812
|
|
Weighted average common shares outstanding—diluted
|
15,354,459
|
|
|
15,023,580
|
|
|
15,300,118
|
|
|
14,971,667
|
|
|
September 30,
2013 |
|
December 31,
2012 |
||||
Raw materials
|
$
|
9,038
|
|
|
$
|
9,173
|
|
Work in process
|
3,499
|
|
|
1,789
|
|
||
Finished goods
|
5,596
|
|
|
5,241
|
|
||
|
$
|
18,133
|
|
|
$
|
16,203
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2013
|
|
2012
|
||||
Beginning balance
|
$
|
814
|
|
|
$
|
933
|
|
Charges to expense
|
746
|
|
|
574
|
|
||
Costs incurred
|
(550
|
)
|
|
(586
|
)
|
||
Ending balance
|
$
|
1,010
|
|
|
$
|
921
|
|
|
|
Sales Originating From
|
||||||||||
Three months ended September 30, 2013
|
|
Americas
|
|
Europe and
Asia
|
|
Total
|
||||||
Mobile communications sales to the United States
|
|
$
|
21,270
|
|
|
$
|
299
|
|
|
$
|
21,569
|
|
Mobile communications sales to Canada
|
|
108
|
|
|
—
|
|
|
108
|
|
|||
Mobile communications sales to Europe
|
|
181
|
|
|
4,622
|
|
|
4,803
|
|
|||
Mobile communications sales to other geographic areas
|
|
1,001
|
|
|
1,532
|
|
|
2,533
|
|
|||
Guidance and stabilization sales to the United States
|
|
2,026
|
|
|
—
|
|
|
2,026
|
|
|||
Guidance and stabilization sales to Canada
|
|
3,700
|
|
|
—
|
|
|
3,700
|
|
|||
Guidance and stabilization sales to Europe
|
|
1,437
|
|
|
—
|
|
|
1,437
|
|
|||
Guidance and stabilization sales to other geographic areas
|
|
4,040
|
|
|
—
|
|
|
4,040
|
|
|||
Intercompany sales
|
|
746
|
|
|
549
|
|
|
1,295
|
|
|||
Subtotal
|
|
34,509
|
|
|
7,002
|
|
|
41,511
|
|
|||
Eliminations
|
|
(746
|
)
|
|
(549
|
)
|
|
(1,295
|
)
|
|||
Net sales
|
|
$
|
33,763
|
|
|
$
|
6,453
|
|
|
$
|
40,216
|
|
Segment net income (loss)
|
|
$
|
1,687
|
|
|
$
|
(301
|
)
|
|
$
|
1,386
|
|
Depreciation and amortization
|
|
$
|
1,117
|
|
|
$
|
408
|
|
|
$
|
1,525
|
|
Total assets
|
|
$
|
132,415
|
|
|
$
|
48,612
|
|
|
$
|
181,027
|
|
|
|
Sales Originating From
|
||||||||||
Three months ended September 30, 2012
|
|
Americas
|
|
Europe and
Asia
|
|
Total
|
||||||
Mobile communications sales to the United States
|
|
$
|
16,609
|
|
|
$
|
—
|
|
|
$
|
16,609
|
|
Mobile communications sales to Canada
|
|
205
|
|
|
—
|
|
|
205
|
|
|||
Mobile communications sales to Europe
|
|
99
|
|
|
2,856
|
|
|
2,955
|
|
|||
Mobile communications sales to other geographic areas
|
|
1,270
|
|
|
1,165
|
|
|
2,435
|
|
|||
Guidance and stabilization sales to the United States
|
|
1,720
|
|
|
—
|
|
|
1,720
|
|
|||
Guidance and stabilization sales to Canada
|
|
2,718
|
|
|
—
|
|
|
2,718
|
|
|||
Guidance and stabilization sales to Europe
|
|
3,407
|
|
|
—
|
|
|
3,407
|
|
|||
Guidance and stabilization sales to other geographic areas
|
|
8,773
|
|
|
—
|
|
|
8,773
|
|
|||
Intercompany sales
|
|
1,577
|
|
|
221
|
|
|
1,798
|
|
|||
Subtotal
|
|
36,378
|
|
|
4,242
|
|
|
40,620
|
|
|||
Eliminations
|
|
(1,577
|
)
|
|
(221
|
)
|
|
(1,798
|
)
|
|||
Net sales
|
|
$
|
34,801
|
|
|
$
|
4,021
|
|
|
$
|
38,822
|
|
Segment net income (loss)
|
|
$
|
1,996
|
|
|
$
|
