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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 | |
---|---|---|---|---|---|---|---|---|---|---|
-0.02 | -0.44% | 4.52 | 4.51 | 4.56 | 4.66 | 4.51 | 4.58 | 7,845 | 16:38:19 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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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
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|
|
Emerging growth company
|
o
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Date
|
Class
|
Outstanding shares
|
May 4, 2017
|
Common Stock, par value $0.01 per share
|
17,024,170
|
|
|
Page No.
|
|
||
ITEM 1.
|
|
|
|
Consolidated Balance Sheets as of March 31, 2017 (unaudited) and December 31, 2016
|
|
|
Consolidated Statements of Operations for the three months ended March 31, 2017 and 2016 (unaudited)
|
|
|
Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2017 and 2016 (unaudited)
|
|
|
Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016 (unaudited)
|
|
|
||
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
|
||
|
||
ITEM 1.
|
||
ITEM 2.
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||
ITEM 6.
|
||
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March 31,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
(unaudited)
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
29,385
|
|
|
$
|
26,422
|
|
Marketable securities
|
16,743
|
|
|
25,712
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $2,967 and $3,477 as of March 31, 2017 and December 31, 2016, respectively
|
26,962
|
|
|
31,152
|
|
||
Inventories
|
21,755
|
|
|
20,745
|
|
||
Prepaid expenses and other current assets
|
4,953
|
|
|
4,801
|
|
||
Total current assets
|
99,798
|
|
|
108,832
|
|
||
Property and equipment, less accumulated depreciation of $47,117 and $45,766 as of March 31, 2017 and December 31, 2016, respectively
|
37,159
|
|
|
36,586
|
|
||
Intangible assets, less accumulated amortization of $17,412 and $16,344 as of March 31, 2017 and
December 31, 2016, respectively |
17,034
|
|
|
17,838
|
|
||
Goodwill
|
31,603
|
|
|
31,343
|
|
||
Other non-current assets
|
5,410
|
|
|
5,134
|
|
||
Non-current deferred income tax asset
|
24
|
|
|
24
|
|
||
Total assets
|
$
|
191,028
|
|
|
$
|
199,757
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
10,342
|
|
|
$
|
8,436
|
|
Accrued compensation and employee-related expenses
|
5,516
|
|
|
4,766
|
|
||
Accrued other
|
8,380
|
|
|
8,317
|
|
||
Accrued product warranty costs
|
2,395
|
|
|
2,280
|
|
||
Deferred revenue
|
7,156
|
|
|
6,661
|
|
||
Current portion of long-term debt
|
2,475
|
|
|
7,900
|
|
||
Liability for uncertain tax positions
|
1,293
|
|
|
1,283
|
|
||
Total current liabilities
|
37,557
|
|
|
39,643
|
|
||
Other long-term liabilities
|
41
|
|
|
326
|
|
||
Long-term debt, excluding current portion
|
46,435
|
|
|
50,153
|
|
||
Non-current deferred income tax liability
|
3,139
|
|
|
3,133
|
|
||
Total liabilities
|
$
|
87,172
|
|
|
$
|
93,255
|
|
Commitments and contingencies (Notes 2, 10 and 12)
|
|
|
|
||||
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; 18,700,561 and 18,420,914 shares issued at March 31, 2017 and December 31, 2016, respectively; and 17,041,570 and 16,761,923 shares outstanding at March 31, 2017 and December 31, 2016, respectively
|
187
|
|
|
184
|
|
||
Additional paid-in capital
|
131,268
|
|
|
129,660
|
|
||
Retained earnings
|
1,732
|
|
|
6,617
|
|
||
Accumulated other comprehensive loss
|
(16,181
|
)
|
|
(16,809
|
)
|
||
|
117,006
|
|
|
119,652
|
|
||
Less: treasury stock at cost, common stock, 1,658,991 shares as of March 31, 2017 and December 31, 2016
|
(13,150
|
)
|
|
(13,150
|
)
|
||
Total stockholders’ equity
|
103,856
|
|
|
106,502
|
|
||
Total liabilities and stockholders’ equity
|
$
|
191,028
|
|
|
$
|
199,757
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
