Coast Guard; potentially lower product and service margins from reseller arrangements; the risk that sales of Starlink terminals will slow down or decrease; potential hardware and software competition for our new CommBox product offerings; unanticipated obstacles to implementation of our manufacturing wind-down; unanticipated costs and expenses arising from the wind-down; unanticipated effects of the wind-down on our ongoing business; the risks associated with increased customer reliance on third-party hardware; the lack of future product differentiation; new service offerings from hardware providers; potential customer delays in selecting our services; the uncertain impact of continuing industry consolidation; the risk that our OpenNet program will lead to further reductions in sales of our satellite products; the risk that our current and future non-exclusive arrangements with Starlink and OneWeb will not provide material benefits; uncertainty regarding customer responses to new product and service introductions; challenges and potential additional expenses in retaining our employees, particularly in the current competitive labor market characterized by rising wages; the challenges of meeting customer expectations with a smaller employee base; uncertainties created by our new business strategy, which may impact customer recruitment and retention; the uncertain impact of ongoing disruptions in our supply chain and associated increases in our costs; the uncertain impact of inflation, particularly with respect to fuel costs, and fears of recession; the uncertain impact of the wars in Ukraine and the Middle East and international tensions in Asia; unanticipated changes or disruptions in our markets; technological breakthroughs by competitors; changes in customer priorities or preferences; potential customer terminations; unanticipated liabilities, charges and write-offs; the potential that competitors will design around or invalidate our intellectual property rights; a history of losses; continued fluctuations in quarterly results; the uncertain impact of changes in trade policy, including actual and potential new or higher tariffs and trade barriers, as well as trade wars with other countries, all of which could change materially under a new presidential administration or a change in control of Congress; unanticipated obstacles in our product and service development, cost engineering and manufacturing efforts; adverse impacts of currency fluctuations; our ability to successfully commercialize our new initiatives without unanticipated additional expenses or delays; potential reduced sales to companies in or dependent upon the turbulent oil and gas industry; the impact of extended economic weakness on the sale and use of marine vessels and recreational vehicles; the potential inability to increase or maintain our market share in the market for airtime services; the risk that declining sales of the TracNet H-series and TracPhone V-HTS series products and related services will reduce airtime gross margins; the risk that reduced product sales will continue to erode product gross margins and lead to increased losses; potential declines or changes in customer demand, due to economic, weather-related, seasonal, and other factors, particularly with respect to the TracNet H-series and TracPhone V-HTS series; exposure for potential intellectual property infringement; changes in tax and accounting requirements or assessments; and export restrictions, delays in procuring export licenses, and other international risks.
AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts, unaudited) Three months ended September 30, Nine months ended September 30, 2024 2023 2024 2023 Sales: Service $ 24,410 $ 29,397 $ 74,122 $ 86,883 Product 4,561 3,798 12,789 14,041 Net sales 28,971 33,195 86,911 100,924 Costs and expenses: Costs of service sales 14,983 16,238 44,496 47,848 Costs of product sales 4,714 4,511 14,321 16,042 Research and development 1,407 2,398 6,771 7,379 Sales, marketing and support 4,932 4,841 15,650 15,673 General and administrative 3,789 4,367 13,214 13,139 Goodwill impairment charge — 5,333 — 5,333 Long-lived assets impairment charge 1,137 657 1,137 657 Total costs and expenses 30,962 38,345 95,589 106,071 Loss from operations (1,991) (5,150) (8,678) (5,147)Interest income 629 997 2,416 2,660 Interest expense 2 — 2 — Other income (expense), net 216 (121) (348) (583)Loss before income tax expense (1,148) (4,274) (6,612) (3,070)Income tax expense 51 95 126 159 Net loss $ (1,199) $ (4,369) $ (6,738) $ (3,229) Net loss per common share Basic $ (0.06) $ (0.23) $ (0.35) $ (0.17)Diluted $ (0.06) $ (0.23) $ (0.35) $ (0.17) Weighted average number of common shares outstanding: Basic 19,433 19,231 19,367 19,090 Diluted 19,433 19,231 19,367 19,090 KVH INDUSTRIES, INC.
Third Quarter 2024 Highlights Total revenues decreased by 13% in the third quarter of 2024 to $29.0 million from $33.2 million in the third quarter of 2023. Airtime revenue decreased $4.6 million, to $22.8 million, or 17%, in the third quarter of 2024 compared to the third quarter of 2023. Non-cash impairment charges of $1.1 million were taken against long-lived assets for the Mobile Broadband reporting unit as the company commenced a plan to sell the warehouse building and surface parking lot located at 75 Enterprise Center in Middletown, Rhode Island. Net loss in the third quarter of 2024 was $1.2 million, or $0.06 per share, compared to net loss of $4.4 million, or $0.23 per share, in the third quarter of 2023. Non-GAAP adjusted EBITDA was $2.9 million in the third quarter of 2024, compared to $4.4 million in the third quarter of 2023.
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