(251
|
)
|
|
$
|
1,745
|
|
Depreciation and amortization
|
|
$
|
1,118
|
|
|
$
|
514
|
|
|
$
|
1,632
|
|
Total assets
|
|
$
|
114,039
|
|
|
$
|
20,062
|
|
|
$
|
134,101
|
|
|
|
Sales Originating From
|
||||||||||
Nine months ended September 30, 2013
|
|
Americas
|
|
Europe and
Asia
|
|
Total
|
||||||
Mobile communication sales to the United States
|
|
$
|
58,767
|
|
|
$
|
476
|
|
|
$
|
59,243
|
|
Mobile communication sales to Canada
|
|
391
|
|
|
—
|
|
|
391
|
|
|||
Mobile communication sales to Europe
|
|
409
|
|
|
12,903
|
|
|
13,312
|
|
|||
Mobile communication sales to other geographic areas
|
|
2,566
|
|
|
3,660
|
|
|
6,226
|
|
|||
Guidance and stabilization sales to the United States
|
|
4,889
|
|
|
—
|
|
|
4,889
|
|
|||
Guidance and stabilization sales to Canada
|
|
11,583
|
|
|
—
|
|
|
11,583
|
|
|||
Guidance and stabilization sales to Europe
|
|
5,895
|
|
|
—
|
|
|
5,895
|
|
|||
Guidance and stabilization sales to other geographic areas
|
|
21,801
|
|
|
—
|
|
|
21,801
|
|
|||
Intercompany sales
|
|
3,286
|
|
|
1,383
|
|
|
4,669
|
|
|||
Subtotal
|
|
109,587
|
|
|
18,422
|
|
|
128,009
|
|
|||
Eliminations
|
|
(3,286
|
)
|
|
(1,383
|
)
|
|
(4,669
|
)
|
|||
Net sales
|
|
$
|
106,301
|
|
|
$
|
17,039
|
|
|
$
|
123,340
|
|
Segment net income (loss)
|
|
$
|
5,302
|
|
|
$
|
(404
|
)
|
|
$
|
4,898
|
|
Depreciation and amortization
|
|
$
|
3,391
|
|
|
$
|
910
|
|
|
$
|
4,301
|
|
Total assets
|
|
$
|
132,415
|
|
|
$
|
48,612
|
|
|
$
|
181,027
|
|
|
|
Sales Originating From
|
||||||||||
Nine months ended September 30, 2012
|
|
Americas
|
|
Europe and
Asia
|
|
Total
|
||||||
Mobile communication sales to the United States
|
|
$
|
47,202
|
|
|
$
|
—
|
|
|
$
|
47,202
|
|
Mobile communication sales to Canada
|
|
571
|
|
|
—
|
|
|
571
|
|
|||
Mobile communication sales to Europe
|
|
342
|
|
|
12,462
|
|
|
12,804
|
|
|||
Mobile communication sales to other geographic areas
|
|
2,777
|
|
|
3,725
|
|
|
6,502
|
|
|||
Guidance and stabilization sales to the United States
|
|
4,848
|
|
|
—
|
|
|
4,848
|
|
|||
Guidance and stabilization sales to Canada
|
|
7,925
|
|
|
—
|
|
|
7,925
|
|
|||
Guidance and stabilization sales to Europe
|
|
7,758
|
|
|
—
|
|
|
7,758
|
|
|||
Guidance and stabilization sales to other geographic areas
|
|
9,959
|
|
|
—
|
|
|
9,959
|
|
|||
Intercompany sales
|
|
8,208
|
|
|
1,271
|
|
|
9,479
|
|
|||
Subtotal
|
|
89,590
|
|
|
17,458
|
|
|
107,048
|
|
|||
Eliminations
|
|
(8,208
|
)
|
|
(1,271
|
)
|
|
(9,479
|
)
|
|||
Net sales
|
|
$
|
81,382
|
|
|
$
|
16,187
|
|
|
$
|
97,569
|
|
Segment net income (loss)
|
|
$
|
1,621
|
|
|
$
|
(798
|
)
|
|
$
|
823
|
|
Depreciation and amortization
|
|
$
|
3,021
|
|
|
$
|
356
|
|
|
$
|
3,377
|
|
Total assets
|
|
$
|
114,039
|
|
|
$
|
20,062
|
|
|
$
|
134,101
|
|
Level 1:
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company’s Level 1 assets are investments in money market mutual funds, government agency bonds, United States treasuries, corporate notes, and certificates of deposit.