Sales:
|
|
|
|
||||
Product
|
$
|
14,863
|
|
|
$
|
15,382
|
|
Service
|
25,348
|
|
|
24,998
|
|
||
Net sales
|
40,211
|
|
|
40,380
|
|
||
Costs and expenses:
|
|
|
|
||||
Costs of product sales
|
10,539
|
|
|
10,670
|
|
||
Costs of service sales
|
13,268
|
|
|
12,991
|
|
||
Research and development
|
3,947
|
|
|
3,783
|
|
||
Sales, marketing and support
|
8,740
|
|
|
8,658
|
|
||
General and administrative
|
8,187
|
|
|
7,652
|
|
||
Total costs and expenses
|
44,681
|
|
|
43,754
|
|
||
Loss from operations
|
(4,470
|
)
|
|
(3,374
|
)
|
||
Interest income
|
166
|
|
|
105
|
|
||
Interest expense
|
353
|
|
|
375
|
|
||
Other expense, net
|
(68
|
)
|
|
(77
|
)
|
||
Loss before income tax expense (benefit)
|
(4,725
|
)
|
|
(3,721
|
)
|
||
Income tax expense (benefit)
|
160
|
|
|
(930
|
)
|
||
Net loss
|
$
|
(4,885
|
)
|
|
$
|
(2,791
|
)
|
|
|
|
|
||||
Net loss per common share
|
|
|
|
||||
Basic and diluted
|
$
|
(0.30
|
)
|
|
$
|
(0.18
|
)
|
Weighted average number of common shares outstanding:
|
|
|
|
||||
Basic and diluted
|
16,261
|
|
|
15,723
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net loss
|
$
|
(4,885
|
)
|
|
$
|
(2,791
|
)
|
Other comprehensive income (loss), net of tax
(1)
:
|
|
|
|
||||
Foreign currency translation adjustment
|
601
|
|
|
(676
|
)
|
||
Unrealized gain (loss) on derivative instruments, net
(2)
|
27
|
|
|
(20
|
)
|
||
Other comprehensive income (loss), net of tax
|
628
|
|
|
(696
|
)
|
||
Total comprehensive loss
|
$
|
(4,257
|
)
|
|
$
|
(3,487
|
)
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(4,885
|
)
|
|
$
|
(2,791
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Provision for doubtful accounts
|
74
|
|
|
403
|
|
||
Depreciation and amortization
|
2,761
|
|
|
3,189
|
|
||
Deferred income taxes
|
—
|
|
|
13
|
|
||
Loss on sale of fixed assets
|
3
|
|
|
256
|
|
||
Loss (gain) on derivative instruments
|
—
|
|
|
(19
|
)
|
||
Compensation expense related to stock-based awards and employee stock purchase plan
|
960
|
|
|
1,052
|
|
||
Unrealized currency translation loss
|
12
|
|
|
536
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
4,160
|
|
|
11,516
|
|
||
Inventories
|
(1,009
|
)
|
|
(1,572
|
)
|
||
Prepaid expenses and other current assets
|
(203
|
)
|
|
(1,167
|
)
|
||
Other non-current assets
|
(269
|
)
|
|
(525
|
)
|
||
Accounts payable
|
1,724
|
|
|
(1,123
|
)
|
||
Deferred revenue
|
454
|
|
|
894
|
|
||
Accrued other
|
849
|
|
|
(1,986
|
)
|
||
Other long-term liabilities
|
(286
|
)
|
|
(38
|
)
|
||
Net cash provided by operating activities
|
$
|
4,345
|
|
|
$
|
8,638
|
|
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(2,047
|
)
|
|
(1,276
|
)
|
||
Cash paid for acquisition of intangible asset
|
(50
|
)
|
|
—
|
|
||
Purchases of marketable securities
|
(1,385
|
)
|
|
(2,306
|
)
|
||
Maturities and sales of marketable securities
|
10,354
|
|
|
2,286
|
|
||
Net cash provided by (used in) investing activities
|
$
|
6,872
|
|
|
$
|
(1,296
|
)
|
Cash flows from financing activities:
|
|
|
|
||||
Repayments of long-term debt
|
(1,518
|
)
|
|
(334
|
)
|
||
Repayments of term note borrowings
|
(7,625
|
)
|
|
(1,219
|
)
|
||
Payment of employee restricted stock withholdings
|
(392
|
)
|
|
(325
|
)
|
||
Proceeds from stock options exercised and employee stock purchase plan
|
1,060
|
|
|
146
|
|
||
Net cash used in financing activities
|
$
|
(8,475
|
)
|
|
$
|
(1,732
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
221
|
|
|
(131
|
)
|
||
Net increase in cash and cash equivalents
|
2,963
|
|
|
5,479
|
|
||
Cash and cash equivalents at beginning of period
|
26,422
|
|
|
22,719
|
|
||
Cash and cash equivalents at end of period
|
$
|
29,385
|
|
|
$
|
28,198
|
|
Supplemental disclosure of non-cash investing activities:
|
|
|
|
||||
Changes in accrued liabilities and accounts payable related to fixed asset additions
