Kvh Industries, Inc. · NASDAQ:KVHI
Kvh Industries — Investor Presentation (August 2016)
36 slides from Kvh Industries's investor presentation, August 2016
Slide 1: KVH Industries Investor Presentation
KVH Industries Investor Presentation Mobile Broadband • Guidance & Stabilization
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation contains forward-looking statements that involve risks and uncertainties. For example, forward-looking statements include statements regarding our financial goals for future periods, our anticipated revenue sales pipeline, backlog, competitive positioning
Slide 3: KVH Industries Overview
KVH Industries Overview • Innovative technology company – Focused on mobile products and services • Mobile broadband satellite services – Global high-speed Internet, television, and phone • Guidance & stabilization systems – Fiber optic gyros (FOGs) and advanced, integrated navigation systems • Succ
Slide 4: Guidance & Stabilization
Guidance & Stabilization • Leading manufacturer of inertial navigation systems – Based on our fiber optic gyro technology • Exciting emerging applications for FOG-based inertial systems – Self-driving cars – Robotics – Drones • Robust demand for TACNAV® military vehicle navigation systems – Stronges
Slide 5: Mobile Broadband
Mobile Broadband • Manufacturer – ~200,000 mobile satellite TV systems – ~6,000 maritime VSAT systems • Network Operator – Only seamless global C/Ku-band VSAT service • Service Provider – Broadband Internet services • Content Delivery – Global IP-MobileCast™ • Premium Content – 10,000 vessels subscr
Slide 6: Large Market for Maritime Broadband
Large Market for Maritime Broadband • Marine broadband revenue expected to grow to $2.3B in five years • 250,000+ vessels – 72,000 to upgrade to VSAT in next five years Yachts • 1.4 million seafarers 18% • Low penetration rate Shipping – Beginning of major upgrade cycle 33% Inland Waterways 12% Gove
Slide 7: Market Drivers: The Value of Communications
Market Drivers: The Value of Communications Operational Efficiency Crew Welfare • Optimize performance • Connectivity improves morale • Reduce fuel consumption • Enhance recruiting & retention & emissions Regulatory Mandates Cost Savings • Digital charts (ECDIS) • Remote repair & diagnostics • Posit
Slide 8: Maritime Industry’s Challenges
Maritime Industry’s Challenges • Despite being largest transportation mode… – 90% of world’s goods are transported by sea • Lags behind alternative transport industries in terms of IT – Remote locations, no cellular or terrestrial options, no onboard IT personnel • Requires affordable global broadba
Slide 9: Overcoming Challenges with End-to-End Solution
Overcoming Challenges with End-to-End Solution
Slide 10: Global Connectivity
Global Connectivity Global Connectivity C/Ku-band Network KIMI MiINYSAT BROADBAND © KVH Industries, Inc.
Slide 11: KVH’s Global Broadband Network
KVH’s Global Broadband Network • 26 transponders on 19 satellites • Covering entire maritime market
Slide 12: Enterprise-grade Connectivity
Enterprise-grade Connectivity • ~640 TB of data and 25 million voice minutes annually • Fleet monitoring application for IT managers
Slide 13: Network Capacity Expansion
Network Capacity Expansion • Leveraging new commercial satellites – No major CAPEX required • New HTS satellites coming online – Intelsat Epic: 60 Gbps/satellite – ViaSat 2: 280 Gbps • OneWeb: 720 Low Earth Orbit (LEO) satellites – Requires tracking antennas even on land – 6 Tbps total capacity
Slide 14: Onboard Hardware
Onboard Hardware KIMI! MiNYSAT BROADBAND Onboard Hardware TracPhone® Systems © KVH Industries, Inc.
Slide 15: Integrated Onboard Hardware and Software
Integrated Onboard Hardware and Software • Building the hardware ensures everything works together • Smaller, simpler, and more reliable – Over-the-air software update capability – Stabilized tracking antennas for any size vessel • Common belowdecks unit – Modem – Voice over IP (VoIP) phone lines –
Slide 16: Content Delivery
Content Delivery Content Delivery IP-MobileCast™ © KVH Industries, Inc.
Slide 17: Bandwidth Usage Continues to Accelerate
Bandwidth Usage Continues to Accelerate • Global mobile data traffic will increase nearly tenfold by 2019 • 55% of mobile cellular data traffic on land is now video • Maritime satellite service providers can’t support streaming • The challenge: how to deliver this content via the satellite service w
Slide 18: Global Content Delivery Solution
Global Content Delivery Solution • IP-MobileCast – Uses multicast technology to broadcast large files to all vessels at once • Delivering 500 GB of content per month to each vessel – Separate data stream – Uses only idle network bandwidth (background multicast) • Does not use customer’s data plan or
Slide 19: Content
Content KIMI MiINYSAT BROADBAND Content Operations & Entertainment KIVIH| © KVH Industries, Inc.