|
Level 2:
|
Quoted prices for similar assets or liabilities in active markets; or observable prices that are based on observable market data, based on directly or indirectly market-corroborated inputs. The Company’s Level 2 assets and liabilities are interest rate swaps and foreign currency forward contracts.
|
Level 3:
|
Unobservable inputs that are supported by little or no market activity, and are developed based on the best information available given the circumstances. The Company has no Level 3 assets.
|
(a)
|
Market approach—prices and other relevant information generated by market transactions involving identical or comparable assets
|
(b)
|
The valuations of the interest rate swaps intended to mitigate the Company’s interest rate risk are determined with the assistance of a third-party financial institution using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument. This analysis utilizes observable market-based inputs, including interest rate curves and interest rate volatility, and reflects the contractual terms of these instruments, including the period to maturity.
|
(c)
|
The valuations of foreign currency forward contracts are determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument. This analysis utilizes observable market-based inputs, including commodity forward curves, and reflects the contractual terms of these instruments, including the period to maturity. The specific contractual terms utilized as inputs in determining fair value and a discussion of the nature of the risks being mitigated by these instruments are detailed in Note 15, “Derivative Instruments and Hedging Activities,” under the caption “Hedges of Foreign Currency Risk."
|
September 30, 2013
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Valuation
Technique
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
$
|
18,153
|
|
|
$
|
18,153
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(a)
|
Government agency bonds
|
9,529
|
|
|
9,529
|
|
|
—
|
|
|
—
|
|
|
(a)
|
||||
United States treasuries
|
10,061
|
|
|
10,061
|
|
|
—
|
|
|
—
|
|
|
(a)
|
||||
Corporate notes
|
8,052
|
|
|
8,052
|
|
|
—
|
|
|
—
|
|
|
(a)
|
||||
Certificates of deposit
|
2,569
|
|
|
2,569
|
|
|
—
|
|
|
—
|
|
|
(a)
|
||||
Foreign currency forward contracts
|
50
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
(c)
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
376
|
|
|
$
|
—
|
|
|
$
|
376
|
|
|
$
|
—
|
|
|
(b)
|
December 31, 2012
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Valuation
Technique
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
$
|
9,921
|
|
|
$
|
9,921
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(a)
|
Government agency bonds
|
