(Mark One) | |||||
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
| (Nasdaq Global Select Market) | |||||||
Large accelerated filer | ☐ | ☒ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 1B. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | Mine Safety Disclosures | |||||||
Item 5. | ||||||||
Item 6. | ||||||||
Item 7. | ||||||||
Item 7A. | ||||||||
Item 8. | ||||||||
Item 9. | ||||||||
Item 9A. | ||||||||
Item 9B. | ||||||||
Item 9C. | ||||||||
Item 10. | ||||||||
Item 11. | ||||||||
Item 12. | ||||||||
Item 13. | ||||||||
Item 14. | ||||||||
Item 15. | ||||||||
Item 16. | ||||||||
ITEM 1. | Business |
Segment | Primary Products | Major Brands | 2021 Net Sales (1) | |||||||||||||||||
Mobile connectivity | Satellite television and internet solutions and media and content delivery solutions | TracVision® TracPhone® CommBox TM mini-VSAT Broadband SM IP-MobileCast TM KVH OneCare ® NEWSlink TM AgilePlans ® | $ | 133,911 | ||||||||||||||||
Inertial navigation | Digital compass and fiber optic gyro-based navigation and guidance systems | TACNAV® | 37,856 | |||||||||||||||||
Total | $ | 171,767 | ||||||||||||||||||
(1) Amounts in thousands |
KVH Team Member Headcount | |||||
Category | # | ||||
Full-time employees | 607 | ||||
Part-time employees | 31 | ||||
Long-term contractors | 10 | ||||
Total | 648 |
KVH Team Member Headcount | |||||
Country | # | ||||
Brazil | 2 | ||||
Cyprus | 3 | ||||
Denmark | 16 | ||||
Germany | 2 | ||||
Greece | 3 | ||||
Hong Kong | 3 | ||||
India | 30 | ||||
Italy | 2 | ||||
Japan | 1 | ||||
Norway | 7 | ||||
Philippines | 55 | ||||
Poland | 1 | ||||
Singapore | 15 | ||||
South Africa | 1 | ||||
Spain | 1 | ||||
United Arab Emirates | 1 | ||||
United Kingdom | 89 | ||||
United States | 416 | ||||
Total | 648 |
ITEM 1A. | Risk Factors |
ITEM 1B. | Unresolved Staff Comments |
ITEM 2. | Properties |
Location | Type | Segment | Principal Uses | Approximate Square Footage | Ownership | Lease Expiration | |||||||||||||||||||||||||||||
Middletown, Rhode Island | Office | Both | Corporate headquarters, research and development, sales and service, marketing and administration | 75,000 | Owned | — | |||||||||||||||||||||||||||||
Middletown, Rhode Island | Plant and warehouse | MC | Manufacturing and warehousing (mobile connectivity products) | 75,300 | Owned | — | |||||||||||||||||||||||||||||
Tinley Park, Illinois | Plant and warehouse | IN | Manufacturing, warehousing, research and development (inertial navigation products) | 101,000 | Owned | — | |||||||||||||||||||||||||||||
Kokkedal, Denmark | Office and warehouse | MC | European headquarters, sales, marketing and support | 11,000 | Leased | Upon 3 month notice |
ITEM 3. | Legal Proceedings |
ITEM 4. | Mine Safety Disclosures |
ITEM 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
ITEM 6. | Removed and reserved. |
ITEM 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
(in thousands) | |||||||||||
Mobile connectivity | $ | 133,911 | $ | 119,453 | |||||||
Inertial navigation | 37,856 | 39,280 | |||||||||
Net sales | $ | 171,767 | $ | 158,733 |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
(in thousands) | |||||||||||
Research and development expense presented in the statement of operations | $ | 17,766 | $ | 15,799 | |||||||
Costs of customer-funded research and development included in costs of service sales | 803 | 2,935 | |||||||||
Total consolidated statements of operations expenditures on research and development activities | $ | 18,569 | $ | 18,734 |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Sales: | |||||||||||
Product | 38.9 | % | 40.7 | % | |||||||
Service | 61.1 | 59.3 | |||||||||
Net sales | 100.0 | 100.0 | |||||||||
Costs and expenses: | |||||||||||
Costs of product sales | 27.3 | 26.2 | |||||||||
Costs of service sales | 37.9 | 37.5 | |||||||||
Research and development | 10.3 | 10.0 | |||||||||
Sales, marketing and support | 18.2 | 18.8 | |||||||||
General and administrative | 16.8 | 15.4 | |||||||||
Goodwill impairment charge | — | 5.5 | |||||||||
Intangible asset impairment charge | — | 1.1 | |||||||||
Total costs and expenses | 110.5 | 114.5 | |||||||||
Loss from operations | (10.5) | (14.5) | |||||||||
Interest income | 0.5 | 0.6 | |||||||||
Interest expense | — | — | |||||||||
Other income, net | 4.2 | 0.1 | |||||||||
Loss before income taxes (benefit) expense | (5.8) | (13.8) | |||||||||
Income tax (benefit) expense | (0.1) | 0.1 | |||||||||
Net loss | (5.7) | % | (13.9) | % |
Change | |||||||||||||||||||||||
For the year ended December 31, | 2021 vs. 2020 | ||||||||||||||||||||||
2021 | 2020 | $ | % | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Mobile connectivity sales | |||||||||||||||||||||||
Product | $ | 30,012 | $ | 27,863 | $ | 2,149 | 8 | % | |||||||||||||||
Service | 103,899 | 91,590 | 12,309 | 13 | % | ||||||||||||||||||
Net sales | $ | 133,911 | $ | 119,453 | $ | 14,458 | 12 | % | |||||||||||||||
Inertial navigation sales | |||||||||||||||||||||||
Product | $ | 36,858 | $ | 36,756 | $ | 102 | — | % | |||||||||||||||
Service | 998 | 2,524 | (1,526) | (60) | % | ||||||||||||||||||
Net sales | $ | 37,856 | $ | 39,280 | $ | (1,424) | (4) | % |
Change | |||||||||||||||||||||||
For the year ended December 31, | 2021 vs. 2020 | ||||||||||||||||||||||
2021 | 2020 | $ | % | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Mobile connectivity (1) | $ | 2,749 | $ | (10,071) | $ | 12,820 | 127 | % | |||||||||||||||
Inertial navigation | 1,649 | 4,799 | (3,150) | (66) | % | ||||||||||||||||||
$ | 4,398 | $ | (5,272) | $ | 9,670 | 183 | % | ||||||||||||||||
Unallocated | (22,344) | (17,665) | (4,679) | (26) | % | ||||||||||||||||||
Loss from operations | $ | (17,946) | $ | (22,937) | $ | 4,991 | 22 | % |
ITEM 7A. | Quantitative and Qualitative Disclosure About Market Risk |
ITEM 8. | Financial Statements and Supplementary Data |
ITEM 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
ITEM 9A. | Controls and Procedures |
/s/ GRANT THORNTON LLP | ||
Boston, Massachusetts | ||
March 11, 2022 |
ITEM 9B. | Other Information |
ITEM 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
ITEM 10. | Directors, Executive Officers and Corporate Governance |
ITEM 11. | Executive Compensation |
ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
ITEM 13. | Certain Relationships and Related Transactions and Director Independence |
ITEM 14. | Principal Accountant Fees and Services |
ITEM 15. | Exhibits and Financial Statement Schedules |
Page | |||||||||||
(a) | 1. | ||||||||||
(a) | 2. | Financial Statement Schedules | |||||||||
None. | |||||||||||
3. | Exhibits |
Exhibit No. | Description | Filed with this Form 10-K | Incorporated by Reference | |||||||||||||||||||||||||||||
Form | Filing Date | Exhibit No. | ||||||||||||||||||||||||||||||
Amended and Restated Certificate of Incorporation, as amended | 10-Q | August 6, 2010 | 3.1 | |||||||||||||||||||||||||||||
Amended and Restated Bylaws | 10-Q | November 1, 2017 | 3.2 | |||||||||||||||||||||||||||||
Specimen certificate for the common stock | 10-K | March 2, 2018 | 4.1 | |||||||||||||||||||||||||||||
Description of Capital Stock | 8-K | August 4, 2020 | 4.1 | |||||||||||||||||||||||||||||
Amended and Restated 1996 Employee Stock Purchase Plan | DEF 14A | April 25, 2016 | App. B | |||||||||||||||||||||||||||||
Amended and Restated 2016 Equity and Incentive Plan | DEF 14A | April 29, 2020 | App. A | |||||||||||||||||||||||||||||
Form of Incentive Stock Option Agreement granted under the 2016 Equity and Incentive Plan | 10-K | March 9, 2017 | 10.5 | |||||||||||||||||||||||||||||
Form of Non-Statutory Stock Option Agreement granted under the 2016 Equity and Incentive Plan | 10-K | March 9, 2017 | 10.6 | |||||||||||||||||||||||||||||
Form of Restricted Stock Agreement granted under the 2016 Equity and Incentive Plan | 10-K | March 9, 2017 | 10.7 | |||||||||||||||||||||||||||||
Policy Regarding Automatic Grants to Non-Employee Directors | 10-Q | May 6, 2009 | 10.23 |
Exhibit No. | Description | Filed with this Form 10-K | Incorporated by Reference | |||||||||||||||||||||||||||||
Form | Filing Date | Exhibit No. | ||||||||||||||||||||||||||||||
Amended and Restated Credit Agreement dated as of October 30, 2018 among KVH Industries, Inc., Bank of America, N.A., as Administrative Agent, Swingline Lender and L/C Issuer, and the Lenders party hereto | 10-Q | October 31, 2018 | 10.1 | |||||||||||||||||||||||||||||
Amended and Restated Security Agreement dated as of October 30, 2018 between KVH Industries, Inc. and Bank of America, N.A., as Administrative Agent | 10-Q | October 31, 2018 | 10.2 | |||||||||||||||||||||||||||||
Amended and Restated Pledge Agreement dated as of October 30, 2018 between KVH Industries, Inc. and Bank of America, N.A., as Administrative Agent with respect to KVH Industries A/S | 10-Q | October 31, 2018 | 10.3 | |||||||||||||||||||||||||||||
Amended and Restated Pledge Agreement dated as of October 30, 2018 between KVH Industries, Inc. and Bank of America, N.A., as Administrative Agent with respect to KVH Industries U.K. Limited | 10-Q | October 31, 2018 | 10.4 | |||||||||||||||||||||||||||||
Consent dated as of May 13, 2019 among KVH Industries, Inc., as Borrower, Bank of America, N.A., as Lender and Administrative Agent, and The Washington Trust Company, as Lender, under the Amended and Restated Credit Agreement dated as of October 30, 2018 among such parties | 8-K | May 16, 2019 | 10.4 | |||||||||||||||||||||||||||||
First Amendment to Amended and Restated Credit Agreement as of July 30, 2020 by and among KVH Industries, Inc., Bank of America, N.A., and The Washington Trust Company | 10-Q | July 31, 2020 | 10.3 | |||||||||||||||||||||||||||||
Second Amendment to Amended and Restated Credit Agreement dated as of October 29, 2021 by and among KVH Industries, Inc., and Bank of America, N.A. | 10-Q | November 4, 2021 | 10.1 | |||||||||||||||||||||||||||||
Cooperation Agreement, dated as of April 8, 2020, by and among KVH Industries, Inc., Vintage Capital Management, LLC, and Kahn Capital Management, LLC | 8-K | April 9, 2020 | 10.1 | |||||||||||||||||||||||||||||
Promissory Note dated as of May 1, 2020 and executed on May 3, 2020 by KVH Industries, Inc., in favor of Bank of America, N.A. | 8-K | May 6, 2020 | 10.1 | |||||||||||||||||||||||||||||
List of Subsidiaries | X | |||||||||||||||||||||||||||||||
Consent of Grant Thornton LLP | X | |||||||||||||||||||||||||||||||
Rule 13a-14(a)/15d-14(a) certification of principal executive officer | X | |||||||||||||||||||||||||||||||
Rule 13a-14(a)/15d-14(a) certification of principal financial officer | X | |||||||||||||||||||||||||||||||
Rule 1350 certification | X |
101.1 | Interactive Data File regarding (a) our Consolidated Balance Sheets as of December 31, 2021 and 2020, (b) our Consolidated Statements of Operations for the years ended December 31, 2021 and 2020, (c) our Consolidated Statements of Comprehensive Loss for the years ended December 31, 2021 and 2020, (d) our Consolidated Statements of Stockholders' Equity for the years ended December 31, 2021 and 2020, (e) our Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020, and (e) the Notes to such Consolidated Financial Statements | X | ||||||||||||||||||||||||||||||
104.1 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | X |
ITEM 16. | Form 10-K Summary |
KVH Industries, Inc. | ||||||||
Date: March 11, 2022 | By: | /S/ BRENT C. BRUUN | ||||||
Brent C. Bruun Interim President and Chief Executive Officer |
Name | Title | Date | ||||||||||||
/S/ BRENT C. BRUUN | Interim President and Chief Executive Officer (Principal Executive Officer) | March 11, 2022 | ||||||||||||
Brent C. Bruun | ||||||||||||||
/S/ ROGER A. KUEBEL | Chief Financial Officer (Principal Financial Officer) | March 11, 2022 | ||||||||||||
Roger A. Kuebel | ||||||||||||||
/S/ JENNIFER L. BAKER | Vice President, Chief Accounting Officer (Principal Accounting Officer) | March 11, 2022 | ||||||||||||
Jennifer L. Baker | ||||||||||||||
/S/ CATHY-ANN MARTINE-DOLECKI | Chair of the Board of Directors | March 11, 2022 | ||||||||||||
Cathy-Ann Martine-Dolecki | ||||||||||||||
/S/ DANELLE M. BARRETT | Director | March 11, 2022 | ||||||||||||
Danelle M. Barrett | ||||||||||||||
/S/ JAMES S. DODEZ | Director | March 11, 2022 | ||||||||||||
James S. Dodez | ||||||||||||||
/S/ CIELO M. HERNANDEZ | Director | March 11, 2022 | ||||||||||||
Cielo M. Hernandez | ||||||||||||||
/S/ CHARLES R. TRIMBLE | Director | March 11, 2022 | ||||||||||||
Charles R. Trimble |
/s/ | ||
We have served as the Company’s auditor since 2014. | ||
March 11, 2022 |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Marketable securities | |||||||||||
Accounts receivable, net of allowance for doubtful accounts of $ | |||||||||||
Inventories, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Current contract assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Intangible assets, net | |||||||||||
Goodwill | |||||||||||
Right of use assets | |||||||||||
Other non-current assets | |||||||||||
Non-current contract assets | |||||||||||
Deferred income tax asset | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued compensation and employee-related expenses | |||||||||||
Accrued other | |||||||||||
Accrued product warranty costs | |||||||||||
Current portion of long-term debt | |||||||||||
Contract liabilities | |||||||||||
Current operating lease liability | |||||||||||
Liability for uncertain tax positions | |||||||||||
Total current liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Long-term operating lease liability | |||||||||||
Long-term contract liabilities | |||||||||||
Long-term debt, excluding current portion | |||||||||||
Deferred income tax liability | |||||||||||
Total liabilities | $ | $ | |||||||||
Commitments and contingencies (Notes 1, 5, 6, 15 and 16) | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Less: treasury stock at cost, | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Sales: | |||||||||||
Product | $ | $ | |||||||||
Service | |||||||||||
Net sales | |||||||||||
Costs and expenses: | |||||||||||
Costs of product sales | |||||||||||
Costs of service sales | |||||||||||
Research and development | |||||||||||
Sales, marketing and support | |||||||||||
General and administrative | |||||||||||
Goodwill impairment charge | |||||||||||
Intangible asset impairment charge | |||||||||||
Total costs and expenses | |||||||||||
Loss from operations | ( | ( | |||||||||
Interest income | |||||||||||
Interest expense | |||||||||||
Other income, net | |||||||||||
Loss before income tax (benefit) expense | ( | ( | |||||||||
Income tax (benefit) expense | ( | ||||||||||
Net loss | $ | ( | $ | ( | |||||||
Net loss per common share | |||||||||||
Basic and diluted | $ | ( | $ | ( | |||||||
Weighted average number of shares outstanding: | |||||||||||
Basic and diluted | |||||||||||
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Net loss | $ | ( | $ | ( | |||||||
Other comprehensive loss, net of tax: | |||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||
Other comprehensive loss, net of tax (1) | ( | ( | |||||||||
Total comprehensive loss | $ | ( | $ | ( |
Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Treasury Stock | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury stock | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Exercise of stock options and issuance of restricted stock awards, net of forfeitures | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options and issuance of restricted stock awards, net of forfeitures | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||
Provision for doubtful accounts | |||||||||||
Depreciation and amortization | |||||||||||
Impairment charge to goodwill and intangibles | |||||||||||
Deferred income taxes | ( | ( | |||||||||
Loss on disposals of fixed assets | |||||||||||
Compensation expense related to stock-based awards and employee stock purchase plan | |||||||||||
Unrealized currency translation (gain) loss | ( | ||||||||||
PPP loan forgiveness | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Inventories | ( | ||||||||||
Prepaid expenses, other current assets, and current contract assets | ( | ||||||||||
Other non-current assets and non-current contract assets | ( | ||||||||||
Accounts payable | ( | ( | |||||||||
Contract liabilities and long-term contract liabilities | ( | ( | |||||||||
Accrued compensation, product warranty and other | ( | ||||||||||
Other long-term liabilities | |||||||||||
Net cash provided by (used in) operating activities | $ | $ | ( | ||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Cash paid for acquisition of intangible assets | ( | ( | |||||||||
Proceeds from sale of fixed assets | |||||||||||
Purchases of marketable securities | ( | ( | |||||||||
Maturities and sales of marketable securities | |||||||||||
Net cash used in investing activities | $ | ( | $ | ( | |||||||
Cash flows from financing activities: | |||||||||||
Proceeds from PPP loan | |||||||||||
Proceeds from stock options exercised and employee stock purchase plan | |||||||||||
Repurchase of common stock | ( | ||||||||||
Payment of finance lease | ( | ( | |||||||||
Net cash provided by financing activities | $ | $ | |||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ( | |||||||||
Net decrease in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for income taxes, net of refunds | $ | $ | |||||||||
Changes in accrued other and accounts payable related to property and equipment additions | $ | $ | |||||||||
Right of use assets (ROU) assets arising from entering into new operating lease obligations | $ | $ |
2021 | 2020 | ||||||||||
Beginning balance | $ | $ | |||||||||
Additions (subtractions) | |||||||||||
Deductions (write-offs/recoveries) from reserve | ( | ( | |||||||||
Ending balance | $ | $ |
2021 | 2020 | ||||||||||
Beginning balance | $ | $ | |||||||||
Charges to expense | |||||||||||
Costs incurred | ( | ( | |||||||||
Ending balance | $ | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Customer-funded service sales | $ | $ | |||||||||
Customer-funded costs included in costs of service sales | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Weighted average common shares outstanding—basic | |||||||||||
Dilutive common shares issuable in connection with stock plans | |||||||||||
Weighted average common shares outstanding—diluted |
December 31, 2021 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
Money market mutual funds | $ | $ | $ | $ | |||||||||||||||||||
Total marketable securities designated as available-for-sale | $ | $ | $ | $ |
December 31, 2020 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
Money market mutual funds | $ | $ | $ | $ | |||||||||||||||||||
United States treasuries | |||||||||||||||||||||||
Total marketable securities designated as available-for-sale | $ | $ | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Raw materials | $ | $ | |||||||||
Work in process | |||||||||||
Finished goods | |||||||||||
$ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Land | $ | $ | |||||||||
Building and improvements | |||||||||||
Leasehold improvements | |||||||||||
Revenue-generating assets | |||||||||||
Machinery and equipment | |||||||||||
Office and computer equipment | |||||||||||