Slide 20: Providing Entertainment and Operations Content to the Maritime Market
Providing Entertainment and Operations Content to the Maritime Market • KVH Media Group – Commercially licensed entertainment content • Partnering with industry leaders to provide critical operations content
Slide 21: News from Home via Video and Print
News from Home via Video and Print • 100+ newspapers in 20+ languages – Created daily by KVH editorial staff – 8,000 ships and 400 cruise ships • 12 TV channels of local news daily – From top seafaring countries
Slide 22: International News in English and Premium News Channels
International News in English and Premium News Channels News Sources – Channels 1 Euronews 2 Russia Today 3 Al Jazeera 4 One America 5 BBC 6 CNN
Slide 23: New Release Movies and TV Shows
New Release Movies and TV Shows • Major Hollywood and international studios • Licensed for commercial use • Content cached locally with unlimited onboard viewing for one year
Slide 24: Popular Sports Entertainment
Popular Sports Entertainment • Daily sports news and highlights • Featured events – Pacquiao/Mayweather highlights
Slide 25: Delivering Content for Maritime Operations
Delivering Content for Maritime Operations • Pushing large data files to entire fleets • Most ships rely on manually updated data – Navigation, port, weather, and safety information – Time-consuming and error-prone process – Large files delivered physically via DVD to vessel • Working with industry
Slide 26: Maritime e-Learning
Maritime e-Learning • Leading provider of maritime training, remote e-Learning, and reporting solutions – Onboard 12,000+ vessels today – More than 950 training titles – >250,000 crew members registered – More than 100 million training hours to date • Subscription-based business model • Onboard trai
Slide 27: Mobile Broadband Strategy
Mobile Broadband Strategy • Built global broadband network • Became leading maritime VSAT connectivity provider* • Launched global IP-MobileCast content delivery system • Acquired content companies for maritime entertainment and e-Learning content • Launched mini-VSAT Broadband 2.0 – High-speed conn
Slide 28: Operational & Financial Overview
Operational & Financial Overview
Slide 29: Growing Subscription Revenue Base
Growing Subscription Revenue Base 54% Subscription-based Service Revenue 44% Total Product Revenue 2% Other Service Revenue Q2 2016
Slide 30: Overall Revenue Split (Q2 2016 TTM)
Overall Revenue Split (Q2 2016 TTM) 79% Mobile Broadband 21% Guidance & Stabilization
Slide 31: Solid Mobile Broadband Growth
Solid Mobile Broadband Growth • 2.5% YOY airtime revenue growth $ in Millions Trailing 12 Month Revenue • Airtime revenues larger $90 than VSAT hardware revenue $80 $70 $60 $50 $40 $30 $20 $10 $0 2q11 2q12 2q13 2q14 2q15 2q16 mini-VSAT Airtime mini-VSAT Hardware
Slide 32: Q2 2016 Mobile Broadband Revenue
Q2 2016 Mobile Broadband Revenue 33% Mobile Broadband 43% Hardware Mobile Broadband Airtime 24% Content & Services
Slide 33: Q2 2016 Financial Summary
Q2 2016 Financial Summary Q2 2016 Q2 2015 Revenue $46.0m $44.9m Service Revenue (% of Total Revenue) 56% 60% Gross Profit Margin 43% 43% GAAP Net Income ($0.8m) $0.0m Non-GAAP Net Income $1.2m $2.1m GAAP EPS ($0.05) $0.00 Non-GAAP EPS $0.08 $0.13 Adjusted EBITDA $3.5m $4.6m Cash $47.4m $48.0m Note:
Slide 34: Q2 YTD 2016 Financial Summary
Q2 YTD 2016 Financial Summary Q2 YTD 2016 Q2 YTD 2015 Revenue $86.4m $86.2m Service Revenue (% of Total Revenue) 59% 61% Gross Profit Margin 42% 43% GAAP Net Income ($3.6m) ($1.4m) Non-GAAP Net Income $0.6m $3.0m GAAP EPS ($0.23) ($0.09) Non-GAAP EPS $0.04 $0.19 Adjusted EBITDA $4.5m $7.4m Cash $47.
Slide 35: Path for Growth 2016 and Beyond
Path for Growth 2016 and Beyond • Continuing to win large guidance & stabilization opportunities – Emerging market opportunities provide upside potential • Maritime IT and operational requirements increasing – Bandwidth requirements going up every day – New legislated crew welfare requirements – New
Slide 36: www.kvh.com
www.kvh.com Mobile Broadband • Guidance & Stabilization