6,817
|
|
|
6,817
|
|
|
—
|
|
|
—
|
|
|
(a)
|
||||
United States treasuries
|
6,089
|
|
|
6,089
|
|
|
—
|
|
|
—
|
|
|
(a)
|
||||
Corporate notes
|
4,679
|
|
|
4,679
|
|
|
—
|
|
|
—
|
|
|
(a)
|
||||
Certificates of deposit
|
1,800
|
|
|
1,800
|
|
|
—
|
|
|
—
|
|
|
(a)
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
542
|
|
|
$
|
—
|
|
|
$
|
542
|
|
|
$
|
—
|
|
|
(b)
|
Consideration transferred - cash
|
|
|
$
|
24,169
|
|
||
Book value of net assets acquired
|
$
|
163
|
|
|
|
||
Fair value adjustments to deferred revenue
|
123
|
|
|
|
|||
Fair value of tangible net assets acquired
|
|
|
$
|
286
|
|
||
|
|
|
|
||||
Identifiable intangibles at acquisition-date fair value
|
|
|
|
||||
Subscriber relationships
|
$
|
8,271
|
|
|
|
||
Distribution rights
|
4,888
|
|
|
|
|||
Internally developed software
|
543
|
|
|
|
|||
Proprietary content
|
186
|
|
|
|
|||
|
|
|
$
|
13,888
|
|
||
Deferred income taxes
|
|
|
(3,134
|
)
|
|||
Goodwill
|
|
|
$
|
13,129
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2013
|
|
2012
|
||||
Pro forma net revenues
|
|
$
|
128,103
|
|
|
$
|
107,128
|
|
Pro forma net income
|
|
$
|
5,537
|
|
|
$
|
1,718
|
|
Basic pro forma net income per share
|
|
$
|
0.37
|
|
|
$
|
0.12
|
|
Diluted pro forma net income per share
|
|
$
|
0.36
|
|
|
$
|
0.11
|
|
|
|
Amounts
|
||
Balance at December 31, 2012
|
|
$
|
4,712
|
|
Goodwill allocated to Headland Media Limited
|
|
13,129
|
|
|
Foreign currency translation adjustment
|
|
245
|
|
|
Balance at September 30, 2013
|
|
$
|
18,086
|
|
|
Useful Life
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||
September 30, 2013
|
|
|
|
|
|
|
|
||||||
Subscriber relationships
|
10
|
|
$
|
8,600
|
|
|
$
|
335
|
|
|
$
|
8,265
|
|
Distribution rights
|
15
|
|
5,083
|
|
|
133
|
|
|
4,950
|
|
|||
Internally developed software
|
3
|
|
565
|
|
|
74
|
|
|
491
|
|
|||
Proprietary content
|
2
|
|
194
|
|
|
39
|
|
|
155
|
|
|||
Intellectual property
|
7
|
|
2,372
|
|
|
1,052
|
|
|
1,320
|
|
|||
|
|
|
$
|
16,814
|
|
|
$
|
1,633
|
|
|
$
|
15,181
|
|
December 31, 2012
|
|
|
|
|
|
|
|
||||||
Intellectual property
|
7
|
|
$
|
2,372
|
|
|
$
|
688
|
|
|
$
|
1,684
|
|
|
|
|
$
|
2,372
|
|
|
$
|
688
|
|
|
$
|
1,684
|
|
|
Year Ending
|
||
|
December 31,
|
||
2013
|
$
|
453
|
|
2014
|
1,811
|
|
|
2015
|
1,749
|
|
|
2016
|
1,594
|
|
|
2017
|
1,456
|
|
|
Thereafter
|
8,118
|
|
|
Total future amortization expense
|
$
|
15,181
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Net sales to foreign customers outside the U.S. and Canada
|
31.9
|
%
|
|
45.3
|
%
|
|
38.3
|
%
|
|
37.9
|
%
|
Net sales to Customer A
|
*
|
|
|
18.9
|
%
|
|
14.2
|
%
|
|
*
|
|
|
*
|
Represents less than
10%
of net sales in the respective period.