Motor vehicles | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
$ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
PPP loan | $ | $ | |||||||||
Total long-term debt | |||||||||||
Less amounts classified as current | |||||||||||
Long-term debt, excluding current portion | $ | $ |
Years ending December 31, | Commitments (a) | ||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Total minimum payments | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Risk-free interest rate | % | % | |||||||||
Expected volatility | % | % | |||||||||
Expected life (in years) | |||||||||||
Dividend yield | % | % |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding at December 31, 2020 | $ | ||||||||||||||||||||||
Granted | $ | ||||||||||||||||||||||
Exercised | ( | $ | |||||||||||||||||||||
Expired, canceled or forfeited | ( | $ | |||||||||||||||||||||
Outstanding at December 31, 2021 | $ | $ | |||||||||||||||||||||
Exercisable at December 31, 2021 | $ | $ | |||||||||||||||||||||
Options vested or expected to vest at December 31, 2021 | $ | $ |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding at December 31, 2019 | $ | ||||||||||||||||||||||
Granted | $ | ||||||||||||||||||||||
Exercised | ( | $ | |||||||||||||||||||||
Expired, canceled or forfeited | ( | $ | |||||||||||||||||||||
Outstanding at December 31, 2020 | $ | $ | |||||||||||||||||||||
Exercisable at December 31, 2020 | $ | $ | |||||||||||||||||||||
Options vested or expected to vest at December 31, 2020 | $ | $ |
Number of Shares | Weighted- average grant date fair value | ||||||||||
Outstanding at December 31, 2020, unvested | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding at December 31, 2021, unvested | $ |
2021 | 2020 | ||||||||||
Cost of product sales | $ | $ | |||||||||
Cost of service sales | |||||||||||
Research and development | |||||||||||
Sales, marketing and support | |||||||||||
General and administrative | |||||||||||
$ | $ |
Foreign Currency Translation | Total Accumulated Other Comprehensive Loss | ||||||||||
Balance, December 31, 2019 | $ | ( | $ | ( | |||||||
Other comprehensive loss | ( | ( | |||||||||
Net other comprehensive loss | ( | ( | |||||||||
Balance, December 31, 2020 | ( | ( | |||||||||
Other comprehensive loss | ( | ( | |||||||||
Net other comprehensive loss | ( | ( | |||||||||
Balance, December 31, 2021 | $ | ( | $ | ( |
Current | Deferred | Total | |||||||||||||||
Year ended December 31, 2021 | |||||||||||||||||
Federal | $ | $ | $ | ||||||||||||||
State | |||||||||||||||||
Foreign | ( | ( | |||||||||||||||
$ | $ | ( | $ | ( | |||||||||||||
Year ended December 31, 2020 | |||||||||||||||||
Federal | $ | $ | $ | ||||||||||||||
State | |||||||||||||||||
Foreign | ( | ( | |||||||||||||||
$ | $ | ( | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Income tax benefit at Federal statutory income tax rate | $ | ( | $ | ( | |||||||
Increase (decrease) in income taxes resulting from: | |||||||||||
State income tax benefit, net of federal benefit | ( | ( | |||||||||
State research and development, investment credits | ( | ( | |||||||||
Non-deductible meals & entertainment | |||||||||||
Non-deductible stock compensation expense | ( | ||||||||||
Non-deductible compensation under 162(m) | |||||||||||
Foreign tax rate differential | |||||||||||
Federal research and development credits | ( | ( | |||||||||
Uncertain tax positions | |||||||||||
Provision to tax return adjustments | |||||||||||
Change in valuation allowance | |||||||||||
PPP loan forgiveness | ( | ||||||||||
Impairment of goodwill and intangibles | |||||||||||
Prior period adjustments | ( | ||||||||||
Other | ( | ||||||||||
Income tax (benefit) expense | $ | ( | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
United States | $ | ( | $ | ( | |||||||
Foreign | ( | ||||||||||
Total | $ | ( | $ | ( |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Deferred tax assets: | |||||||||||
Accounts receivable, due to allowance for doubtful accounts | $ | $ | |||||||||
Inventories | |||||||||||
Operating loss carry-forwards | |||||||||||
Stock-based compensation expense | |||||||||||
Property and equipment, due to difference in depreciation | |||||||||||
Research and development tax credit carry-forwards | |||||||||||
Foreign tax credit carry-forwards | |||||||||||
State tax credit carry-forwards | |||||||||||
Capitalized research and development | |||||||||||
Warranty reserve | |||||||||||
Accrued expenses | |||||||||||
Lease liability | |||||||||||
Gross deferred tax assets | |||||||||||
Less valuation allowance | ( | ( | |||||||||
Total deferred tax assets | |||||||||||
Deferred tax liabilities: | |||||||||||
Purchased intangible assets | ( | ( | |||||||||
Property and equipment, due to differences in depreciation | ( | ( | |||||||||
Right of use asset | ( | ( | |||||||||
Total deferred tax liabilities | ( | ( | |||||||||
Net deferred tax liability | $ | ( | $ | ( | |||||||
Deferred income tax asset | $ | $ | |||||||||
Deferred income tax liability | $ | ( | $ | ( |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Unrecognized tax benefits as of January 1 | $ | $ | |||||||||
Gross decrease in unrecognized tax benefits - prior year tax positions | ( | ( | |||||||||
Lapse of statute of limitations | ( | ( | |||||||||
Unrecognized tax benefits as of December 31 | $ | $ |
Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | |||||||||||||||
December 31, 2021 | |||||||||||||||||
Subscriber relationships | $ | $ | $ | ||||||||||||||
Distribution rights | |||||||||||||||||
Internally developed software | |||||||||||||||||
Proprietary content | |||||||||||||||||
Intellectual property | |||||||||||||||||
$ | $ | $ | |||||||||||||||
December 31, 2020 | |||||||||||||||||
Subscriber relationships | $ | $ | $ | ||||||||||||||
Distribution rights | |||||||||||||||||
Internally developed software | |||||||||||||||||
Proprietary content | |||||||||||||||||
Intellectual property | |||||||||||||||||
$ | $ | $ |
Intangible Asset | Weighted Average Remaining Useful Life in Years | ||||
Subscriber relationships | |||||
Years ending December 31, | Amortization Expense | ||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total amortization expense | $ |
2021 | |||||
Balance at December 31, 2020 | $ | ||||
Amortization expense | ( | ||||
Intangibles assets acquired in asset acquisition | |||||
Foreign currency translation adjustment | ( | ||||
Balance at December 31, 2021 | $ |
Goodwill | |||||
Balance at December 31, 2020 | $ | ||||
Foreign currency translation adjustment | ( | ||||
Balance at December 31, 2021 | $ |
Year Ended December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Mobile connectivity product, transferred at point in time | $ | $ | ||||||||||||
Mobile connectivity product, transferred over time | ||||||||||||||
Mobile connectivity service | ||||||||||||||
Inertial navigation product | ||||||||||||||
Inertial navigation service | ||||||||||||||
Total net sales | $ | $ |
For the year ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Net sales: | |||||||||||
Mobile connectivity | $ | $ | |||||||||
Inertial navigation | |||||||||||
Consolidated net sales | $ | $ | |||||||||
Operating income (loss): | |||||||||||
Mobile connectivity (1) | $ | $ | ( | ||||||||
Inertial navigation | |||||||||||
Subtotal | ( | ||||||||||
Unallocated, net | ( | ( | |||||||||
Loss from operations | ( | ( | |||||||||
Net interest and other income | |||||||||||
Loss before income tax (benefit) expense | $ | ( | $ | ( |
For the year ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Depreciation expense: | |||||||||||
Mobile connectivity | $ | $ | |||||||||
Inertial navigation | |||||||||||
Unallocated | |||||||||||
Total consolidated depreciation expense | $ | $ | |||||||||
Amortization expense: | |||||||||||
Mobile connectivity | $ | $ | |||||||||
Inertial navigation | |||||||||||
Unallocated | |||||||||||
Total consolidated amortization expense | $ | $ |
December 31, 2021 | Total | Level 1 | Level 2 | Level 3 | Valuation Technique | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Money market mutual funds | $ | $ | $ | $ | (a) | ||||||||||||||||||||||||
December 31, 2020 | Total | Level 1 | Level 2 | Level 3 | Valuation Technique | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Money market mutual funds | $ | $ | $ | $ | (a) | ||||||||||||||||||||||||
United States treasuries | $ | $ | $ | $ | (a) |
Years ending December 31, | |||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
Total undiscounted lease payments | $ | ||||
Less amount representing interest | $ | ( | |||
Present value of operating lease liabilities | $ | ||||
Less current installments of obligation under current-operating lease liabilities | $ | ||||
Obligations under long-term operating lease liabilities, excluding current installments | $ | ||||
Weighted-average remaining lease term - operating leases (years) | |||||
Weighted-average discount rate - operating leases | % |
2022 | $ | ||||
2023 | |||||
Total undiscounted lease payments | $ | ||||
Less amount representing interest | $ | ( | |||
Present value of financing lease liabilities | $ | ||||
$ | |||||
$ | |||||
Weighted-average remaining lease term - finance leases (years) | |||||
Weighted-average discount rate - finance leases | % |
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Total undiscounted cash flows | $ | ||||
Present value of lease payments | $ | ||||
Difference between undiscounted cash flows and discounted cash flows | $ |
2022 | |||||
2023 | |||||
2024 | |||||
Total | $ |
Exhibit 21.1 | ||||||||
List of Subsidiaries | ||||||||
KVH Industries A/S | Denmark | |||||||
KVH Industries Pte. Ltd. | Singapore | |||||||
KVH Industries Brasil Comunicacao Por Satelite Ltda. | Brazil | |||||||
KVH Industries Norway AS | Norway | |||||||
KVH Industries Japan Co. Ltd. | Japan | |||||||
KVH Industries UK Ltd. | United Kingdom | |||||||
KVH Media Group Ltd. | United Kingdom | |||||||
KVH Media Group Entertainment Ltd. | United Kingdom | |||||||
KVH Media Group Communication Ltd. | United Kingdom | |||||||
KVH Media Group International Ltd. | United Kingdom | |||||||
KVH Media Group Ltd. | Cyprus | |||||||
KVH Media Group India Private Ltd | India | |||||||
/s/ GRANT THORNTON LLP | ||
Boston, Massachusetts | ||
March 11, 2022 |
/S/ BRENT C. BRUUN | ||||||||||||||
Brent C. Bruun | ||||||||||||||
Interim President and | ||||||||||||||
Chief Executive Officer |
/S/ ROGER A. KUEBEL | ||||||||||||||
Roger A. Kuebel | ||||||||||||||
Chief Financial Officer | ||||||||||||||
/S/ BRENT C. BRUUN | /S/ ROGER A. KUEBEL | |||||||||||||
Brent C. Bruun | Roger A. Kuebel | |||||||||||||
Interim President and Chief Executive Officer | Chief Financial Officer | |||||||||||||
Date: | March 11, 2022 | Date: | March 11, 2022 |
Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Firm ID | 248 |
Auditor Name | GRANT THORNTON LLP |
Auditor Location | Boston, Massachusetts |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 1,636 | $ 1,596 |
Property and equipment, accumulated depreciation | 64,260 | 57,992 |
Intangible assets, accumulated amortization | $ 9,944 | $ 8,917 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 20,342,695 | 18,910,001 |
Common stock, shares outstanding (in shares) | 19,862,534 | 18,429,840 |
Treasury stock, shares outstanding (in shares) | 1,432,694 | 1,432,694 |
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|||
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (9,763) | $ (21,940) | ||
Other comprehensive loss, net of tax: | ||||
Foreign currency translation adjustment | (177) | (465) | ||
Net other comprehensive loss | [1] | (177) | (465) | |
Total comprehensive loss | $ (9,940) | $ (22,405) | ||
|
Consolidated Statements of Cash Flows - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Cash flows from operating activities: | ||
Net loss | $ (9,763,000) | $ (21,940,000) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Provision for doubtful accounts | 530,000 | 333,000 |
Depreciation and amortization | 14,601,000 | 11,663,000 |
Impairment charge to goodwill and intangibles | 0 | 10,490,000 |
Deferred income taxes | (186,000) | (283,000) |
Loss on disposals of fixed assets | 494,000 | 713,000 |
Compensation expense related to stock-based awards and employee stock purchase plan | 4,109,000 | 3,462,000 |
Unrealized currency translation (gain) loss | (112,000) | 151,000 |
PPP loan forgiveness | (6,979,000) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (506,000) | (1,123,000) |
Inventories | 33,000 | (1,205,000) |
Prepaid expenses, other current assets, and current contract assets | 147,000 | (314,000) |
Other non-current assets and non-current contract assets | 509,000 | (484,000) |
Accounts payable | (251,000) | (3,274,000) |
Contract liabilities and long-term contract liabilities | (665,000) | (817,000) |
Accrued compensation, product warranty and other | 945,000 | (458,000) |
Other long-term liabilities | 3,000 | 7,000 |
Net cash provided by (used in) operating activities | 2,909,000 | (3,079,000) |
Cash flows from investing activities: | ||
Capital expenditures | (18,740,000) | (14,066,000) |
Cash paid for acquisition of intangible assets | (62,000) | (75,000) |
Proceeds from sale of fixed assets | 100,000 | 80,000 |
Purchases of marketable securities | (6,000) | (8,734,000) |
Maturities and sales of marketable securities | 12,000,000 | 13,500,000 |
Net cash used in investing activities | (6,708,000) | (9,295,000) |
Cash flows from financing activities: | ||
Proceeds from PPP loan | 0 | 6,927,000 |
Proceeds from stock options exercised and employee stock purchase plan | 2,939,000 | 1,216,000 |
Repurchase of common stock | 0 | (390,000) |
Payment of finance lease | (294,000) | (624,000) |
Net cash provided by financing activities | 2,645,000 | 7,129,000 |
Effect of exchange rate changes on cash and cash equivalents | (48,000) | (542,000) |
Net decrease in cash and cash equivalents | (1,202,000) | (5,787,000) |
Cash and cash equivalents at beginning of period | 12,578,000 | 18,365,000 |
Cash and cash equivalents at end of period | 11,376,000 | 12,578,000 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes, net of refunds | 419,000 | 1,051,000 |
Changes in accrued other and accounts payable related to property and equipment additions | 384,000 | 165,000 |
Right of use assets (ROU) assets arising from entering into new operating lease obligations | $ 407,000 | $ 3,032,000 |
Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a)Description of Business KVH Industries, Inc. (together with its subsidiaries, the Company or KVH) designs, develops, manufactures and markets mobile connectivity products and services for the marine and land markets, and inertial navigation products for both the commercial and defense markets. KVH's reporting segments are as follows: •the mobile connectivity segment and •the inertial navigation segment KVH’s mobile connectivity products enable customers to receive voice and Internet services, and live digital television via satellite services in marine vessels, recreational vehicles, buses and automobiles. KVH sells and leases its mobile connectivity products through an extensive international network of dealers and distributors. KVH also sells and leases products directly to end users. KVH’s mobile connectivity service sales represent primarily sales earned from satellite voice and Internet airtime services. KVH provides, for monthly fixed and usage fees, satellite connectivity services, including broadband Internet, data and VoIP services, to its TracPhone V-series customers. AgilePlans, a mini-VSAT Broadband service offering, is a monthly subscription model providing global connectivity to commercial maritime customers, including hardware, installation, broadband Internet, Voice over Internet Protocol (VoIP), entertainment and training content and global support for a monthly fee with no minimum commitment. KVH offers AgilePlans customers a variety of airtime data plans with varying data speeds and fixed data usage levels with overage charges per megabyte, which is similar to the plans that the Company offers to its other customers. The Company recognizes the monthly subscription fee as service revenue over the service delivery period. The Company retains ownership of the hardware that it provides to AgilePlans customers, who must return the hardware to KVH if they decide to terminate the service. Because KVH does not sell the hardware under AgilePlans, the Company does not recognize any product revenue when the hardware is deployed to an AgilePlans customer. KVH records the cost of the hardware used by AgilePlans customers as revenue-generating assets and depreciates the cost over an estimated useful life of five years. Since the Company is retaining ownership of the hardware, it does not accrue any warranty costs for AgilePlans hardware; however, any maintenance costs on the hardware is expensed in the period these costs are incurred. Mobile connectivity service sales also include the distribution of commercially licensed entertainment, including news, sports, music, and movies to commercial and leisure customers in the maritime, hotel, and retail markets through the KVH Media Group. KVH also earns monthly usage fees from third-party satellite connectivity services, including voice, data and Internet services, provided to its Inmarsat and Iridium customers who choose to activate their subscriptions with KVH. Mobile connectivity service sales also include engineering services provided under development contracts, sales from product repairs, and extended warranty sales. KVH's inertial navigation products offer precision fiber optic gyro (FOG)-based systems that enable platform and optical stabilization, navigation, pointing and guidance. KVH’s inertial navigation products also include tactical navigation systems that provide uninterrupted access to navigation and pointing information in a variety of military vehicles, including tactical trucks and light armored vehicles. KVH’s inertial navigation products are sold directly to U.S. and foreign governments and government contractors, as well as through an international network of authorized independent sales representatives. In addition, KVH's inertial navigation technology is used in numerous commercial products, such as navigation and positioning systems for various applications including autonomous platforms, precision mapping, dynamic surveying, train location control and track geometry measurement systems, industrial robotics and optical stabilization. KVH’s inertial navigation service sales include product repairs, engineering services provided under development contracts and extended warranty sales. (b)Principles of Consolidation The accompanying consolidated financial statements of KVH Industries, Inc. and its wholly owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America. All of the operating expenses of the subsidiaries that serve as the Company’s European, Singaporean, Japanese, and Brazilian international distributors are reflected within sales, marketing, and support within the accompanying consolidated statements of operations. All significant intercompany accounts and transactions have been eliminated in consolidation. (c)Significant Estimates and Assumptions and Other Significant Non-Recurring Transactions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of sales and expenses during the reporting periods. The 2021 consolidated financial statements reflect a $6,979 gain in other income related to the U.S. Small Business Administration’s forgiveness of the PPP loan during the third quarter of 2021. See Note 5. The 2020 consolidated financial statements reflect a $10,490 goodwill and intangible impairment charge on the KVH Media Group reporting unit within the mobile connectivity segment. See Note 1(k) and Note 9. On an on-going basis, the Company evaluates its significant estimates, including those related to terminal values and other assumptions and estimates used to evaluate the recoverability of long-lived assets and goodwill and estimated fair values of long-lived assets, including goodwill, amortization methods and periods. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. (d)Concentration of Credit Risk and Single Source Suppliers Cash, cash equivalents and marketable securities. The Company is potentially subject to financial instrument concentration of credit risk through its cash, cash equivalent and marketable securities investments. To mitigate these risks the Company maintains cash, cash equivalents and marketable securities with reputable and nationally recognized financial institutions. As of December 31, 2021, $13,147 classified as marketable securities was held by Wells Fargo and substantially all of the cash and cash equivalents were held by Bank of America, N.A. See Note 2 for a description of marketable securities. Trade accounts receivable. Concentrations of risk (see Note 11) with respect to trade accounts receivable are generally limited due to the large number of customers and their dispersion across several geographic areas. Although the Company does not foresee that credit risk associated with these receivables will deviate from historical experience, repayment is dependent upon the financial stability of those individual customers. The Company establishes allowances for potential bad debts and evaluates, on a monthly basis, the adequacy of those reserves based upon historical experience and its expectations for future collectability concerns. The Company performs ongoing credit evaluations of the financial condition of its customers and generally does not require collateral. Activity within the Company’s allowance for doubtful accounts for the periods presented is as follows:
Revenue and operations. Certain components from third parties used in the Company’s products are procured from single sources of supply. The failure of a supplier, including a subcontractor, to deliver on schedule could delay or interrupt the Company’s delivery of products and thereby materially adversely affect the Company’s revenues and operating results. (e)Revenue Recognition In accordance with Accounting Standards Codification (ASC) 606, revenue is recognized when a customer obtains control of promised products and services. The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for these products and services. To achieve this core principle, the Company applies the following five steps: 1) Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the products and services to be transferred and identifies the payment terms related to these products and services, (ii) the contract has commercial substance, and (iii) the Company determines that collection of substantially all consideration for products and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors, including the customer’s historical payment pattern or, in the case of a new customer, published credit and financial information pertaining to the customer. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the products and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the product or service is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised products and services, the Company must apply judgment to determine whether promised products and services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised products and services are accounted for as a combined performance obligation. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products and services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method, depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct products or services that are substantially the same qualify as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct product or service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. 5) Recognize revenue when or as the Company satisfies a performance obligation The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised product or service to a customer. Product sales Revenue from product sales is recognized when control of the goods is transferred to the customer, which generally occurs at the Company’s plant or warehouse upon delivery to the carrier for shipment. Revenue related to shipping and handling is recognized when the products are shipped and the associated costs are accrued for based on the Company’s election to account for shipping and handling activities as a fulfillment of the promise to transfer the products and not as a combined promise. For certain inertial navigation product sales, customer acceptance or inspection may be required before control of the goods is transferred to the customer. For those sales, revenue is recognized after notification of customer acceptance and the goods have been delivered to the carrier for shipment. In certain circumstances customers may request a bill-and-hold arrangement. Under these bill-and-hold arrangements, revenue is recognized when the Company has fulfilled all of its performance obligations, the units are segregated for the specific customer only, and the goods are ready for physical transfer to the customer in accordance with their defined contract delivery schedule. The Company’s standard payment terms for product sales are generally Net 30. Under certain limited conditions, the Company, at its sole discretion, provides for the return of goods. No product is accepted for return and no credit is allowed on any returned product unless the Company has granted and confirmed prior written permission by means of appropriate authorization. The Company establishes reserves for potential sales returns, credits, and allowances, and evaluates, on a monthly basis, the adequacy of those reserves based upon historical experience and expectations for the future. Contracts with multiple performance obligations The Company sells products and services through arrangements that in certain instances bundle VSAT equipment, satellite connectivity and other services. For these arrangements, the Company has determined that the performance obligations are not distinct in the context of the contracts with certain customers. The Company recognizes product revenue under these arrangements over the estimated satellite connectivity customer life, which is estimated to be five years based on historical evidence. Satellite connectivity and media content service sales Directly sold and re-sold satellite connectivity service for voice, data and Internet is recognized monthly based primarily on contracted fixed-fee schedules as well as any overages for minutes or megabytes of traffic processed. The Company has evaluated whether it obtains control of the services that are being transferred to the customer in assessing gross revenue reporting as principal verse net revenue reporting as agent for its satellite connectivity service sales and its payments to the applicable service providers. Based on the Company's assessment of the indicators, the Company has determined that gross revenue reporting as a principal is appropriate. The applicable indicators of gross revenue reporting include, but are not limited to, the following: •The Company is the primary obligor in its arrangements with its subscribers. The Company manages all interactions with the subscribers, while satellite connectivity service providers do not interact with the subscribers. In addition, the Company assumes the entire performance risk under its arrangements with the subscribers and in the event of a performance issue, the Company may incur reductions in fees without regard for any recourse that the Company may have with the applicable satellite connective service providers. •The Company has discretion in establishing pricing, as the pricing under its arrangements with the subscribers is negotiated through a contracting process. The Company then separately negotiates the fees with the applicable satellite service providers. •The Company has complete discretion in determining which satellite service providers it will contract with. As a result, the Company has determined that it earns revenue (as a principal) from the delivery of satellite connectivity services to its subscribers and records all satellite connectivity service sales to subscribers as gross sales. All associated regulatory service fees and costs are recorded net in the consolidated financial statements. The Company sells prepaid airtime services in the form of prepaid cards. A liability is established upon purchase equal to the cash paid for the prepaid card. The Company recognizes revenue from the prepaid services upon the use of the prepaid card by the customer. The Company does not offer refunds for unused prepaid services. Prepaid airtime services have not been a significant portion of the Company’s total sales. Media content sales include the Company's distribution of commercially licensed news, sports, movies and music content for commercial and leisure customers in the maritime, hotel, and retail markets. The Company typically recognizes revenue from media content sales ratably over the period of the service contract. The accounting estimates related to the recognition of satellite connectivity and media content service sales require the Company to make assumptions about future billing adjustments for disputes with subscribers as well as unauthorized usage. The Company recognizes the monthly subscription fee as service revenue over the service delivery period. Under AgilePlans, the Company retains ownership of the hardware that it provides to these customers, who must return the hardware to KVH if they decide to terminate the service. Because KVH does not sell the hardware under AgilePlans, the Company does not recognize any product revenue when the hardware is deployed to an AgilePlans customer. Inertial navigation service sales The Company engages in contracts for development, production, and services activities related to standard product modification or enhancement. The Company considers the nature of these contracts and the types of products and services provided when determining the proper accounting for a particular contract. Customer and government-agency contracted engineering service and sales under development contracts are recognized primarily during the periods in which the Company performs the service or development efforts in accordance with the agreement. Services performed under these types of contracts include engineering studies, surveys, building construction, prototype development, and program management. Performance is determined principally by comparing the accumulated labor hours incurred to date with management’s estimate of the total labor hours to complete the contracted work. Incurred labor hours represent work performed, which corresponds with and best depicts the transfer of control to the customer. This continuous transfer of control to the customer is supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit and take control of any work in process. The Company establishes billing terms at the time project deliverables and milestones are agreed. Unbilled revenue recognized in excess of the amounts invoiced to clients are classified within the accompanying consolidated balance sheets as “accounts receivable” as the Company's right to consideration is unconditional. Product service sales Product service sales other than under development contracts are recognized when completed services are delivered to the customer. The Company also sells extended warranty contracts on mobile connectivity and inertial navigation products. Sales under these contracts are recognized ratably over the contract term. Product service sales including extended warranties are not a significant portion of the Company’s total sales. Sales-type leases Revenue is recognized on sales-type leases primarily from the TracPhone mini-VSAT products. In accordance with ASC 842, the Company records the leases at a price typically equivalent to normal selling price and in excess of the cost or carrying amount. Upon delivery, the Company records the net present value of all payments under these leases as product revenue, and the related costs of the product are charged to cost of sales. See Note 16. (f)Leases In accordance with ASC 842, the Company recognizes all leases greater than one year in duration on the balance sheet as right-of-use assets and lease liabilities. In ASC 842, a lease is defined as follows: “[a] contract is or contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.” Many of our lease agreements contain renewal options which are recognized if it is determined that the Company is reasonably certain to renew the lease at inception or when a triggering event occurs. Some of our lease agreements contain rent escalation clauses, rent holidays, capital improvement funding or other lease concessions. The Company recognizes the minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement and amortize such expense over the term of the lease beginning with the commencement date. Variable lease components that are not fixed at the beginning of the lease are recognized as incurred. Under certain third-party service agreements, the Company controls a specific space or underlying asset used in providing the service by the third-party service provider. These arrangements meet the definition under ASC 842 and therefore are accounted for under ASC 842. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when reasonably certain to be exercised. The present value of lease payments is determined using the incremental borrowing rate based on the information available at the lease commencement date. (g) Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, which include cash equivalents, investments, accounts receivable, accounts payable and accrued expenses, approximate their fair values due to the short maturity of these instruments. See Note 2 for more information on the fair value of the Company’s marketable securities. The carrying amount of the Company’s debt, and capital lease approximates fair value based on currently available quoted rates of similarly structured debt facilities. See Note 5 for more information on the fair value of the Company’s debt and line of credit and Note 16 for the Company's finance lease. (h)Cash, Cash Equivalents, and Marketable Securities In accordance with the Company’s investment policy, cash in excess of operational needs is invested in money market mutual funds, government agency bonds, United States treasuries, municipal bonds, corporate notes, or certificates of deposit. All highly liquid investments with a maturity date of three months or less at the date of purchase are classified as cash equivalents. The Company determines the appropriate classification of marketable securities at each balance sheet date. As of December 31, 2021 and 2020, all of the Company’s marketable securities have been designated as available-for-sale and are carried at their fair value with unrealized gains and losses included in accumulated other comprehensive loss in the accompanying consolidated balance sheets. The Company reviews investments in debt securities for other than temporary impairment whenever the fair value of an investment is less than amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers whether it intends to sell the security, whether it expects to recover the credit loss, and if it is more likely than not that the Company will be required to sell the security prior to recovery. Evidence considered in this assessment includes the reasons for the impairment, compliance with the Company’s investment policy, the severity and duration of the impairment, changes in value subsequent to year-end and forecasted performance of the investee. The Company has reviewed its securities with unrealized losses as of December 31, 2021 and 2020 and has concluded that no other-than-temporary impairments exist. (i)Inventories Inventories are stated at the lower of cost and net realizable value using the first-in first-out costing method. The Company adjusts the carrying value of its inventory based on the consideration of excess and obsolete components based on future estimate demand. The Company records inventory charges to costs of product sales. (j)Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are computed on the straight-line method over the estimated useful lives of the respective assets. The principal lives used in determining the depreciation rates of various assets are: buildings and improvements, 5-40 years; leasehold improvements, shorter of original lease term or useful life; machinery, satellite hubs and equipment, 4-10 years; office and computer equipment, 3-7 years; and motor vehicles, 5 years. (k)Goodwill, Intangible Assets and other Long-Lived Assets The Company’s goodwill and intangible assets are associated with the purchase of Virtek Communication (now known as KVH Industries Norway AS) in September 2010 and Headland Media Limited (now known as the KVH Media Group) in May 2013. In accordance with ASC Update No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test of Goodwill Impairment. (ASC 350), the Company performs a goodwill impairment test at least annually based on either an optional qualitative assessment or a quantitative analysis comparing the estimated fair value of a reporting unit to its carrying value as of the test date. Any impairment charges would be based on the quantitative analysis. As a result of the 2020 annual impairment test, the Company recorded goodwill impairment charges of $8,732 and intangible asset impairment charges of $1,758 related to its KVH Media Group reporting unit. Prior to 2020, the Company had not recorded or incurred goodwill impairment charges. For the October 1, 2020 test, due to the uncertainty that the global pandemic presented during 2020, the Company determined that it should perform a quantitative analysis of goodwill impairment. The Company performed this full quantitative analysis in the fourth quarter of 2020 in conjunction with its annual budgeting and long-term planning cycle. The revenues and cash flows of KVH Media Group have been significantly impacted by the global reduction in travel since the start of the pandemic. With the assistance of valuation specialists, the Company utilized an income approach and market approach to estimate the fair value of its reporting units, based on assumptions the Company believed to be reasonable. As an additional corroborative test of the reasonableness of those assumptions, the Company completed a reconciliation of its market capitalization and overall enterprise value to the fair value of all of its reporting units as of October 1, 2020. The Company estimated that, as of October 1, 2020, the fair value of the mobile broadband reporting unit exceeded its carrying value by 18%; however, the carrying value of the KVH Media Group reporting unit exceeded its fair value by $10,156, which signified that an impairment had occurred and identified a triggering event to review the other long-lived assets for impairment. In accordance with ASC 360-10, Property, Plant and Equipment – Impairment or Disposal of Long-Lived Assets (ASC 360), with regard to its long-lived assets, the Company performed an undiscounted cash flow analysis and concluded that the carrying value of the asset group was not recoverable. Accordingly, the Company then performed an analysis to estimate the fair value of the other long-lived assets and recognized an impairment charge of $1,758, against the distribution rights intangible asset, the amount by which the carrying value of the asset group’s other long-lived assets exceeded their estimated fair value, and a reduction in the associated deferred tax liability of $334. As a result, the Company recognized an impairment charge to KVH Media Group’s goodwill in the amount of $8,732, the remaining amount by which the carrying value exceeded its fair value. For the October 1, 2021 test, the Company performed a qualitative assessment of goodwill impairment (Step 0) and concluded that for the mobile broadband reporting unit, it was more likely than not that, for this reporting unit, the fair value exceeded the carrying value. For the KVH Media Group reporting unit, the Company determined that it was necessary to perform the Step 1 quantitative analysis due to the ongoing global pandemic and its impacts. The Company utilized an income approach to estimate the fair value of the reporting unit. The Company believes that the assumptions used to estimate the fair value of its KVH Media Group reporting unit were reasonable. The Company estimated that, as of October 1, 2021, the fair value of its KVH Media Group exceeded its carrying value by more than 20%. A negative trend of operating results or material changes to forecasted operating results could result in the requirement for additional interim goodwill impairment tests and the potential of future goodwill impairment charges, which could be material. The Company did not identify any impairment indicators that required an interim goodwill impairment test as of December 31, 2021. Intangible assets with estimated lives and other long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of intangible assets with estimated lives and other long-lived assets is measured by a comparison of the carrying amount of an asset or asset group to future net undiscounted cash flows expected to be generated by the asset or asset group. If these comparisons indicate that an asset is not recoverable, the Company will recognize an impairment loss for the amount by which the carrying value of the asset or asset group exceeds the related estimated fair value. Estimated fair value is based on either discounted future operating cash flows or appraised values, depending on the nature of the asset. During 2021, there were no events or changes in circumstances that indicated any of the carrying amounts of the Company’s intangible assets or other long-lived assets may not be recoverable. See Note 9 for further discussion of goodwill and intangible assets. (l)Other Non-Current Assets Other non-current assets are primarily comprised of long-term lease receivables, prepaid expenses, and deposits. (m)Product Warranty The Company’s products carry standard limited warranties that range from to two years and vary by product. The warranty period begins on the date of retail purchase or lease by the original purchaser. The Company accrues estimated product warranty costs at the time of sale and any additional amounts are recorded when such costs are probable and can be reasonably estimated. Factors that affect the Company’s warranty liability include the number of units sold or leased, historical and anticipated rates of warranty repairs and the cost per repair. Warranty and related costs are reflected within sales, marketing and support in the accompanying consolidated statements of operations. As of December 31, 2021 and 2020, the Company had accrued product warranty costs of $1,179 and $1,812, respectively. The following table summarizes product warranty activity during 2021 and 2020:
(n)Shipping and Handling Costs Shipping and handling costs are expensed as incurred and included in cost of sales. Billings for shipping and handling are reflected within net sales in the accompanying consolidated statements of operations. (o)Research and Development Expenditures for research and development, including customer-funded research and development, are expensed as incurred. Revenue and related development costs from customer-funded research and development are as follows:
(p)Advertising Costs Costs related to advertising are expensed as incurred. Advertising expense was $1,259 and $1,285 for the years ended December 31, 2021 and 2020, respectively, and is included in sales, marketing, and support expense in the accompanying consolidated statements of operations. (q)Foreign Currency Translation The financial statements of the Company’s foreign subsidiaries located in Denmark and Singapore are maintained using the United States dollar as the functional currency. Exchange rates in effect on the date of the transaction are used to record monetary assets and liabilities. Revenue and other expense elements are recorded at rates that approximate the rates in effect on the transaction dates. Foreign currency exchange gains and losses are recognized within “Other income, net” in the accompanying consolidated statements of operations. For the years ended December 31, 2021 and 2020, the Company recorded a total of net foreign currency exchange losses in its accompanying consolidated statements of operations of $3 and $48, respectively, which is comprised of both realized and unrealized foreign currency exchange gains and losses. The financial statements of the Company’s foreign subsidiaries located in the United Kingdom, Brazil, Norway, Cyprus, India and Japan use the foreign subsidiaries’ respective local currencies as the functional currency. The Company translates the assets and liabilities of these foreign subsidiaries at the exchange rates in effect at year-end. Net sales, costs and expenses are translated using average exchange rates in effect during the year. Gains and losses from foreign currency translation are credited or charged to accumulated other comprehensive loss included in stockholders' equity in the accompanying consolidated balance sheets. (r)Income Taxes The Company is subject to income taxes in the U.S. and in numerous foreign jurisdictions. The Company accounts for income taxes following ASC Topic 740, Accounting for Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some or all of a deferred tax asset will not be realized. The Company determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, no amount of the benefit attributable to the position is recognized. The tax benefit to be recognized of any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes interest and penalties within the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets. See Note 8 for further discussion of income taxes. (s)Net Loss per Common Share Basic net loss per share is calculated based on the weighted average number of common shares outstanding during the period. Diluted net income per share incorporates the dilutive effect of common stock equivalent options, warrants and other convertible securities, if any, as determined in accordance with the treasury stock accounting method. For the years ended December 31, 2021 and 2020 since there was a net loss, the Company excluded all 747 and 1,566 shares, respectively, in outstanding stock options and non-vested restricted shares from its diluted loss per share calculation, as inclusion of these securities would have reduced the net loss per share. A reconciliation of the basic and diluted weighted average common shares outstanding is as follows:
(t)Contingent Liabilities The Company estimates the amount of potential exposure it may have with respect to claims, assessments and litigation in accordance with ASC 450, Contingencies. As of December 31, 2021 and 2020, the Company was not party to any lawsuit or proceeding that, in management's opinion, was likely to materially harm the Company's business, results of operations, financial condition or cash flows. It is not always possible to predict the outcome of litigation, as it is subject to many uncertainties. Additionally, it is not always possible for management to make meaningful estimates of the potential loss or range of loss associated with such litigation. (u)Operating Segments The Company operates in two segments, the mobile connectivity and inertial navigation segments. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. The Company’s chief operating decision maker is its President, Chief Executive Officer and Chairman of the Board. The Company operates in a number of major geographic areas, including internationally. Revenues are generated from international locations, primarily consisting of Canada, European countries, both inside and outside the European Union, as well as Africa, Asia/Pacific, the Middle East, and South America (see Note 12, "Segment Reporting"). (v)Recently Issued Accounting Standards From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies. Recently issued standards typically do not require adoption until a future effective date. Prior to their effective date, the Company evaluates the pronouncements to determine the potential effects of adoption on our consolidated financial statements. Standard Implemented ASC Update No. 2019-12 In December 2019, the FASB issued ASC Update No. 2019-12, Income Taxes (Topic 740). The update is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The purpose of Update No. 2019-12 is to remove certain exceptions for recognizing deferred taxes for investments and simplify the accounting for income taxes in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. It amends the requirements relating to the accounting for "hybrid" tax regimes. Update No. 2019-12 did not have a material impact on the Company's financial position or results of operations. Standards to be Implemented ASC Update No. 2016-13, ASC Update No. 2018-19, ASC Update No. 2019-04, ASC Update No. 2019-05, ASC Update No. 2019-10, ASC Update No. 2019-11 and ASC Update No. 2020-02 In June 2016, the FASB issued ASC Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The purpose of Update No. 2016-13 is to replace the incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit loss estimates. In November 2018, the FASB issued ASC Update No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. This update introduced an expected credit loss methodology for the impairment of financial assets measured at amortized cost. The amendment also clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. In May 2019, the FASB issued ASC Update No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. This update introduced clarifications of the Board’s intent with respect to accrued interest, the transfer between classifications or categories for loans and debt securities, recoveries, reinsurance recoverables, projects of interest rate environments for variable-rate financial instruments, costs to sell when foreclosure is probable, consideration of expected prepayments when determining the effective interest rate, vintage disclosures, and extension and renewal options. In May 2019, the FASB issued ASC Update No. 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief. The amendments in the update ease the transition for entities adopting ASC Update 2016-13 and increase the comparability of financial statement information. With the exception of held-to-maturity debt securities, the amendments allow entities to irrevocably elect to apply the fair value option to financial instruments that were previously recorded at amortized cost basis within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. In November 2019, the FASB issued ASC Update No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates. The amendments in this update change some effective dates for certain new accounting standards including those pertaining to Topic 326 discussed above, for certain types of entities. In November 2019, the FASB issued ASC Update No. 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses (Topic 326). The update is effective for entities that have adopted ASU 2016-13. The purpose of Update No. 2019-11 is to clarify the scope of the recovery guidance to purchased financial assets with credit deterioration. In February 2020, the FASB issued ASC Update No. 2020-02, Financial Instruments – Credit Losses (Topic 326) and Leases (Topic 842). The purpose of Update No. 2020-02 is to clarify the scope and interpretation of the standard. As a smaller reporting entity, the effective date for Topic 326 will be the fiscal year beginning after December 15, 2022. The adoption of Update Nos. 2016-13, 2018-19, 2019-04, 2019-05, 2019-10, 2019-11 and 2020-02 is not expected to have a material impact on the Company's financial position or results of operations. There are no other recent accounting pronouncements issued by the FASB that the Company expects would have a material impact on the Company's financial statements.
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | Marketable Securities Marketable securities as of December 31, 2021 and 2020 consisted of the following:
The effective maturity date of the United States treasuries is less than one year. Interest income from marketable securities was $6 and $135 for the years ended December 31, 2021 and 2020, respectively.
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Inventories | Inventories Inventories are stated at the lower of cost and net realizable value using the first-in first-out costing method. Inventories as of December 31, 2021 and 2020 include the costs of material, labor, and factory overhead. Components of inventories consist of the following:
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Property and Equipment | Property and Equipment Property and equipment, net, as of December 31, 2021 and 2020 consist of the following:
Depreciation expense for the years ended December 31, 2021 and 2020 amounted to $13,574 and $10,659, respectively. Certain revenue-generating hardware assets are utilized by the Company in the delivery of the Company's airtime services, media, and other content.
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Line of Credit | Debt and Line of Credit Long-term debt consists of the following:
Paycheck Protection Program Loan In May 2020, the Company received a $6,927 loan (the PPP Loan) from Bank of America, N.A., (the Lender) under the Paycheck Protection Program (PPP), which was established under the Coronavirus Aid, Relief, and Economic Security Act (as modified by the Paycheck Protection Flexibility Act of 2020, the CARES Act) and is administered by the U.S. Small Business Administration (the SBA). The term of the PPP Loan was two years from the funding date, and the interest rate was 1.00%. Interest on the loan accrued from the funding date, but was deferred. In August 2021, the Company applied for forgiveness of the full amount of the PPP Loan. On September 24, 2021, the Company received notification from the Lender that, on September 19, 2021, the SBA had determined that the PPP Loan forgiveness application was approved, and the PPP Loan, including all accrued interest thereon, was paid in full by the SBA. The forgiveness of the PPP Loan including all interest accrued of $6,979 is recognized in Other income, net in the accompanying consolidated statements of operations for the year ended December 31, 2021. Line of Credit Effective October 30, 2018, the Company entered into an amended and restated three-year senior secured credit facility agreement (the 2018 Credit Agreement) with Bank of America, N.A., as Administrative Agent, and the lenders named from time to time as parties thereto (the 2018 Lenders), which included a reducing revolving credit facility (the 2018 Revolver) of up to $20,000 initially and reducing to $15,000 on December 31, 2019, to be used for general corporate purposes. The Company's obligations under the 2018 Credit Agreement are secured by substantially all of its assets and the pledge of equity interests in certain of its subsidiaries. As of December 31, 2021, no amounts were outstanding under the 2018 Revolver. Borrowings under the 2018 Revolver are subject to the satisfaction of various conditions precedent at the time of each borrowing, including the continued accuracy of the Company’s representations and warranties and the absence of any default under the 2018 Credit Agreement. As of December 31, 2021, the Company was only able to draw on $10,900 of the $15,000 facility due to covenant restrictions. The 2018 Credit Agreement contained two financial covenants, a maximum Consolidated Leverage Ratio and a minimum Consolidated Fixed Charge Coverage Ratio, each as defined in the 2018 Credit Agreement. The Consolidated Leverage Ratio could not exceed 2.50:1.00 through December 31, 2020 and may not exceed 2.00:1.00 after December 31, 2020. The Consolidated Fixed Charge Coverage Ratio may not be less than 1.25:1.00. On July 30, 2020, the Company amended the 2018 Credit Agreement to reflect the incurrence of the PPP Loan. Under the amended facility, the principal and interest on the PPP Loan were not included in the maximum Consolidated Leverage Ratio or the minimum Consolidated Fixed Charge Coverage Ratio calculations except as to any portion of the PPP Loan that is not ultimately forgiven. In September 2021, the PPP Loan was forgiven in full. On October 29, 2021, the Company amended the 2018 Credit Agreement to maintain the $15,000 2018 Revolver, extend the maturity date of the 2018 Revolver to October 28, 2022, eliminate the Consolidated Fixed Charge Coverage Ratio financial covenant, add a minimum trailing four-quarter Consolidated Adjusted EBITDA financial covenant of $3,000, modify the definition of Consolidated Adjusted EBITDA, modify the interest rate margins and certain lender fees, and transition the interest rate provisions based on LIBOR to the Bloomberg Short Term Bank Yield Index. In addition, Bank of America became the sole lender under the 2018 Credit Agreement. The 2018 Credit Agreement imposes certain other affirmative and negative covenants, including without limitation covenants with respect to the payment of taxes and other obligations, compliance with laws, performance of material contracts, creation of liens, incurrence of indebtedness, investments, dispositions, fundamental changes, restricted payments, changes in the nature of the Company’s business, transactions with affiliates, corporate and accounting changes, and sale and leaseback arrangements.
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Commitment and Contingencies |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies The Company has certain operating leases and other commitments for satellite capacity, various equipment, and facilities. The following reflects future minimum payments under operating leases and other commitments that have initial or remaining non-cancelable terms at December 31, 2021:
(a) Includes the future minimum lease payments for the Company's operating leases as seen in Note 16. Total rent expense incurred under facility operating leases for the years ended December 31, 2021 and 2020 amounted to $868 and $875, respectively. Total expense incurred under satellite capacity and equipment operating leases and other commitments for the years ended December 31, 2021 and 2020 amounted to $39,216 and $34,990, respectively, which also includes payments for usage charges in excess of the minimum contractual requirements. In the normal course of business, the Company enters into unconditional purchase order obligations with its suppliers for inventory and other operational purchases. Outstanding and unconditional purchase order obligations were $26,371 as of December 31, 2021, which the Company expects to fulfill in 2022. The Company did not have any off-balance sheet commitments, guarantees, or standby repurchase obligations as of December 31, 2021. Legal Matters In the ordinary course of business, the Company is a party to inquiries, legal proceedings and claims including, from time to time, disagreements with vendors and customers. The Company is not a party to any lawsuit or proceeding that, in management's opinion, is likely to materially harm the Company's business, results of operations, financial condition, or cash flows.
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Stockholders' Equity |
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Share-based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity The Company recognizes stock-based compensation in accordance with the provisions of ASC Topic 718, Compensation-Stock Compensation. Stock-based compensation expense, excluding compensation charges related to our employee stock purchase plan, or the ESPP, was $4,053 and $3,414 for the years ended December 31, 2021 and 2020, respectively. The Company is authorized to grant stock options, restricted stock awards and other stock-based awards under its Amended and Restated 2016 Equity and Incentive Plan (the 2016 Plan) with respect to up to 4,800 shares of common stock, an increase of 1,800 shares reserved for issuance under the previous 2016 Plan as approved by our shareholders on June 10, 2020. Options have generally been granted with an exercise price equal to the fair market value of the common stock on the date of grant and have generally provided for vesting in equal annual amounts over four years beginning on the first anniversary of the date of the grant. No options are exercisable for periods of more than five years after date of grant. Under the 2016 Plan, each share issued under awards other than options and stock appreciation rights will reduce the number of shares reserved for issuance by two shares. Shares issued under options or stock appreciation rights will reduce the shares reserved for issuance on a share-for-share basis. The 2016 Plan and earlier equity compensation plans, pursuant to which an aggregate of 14,215 shares of the Company’s common stock were reserved for issuance, were all approved by the Company's shareholders. As of December 31, 2021, 458 shares were available for future grants. The Compensation Committee of the Board of Directors administers the equity compensation plans, approves the individuals to whom awards will be granted and determines the number of shares and other terms of each award. Outstanding options under the Company's equity compensation plans at December 31, 2021 expire from March 2022 through March 2026. None of the Company’s outstanding options includes performance-based or market-based vesting conditions as of December 31, 2021. (a)Employee Stock Options The Company has estimated the fair value of each option grant on the date of grant using the Black-Scholes option-pricing model. The expected volatility assumption is based on the historical daily price data of the Company’s common stock over a period equivalent to the weighted average expected life of the Company’s options. The expected term of options granted is derived using assumed exercise rates based on historical exercise patterns and represents the period of time the options granted are expected to be outstanding. The risk-free interest rate is based on the actual U.S. Treasury zero-coupon rates for bonds matching the expected term of the option as of the option grant date. The dividend yield of zero is based upon the fact that the Company has not historically declared or paid cash dividends, and does not expect to declare or pay dividends in the foreseeable future. The per share weighted-average fair values of stock options granted during 2021 and 2020 were $4.70 and $2.88, respectively. The weighted-average assumptions used to value options as of their grant date were as follows:
The changes in outstanding stock options for the year ended December 31, 2021 and 2020 are as follows:
The total aggregate intrinsic value of options exercised was $914 and $269 in 2021 and 2020, respectively. As of December 31, 2021, there was $3,599 of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 2.42 years. In 2021 and 2020, the Company recorded compensation charges of $1,740 and $1,401, respectively, related to stock options. Compensation costs for options subject only to service conditions that vest ratably are recognized on a straight-line basis over the requisite service period for the entire award. During 2021 and 2020, cash received under stock option plans for exercises was $2,709 and $880, respectively. (b)Restricted Stock The Company granted 217 and 317 restricted stock awards to employees under the terms of the 2016 Plan or the Amended and Restated 2006 Stock Incentive Plan (2006 Plan) for the years ended December 31, 2021 and 2020, respectively. The restricted stock awards have generally provided for vesting annually over four years from the date of grant subject to the recipient remaining an employee through the applicable vesting dates. Compensation expense for restricted stock awards is measured at fair value on the date of grant based on the number of shares granted and the quoted market closing price of the Company’s common stock. Such value is recognized as expense over the vesting period of the award, net of forfeitures. The weighted-average grant-date fair value of restricted stock granted during 2021 and 2020 was $12.23 and $8.19 per share, respectively. As of December 31, 2021, there was $3,838 of total unrecognized compensation expense related to restricted stock awards, which is expected to be recognized over a weighted-average period of 2.21 years. Compensation costs for awards subject only to service conditions that vest ratably are recognized on a straight-line basis over the requisite service period for the entire award. Compensation cost for awards initially subject to certain performance conditions are recognized on a ratable basis over the requisite service period for the entire award. In 2021 and 2020, the Company recorded compensation charges of $2,313 and $2,013, respectively, related to restricted stock awards. Restricted stock activity under the 2006 Plan and the 2016 Plan for 2021 is as follows:
(c)Employee Stock Purchase Plan Under the Company's Amended and Restated 1996 Employee Stock Purchase Plan (ESPP), an aggregate of 1,650 shares of common stock have been reserved for issuance, of which 821 shares remain available as of December 31, 2021. The ESPP covers all of the Company’s employees. Under the terms of the ESPP, eligible employees can elect to have up to six percent of their pre-tax compensation withheld to purchase shares of the Company’s common stock on a semi-annual basis at 85% of the market price on the first or last day of each purchase period, whichever is lower. During 2021 and 2020, shares issued under this plan were 26 and 44 shares, respectively. The Company utilizes the Black-Scholes option-pricing model to calculate the fair value of these discounted purchases. The fair value of the 15% discount is recognized as compensation expense over the purchase period. The Company applies a graded vesting approach because the ESPP provides for multiple purchase periods and is, in substance, a series of linked awards. In 2021 and 2020, the Company recorded compensation charges of $56 and $48, respectively, related to the ESPP. During 2021 and 2020, cash received under the ESPP was $230 and $336, respectively. (d)Stock-Based Compensation Expense The following presents stock-based compensation expense, including expense for the ESPP, in the Company's consolidated statements of operations for the years ended December 31, 2021 and 2020.
(e) Accumulated Other Comprehensive Loss (AOCI) Comprehensive loss includes net income (loss) and unrealized gains and losses from foreign currency translation. The components of the Company’s comprehensive loss and the effect on earnings for the periods presented are detailed in the accompanying consolidated statements of comprehensive loss.
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Income Taxes |
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Income Taxes | Income Taxes Income tax (benefit) expense for the years ended December 31, 2021 and 2020 attributable to loss from operations is presented below.
Actual income tax (benefit) expense differs from the “expected” income tax (benefit) expense computed by applying the United States Federal statutory income tax rate of 21% for both 2021 and 2020 to loss before tax (benefit) expense, as follows:
Loss before income tax (benefit) expense determined by tax jurisdiction, are as follows:
Deferred tax assets and liabilities for the periods presented consisted of the following:
As of December 31, 2021 the Company has federal and state tax loss carryforwards of approximately $22,103 and $16,878, respectively. The federal loss carryforward has no expiration date. The state losses expire through the year 2041. As of December 31, 2021, the Company had federal research and development tax credit carry-forwards in the amount of $6,238 and other general business credits of $9 that expire in years 2028 through 2041. As of December 31, 2021, the Company had foreign tax credit carry-forwards in the amount of $2,345 that expire in years 2026 through 2027. As of December 31, 2021, the Company had state research and development tax credit carry-forwards in the amount of $4,918 that expire in years 2022 through 2028. The Company also had other state tax credit carry-forwards of $114 available to reduce future state tax expense that expire in years 2022 through 2028. The Company’s ability to utilize these net operating loss carry-forwards and tax credit carry-forwards may be limited in the future if the Company experiences an ownership change pursuant to Internal Revenue Code Section 382. An ownership change occurs when the ownership percentages of 5% or greater stockholders change by more than 50% over a three-year period. In assessing the realizability of its net deferred tax assets, the Company considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2021, the Company concluded that a net increase of $4,648 of the valuation allowance was appropriate. The change was the result of an increase in domestic tax credits, net operating loss balances, and property and equipment differences due to depreciation. As part of the Company’s analysis, the Company evaluated, among other factors, its recent history of generating tax losses and its near-term forecasts of future taxable income or losses. As of December 31, 2021, unremitted foreign earnings, which were not significant, have been retained by the Company's foreign subsidiaries for indefinite reinvestment. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company could be subject to state tax and withholding taxes payable to various foreign countries. The Company establishes reserves for uncertain tax positions based on management’s assessment of exposure associated with tax deductions, permanent tax differences, and tax credits. The tax reserves are analyzed periodically and adjustments are made as events occur that warrant adjustment to the reserve. The Company's policy is to recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. The aggregate changes in the total gross amount of unrecognized tax benefits are as follows:
All unrecognized tax benefits as of December 31, 2021 and 2020, if recognized, would result in a reduction of the Company's effective tax rate. The Company recorded interest and penalties of $46 and $61 in its consolidated statement of operations for the years ended December 31, 2021 and 2020, respectively. Total accrued interest and penalties related to tax positions taken on our tax returns and included in non-current income taxes payable was approximately $255 and $208 as of December 31, 2021 and 2020, respectively. The timing of any resolution of income tax examinations is highly uncertain, as are the amounts and timing of any settlement payment. These events could cause fluctuations in the balance sheet classification of current and non-current assets and liabilities. The Company estimates that it is reasonably possible that the balance of unrecognized tax benefits as of December 31, 2021 may decrease approximately $19 in the next twelve months as a result of a lapse of statutes of limitation and settlements with taxing authorities. The Company’s tax jurisdictions include the United States, the United Kingdom, Denmark, Cyprus, Norway, Brazil, Singapore, Japan, and India. In general, the statute of limitations with respect to the Company's United States federal income taxes has expired for years prior to 2018, and the relevant state and foreign statutes vary. However, preceding years remain open to examination by United States federal and state and foreign taxing authorities to the extent of future utilization of net operating losses and research and development tax credits generated in each preceding year.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Intangible assets arose from an acquisition made prior to 2013 and the acquisition of KVH Media Group (acquired as Headland Media Limited) in May 2013. Intangibles arising from the acquisition made prior to 2013 were amortized on a straight-line basis over an estimated useful life of 7 years. Intangibles arising from the acquisition of KVH Media Group are being amortized on a straight-line basis over the estimated useful life of: (i) 10 years for acquired subscriber relationships and (ii) 15 years for distribution rights. Due to the impairment of distribution rights during the Company's 2020 annual impairment test, the estimated useful life of distribution rights was reduced from 15 years to 1 year. The intangibles arising from the KVH Media Group acquisition were recorded in pounds sterling and fluctuations in exchange rates cause these amounts to increase or decrease from time to time. In January 2017, the Company completed the acquisition of certain subscriber relationships from a third party. This acquisition did not meet the definition of a business under ASC 2017-01, Business Combinations (Topic 805)-Clarifying the Definition of a Business, which the Company adopted on October 1, 2016. The Company ascribed $100 of the initial purchase price to the acquired subscriber relationships definite-lived intangible assets with an initial estimated useful life of 10 years. Under the asset purchase agreement, the purchase price includes a component of contingent consideration under which the Company is required to pay a percentage of recurring revenues received from the acquired subscriber relationships through 2026 up to a maximum annual payment of $114. As of December 31, 2021, the carrying value of the intangible assets acquired in the asset acquisition was $408. As the acquisition did not represent a business combination, the contingent consideration arrangement is recognized only when the contingency is resolved and the consideration is paid or becomes payable. The amounts payable under the contingent consideration arrangement, if any, will be included in the measurement of the cost of the acquired subscriber relationships. An additional $62 and $75 of consideration was earned under the contingent consideration arrangement during the years ended December 31, 2021 and 2020, respectively. Acquired intangible assets are subject to amortization. The following table summarizes acquired intangible assets at December 31, 2021 and 2020, respectively:
Amortization expense related to intangible assets was $1,027 and $1,004 for years ended December 31, 2021 and 2020, respectively, and was categorized as general and administrative expense. As of December 31, 2021, the total weighted average remaining useful lives of the definite-lived intangible assets was 1.5 years and the weighted average remaining useful lives by the definite-lived intangible asset category are as follows:
Estimated future amortization expense for intangible assets recorded by the Company at December 31, 2021 is as follows:
The changes in the carrying amount of intangible assets during the year ended December 31, 2021 is as follows:
Goodwill is recorded when the consideration for an acquisition exceeds the fair value of net tangible and identifiable intangible assets acquired. All of the Company's goodwill as of December 31, 2021 relates to its mobile connectivity reportable segment. None of the Company's goodwill is deductible for tax purposes. The changes in the carrying amount of goodwill during the year ended December 31, 2021 is as follows:
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401(k) Plan |
12 Months Ended |
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Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
401(k) Plan | 401(k) PlanThe Company has a 401(k) Plan (the Plan) for all eligible employees. Participants may defer a portion of their pre-tax or post-tax earnings subject to limits determined by the Internal Revenue Service. Participants age 50 or older may be eligible to make additional contributions. The Company matches contributions by the Plan participants up to 6%. The Company’s contributions vest over a five-year period from the date of hire. During a five and half month period in 2020, as a result of the uncertainty caused by the COVID-19 pandemic, the Company paused matching contributions. The Company matching contributions were $900 and $561 for the years ended December 31, 2021 and 2020, respectively. In addition, the Company may make additional contributions to the Plan at the discretion of the Compensation Committee of the Board of Directors. There were no discretionary contributions in 2021 and 2020. |
Revenue from Contracts with Customers (ASC 606) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contracts with Customers (ASC 606) | Revenue from Contracts with Customers (ASC 606) In accordance with ASC 606, revenue is recognized when a customer obtains control of promised products and services. The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for these products and services. Disaggregation of Revenue The following table summarizes net sales from contracts with customers for the years ended December 31, 2021 and 2020:
Revenue recognized during the years ended December 31, 2021 and 2020 from amounts included in contract liabilities at the beginning of the fiscal year was approximately $2,281 and $2,586, respectively. For mobile connectivity product sales, the delivery of the Company’s performance obligations are generally transferred to the customer, and associated revenue is recognized, at a point in time, with the exception of certain mini-VSAT contracts which are transferred to customers over time. For mobile connectivity service sales, the delivery of the Company’s performance obligations are transferred to the customer, and associated revenue is recognized, over time. For inertial navigation product sales, the delivery of the Company’s performance obligations are generally transferred to the customer, and associated revenue is recognized, at a point in time. For inertial navigation service sales, the Company's performance obligations are generally transferred to customers, and associated revenue is recognized, over time. Business and Credit Concentrations Concentrations of risk with respect to trade accounts receivable are generally limited due to the large number of customers and their dispersion across several geographic areas. Although the Company does not foresee that credit risk associated with these receivables will deviate from historical experience, repayment is dependent upon the financial stability of those individual customers. The Company establishes allowances for potential bad debts and evaluates, on a monthly basis, the adequacy of those reserves based upon historical experience and its expectations for future collectability concerns. The Company performs ongoing credit evaluations of the financial condition of its customers and generally does not require collateral. No single customer accounted for 10% or more of consolidated net sales for the years ended December 31, 2021 or 2020 or accounts receivables as of December 31, 2021 or 2020. Certain components from third parties used in the Company’s products are procured from single sources of supply. The failure of a supplier, including a subcontractor, to deliver on schedule could delay or interrupt the Company’s delivery of products and thereby materially adversely affect the Company’s revenues and operating results.
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Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting The Company's reportable segments are mobile connectivity and inertial navigation. The financial results of each segment are based on revenues from external customers, costs of revenue and operating expenses that are directly attributable to the segment and an allocation of costs from shared functions. These shared functions include, but are not limited to, facilities, human resources, information technology, and engineering. Allocations are made based on management’s judgment of the most relevant factors, such as head count, number of customer sites, or other operational data that contribute to the shared costs. Certain corporate-level costs have not been allocated as they are not directly attributable to either segment. These costs primarily consist of broad corporate functions, including executive, legal, finance, and costs associated with corporate actions. Segment-level asset information has not been provided as such information is not reviewed by the chief operating decision-maker for purposes of assessing segment performance and allocating resources. There are no significant inter-segment sales or transactions. The Company's performance is impacted by the levels of activity in the marine and land mobile markets and defense sectors, among others. Performance in any particular period could be impacted by the timing of sales to certain large customers. The mobile connectivity segment primarily manufactures and distributes a comprehensive family of mobile satellite antenna products and services that provide access to television, the Internet and voice services while on the move. Product sales within the mobile connectivity segment accounted for approximately 17% and 18% of our consolidated net sales for 2021 and 2020, respectively. Sales of mini-VSAT Broadband airtime service accounted for approximately 54% and 51% of our consolidated net sales for 2021 and 2020, respectively. The inertial navigation segment manufactures and distributes a portfolio of digital compass and fiber optic gyro (FOG)-based systems that address the rigorous requirements of military and commercial customers and provide reliable, easy-to-use and continuously available navigation and pointing data. The principal product categories in this segment include the FOG-based inertial measurement units (IMUs) for precision guidance, FOGs for tactical navigation as well as pointing and stabilization systems, and digital compasses that provide accurate heading information for demanding applications, security, automation and access control equipment and systems. Sales of FOG-based guidance and navigation systems within the inertial navigation segment accounted for approximately 16% of consolidated net sales for both 2021 and 2020. No other single product class accounts for 10% or more of consolidated net sales. The Company operates in a number of major geographic areas, including internationally. Revenues from international locations primarily include Canada, European Union countries, and other European countries, as well as countries in Africa, Asia/Pacific, the Middle East, and India. Revenues are based upon customer location and internationally represented 60% and 64% of consolidated net sales for 2021 and 2020, respectively. Sales to Singapore customers represented 11% of the Company's consolidated net sales for 2021. No other individual foreign country represented 10% or more of the Company's consolidated net sales for 2021. No individual foreign country represented 10% or more of the Company's consolidated net sales for 2020. As of December 31, 2021 and 2020, the long-lived tangible assets related to the Company’s international subsidiaries were less than 10% of the Company’s long-lived tangible assets and were deemed not material. Net sales and operating income (loss) for the Company's reporting segments and the Company's loss before income tax (benefit) expense for the years ended December 31, 2021 and 2020 were as follows:
(1) Includes an impairment charge of $10,490 for the KVH Media Group reporting unit within the mobile connectivity segment for the year ended December 31, 2020. Depreciation expense and amortization expense for the Company's segments are presented in the table that follows for the periods presented:
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Share Buyback Program |
12 Months Ended |
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Dec. 31, 2021 | |
Disclosure of Repurchase Agreements [Abstract] | |
Share Buyback Program | Share Buyback Program On October 4, 2019, the Company's Board of Directors authorized a share repurchase program pursuant to which the Company was authorized to purchase up to 1,000 shares of the Company’s common stock. The program expired on October 4, 2020. Under the repurchase program, the Company, at management’s discretion, was authorized to repurchase shares on the open market from time to time, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement. In January 2020, the Company repurchased 36 shares of common stock in open market transactions at a cost of approximately $390. The total amount the Company repurchased under the repurchase program since the inception of the October 4, 2019 repurchase program was 151 shares of common stock for an approximate cost of $1,690. There were no repurchase programs outstanding during 2021.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures (ASC 820), provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company’s Level 1 assets are investments in money market mutual funds and United States treasuries. Level 2: Quoted prices for similar assets or liabilities in active markets; or observable prices that are based on observable market data, based on directly or indirectly market-corroborated inputs. The Company has no Level 2 assets or liabilities. Level 3: Unobservable inputs that are supported by little or no market activity, and are developed based on the best information available given the circumstances. The Company has no Level 3 assets. Assets and liabilities measured at fair value are based the valuation techniques identified in the table below. The valuation techniques are: (a)Market approach—prices and other relevant information generated by market transactions involving identical or comparable assets. The following tables present financial assets and liabilities at December 31, 2021 and December 31, 2020 for which the Company measures fair value on a recurring basis, by level, within the fair value hierarchy:
The carrying amount of certain financial instruments approximates fair value due to their short-term, highly liquid nature. These instruments include cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses. The carrying amount of the Company's operating and financing lease liabilities approximates fair value based on currently available quoted rates of similarly structured borrowings. Assets Measured and Recorded at Fair Value on a Nonrecurring Basis The Company's non-financial assets, such as goodwill, intangible assets, and other long-lived assets resulting from business combinations, are measured at fair value using income approach valuation methodologies at the date of acquisition and subsequently re-measured if an impairment exists. During 2020, the Company recorded an impairment charge of $10,490 to goodwill and intangible assets. There was no additional impairment of the Company's non-financial assets noted as of December 31, 2021. See Note 1(k) and Note 9 for additional details. The Company does not have any liabilities that are recorded at fair value on a non-recurring basis.
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Legal Matters |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Legal Matters | Commitments and Contingencies The Company has certain operating leases and other commitments for satellite capacity, various equipment, and facilities. The following reflects future minimum payments under operating leases and other commitments that have initial or remaining non-cancelable terms at December 31, 2021:
(a) Includes the future minimum lease payments for the Company's operating leases as seen in Note 16. Total rent expense incurred under facility operating leases for the years ended December 31, 2021 and 2020 amounted to $868 and $875, respectively. Total expense incurred under satellite capacity and equipment operating leases and other commitments for the years ended December 31, 2021 and 2020 amounted to $39,216 and $34,990, respectively, which also includes payments for usage charges in excess of the minimum contractual requirements. In the normal course of business, the Company enters into unconditional purchase order obligations with its suppliers for inventory and other operational purchases. Outstanding and unconditional purchase order obligations were $26,371 as of December 31, 2021, which the Company expects to fulfill in 2022. The Company did not have any off-balance sheet commitments, guarantees, or standby repurchase obligations as of December 31, 2021. Legal Matters In the ordinary course of business, the Company is a party to inquiries, legal proceedings and claims including, from time to time, disagreements with vendors and customers. The Company is not a party to any lawsuit or proceeding that, in management's opinion, is likely to materially harm the Company's business, results of operations, financial condition, or cash flows.
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Leases |
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Leases | Leases Lessee The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense was $3,963 and $3,413 for the year ended December 31, 2021 and 2020, respectively. Short-term operating lease costs was $237 and $244 for the years ended December 31, 2021 and 2020, respectively. Sublease income was $134 for both the years ended December 31, 2021 and 2020. Maturities of lease liabilities as of December 31, 2021 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:
During the first quarter of 2018, the Company entered into a five-year financing lease for three satellite hubs for its HTS network. During the first quarter of 2021, the terms of this lease were adjusted and the Company discontinued use of two satellite hubs and was released from the related payment obligation in exchange for additional satellite service capacity. As of December 31, 2021, the gross costs and accumulated depreciation associated with this lease are included in revenue generating assets and amounted to $1,268 and $710, respectively. The obligations under financing leases are stated at the present value of minimum lease payments. The property and equipment held under this financing lease are amortized on a straight‑line basis over the seven-year estimated useful life of the asset, since the lease meets the bargain purchase option criteria. Amortization of assets held under financing leases is included within depreciation expense. Depreciation expense for the remaining capital assets was $181 for both the years ended December 31, 2021 and 2020. The future undiscounted lease payments under this financing lease as of December 31, 2021 are:
Lessor The Company enters into leases with certain customers primarily for the TracPhone mini-VSAT systems. These leases are classified as sales-type leases as title of the equipment transfers to the customer at the end of the lease term. The Company records the leases at a price typically equivalent to normal selling price and in excess of the cost or carrying amount. Upon delivery, the Company records the net present value of all payments under these leases as product revenue, and the related costs of the product are charged to cost of sales. Interest income is recognized throughout the lease term (typically to five years) using an implicit interest rate. The sales-type leases do not have unguaranteed residual assets. The current portion of the net investment in these leases was $3,881 as of December 31, 2021 and the non-current portion of the net investment in these leases was $6,777 as of December 31, 2021. The current portion of the net investment in the leases is included in accounts receivable, net of allowance for doubtful accounts on the accompanying consolidated balance sheets and the non-current portion of the net investment in these leases is included in other non-current assets on the accompanying consolidated balance sheets. Interest income from sales-type leases was $882 and $859 during the year ended December 31, 2021 and 2020, respectively. The future undiscounted cash flows from these leases as of December 31, 2021 are:
In 2021, the Company entered into three-year leases for its TracPhone mini-VSAT systems, in which ownership of the hardware does not transfer to the lessee by the end of the lease term. As a result, and in light of other factors indicated in ASC 842, these leases are classified as operating leases. As of December 31, 2021, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $1,444 and $154, respectively. They are depreciated on a straight-line basis over a five-year estimated useful life. Depreciation expense for these assets was $154 for the year ended December 31, 2021. For the year ended December 31, 2021, lease revenue of $243 was recognized in service sales in the statements of operations. As of December 31, 2021, minimum future lease payments to be received on the operating leases are as follows:
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Leases | Leases Lessee The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense was $3,963 and $3,413 for the year ended December 31, 2021 and 2020, respectively. Short-term operating lease costs was $237 and $244 for the years ended December 31, 2021 and 2020, respectively. Sublease income was $134 for both the years ended December 31, 2021 and 2020. Maturities of lease liabilities as of December 31, 2021 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:
During the first quarter of 2018, the Company entered into a five-year financing lease for three satellite hubs for its HTS network. During the first quarter of 2021, the terms of this lease were adjusted and the Company discontinued use of two satellite hubs and was released from the related payment obligation in exchange for additional satellite service capacity. As of December 31, 2021, the gross costs and accumulated depreciation associated with this lease are included in revenue generating assets and amounted to $1,268 and $710, respectively. The obligations under financing leases are stated at the present value of minimum lease payments. The property and equipment held under this financing lease are amortized on a straight‑line basis over the seven-year estimated useful life of the asset, since the lease meets the bargain purchase option criteria. Amortization of assets held under financing leases is included within depreciation expense. Depreciation expense for the remaining capital assets was $181 for both the years ended December 31, 2021 and 2020. The future undiscounted lease payments under this financing lease as of December 31, 2021 are:
Lessor The Company enters into leases with certain customers primarily for the TracPhone mini-VSAT systems. These leases are classified as sales-type leases as title of the equipment transfers to the customer at the end of the lease term. The Company records the leases at a price typically equivalent to normal selling price and in excess of the cost or carrying amount. Upon delivery, the Company records the net present value of all payments under these leases as product revenue, and the related costs of the product are charged to cost of sales. Interest income is recognized throughout the lease term (typically to five years) using an implicit interest rate. The sales-type leases do not have unguaranteed residual assets. The current portion of the net investment in these leases was $3,881 as of December 31, 2021 and the non-current portion of the net investment in these leases was $6,777 as of December 31, 2021. The current portion of the net investment in the leases is included in accounts receivable, net of allowance for doubtful accounts on the accompanying consolidated balance sheets and the non-current portion of the net investment in these leases is included in other non-current assets on the accompanying consolidated balance sheets. Interest income from sales-type leases was $882 and $859 during the year ended December 31, 2021 and 2020, respectively. The future undiscounted cash flows from these leases as of December 31, 2021 are:
In 2021, the Company entered into three-year leases for its TracPhone mini-VSAT systems, in which ownership of the hardware does not transfer to the lessee by the end of the lease term. As a result, and in light of other factors indicated in ASC 842, these leases are classified as operating leases. As of December 31, 2021, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $1,444 and $154, respectively. They are depreciated on a straight-line basis over a five-year estimated useful life. Depreciation expense for these assets was $154 for the year ended December 31, 2021. For the year ended December 31, 2021, lease revenue of $243 was recognized in service sales in the statements of operations. As of December 31, 2021, minimum future lease payments to be received on the operating leases are as follows:
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Leases | Leases Lessee The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense was $3,963 and $3,413 for the year ended December 31, 2021 and 2020, respectively. Short-term operating lease costs was $237 and $244 for the years ended December 31, 2021 and 2020, respectively. Sublease income was $134 for both the years ended December 31, 2021 and 2020. Maturities of lease liabilities as of December 31, 2021 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:
During the first quarter of 2018, the Company entered into a five-year financing lease for three satellite hubs for its HTS network. During the first quarter of 2021, the terms of this lease were adjusted and the Company discontinued use of two satellite hubs and was released from the related payment obligation in exchange for additional satellite service capacity. As of December 31, 2021, the gross costs and accumulated depreciation associated with this lease are included in revenue generating assets and amounted to $1,268 and $710, respectively. The obligations under financing leases are stated at the present value of minimum lease payments. The property and equipment held under this financing lease are amortized on a straight‑line basis over the seven-year estimated useful life of the asset, since the lease meets the bargain purchase option criteria. Amortization of assets held under financing leases is included within depreciation expense. Depreciation expense for the remaining capital assets was $181 for both the years ended December 31, 2021 and 2020. The future undiscounted lease payments under this financing lease as of December 31, 2021 are:
Lessor The Company enters into leases with certain customers primarily for the TracPhone mini-VSAT systems. These leases are classified as sales-type leases as title of the equipment transfers to the customer at the end of the lease term. The Company records the leases at a price typically equivalent to normal selling price and in excess of the cost or carrying amount. Upon delivery, the Company records the net present value of all payments under these leases as product revenue, and the related costs of the product are charged to cost of sales. Interest income is recognized throughout the lease term (typically to five years) using an implicit interest rate. The sales-type leases do not have unguaranteed residual assets. The current portion of the net investment in these leases was $3,881 as of December 31, 2021 and the non-current portion of the net investment in these leases was $6,777 as of December 31, 2021. The current portion of the net investment in the leases is included in accounts receivable, net of allowance for doubtful accounts on the accompanying consolidated balance sheets and the non-current portion of the net investment in these leases is included in other non-current assets on the accompanying consolidated balance sheets. Interest income from sales-type leases was $882 and $859 during the year ended December 31, 2021 and 2020, respectively. The future undiscounted cash flows from these leases as of December 31, 2021 are:
In 2021, the Company entered into three-year leases for its TracPhone mini-VSAT systems, in which ownership of the hardware does not transfer to the lessee by the end of the lease term. As a result, and in light of other factors indicated in ASC 842, these leases are classified as operating leases. As of December 31, 2021, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $1,444 and $154, respectively. They are depreciated on a straight-line basis over a five-year estimated useful life. Depreciation expense for these assets was $154 for the year ended December 31, 2021. For the year ended December 31, 2021, lease revenue of $243 was recognized in service sales in the statements of operations. As of December 31, 2021, minimum future lease payments to be received on the operating leases are as follows:
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Subsequent Events |
12 Months Ended |
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Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On March 6, 2022, the Company's President and Chief Executive Officer, Martin Kits van Heyningen retired from his executive and Board roles after more than 40 years of service. The Board of Directors has engaged an executive search firm to identify a new Chief Executive Officer. Brent C. Bruun, the Company’s Chief Operating Officer, has been appointed as its interim President and Chief Executive Officer. In March 2022, the Company also restructured its operations to reduce costs and better reflect a more focused strategy, which resulted in an approximately 10% reduction in its workforce.