|
$
|
169
|
|
|
$
|
—
|
|
Deferred purchase price consideration related to asset acquisition included in accrued expenses
|
$
|
50
|
|
|
$
|
—
|
|
•
|
changes in the Company's overall organizational structure, including the appointment of a Chief Operating Officer and a new Chief Financial Officer;
|
•
|
the completion of the Company's planning process for 2017, as a result of which the Company changed how it will measure and assess its financial performance; and
|
•
|
the Company's process for measuring incentive compensation for key executives in 2016 and later years.
|
(4)
|
Marketable Securities
|
March 31, 2017
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Money market mutual funds
|
$
|
14,233
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,233
|
|
Certificates of deposit
|
2,510
|
|
|
—
|
|
|
—
|
|
|
2,510
|
|
||||
Total marketable securities designated as available-for-sale
|
$
|
16,743
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,743
|
|
December 31, 2016
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Money market mutual funds
|
$
|
21,848
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,848
|
|
Certificates of deposit
|
3,864
|
|
|
—
|
|
|
—
|
|
|
3,864
|
|
||||
Total marketable securities designated as available-for-sale
|
$
|
25,712
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,712
|
|
March 31, 2017
|
Amortized
Cost
|
|
Fair
Value
|
||||
Due in less than one year
|
$
|
2,510
|
|
|
$
|
2,510
|
|
December 31, 2016
|
Amortized
Cost
|
|
Fair
Value
|
||||
Due in less than one year
|
$
|
3,864
|
|
|
$
|
3,864
|
|
•
|
The adoption of ASC Update No. 2016-09 requires all income tax adjustments to be recorded in the consolidated statements of operations. The cumulative adjustment upon adoption to accumulated earnings was zero since the increase in net deferred tax assets was fully offset by a corresponding increase in the deferred tax asset valuation allowance. The amount of deferred tax assets that had not been previously recognized due to the recognition of excess tax benefits was
$1,571
.
|
•
|
The tax benefit or expense is required to be classified as a cash flow provided by (used in) operating activities. It was previously required to be presented as a cash flow provided by (used in) financing activities in the Consolidated Statements of Cash Flows, with a corresponding adjustment to operating cash flows.
|
•
|
In the diluted net earnings per share calculation, when applying the treasury stock method for shares that could be repurchased, the assumed proceeds no longer include the amount of excess tax benefit. This provision, which is only applicable on a prospective basis, did not have an impact on the Company's diluted net earnings per share calculation for the
three months ended March 31, 2017
.
|
•
|
The Company has elected to account for forfeitures on share-based payments as these forfeitures occur, which represents a change from the accounting previously required under ASC Topic 718. As a result, the Company notes that future forfeitures could result in a significant reversal of stock-based compensation expense recognized in the period in which such forfeitures occur. During the
three months ended March 31, 2017
, as a result of share-based award forfeitures, the Company recorded a reversal of previously recognized stock-based compensation expense of
$5
. In addition, had the Company continued to account for stock-based compensation expense related to forfeitures of share-based payments based on estimating the number of awards expected to be forfeited and recognizing only stock-based compensation expense on awards expected to vest, the Company would have recognized
$927
of stock-based compensation expense, or
$16
less than what was actually recorded during the
three months ended March 31, 2017
.