|
Interest Rate Derivatives
|
Notional
(in thousands)
|
|
Asset
(Liability)
|
|
Effective Date
|
|
Maturity Date
|
|
Index
|
|
Strike Rate
|
||||
Interest rate swap
|
$
|
1,725
|
|
|
(181
|
)
|
|
April 1, 2010
|
|
April 1, 2019
|
|
1-month LIBOR
|
|
5.91
|
%
|
Interest rate swap
|
$
|
1,725
|
|
|
(195
|
)
|
|
April 1, 2010
|
|
April 1, 2019
|
|
1-month LIBOR
|
|
6.07
|
%
|
Notional (in millions)
|
Effective Date
|
Maturity Date
|
Index
|
Weighted-Average Strike Rate
|
Hedge Designation
|
0.5 USD
|
Various from October 2013 to December 2013
|
Various from October 2013 to December 2013
|
U.S. Dollar to GBP Exchange Rate
|
1.58 USD
|
Designated
|
1.8 USD
|
Various from January 2014 to December 2014
|
Various from January 2014 to December 2014
|
U.S. Dollar to GBP Exchange Rate
|
1.57 USD
|
Designated
|
0.12 EUR
|
Various from October 2013 to December 2013
|
Various from October 2013 to December 2013
|
Euro to GBP Exchange Rate
|
1.24 EUR
|
Designated
|
0.48 EUR
|
Various from January 2014 to December 2014
|
Various from January 2014 to December 2014
|
Euro to GBP Exchange Rate
|
1.16 EUR
|
Designated
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(in thousands)
|
||||||||||||||
Mobile communications
|
$
|
29,013
|
|
|
$
|
22,204
|
|
|
$
|
79,172
|
|
|
$
|
67,079
|
|
Guidance and stabilization
|
11,203
|
|
|
16,618
|
|
|
44,168
|
|
|
30,490
|
|
||||
Net sales
|
$
|
40,216
|
|
|
$
|
38,822
|
|
|
$
|
123,340
|
|
|
$
|
97,569
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Sales:
|
|
|
|
|
|
|
|
||||
Product
|
50.6
|
%
|
|
63.2
|
%
|
|
57.9
|
%
|
|
64.2
|
%
|
Service
|
49.4
|
|
|
36.8
|
|
|
42.1
|
|
|
35.8
|
|
Net sales
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
Cost and expenses:
|
|
|
|
|
|
|
|
||||
Costs of product sales
|
29.3
|
|
|
34.3
|
|
|
32.4
|
|
|
37.9
|
|
Costs of service sales
|
29.6
|
|
|
25.8
|
|
|
26.8
|
|
|
23.2
|
|
Research and development
|
8.3
|
|
|
7.6
|
|
|
7.7
|
|
|
9.4
|
|
Sales, marketing and support
|
15.8
|
|
|
16.4
|
|
|
16.9
|
|
|
17.7
|
|
General and administrative
|
11.8
|
|
|
7.8
|
|
|
10.6
|
|
|
9.1
|
|
Total costs and expenses
|
94.8
|
|
|
91.9
|
|
|
94.4
|
|
|
97.3
|
|
Income from operations
|
5.2
|
|
|
8.1
|
|
|
5.6
|
|
|
2.7
|
|
Interest income
|
0.5
|
|
|
0.4
|
|
|
0.5
|
|
|
0.4
|
|
Interest expense
|
0.5
|
|
|
0.2
|
|
|
0.4
|
|
|
0.2
|
|
Other income, net
|
0.5
|
|
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
Income before income tax expense
|
5.7
|
|
|
8.4
|
|
|
5.9
|
|
|
3.0
|
|
Income tax expense
|
2.3
|
|
|
3.8
|
|
|
1.9
|
|
|
2.0
|
|
Net income
|
3.4
|
%
|
|
4.6
|
%
|
|
4.0
|
%
|
|
1.0
|
%
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
•
|
override of access controls over banking security devices and personal identification numbers enabling the unauthorized execution of wire transfers;
|
•
|
ineffective review controls over the supporting documentation by the subsidiary country general manager over expenditures and expenses; and
|
•
|
override of review controls designed to address the accuracy and approval of manual journal entries at the Danish subsidiary.
|
•
|
termination of the employment of the individual involved and reassignment of his duties to an interim controller for our Danish subsidiary;
|
•
|
implementation of a new corporate-level control to review manual journal entries of foreign subsidiaries; and
|
•
|
implementation of new controls regarding the physical safekeeping of banking security devices and personal
identification numbers, which are designed to prevent one person from gaining access to two devices and personal identification numbers required to execute wire transfers.
|
•
|
management review of the design and operation of our process-level and transaction-level controls at our Danish subsidiary in relation to cash management and manual journal entry review and approvals, and management implemented a master vendor payment control using available software services at our Danish bank; and
|
•
|
management completed on-site training at the Danish location to reinforce control consciousness.
