KVH Industries Inc. (NASDAQ:KVHI) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 09:00 am ET


KVH Industries Inc. (NASDAQ:KVHI) Q2 2020 Earnings Conference Call - Final Transcript


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Good day, and welcome to the KVH Industries, Inc. Q2 2020 Earnings Conference Call. Today's call is being recorded.

At this time, I would like to turn the conference over to Donald Reilly, Chief Financial Officer. Please go ahead.

Donald W. Reilly

Thank you, operator. Good morning, everyone. Thanks for joining us today to discuss KVH Industries' second quarter results, which are included in the earnings release we published this morning. With me on this call is Martin Kits van Heyningen, the Company's Chief Executive Officer; and Brent Bruun, our Chief Operating Officer.

The earnings release is available on our website and through our Investor Relations department. If you would like to listen to a recording of today's call, you can access a webcast replay on our website. If you are listening via the web, feel free to submit questions to ir@kvh.com.

This conference call will contain certain forward-looking statements that are subject to many assumptions and uncertainties that may cause our actual results to differ materially from those expressed in these statements. We undertake no obligation to update or revise any forward-looking statements.

We will also discuss certain non-GAAP financial measures. You will find definitions of these measures in our press release as well as reconciliations of these non-GAAP measures to comparable GAAP measures. We encourage you to review the cautionary statements made in our SEC filings, specifically those under the heading Risk Factors in our first quarter Form 10-Q filed on May 1, and our 2019 Form 10-K, which was filed on February 28 and our Form 10-Q for the second quarter, which we expect to be filed later today. The Company's other SEC filings are available directly from the Investor Information section of our website.

And at this time, I would like to turn the call over to Martin. Martin?

Martin Kits van Heyningen

Thanks, Don. Good morning, everyone. And thank you for joining us today. So as was the case for most companies, we entered the second quarter with incredible uncertainty relating from the COVID-19 global pandemic. I'm happy to say, however, that while we anticipated and prepared for a range of scenarios, both of our business segments held up well in the face of these global health and economic challenges. Our quarterly revenue was $37 million, down only 7% compared to Q2 of last year. Our VSAT shipments remained strong. Our airtime revenue continued to grow. Our FOG and TACNAV sales were healthy, and our gross margins expanded. We're very pleased with the results for the quarter in the face of the challenges we all experienced.

We also worked very hard to manage our operating expenses while sustaining our business. Both of our factories ran at full capacity throughout the second quarter. We implemented and continue to maintain an array of health and safety initiatives, resulting in no missed shipments, no health issues and no outbreaks amongst our employees around the globe. We managed our supply chain aggressively. And as a result, we have products on the shelf that we continue to be