|
|
|
|
|
||
|
Three Months Ended
March 31,
|
||||
|
2017
|
|
2016
|
||
Risk-free interest rate
|
1.96
|
%
|
|
1.43
|
%
|
Expected volatility
|
35.53
|
%
|
|
38.22
|
%
|
Expected life (in years)
|
4.22
|
|
|
4.17
|
|
Dividend yield
|
0
|
%
|
|
0
|
%
|
|
Three Months Ended
March 31,
|
||||||
|
2017
|
|
2016
|
||||
Cost of product sales
|
$
|
82
|
|
|
$
|
90
|
|
Cost of service sales
|
—
|
|
|
1
|
|
||
Research and development
|
189
|
|
|
186
|
|
||
Sales, marketing and support
|
268
|
|
|
273
|
|
||
General and administrative
|
421
|
|
|
503
|
|
||
|
$
|
960
|
|
|
$
|
1,053
|
|
|
Foreign Currency Translation
|
|
Unrealized Gain (Loss) on Available for Sale Marketable Securities
|
|
Interest Rate Swaps
|
|
Total Accumulated Other Comprehensive Loss
|
||||
Balance, December 31, 2016
|
(16,651
|
)
|
|
—
|
|
|
(158
|
)
|
|
(16,809
|
)
|
Other comprehensive (loss) income before reclassifications
|
601
|
|
|
—
|
|
|
5
|
|
|
606
|
|
Amounts reclassified from AOCI to Other income (expense), net (1)
|
—
|
|
|
—
|
|
|
22
|
|
|
22
|
|
Net other comprehensive (loss) income, March 31, 2017
|
601
|
|
|
—
|
|
|
27
|
|
|
628
|
|
Balance, March 31, 2017
|
(16,050
|
)
|
|
—
|
|
|
(131
|
)
|
|
(16,181
|
)
|
|
Foreign Currency Translation
|
|
Unrealized Gain (Loss) on Available for Sale Marketable Securities
|
|
Interest Rate Swaps
|
|
Total Accumulated Other Comprehensive Loss
|
||||||||
Balance, December 31, 2015
|
$
|
(7,363
|
)
|
|
$
|
1
|
|
|
$
|
(238
|
)
|
|
$
|
(7,600
|
)
|
Other comprehensive (loss) income before reclassifications
|
(676
|
)
|
|
—
|
|
|
(45
|
)
|
|
(721
|
)
|
||||
Amounts reclassified from AOCI to Other income (expense), net (1)
|
—
|
|
|
—
|
|
|
25
|
|
|
25
|
|
||||
Net other comprehensive (loss) income, March 31, 2016
|
(676
|
)
|
|
—
|
|
|
(20
|
)
|
|
(696
|
)
|
||||
Balance, March 31, 2016
|
(8,039
|
)
|
|
1
|
|
|
(258
|
)
|
|
(8,296
|
)
|
|
Three Months Ended
|
||||
|
March 31,
|
||||
|
2017
|
|
2016
|
||
Weighted average common shares outstanding—basic
|
16,261
|
|
|
15,723
|
|
Dilutive common shares issuable in connection with stock plans
|
—
|
|
|
—
|
|
Weighted average common shares outstanding—diluted
|
16,261
|
|
|
15,723
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Raw materials
|
$
|
11,629
|
|
|
$
|
10,606
|
|
Work in process
|
2,170
|
|
|
2,185
|
|
||
Finished goods
|
7,956
|
|
|
7,954
|
|
||
|
$
|
21,755
|
|
|
$
|
20,745
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Land
|
$
|
3,828
|
|
|
$
|
3,828
|
|
Building and improvements
|
22,994
|
|
|
21,717
|
|
||
Leasehold improvements
|
155
|
|
|
155
|
|
||
Machinery and equipment
|
42,258
|
|
|
41,777
|
|
||
Office and computer equipment
|
14,990
|
|
|
14,824
|
|
||
Motor vehicles
|
51
|
|
|
51
|
|
||
|
84,276
|
|
|
82,352
|
|
||
Less accumulated depreciation
|
(47,117
|
)
|
|
(45,766
|
)
|
||
|
$
|
37,159
|
|
|
$
|
36,586
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Term note
|
$
|
46,000
|
|
|
$
|
53,625
|
|
Mortgage loan
|
2,910
|
|
|
2,951
|
|
||
Equipment loans
|
—
|
|
|
1,477
|
|
||
Total
|
48,910
|
|
|
58,053
|
|
||
Less amounts classified as current
|
2,475
|
|
|
7,900
|
|
||
Long-term debt, excluding current portion
|
$
|
46,435
|
|
|
$
|
50,153
|
|
|
For the three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net sales:
|
|
|
|
||||
Mobile connectivity
|
$
|
34,287
|
|
|
$
|
35,265
|
|
Inertial navigation
|
5,924
|
|
|
5,115
|
|
||
Consolidated net sales
|
$
|
40,211
|
|
|
$
|
40,380
|
|
|
|
|
|
||||
Operating earnings (loss):
|
|
|
|
||||
Mobile connectivity
|
$
|
622
|
|
|
$
|
1,990
|
|
Inertial navigation
|
(44
|
)
|
|
(927
|
)
|
||
Subtotal
|
578
|
|
|
1,063
|
|
||
Unallocated, net
|
(5,048
|
)
|
|
(4,437
|
)
|
||
Loss from operations
|
(4,470
|
)
|
|
(3,374
|
)
|
||
Net interest and other expense
|
(255
|
)
|
|
(347
|
)
|
||
Loss before income tax expense (benefit)
|
$
|
(4,725
|
)
|
|
$
|
(3,721
|
)
|
|
For the three months ended March 31,
|
||||
|
2017
|
|
2016
|
||
Depreciation expense:
|
|
|
|
||
Mobile connectivity
|
1,478
|
|
|
1,659
|
|
Inertial navigation
|
195
|
|
|
224
|
|
Unallocated
|
20
|
|
|
24
|
|
Total consolidated depreciation expense
|
1,693
|
|
|
1,907
|
|
|
|
|
|
||
Amortization expense:
|
|
|
|
||
Mobile connectivity
|
1,068
|
|
|
1,283
|
|
Inertial navigation
|
—
|
|
|
—
|
|
Unallocated
|
—
|
|
|
—
|
|
Total consolidated amortization expense
|
1,068
|
|
|
1,283
|
|
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 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 liabilities are interest rate swaps.
|
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.
|
March 31, 2017
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Valuation
Technique
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
$
|
14,233
|
|
|
$
|
14,233
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(a)
|
Certificates of deposit
|
2,510
|
|
|
2,510
|
|
|
—
|
|
|
—
|
|
|
(a)
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
131
|
|
|
—
|
|
|
131
|
|
|
—
|
|
|
(b)
|
December 31, 2016
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Valuation
Technique
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
$
|
21,848
|
|
|
$
|
21,848
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(a)
|
Certificates of deposit
|
3,864
|
|
|
3,864
|
|
|
—
|
|
|
—
|
|
|
(a)
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
158
|
|
|
—
|
|
|
158
|
|
|
—
|
|
|
(b)
|
|
|
Amounts
|
||
Balance at December 31, 2016
|
|
$
|
31,343
|
|
Foreign currency translation adjustment
|
|
260
|
|
|
Balance at March 31, 2017
|
|
$
|
31,603
|
|
|
|
Amounts
|
||
Balance at December 31, 2016
|
|
$
|
17,838
|
|
Amortization expense
|
|
(1,068
|
)
|
|
Intangible assets acquired in asset acquisition
|
|
100
|
|
|
Foreign currency translation adjustment
|
|
164
|
|
|
Balance at March 31, 2017
|
|
$
|
17,034
|
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||
March 31, 2017
|
|
|
|
|
|
|
||||||
Subscriber relationships
|
|
$
|
17,086
|
|
|
$
|
6,891
|
|
|
$
|
10,195
|
|
Distribution rights
|
|
4,150
|
|
|
1,245
|
|
|
2,905
|
|
|||
Internally developed software
|
|
2,304
|
|
|
1,983
|
|
|
321
|
|
|||
Proprietary content
|
|
7,993
|
|
|
4,785
|
|
|
3,208
|
|
|||
Intellectual property
|
|
2,284
|
|
|
2,137
|
|
|
147
|
|
|||
Favorable lease
|
|
629
|
|
|
371
|
|
|
258
|
|
|||
|
|
$
|
34,446
|
|
|
$
|
17,412
|
|
|
$
|
17,034
|
|
December 31, 2016
|
|
|
|
|
|
|
||||||
Subscriber relationships
|
|
$
|
16,888
|
|
|
$
|
6,431
|
|
|
$
|
10,457
|
|
Distribution rights
|
|
4,122
|
|
|
1,180
|
|
|
2,942
|
|
|||
Internally developed software
|
|
2,301
|
|
|
1,904
|
|
|
397
|
|
|||
Proprietary content
|
|
7,960
|
|
|
4,431
|
|
|
3,529
|
|
|||
Intellectual property
|
|
2,284
|
|
|
2,056
|
|
|
228
|
|
|||
Favorable lease
|
|
627
|
|
|
342
|
|
|
285
|
|
|||
|
|
$
|
34,182
|
|
|
$
|
16,344
|
|
|
$
|
17,838
|
|
|
Three Months Ended March 31,
|
||||||
Expense Category
|
2017
|
|
2016
|
||||
Cost of service sales
|
$
|
355
|
|
|
$
|
452
|
|
General administrative expense
|
713
|
|
|
831
|
|
||
Total amortization expense
|
$
|
1,068
|
|
|
$
|
1,283
|
|
Intangible Asset
|
Weighted Average Remaining Useful Life in Years
|
Subscriber relationships
|
5.6
|
Distribution rights
|
11.1
|
Internally developed software
|
1.1
|
Proprietary content
|
2.3
|
Intellectual property
|
0.5
|
Favorable lease
|
2.3
|
Remainder of 2017
|
$
|
3,099
|
|
2018
|
3,766
|
|
|
2019
|
2,880
|
|
|
2020
|
2,114
|
|
|
2021
|
2,114
|
|
|
Thereafter
|
3,061
|
|
|
Total future amortization expense
|
$
|
17,034
|
|
Interest Rate Derivatives
|
Notional
(in thousands)
|
|
Asset
(Liability)
|
|
Effective Date
|
|
Maturity Date
|
|
Index
|
|
Strike Rate
|
||||
Interest rate swap
|
$
|
1,455
|
|
|
(63
|
)
|
|
April 1, 2010
|
|
April 1, 2019
|
|
1-month LIBOR
|
|
5.91
|
%
|
Interest rate swap
|
$
|
1,455
|
|
|
(68
|
)
|
|
April 1, 2010
|
|
April 1, 2019
|
|
1-month LIBOR
|
|
6.07
|
%
|
Interest Rate Derivatives
|
Notional
(in thousands)
|
|
Asset
(Liability)
|
|
Effective Date
|
|
Maturity Date
|
|
Index
|
|
Strike Rate
|
||||
Interest rate swap
|
$
|
1,476
|
|
|
(76
|
)
|
|
April 1, 2010
|
|
April 1, 2019
|
|
1-month LIBOR
|
|
5.91
|
%
|
Interest rate swap
|
$
|
1,476
|
|
|
(82
|
)
|
|
April 1, 2010
|
|
April 1, 2019
|
|
1-month LIBOR
|
|
6.07
|
%
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Research and development expense presented on the statement of operations
|
$
|
3,947
|
|
|
$
|
3,783
|
|
Costs of customer-funded research and development included in costs of service sales
|
509
|
|
|
147
|
|
||
Total consolidated statements of operations expenditures on research and development activities
|
$
|
4,456
|
|
|
$
|
3,930
|
|
|
|
|
|
|
Change
|
|||||||||
|
For the three months ended March 31,
|
|
2017 vs. 2016
|
|||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Mobile connectivity sales
|
|
|
|
|
|
|
|
|||||||
Product
|
$9,854
|
|
$10,716
|
|
$
|
(862
|
)
|
|
(8
|
)%
|
||||
Service
|
24,433
|
|
|
24,549
|
|
|
(116
|
)
|
|
(1
|
)%
|
|||
Net sales
|
$
|
34,287
|
|
|
$
|
35,265
|
|
|
$
|
(978
|
)
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Inertial navigation sales
|
|
|
|
|
|
|
|
|||||||
Product
|
$5,009
|
|
$4,666
|
|
$
|
343
|
|
|
7
|
%
|
||||
Service
|
915
|
|
|
449
|
|
|
466
|
|
|
104
|
%
|
|||
Net sales
|
$
|
5,924
|
|
|
$
|
5,115
|
|
|
$
|
809
|
|
|
16
|
%
|
|
|
|
|
|
Change
|
|||||||||
|
For the three months ended March 31,
|
|
2017 vs. 2016
|
|||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Mobile connectivity
|
$622
|
|
$1,990
|
|
$
|
(1,368
|
)
|
|
(69
|
)%
|
||||
Inertial navigation
|
(44
|
)
|
|
(927
|
)
|
|
883
|
|
|
95
|
%
|
|||
|
$578
|
|
$1,063
|
|
$(485)
|
|
(46
|
)%
|
||||||
Unallocated
|
(5,048
|
)
|
|
(4,437
|
)
|
|
(611
|
)
|
|
(14
|
)%
|
|||