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
many of our primary competitors are well-established companies that could have substantially greater financial, managerial, technical, marketing, personnel and other resources than we do;
|
•
|
product improvements, new product developments or price reductions by competitors may weaken customer acceptance of, and reduce demand for, our products;
|
•
|
new technology or market trends may disrupt or displace a need for our products; and
|
•
|
our competitors may have lower production costs than we do, which may enable them to compete more aggressively in offering discounts and other promotions.
|
•
|
increasing budgetary pressures, that may reduce or delay funding for military programs;
|
•
|
changes in modernization plans for military equipment;
|
•
|
changes in tactical navigation requirements;
|
•
|
global conflicts impacting troop deployment, including troop withdrawals from the Middle East;
|
•
|
priorities for current battlefield operations;
|
•
|
new military and operational doctrines that affect military equipment needs;
|
•
|
sales cycles that are long and difficult to predict;
|
•
|
shifting response time and/or delays in the approval process associated with the export licenses we must obtain prior to the international shipment of certain of our military products;
|
•
|
delays in military procurement schedules; and
|
•
|
delays in the testing and acceptance of our products, including delays resulting from changes in customer specifications.
|
•
|
match our manufacturing facilities and capacity to demand for our products in a timely manner;
|
•
|
successfully attract, train, motivate and manage appropriate numbers of employees for manufacturing, sales and customer support activities;
|
•
|
effectively manage our inventory and working capital; and
|
•
|
improve the efficiencies within our operating, administrative, financial and accounting systems, and our procedures and controls.
|
•
|
technical challenges we may face in adapting our mobile communications products to function with different satellite services and technology in use in various regions around the world;
|
•
|
satisfaction of international regulatory requirements and delays and costs associated with procurement of any necessary licenses or permits;
|
•
|
restrictions on the sale of certain guidance and stabilization products to foreign military and government customers;
|
•
|
increased costs of providing customer support in multiple languages;
|
•
|
increased costs of managing operations that are international in scope;
|
•
|
potentially adverse tax consequences, including restrictions on the repatriation of earnings;
|
•
|
protectionist laws and business practices that favor local competitors, which could slow our growth in international markets;
|
•
|
potentially longer sales cycles, which could slow our revenue growth from international sales;
|
•
|
potentially longer accounts receivable payment cycles and difficulties in collecting accounts receivable;
|
•
|
losses arising from foreign currency exchange rate fluctuations; and
|
•
|
economic and political instability in some international markets.
|
•
|
changes in demand for our mobile communications products and services and guidance and stabilization products and services;
|
•
|
the timing and size of individual orders from military customers;
|
•
|
the mix of products we sell;
|
•
|
our ability to manufacture, test and deliver products in a timely and cost-effective manner, including the availability and timely delivery of components and subassemblies from our suppliers;
|
•
|
our success in winning competitions for orders;
|
•
|
the timing of new product introductions by us or our competitors;
|
•
|
expense incurred in pursuing acquisitions;
|
•
|
market and competitive pricing pressures;
|
•
|
general economic climate; and
|
•
|
seasonality of pleasure boat and recreational vehicle usage.
|
•
|
variations in our quarterly results of operations;
|
•
|
the introduction of new products and services by us or our competitors;
|
•
|
changing needs of military customers;
|
•
|
changes in estimates of our performance or recommendations by securities analysts;
|
•
|
the hiring or departure of key personnel;
|
•
|
acquisitions or strategic alliances involving us or our competitors;
|
•
|
market conditions in our industries; and
|
•
|
the global macroeconomic and geopolitical environment.