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Summary of Significant Accounting Policies (Policies) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principles of Consolidation | Principles of ConsolidationThe accompanying consolidated financial statements of KVH Industries, Inc. and its wholly owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America. All of the operating expenses of the subsidiaries that serve as the Company’s European, Singaporean, Japanese, and Brazilian international distributors are reflected within sales, marketing, and support within the accompanying consolidated statements of operations. All significant intercompany accounts and transactions have been eliminated in consolidation. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Estimates and Assumptions and Other Significant Non-Recurring Transactions | Significant Estimates and Assumptions and Other Significant Non-Recurring Transactions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of sales and expenses during the reporting periods. The 2021 consolidated financial statements reflect a $6,979 gain in other income related to the U.S. Small Business Administration’s forgiveness of the PPP loan during the third quarter of 2021. See Note 5. The 2020 consolidated financial statements reflect a $10,490 goodwill and intangible impairment charge on the KVH Media Group reporting unit within the mobile connectivity segment. See Note 1(k) and Note 9. On an on-going basis, the Company evaluates its significant estimates, including those related to terminal values and other assumptions and estimates used to evaluate the recoverability of long-lived assets and goodwill and estimated fair values of long-lived assets, including goodwill, amortization methods and periods. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances.
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Concentration of Credit Risk and Single Source Suppliers | Concentration of Credit Risk and Single Source Suppliers Cash, cash equivalents and marketable securities. The Company is potentially subject to financial instrument concentration of credit risk through its cash, cash equivalent and marketable securities investments. To mitigate these risks the Company maintains cash, cash equivalents and marketable securities with reputable and nationally recognized financial institutions. As of December 31, 2021, $13,147 classified as marketable securities was held by Wells Fargo and substantially all of the cash and cash equivalents were held by Bank of America, N.A. See Note 2 for a description of marketable securities. Trade accounts receivable. Concentrations of risk (see Note 11) with respect to trade accounts receivable are generally limited due to the large number of customers and their dispersion across several geographic areas. Although the Company does not foresee that credit risk associated with these receivables will deviate from historical experience, repayment is dependent upon the financial stability of those individual customers. The Company establishes allowances for potential bad debts and evaluates, on a monthly basis, the adequacy of those reserves based upon historical experience and its expectations for future collectability concerns. The Company performs ongoing credit evaluations of the financial condition of its customers and generally does not require collateral. Activity within the Company’s allowance for doubtful accounts for the periods presented is as follows:
Revenue and operations. Certain components from third parties used in the Company’s products are procured from single sources of supply. The failure of a supplier, including a subcontractor, to deliver on schedule could delay or interrupt the Company’s delivery of products and thereby materially adversely affect the Company’s revenues and operating results.
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Revenue Recognition / Shipping and Handling Costs | Revenue Recognition In accordance with Accounting Standards Codification (ASC) 606, revenue is recognized when a customer obtains control of promised products and services. The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for these products and services. To achieve this core principle, the Company applies the following five steps: 1) Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the products and services to be transferred and identifies the payment terms related to these products and services, (ii) the contract has commercial substance, and (iii) the Company determines that collection of substantially all consideration for products and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors, including the customer’s historical payment pattern or, in the case of a new customer, published credit and financial information pertaining to the customer. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the products and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the product or service is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised products and services, the Company must apply judgment to determine whether promised products and services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised products and services are accounted for as a combined performance obligation. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products and services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method, depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct products or services that are substantially the same qualify as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct product or service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. 5) Recognize revenue when or as the Company satisfies a performance obligation The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised product or service to a customer. Product sales Revenue from product sales is recognized when control of the goods is transferred to the customer, which generally occurs at the Company’s plant or warehouse upon delivery to the carrier for shipment. Revenue related to shipping and handling is recognized when the products are shipped and the associated costs are accrued for based on the Company’s election to account for shipping and handling activities as a fulfillment of the promise to transfer the products and not as a combined promise. For certain inertial navigation product sales, customer acceptance or inspection may be required before control of the goods is transferred to the customer. For those sales, revenue is recognized after notification of customer acceptance and the goods have been delivered to the carrier for shipment. In certain circumstances customers may request a bill-and-hold arrangement. Under these bill-and-hold arrangements, revenue is recognized when the Company has fulfilled all of its performance obligations, the units are segregated for the specific customer only, and the goods are ready for physical transfer to the customer in accordance with their defined contract delivery schedule. The Company’s standard payment terms for product sales are generally Net 30. Under certain limited conditions, the Company, at its sole discretion, provides for the return of goods. No product is accepted for return and no credit is allowed on any returned product unless the Company has granted and confirmed prior written permission by means of appropriate authorization. The Company establishes reserves for potential sales returns, credits, and allowances, and evaluates, on a monthly basis, the adequacy of those reserves based upon historical experience and expectations for the future. Contracts with multiple performance obligations The Company sells products and services through arrangements that in certain instances bundle VSAT equipment, satellite connectivity and other services. For these arrangements, the Company has determined that the performance obligations are not distinct in the context of the contracts with certain customers. The Company recognizes product revenue under these arrangements over the estimated satellite connectivity customer life, which is estimated to be five years based on historical evidence. Satellite connectivity and media content service sales Directly sold and re-sold satellite connectivity service for voice, data and Internet is recognized monthly based primarily on contracted fixed-fee schedules as well as any overages for minutes or megabytes of traffic processed. The Company has evaluated whether it obtains control of the services that are being transferred to the customer in assessing gross revenue reporting as principal verse net revenue reporting as agent for its satellite connectivity service sales and its payments to the applicable service providers. Based on the Company's assessment of the indicators, the Company has determined that gross revenue reporting as a principal is appropriate. The applicable indicators of gross revenue reporting include, but are not limited to, the following: •The Company is the primary obligor in its arrangements with its subscribers. The Company manages all interactions with the subscribers, while satellite connectivity service providers do not interact with the subscribers. In addition, the Company assumes the entire performance risk under its arrangements with the subscribers and in the event of a performance issue, the Company may incur reductions in fees without regard for any recourse that the Company may have with the applicable satellite connective service providers. •The Company has discretion in establishing pricing, as the pricing under its arrangements with the subscribers is negotiated through a contracting process. The Company then separately negotiates the fees with the applicable satellite service providers. •The Company has complete discretion in determining which satellite service providers it will contract with. As a result, the Company has determined that it earns revenue (as a principal) from the delivery of satellite connectivity services to its subscribers and records all satellite connectivity service sales to subscribers as gross sales. All associated regulatory service fees and costs are recorded net in the consolidated financial statements. The Company sells prepaid airtime services in the form of prepaid cards. A liability is established upon purchase equal to the cash paid for the prepaid card. The Company recognizes revenue from the prepaid services upon the use of the prepaid card by the customer. The Company does not offer refunds for unused prepaid services. Prepaid airtime services have not been a significant portion of the Company’s total sales. Media content sales include the Company's distribution of commercially licensed news, sports, movies and music content for commercial and leisure customers in the maritime, hotel, and retail markets. The Company typically recognizes revenue from media content sales ratably over the period of the service contract. The accounting estimates related to the recognition of satellite connectivity and media content service sales require the Company to make assumptions about future billing adjustments for disputes with subscribers as well as unauthorized usage. The Company recognizes the monthly subscription fee as service revenue over the service delivery period. Under AgilePlans, the Company retains ownership of the hardware that it provides to these customers, who must return the hardware to KVH if they decide to terminate the service. Because KVH does not sell the hardware under AgilePlans, the Company does not recognize any product revenue when the hardware is deployed to an AgilePlans customer. Inertial navigation service sales The Company engages in contracts for development, production, and services activities related to standard product modification or enhancement. The Company considers the nature of these contracts and the types of products and services provided when determining the proper accounting for a particular contract. Customer and government-agency contracted engineering service and sales under development contracts are recognized primarily during the periods in which the Company performs the service or development efforts in accordance with the agreement. Services performed under these types of contracts include engineering studies, surveys, building construction, prototype development, and program management. Performance is determined principally by comparing the accumulated labor hours incurred to date with management’s estimate of the total labor hours to complete the contracted work. Incurred labor hours represent work performed, which corresponds with and best depicts the transfer of control to the customer. This continuous transfer of control to the customer is supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit and take control of any work in process. The Company establishes billing terms at the time project deliverables and milestones are agreed. Unbilled revenue recognized in excess of the amounts invoiced to clients are classified within the accompanying consolidated balance sheets as “accounts receivable” as the Company's right to consideration is unconditional. Product service sales Product service sales other than under development contracts are recognized when completed services are delivered to the customer. The Company also sells extended warranty contracts on mobile connectivity and inertial navigation products. Sales under these contracts are recognized ratably over the contract term. Product service sales including extended warranties are not a significant portion of the Company’s total sales. Sales-type leases Revenue is recognized on sales-type leases primarily from the TracPhone mini-VSAT products. In accordance with ASC 842, the Company records the leases at a price typically equivalent to normal selling price and in excess of the cost or carrying amount. Upon delivery, the Company records the net present value of all payments under these leases as product revenue, and the related costs of the product are charged to cost of sales. See Note 16. Shipping and Handling CostsShipping and handling costs are expensed as incurred and included in cost of sales. Billings for shipping and handling are reflected within net sales in the accompanying consolidated statements of operations.
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Leases | LeasesIn accordance with ASC 842, the Company recognizes all leases greater than one year in duration on the balance sheet as right-of-use assets and lease liabilities. In ASC 842, a lease is defined as follows: “[a] contract is or contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.”Many of our lease agreements contain renewal options which are recognized if it is determined that the Company is reasonably certain to renew the lease at inception or when a triggering event occurs. Some of our lease agreements contain rent escalation clauses, rent holidays, capital improvement funding or other lease concessions. The Company recognizes the minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement and amortize such expense over the term of the lease beginning with the commencement date. Variable lease components that are not fixed at the beginning of the lease are recognized as incurred. Under certain third-party service agreements, the Company controls a specific space or underlying asset used in providing the service by the third-party service provider. These arrangements meet the definition under ASC 842 and therefore are accounted for under ASC 842. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when reasonably certain to be exercised. The present value of lease payments is determined using the incremental borrowing rate based on the information available at the lease commencement date. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LeasesIn accordance with ASC 842, the Company recognizes all leases greater than one year in duration on the balance sheet as right-of-use assets and lease liabilities. In ASC 842, a lease is defined as follows: “[a] contract is or contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.”Many of our lease agreements contain renewal options which are recognized if it is determined that the Company is reasonably certain to renew the lease at inception or when a triggering event occurs. Some of our lease agreements contain rent escalation clauses, rent holidays, capital improvement funding or other lease concessions. The Company recognizes the minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement and amortize such expense over the term of the lease beginning with the commencement date. Variable lease components that are not fixed at the beginning of the lease are recognized as incurred. Under certain third-party service agreements, the Company controls a specific space or underlying asset used in providing the service by the third-party service provider. These arrangements meet the definition under ASC 842 and therefore are accounted for under ASC 842. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when reasonably certain to be exercised. The present value of lease payments is determined using the incremental borrowing rate based on the information available at the lease commencement date. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial InstrumentsThe carrying amounts of the Company’s financial instruments, which include cash equivalents, investments, accounts receivable, accounts payable and accrued expenses, approximate their fair values due to the short maturity of these instruments. See Note 2 for more information on the fair value of the Company’s marketable securities. The carrying amount of the Company’s debt, and capital lease approximates fair value based on currently available quoted rates of similarly structured debt facilities. See Note 5 for more information on the fair value of the Company’s debt and line of credit and Note 16 for the Company's finance lease. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents, and Marketable Securities In accordance with the Company’s investment policy, cash in excess of operational needs is invested in money market mutual funds, government agency bonds, United States treasuries, municipal bonds, corporate notes, or certificates of deposit. All highly liquid investments with a maturity date of three months or less at the date of purchase are classified as cash equivalents. The Company determines the appropriate classification of marketable securities at each balance sheet date. As of December 31, 2021 and 2020, all of the Company’s marketable securities have been designated as available-for-sale and are carried at their fair value with unrealized gains and losses included in accumulated other comprehensive loss in the accompanying consolidated balance sheets. The Company reviews investments in debt securities for other than temporary impairment whenever the fair value of an investment is less than amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers whether it intends to sell the security, whether it expects to recover the credit loss, and if it is more likely than not that the Company will be required to sell the security prior to recovery. Evidence considered in this assessment includes the reasons for the impairment, compliance with the Company’s investment policy, the severity and duration of the impairment, changes in value subsequent to year-end and forecasted performance of the investee. The Company has reviewed its securities with unrealized losses as of December 31, 2021 and 2020 and has concluded that no other-than-temporary impairments exist.
