MIDDLETOWN – KVH Industries Inc. reported a profit of $47.2 million in the second quarter, or $2.90 per diluted share, for all operations, continued and discontinued, in a release Friday. The company had reported a loss of $1.3 million in the second quarter of 2018.
The second-quarter profit was due to the sale of the company’s Videotel maritime training business for $89.4 million to Oakley Capital, which resulted in a pretax gain of $54.5 million.
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Net sales for the quarter totaled $39.2 million, a 1.6% year-over-year increase.
“As we announced in May, we successfully completed the sale of our Videotel business during this quarter. This transaction generated approximately $90 million in cash for us, enabling us to repay substantially our outstanding debt and leaving more than $65 million in cash on our balance sheet,” said company CEO Martin Kits van Heyningen in prepared remarks. In fact, long-term debt fell from $29.4 million to $2 million from Dec. 31 to the end of the period on June 30.
“While we are still making plans for the best use of this liquidity, the Videotel proceeds allows us to accelerate investments in our key long-term growth initiatives – our photonic chip technology; our new Internet of Things platform called KVH Watch, which we announced in Q2; and promotion and expansion of our AgilePlans program through demand generation programs with our key service providers,” added Kits van Heyningen.
Continuing operations (excluding Videotel) for the company resulted in a $3.5 million loss in the second quarter of 2019, compared with a net loss in the same 2018 period of $2.4 million.
The company said that service revenue increased 9.2% year over year to $24.5 million, largely due to an increase in mobile connectivity service sales. Product revenue declined 9.1% year over year to $14.7 million, largely attributed to a decline in TACNAV product sales.
Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com.