|
•
|
entry into new and unfamiliar lines of business or markets, which may present challenges or risks that we did not anticipate;
|
•
|
charges related to any potential acquisition from which we may withdraw;
|
•
|
diversion of our management’s time, attention, and resources;
|
•
|
loss of key acquired personnel;
|
•
|
increased costs to improve or coordinate managerial, operational, financial, and administrative systems, including compliance with the Sarbanes-Oxley Act of 2002;
|
•
|
dilutive issuances of equity securities;
|
•
|
the assumption of legal liabilities; and
|
•
|
losses arising from impairment charges associated with goodwill or intangible assets.
|
•
|
the ability of our Board of Directors to issue preferred stock, and determine its terms, without a stockholder vote;
|
•
|
the classification of our Board of Directors, which effectively prevents stockholders from electing a majority of the directors at any one annual meeting of stockholders;
|
•
|
the limitation that directors may be removed only for cause by the affirmative vote of the holders of two-thirds of our shares of capital stock entitled to vote;
|
•
|
the prohibition against stockholder actions by written consent;
|
•
|
the inability of stockholders to call a special meeting of stockholders; and
|
•
|
advance notice requirements for stockholder proposals and director nominations.
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Exhibit
No.
|
|
Description
|
|
Filed with
this Form 10-Q
|
|
Incorporated by Reference
|
|||||
|
Form
|
|
Filing Date
|
|
Exhibit No.
|
||||||
3.1
|
|
|
Amended and Restated Certificate of Incorporation, as amended
|
|
|
|
10-Q
|
|
August 6, 2010
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
|
Amended, Restated and Corrected Bylaws of KVH Industries, Inc.
|
|
|
|
8-K
|
|
July 31, 2007
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
|
Specimen certificate for the common stock
|
|
|
|
S-1/A
|
|
March 22, 1996
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
Rule 13a-14(a)/15d-14(a) certification of principal executive officer
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
Rule 13a-14(a)/15d-14(a) certification of principal financial officer
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
|
Section 1350 certification of principal executive officer and principal financial officer
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101
|
|
|
Interactive Data File regarding (a) our Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012, (b) our Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2013 and 2012, (c) our Consolidated Statements of Other Comprehensive Income for the Three and Nine Months Ended September 30, 2013 and 2012, (d) our Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012 and (e) the Notes to such Consolidated Financial Statements.
|
|
X
|
|
|
|
|
|
|
Date: November 8, 2013
|
|
|
|
KVH Industries, Inc.
|
|
|
|
By:
|
/s/ P
ETER A. RENDALL
|
|
Peter A. Rendall
|
|
(Duly Authorized Officer and Chief Financial
Officer)
|
Exhibit
No.
|
|
Description
|
|
Filed with
this Form 10-Q
|
|
Incorporated by Reference
|
|||||
|
Form
|
|
Filing Date
|
|
Exhibit No.
|
||||||
3.1
|
|
|
Amended and Restated Certificate of Incorporation, as amended
|
|
|
|
10-Q
|
|
August 6, 2010
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
|
Amended, Restated and Corrected Bylaws of KVH Industries, Inc.
|
|
|
|
8-K
|
|
July 31, 2007
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
|
Specimen certificate for the common stock
|
|
|
|
S-1/A
|
|
March 22, 1996
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
Rule 13a-14(a)/15d-14(a) certification of principal executive officer
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
Rule 13a-14(a)/15d-14(a) certification of principal financial officer
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
|
Section 1350 certification of principal executive officer and principal financial officer
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101
|
|
|
Interactive Data File regarding (a) our Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012, (b) our Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2013 and 2012, (c) our Consolidated Statements of Other Comprehensive Income for the Three and Nine Months Ended September 30, 2013 and 2012, (d) our Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012 and (e) the Notes to such Consolidated Financial Statements.
|
|
X
|
|
|
|
|
|
|
1 Year KVH Industries Chart |
1 Month KVH Industries Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions