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KVH Reports Second Quarter Results

- Record Quarterly Revenue of $23.2 Million

- Net Profit of $1.5 Million; $0.10 Earnings per Share

MIDDLETOWN, R.I., July 19 -- KVH Industries, Inc., today reported financial results for the second quarter ended June 30, 2007. Revenue for the second quarter of 2007 was $23.2 million, a 6% increase over the second quarter ended June 30, 2006. Net income for the quarter was $1.5 million, or $0.10 on a per-diluted share basis. During the same period last year the company reported net income of $1.7 million, or $0.11 on a per-diluted share basis.

For the six months ended June 30, 2007, revenue increased 3% to $43.6 million from $42.3 million for the six months ended June 30, 2006. KVH reported net income of $1.6 million or $0.10 on a per-diluted share basis for the 2007 period, versus net income of $2.9 million or $0.20 on a per-diluted share basis in the year-ago period.

"Overall, we had a good second quarter that was in line with our expectations. We set a record for quarterly revenue and continued to build our long-term military business. We also made great strides in strengthening our positions in both the marine and land mobile markets through the development and introduction of several new products and services," said Martin Kits van Heyningen, KVH's president and chief executive officer.

In the second quarter of 2007, mobile communication revenue was $17.5 million, up 4% on a year-over-year basis. Defense-related sales, including those for KVH's fiber optic gyro (FOG) solutions and TACNAV(R) military navigation systems, were approximately $5.7 million, up 11% on a year-over- year basis.

"The recent introduction of our new TracVision(R) M-series satellite TV systems helped drive our marine sales up 12% over the same quarter last year. Within the land mobile market, quarterly revenue was down 11% compared to a very strong second quarter in 2006, which was our first full quarter of TracVision R6 shipments into the RV market. Looking ahead, we are excited about the potential of our new TracVision SlimLine satellite TV systems, which were introduced publicly today and have already been selected by a number of leading RV manufacturers.

"Within our mobile communications business, last week's launch of our TracPhone(R) V7 satellite communications system and the mini-VSAT Broadband(sm) service is one of the more important strategic announcements we've made in recent years. Our effort to bring broadband, affordable Internet access to mariners has been a large and complex project that involved establishing new relationships with both ViaSat and satellite owner-operator SES AMERICOM. For sales to our customers, KVH will serve as the sole point of contact for hardware and airtime sales, activations, billing, and technical support for this new product and service. In addition, we will receive revenue from hardware sales as well as from the recurring monthly airtime generated by leisure boaters, commercial maritime operations, and government vessels using this unique end-to-end maritime communications solution."

Turning to the defense market, Mr. Kits van Heyningen remarked, "We enjoyed strong product sales growth in the second quarter. Fiber optic gyro product revenue was up 31% and defense navigation revenue was up 43% year over year from the same quarter in 2006. While customer-funded engineering revenue was down compared to the second quarter of 2006, we continued to add long-term contract value to our military navigation business for 2008 and beyond. At the same time, we aggressively pursued new opportunities, including the potential application of our low-profile satellite antenna technology to high-speed satellite communications-on-the-move for the U.S. military."

Commenting on the company's financial results for the second quarter, Patrick Spratt, KVH's chief financial officer, said, "The second quarter was generally on track with our expectations for both the top and bottom lines. As anticipated, sales of our higher-margin TACNAV systems, which were roughly three times higher on a sequential basis compared to the first quarter, contributed to a healthy improvement in gross margin to 42%. Operating expenses were affected by low levels of customer-funded engineering as well as the expense associated with ongoing patent litigation.

"While defense sales were strong this quarter, we have been informed that two potential orders that we were expecting to receive for the third quarter have been delayed. One is a significant TACNAV order from an international customer. The other is the U.S. Army's new contract for its CROWS stabilized weapon program, which is now tentatively scheduled to be announced in September 2007. Since our original expectation was that both of these programs would have been awarded by now, we had built them into our expectations for the second half of 2007. As we generally only include booked defense business in our near-term guidance, we are removing these from our third quarter guidance at this time. This will most likely result in third quarter revenue being in the range of $18 to $19 million. This is also expected to result in a loss of $0.04 to $0.08 cents per share for the third quarter of 2007. We are confident that our mobile communications business will remain strong and in line with our previous expectations for the remainder of the year. Given this outlook, and assuming that the CROWS contract award is made by the end of September and is favorable for us, we anticipate that our fourth quarter revenue will grow approximately 30% on a year-over-year basis to roughly $22 to $23 million while earnings will be in the range of $0.10 to $0.14 cents per share."

  Recent Operational Highlights:

  -- July 19, 2007 - KVH introduced its new 12" high SlimLine series of
     TracVision satellite TV systems for RVs, which offer fully automatic
     switching among satellites, built-in HDTV capabilities, and higher
     antenna efficiency and signal reception than competing 12" high
     antennas.
  -- July 12, 2007 - KVH launched the new mini-VSAT Broadband service for
     maritime applications. This new high-speed service relies on spread
     spectrum technology to deliver fast, affordable Internet and phone
     service via KVH's new 24" TracPhone V7.
  -- June 27, 2007 - KVH announced that Monaco Coach, a leading manufacturer
     of recreational vehicles and the United States' largest builder of
     Class A motor coaches, will add the KVH TracVision SlimLine mobile
     satellite TV systems to its new 2008 vehicles.
  -- June 25, 2007 - KVH received a $1.1 million order for its DSP-3000
     fiber optic gyros (FOGs) from a U.S. military customer. KVH's compact,
     highly accurate FOGs will be used for real-time image synchronization
     and stabilization in military training simulator systems.
  -- June 6, 2007 - KVH received a new contract from an international
     customer for the purchase of KVH's TACNAV II FOG-based vehicle
     navigation systems and displays. The contract has a total value of
     approximately $2.3 million with shipments starting in 2007 and
     extending through 2010.

KVH is webcasting its second quarter conference call live at 10:30 a.m. Eastern time today through the company's website. The conference call can be accessed via the company's website at http://investors.kvh.com/. The audio archive and an MP3 podcast will also be available on the company website within three hours of the completion of the call.

About KVH Industries, Inc.

KVH Industries, Inc., is a leading manufacturer of systems to provide mobile access to satellite TV, communication, and high-speed Internet, as well as navigation, pointing, and guidance solutions for 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. For more information, visit http://www.kvh.com/.

KVH, TracVision, TACNAV, and TracPhone are registered trademarks of KVH Industries, Inc., while mini-VSAT Broadband is a service mark of KVH Industries, Inc. All other trademarks are the property of their respective companies.

                   KVH INDUSTRIES, INC. AND SUBSIDIARY
                      SELECTED FINANCIAL INFORMATION

             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
           (in thousands, except per share amounts, unaudited)

                                  Three Months Ended     Six Months Ended
                                       June 30,              June 30,
                                  -------------------   -------------------
                                     2007      2006       2007       2006
                                  --------   --------   --------   --------

  Net sales                       $ 23,247   $ 21,968   $ 43,645   $ 42,257
  Cost of sales                     13,382     13,373     26,186     24,842
                                  --------   --------   --------   --------
         Gross profit                9,865      8,595     17,459     17,415

  Operating expenses:
    Research and development         2,530      1,973      4,728      4,142
    Sales, marketing and support     3,779      3,428      7,791      7,273
    General and administrative       2,339      1,790      4,123      3,685
                                  --------   --------   --------   --------

  Income from operations             1,217      1,404        817      2,315
    Other income, net                  616        511      1,252        943
    Income tax expense                (332)      (229)      (511)      (318)
                                  --------   --------   --------   --------
  Net income                      $  1,501   $  1,686   $  1,558   $  2,940
                                  ========   ========   ========   ========

  Net income per common share
    Basic and Diluted             $   0.10   $   0.11    $   0.10  $   0.20
                                  ========   ========    ========  ========

  Weighted average common shares
   outstanding
    Basic                            15,016    14,773      14,962    14,729
                                  =========  ========    ========  ========
    Diluted                          15,031    14,893      14,997    14,860
                                  =========  ========    ========  ========

                   KVH INDUSTRIES, INC. AND SUBSIDIARY
                      SELECTED FINANCIAL INFORMATION

                  CONDENSED CONSOLIDATED  BALANCE SHEETS
                        (in thousands, unaudited)

                                               June 30,        December 31,
                                                 2007              2006
                                              -----------      -----------
  ASSETS

     Cash, cash equivalents and
      marketable securities                   $   53,881       $   54,739
     Accounts receivable, net                     14,184           10,556
     Inventories                                   8,703            9,043
     Other assets                                  1,075            1,028
                                               ----------       ----------
            Total current assets                  77,843           75,366

     Property and equipment, net                  11,158            9,569
     Deferred income taxes                         3,334            3,334
     Other non-current assets                         79              155
                                              -----------      -----------
            Total assets                      $   92,414       $   88,424
                                              ===========      ===========

  LIABILITIES AND STOCKHOLDERS' EQUITY
     Accounts payable and accrued
      expenses                                $    9,118       $    8,121
     Current portion of long-term debt               128              123
                                               ----------      -----------
            Total current liabilities              9,246            8,244

     Deferred revenue                                 60              227
     Long-term debt, excluding current
      portion                                      2,093            2,158
     Stockholders' equity                         81,015           77,795
                                              -----------      -----------
            Total liabilities and
             stockholders' equity             $   92,414       $   88,424
                                              ===========      ===========