Loss from operations
|
$
|
(4,470
|
)
|
|
$
|
(3,374
|
)
|
|
$
|
(1,096
|
)
|
|
(32
|
)%
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
Total Number of Shares
|
|
Average Price Per Share
|
|||
January
|
—
|
|
|
—
|
|
|
February
|
15,179
|
|
|
$
|
10.30
|
|
March
|
28,038
|
|
|
$
|
8.41
|
|
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 and Restated Bylaws
|
|
|
|
8-K
|
|
April 30, 2014
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
|
Specimen certificate for the common stock
|
|
|
|
S-1/A
|
|
March 22, 1996
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
|
Third Amendment of Credit Agreement, dated as of March 7, 2017, among Bank of America, N.A., The Washington Trust Company and KVH Industries, Inc.
|
|
|
|
8-K
|
|
March 9, 2017
|
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
The following financial information from KVH Industries, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets (unaudited), (ii) the Consolidated Statements of Operations (unaudited), (iii) the Consolidated Statements of Comprehensive Loss (unaudited), (iv) the Consolidated Statements of Cash Flows (unaudited), and (v) the Notes to Consolidated Financial Statements (unaudited).
|
|
X
|
|
|
|
|
|
|
Date: May 9, 2017
|
|
|
|
KVH Industries, Inc.
|
|
|
|
By:
|
/s/ D
ONALD
W
.
R
EILLY
|
|
Donald W. Reilly
|
|
(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 and Restated Bylaws
|
|
|
|
8-K
|
|
April 30, 2014
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
|
Specimen certificate for the common stock
|
|
|
|
S-1/A
|
|
March 22, 1996
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
|
Third Amendment of Credit Agreement, dated as of March 7, 2017, among Bank of America, N.A., The Washington Trust Company and KVH Industries, Inc.
|
|
|
|
8-K
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March 9, 2017
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10.1
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31.1
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Rule 13a-14(a)/15d-14(a) certification of principal executive officer
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X
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31.2
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Rule 13a-14(a)/15d-14(a) certification of principal financial officer
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X
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32.1
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Section 1350 certification of principal executive officer and principal financial officer
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X
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101
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The following financial information from KVH Industries, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets (unaudited), (ii) the Consolidated Statements of Operations (unaudited), (iii) the Consolidated Statements of Comprehensive Loss (unaudited), (iv) the Consolidated Statements of Cash Flows (unaudited), and (v) the Notes to Consolidated Financial Statements (unaudited).
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X
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