Revenue gains and completion of the sale of its Videotel business produce a positive Q2 result for US marine communication provider
Maritime VSAT provider KVH Industries Inc released its second quarter results on Friday, marking revenue gains and record product shipments.
Total revenue for the quarter ended June 30, 2019 was reported at US$39.2m, compared against $38.6m for the second quarter of 2018. Product revenues for the second quarter declined by 9% year-over-year to $14.7m, while service revenues grew by 9% to $24.5m.
The company noted that VSAT product shipments for the quarter improved by 11% YOY, establishing a new record for the firm. Mini-VSAT broadband airtime revenue grew by $1.8m for a 10% YOY increase, driven by a 13% increase in subscriber numbers. Yet in spite of those positive figures, the company reported a net loss for the quarter of $3.5m, compared to a net loss of $2.4m for the second quarter of 2018.
“Growth in our core business remained strong in the second quarter,” said KVH CEO, Martin Kits van Heyningen. “We were pleased to see our airtime gross margins growing significantly, coming in at just under 35% for the quarter. We expect this margin improvement to continue through the end of the year.”
The second quarter of 2019 saw KVH finalise the sale of its maritime training business, Videotel, to Oakley Capital. Considered a discontinued operation, its contribution was excluded from the company’s Q2 financial results. “This transaction generated approximately $90m in cash for us, enabling us to repay substantially our outstanding debt and leaving more than $65m in cash on our balance sheet,” noted Kits van Heyningen. “While we are still making plans for the best use of this liquidity, the Videotel proceeds allow us to accelerate investments in our key long-term growth initiatives … at this time we expect to invest between $2.0m and $3.0m in these initiatives in the remainder of this year.”