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Inventories | InventoriesInventories are stated at the lower of cost and net realizable value using the first-in first-out costing method. The Company adjusts the carrying value of its inventory based on the consideration of excess and obsolete components based on future estimate demand. The Company records inventory charges to costs of product sales. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and EquipmentProperty and equipment are stated at cost. Depreciation and amortization are computed on the straight-line method over the estimated useful lives of the respective assets. The principal lives used in determining the depreciation rates of various assets are: buildings and improvements, 5-40 years; leasehold improvements, shorter of original lease term or useful life; machinery, satellite hubs and equipment, 4-10 years; office and computer equipment, 3-7 years; and motor vehicles, 5 years. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill, Intangible Assets and other Long-Lived Assets | Goodwill, Intangible Assets and other Long-Lived Assets The Company’s goodwill and intangible assets are associated with the purchase of Virtek Communication (now known as KVH Industries Norway AS) in September 2010 and Headland Media Limited (now known as the KVH Media Group) in May 2013. In accordance with ASC Update No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test of Goodwill Impairment. (ASC 350), the Company performs a goodwill impairment test at least annually based on either an optional qualitative assessment or a quantitative analysis comparing the estimated fair value of a reporting unit to its carrying value as of the test date. Any impairment charges would be based on the quantitative analysis. As a result of the 2020 annual impairment test, the Company recorded goodwill impairment charges of $8,732 and intangible asset impairment charges of $1,758 related to its KVH Media Group reporting unit. Prior to 2020, the Company had not recorded or incurred goodwill impairment charges. For the October 1, 2020 test, due to the uncertainty that the global pandemic presented during 2020, the Company determined that it should perform a quantitative analysis of goodwill impairment. The Company performed this full quantitative analysis in the fourth quarter of 2020 in conjunction with its annual budgeting and long-term planning cycle. The revenues and cash flows of KVH Media Group have been significantly impacted by the global reduction in travel since the start of the pandemic. With the assistance of valuation specialists, the Company utilized an income approach and market approach to estimate the fair value of its reporting units, based on assumptions the Company believed to be reasonable. As an additional corroborative test of the reasonableness of those assumptions, the Company completed a reconciliation of its market capitalization and overall enterprise value to the fair value of all of its reporting units as of October 1, 2020. The Company estimated that, as of October 1, 2020, the fair value of the mobile broadband reporting unit exceeded its carrying value by 18%; however, the carrying value of the KVH Media Group reporting unit exceeded its fair value by $10,156, which signified that an impairment had occurred and identified a triggering event to review the other long-lived assets for impairment. In accordance with ASC 360-10, Property, Plant and Equipment – Impairment or Disposal of Long-Lived Assets (ASC 360), with regard to its long-lived assets, the Company performed an undiscounted cash flow analysis and concluded that the carrying value of the asset group was not recoverable. Accordingly, the Company then performed an analysis to estimate the fair value of the other long-lived assets and recognized an impairment charge of $1,758, against the distribution rights intangible asset, the amount by which the carrying value of the asset group’s other long-lived assets exceeded their estimated fair value, and a reduction in the associated deferred tax liability of $334. As a result, the Company recognized an impairment charge to KVH Media Group’s goodwill in the amount of $8,732, the remaining amount by which the carrying value exceeded its fair value. For the October 1, 2021 test, the Company performed a qualitative assessment of goodwill impairment (Step 0) and concluded that for the mobile broadband reporting unit, it was more likely than not that, for this reporting unit, the fair value exceeded the carrying value. For the KVH Media Group reporting unit, the Company determined that it was necessary to perform the Step 1 quantitative analysis due to the ongoing global pandemic and its impacts. The Company utilized an income approach to estimate the fair value of the reporting unit. The Company believes that the assumptions used to estimate the fair value of its KVH Media Group reporting unit were reasonable. The Company estimated that, as of October 1, 2021, the fair value of its KVH Media Group exceeded its carrying value by more than 20%. A negative trend of operating results or material changes to forecasted operating results could result in the requirement for additional interim goodwill impairment tests and the potential of future goodwill impairment charges, which could be material. The Company did not identify any impairment indicators that required an interim goodwill impairment test as of December 31, 2021. Intangible assets with estimated lives and other long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of intangible assets with estimated lives and other long-lived assets is measured by a comparison of the carrying amount of an asset or asset group to future net undiscounted cash flows expected to be generated by the asset or asset group. If these comparisons indicate that an asset is not recoverable, the Company will recognize an impairment loss for the amount by which the carrying value of the asset or asset group exceeds the related estimated fair value. Estimated fair value is based on either discounted future operating cash flows or appraised values, depending on the nature of the asset. During 2021, there were no events or changes in circumstances that indicated any of the carrying amounts of the Company’s intangible assets or other long-lived assets may not be recoverable. See Note 9 for further discussion of goodwill and intangible assets.
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Other Non-Current Assets | Other Non-Current AssetsOther non-current assets are primarily comprised of long-term lease receivables, prepaid expenses, and deposits. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranty | Product WarrantyThe Company’s products carry standard limited warranties that range from | to two years and vary by product. The warranty period begins on the date of retail purchase or lease by the original purchaser. The Company accrues estimated product warranty costs at the time of sale and any additional amounts are recorded when such costs are probable and can be reasonably estimated. Factors that affect the Company’s warranty liability include the number of units sold or leased, historical and anticipated rates of warranty repairs and the cost per repair. Warranty and related costs are reflected within sales, marketing and support in the accompanying consolidated statements of operations.||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and Development | Research and DevelopmentExpenditures for research and development, including customer-funded research and development, are expensed as incurred. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising Costs | Advertising CostsCosts related to advertising are expensed as incurred. Advertising expense was $1,259 and $1,285 for the years ended December 31, 2021 and 2020, respectively, and is included in sales, marketing, and support expense in the accompanying consolidated statements of operations. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign Currency Translation | Foreign Currency TranslationThe financial statements of the Company’s foreign subsidiaries located in Denmark and Singapore are maintained using the United States dollar as the functional currency. Exchange rates in effect on the date of the transaction are used to record monetary assets and liabilities. Revenue and other expense elements are recorded at rates that approximate the rates in effect on the transaction dates. Foreign currency exchange gains and losses are recognized within “Other income, net” in the accompanying consolidated statements of operations. For the years ended December 31, 2021 and 2020, the Company recorded a total of net foreign currency exchange losses in its accompanying consolidated statements of operations of $3 and $48, respectively, which is comprised of both realized and unrealized foreign currency exchange gains and losses.The financial statements of the Company’s foreign subsidiaries located in the United Kingdom, Brazil, Norway, Cyprus, India and Japan use the foreign subsidiaries’ respective local currencies as the functional currency. The Company translates the assets and liabilities of these foreign subsidiaries at the exchange rates in effect at year-end. Net sales, costs and expenses are translated using average exchange rates in effect during the year. Gains and losses from foreign currency translation are credited or charged to accumulated other comprehensive loss included in stockholders' equity in the accompanying consolidated balance sheets. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The Company is subject to income taxes in the U.S. and in numerous foreign jurisdictions. The Company accounts for income taxes following ASC Topic 740, Accounting for Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some or all of a deferred tax asset will not be realized. The Company determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, no amount of the benefit attributable to the position is recognized. The tax benefit to be recognized of any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes interest and penalties within the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets. See Note 8 for further discussion of income taxes.
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Net Loss per Common Share | Net Loss per Common ShareBasic net loss per share is calculated based on the weighted average number of common shares outstanding during the period. Diluted net income per share incorporates the dilutive effect of common stock equivalent options, warrants and other convertible securities, if any, as determined in accordance with the treasury stock accounting method. For the years ended December 31, 2021 and 2020 since there was a net loss, the Company excluded all 747 and 1,566 shares, respectively, in outstanding stock options and non-vested restricted shares from its diluted loss per share calculation, as inclusion of these securities would have reduced the net loss per share. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingent Liabilities | Contingent LiabilitiesThe Company estimates the amount of potential exposure it may have with respect to claims, assessments and litigation in accordance with ASC 450, Contingencies. As of December 31, 2021 and 2020, the Company was not party to any lawsuit or proceeding that, in management's opinion, was likely to materially harm the Company's business, results of operations, financial condition or cash flows. It is not always possible to predict the outcome of litigation, as it is subject to many uncertainties. Additionally, it is not always possible for management to make meaningful estimates of the potential loss or range of loss associated with such litigation. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Segments | Operating Segments The Company operates in two segments, the mobile connectivity and inertial navigation segments. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. The Company’s chief operating decision maker is its President, Chief Executive Officer and Chairman of the Board. The Company operates in a number of major geographic areas, including internationally. Revenues are generated from international locations, primarily consisting of Canada, European countries, both inside and outside the European Union, as well as Africa, Asia/Pacific, the Middle East, and South America (see Note 12, "Segment Reporting").
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Recently Issued Accounting Standards | Recently Issued Accounting Standards From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies. Recently issued standards typically do not require adoption until a future effective date. Prior to their effective date, the Company evaluates the pronouncements to determine the potential effects of adoption on our consolidated financial statements. Standard Implemented ASC Update No. 2019-12 In December 2019, the FASB issued ASC Update No. 2019-12, Income Taxes (Topic 740). The update is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The purpose of Update No. 2019-12 is to remove certain exceptions for recognizing deferred taxes for investments and simplify the accounting for income taxes in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. It amends the requirements relating to the accounting for "hybrid" tax regimes. Update No. 2019-12 did not have a material impact on the Company's financial position or results of operations. Standards to be Implemented ASC Update No. 2016-13, ASC Update No. 2018-19, ASC Update No. 2019-04, ASC Update No. 2019-05, ASC Update No. 2019-10, ASC Update No. 2019-11 and ASC Update No. 2020-02 In June 2016, the FASB issued ASC Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The purpose of Update No. 2016-13 is to replace the incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit loss estimates. In November 2018, the FASB issued ASC Update No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. This update introduced an expected credit loss methodology for the impairment of financial assets measured at amortized cost. The amendment also clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. In May 2019, the FASB issued ASC Update No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. This update introduced clarifications of the Board’s intent with respect to accrued interest, the transfer between classifications or categories for loans and debt securities, recoveries, reinsurance recoverables, projects of interest rate environments for variable-rate financial instruments, costs to sell when foreclosure is probable, consideration of expected prepayments when determining the effective interest rate, vintage disclosures, and extension and renewal options. In May 2019, the FASB issued ASC Update No. 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief. The amendments in the update ease the transition for entities adopting ASC Update 2016-13 and increase the comparability of financial statement information. With the exception of held-to-maturity debt securities, the amendments allow entities to irrevocably elect to apply the fair value option to financial instruments that were previously recorded at amortized cost basis within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. In November 2019, the FASB issued ASC Update No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates. The amendments in this update change some effective dates for certain new accounting standards including those pertaining to Topic 326 discussed above, for certain types of entities. In November 2019, the FASB issued ASC Update No. 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses (Topic 326). The update is effective for entities that have adopted ASU 2016-13. The purpose of Update No. 2019-11 is to clarify the scope of the recovery guidance to purchased financial assets with credit deterioration. In February 2020, the FASB issued ASC Update No. 2020-02, Financial Instruments – Credit Losses (Topic 326) and Leases (Topic 842). The purpose of Update No. 2020-02 is to clarify the scope and interpretation of the standard. As a smaller reporting entity, the effective date for Topic 326 will be the fiscal year beginning after December 15, 2022. The adoption of Update Nos. 2016-13, 2018-19, 2019-04, 2019-05, 2019-10, 2019-11 and 2020-02 is not expected to have a material impact on the Company's financial position or results of operations. There are no other recent accounting pronouncements issued by the FASB that the Company expects would have a material impact on the Company's financial statements.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of allowance for doubtful accounts | Activity within the Company’s allowance for doubtful accounts for the periods presented is as follows:
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Summary of product warranty activity | The following table summarizes product warranty activity during 2021 and 2020:
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Revenue and related development costs, customer-funded research and development costs | Revenue and related development costs from customer-funded research and development are as follows:
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Schedule of reconciliation of basic and diluted weighted average common shares outstanding | A reconciliation of the basic and diluted weighted average common shares outstanding is as follows:
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Marketable Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale securities | Marketable securities as of December 31, 2021 and 2020 consisted of the following:
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of inventories | Inventories as of December 31, 2021 and 2020 include the costs of material, labor, and factory overhead. Components of inventories consist of the following:
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Property and Equipment (Tables) |
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Property, plant and equipment | Property and equipment, net, as of December 31, 2021 and 2020 consist of the following:
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Debt and Line of Credit (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | Long-term debt consists of the following:
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Commitment and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Lease Liability and Other Commitments | The following reflects future minimum payments under operating leases and other commitments that have initial or remaining non-cancelable terms at December 31, 2021:
(a) Includes the future minimum lease payments for the Company's operating leases as seen in Note 16.
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Stockholders' Equity (Tables) |
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Share-based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of weighted-average assumptions used to value options as of their grant date | The weighted-average assumptions used to value options as of their grant date were as follows:
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Schedule of share-based compensation, stock options, activity | The changes in outstanding stock options for the year ended December 31, 2021 and 2020 are as follows:
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Schedule of share-based compensation, restricted stock and restricted stock units activity | Restricted stock activity under the 2006 Plan and the 2016 Plan for 2021 is as follows:
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Schedule of share-based compensation, activity | The following presents stock-based compensation expense, including expense for the ESPP, in the Company's consolidated statements of operations for the years ended December 31, 2021 and 2020.
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Schedule of Accumulated Other Comprehensive Income (Loss) | The components of the Company’s comprehensive loss and the effect on earnings for the periods presented are detailed in the accompanying consolidated statements of comprehensive loss.
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | Income tax (benefit) expense for the years ended December 31, 2021 and 2020 attributable to loss from operations is presented below.
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Schedule of Effective Income Tax Rate Reconciliation | Actual income tax (benefit) expense differs from the “expected” income tax (benefit) expense computed by applying the United States Federal statutory income tax rate of 21% for both 2021 and 2020 to loss before tax (benefit) expense, as follows:
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Schedule of Loss before Income Tax, Domestic and Foreign | Loss before income tax (benefit) expense determined by tax jurisdiction, are as follows:
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Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities for the periods presented consisted of the following:
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Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible | The aggregate changes in the total gross amount of unrecognized tax benefits are as follows:
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Goodwill and Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of finite-lived intangible assets | The following table summarizes acquired intangible assets at December 31, 2021 and 2020, respectively:
The changes in the carrying amount of intangible assets during the year ended December 31, 2021 is as follows:
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Schedule of finite-lived intangible assets, future amortization expense | Estimated future amortization expense for intangible assets recorded by the Company at December 31, 2021 is as follows:
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Schedule of goodwill | The changes in the carrying amount of goodwill during the year ended December 31, 2021 is as follows:
|
Revenue from Contracts with Customers (ASC 606) (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table summarizes net sales from contracts with customers for the years ended December 31, 2021 and 2020:
|
Segment Reporting (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reporting segments | Net sales and operating income (loss) for the Company's reporting segments and the Company's loss before income tax (benefit) expense for the years ended December 31, 2021 and 2020 were as follows:
(1) Includes an impairment charge of $10,490 for the KVH Media Group reporting unit within the mobile connectivity segment for the year ended December 31, 2020. Depreciation expense and amortization expense for the Company's segments are presented in the table that follows for the periods presented:
|
Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value on recurring basis | Assets and liabilities measured at fair value are based the valuation techniques identified in the table below. The valuation techniques are: (a)Market approach—prices and other relevant information generated by market transactions involving identical or comparable assets. The following tables present financial assets and liabilities at December 31, 2021 and December 31, 2020 for which the Company measures fair value on a recurring basis, by level, within the fair value hierarchy:
|
Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future minimum lease payments under operating leases | Maturities of lease liabilities as of December 31, 2021 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:
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Schedule of future minimum capital lease payments | The future undiscounted lease payments under this financing lease as of December 31, 2021 are:
|
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Sales-type lease, future undiscounted cash flows | The future undiscounted cash flows from these leases as of December 31, 2021 are:
|
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Lessor, Operating Lease, Payment to be Received, Fiscal Year Maturity | As of December 31, 2021, minimum future lease payments to be received on the operating leases are as follows:
|
Summary of Significant Accounting Policies (Details) shares in Thousands |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 01, 2020
USD ($)
|
Sep. 30, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2021
USD ($)
segment
shares
|
Dec. 31, 2020
USD ($)
shares
|
Dec. 31, 2019
USD ($)
|
|
Accounting Policies [Line Items] | ||||||
PPP loan forgiveness | $ 6,979,000 | $ 6,979,000 | $ 0 | |||
Goodwill and intangible impairment charges | $ 10,490,000 | 0 | 10,490,000 | |||
Marketable securities | 25,141,000 | 13,147,000 | 25,141,000 | |||
Intangible asset impairment charge | 0 | 8,732,000 | ||||
Deferred tax liability, intangible asset | 384,000 | 199,000 | 384,000 | |||
Goodwill, impairment loss | 0 | 1,758,000 | ||||
Product warranty accrual | $ 1,812,000 | 1,179,000 | 1,812,000 | $ 2,194,000 | ||
Advertising expense | 1,259,000 | 1,285,000 | ||||
Foreign currency exchange (gain) loss | $ 3,000 | $ 48,000 | ||||
Antidilutive securities (in shares) | shares | 747 | 1,566 | ||||
Number of operating segments | segment | 2 | |||||
Mobile Broadband Reporting Unit | ||||||
Accounting Policies [Line Items] | ||||||
Reporting unit, percent fair value in excess of carrying value | 18.00% | |||||
KVH Media Group Reporting Unit | ||||||
Accounting Policies [Line Items] | ||||||
Intangible asset impairment charge | $ 1,758,000 | $ 1,758,000 | ||||
Fair value reporting unit | 10,156,000 | |||||
Deferred tax liability, intangible asset | 334,000 | |||||
Goodwill, impairment loss | $ 8,732,000 | $ 8,732,000 | ||||
Revenue-generating assets | ||||||
Accounting Policies [Line Items] | ||||||
Useful lives | 5 years | |||||
Motor vehicles | ||||||
Accounting Policies [Line Items] | ||||||
Useful lives | 5 years | |||||
Minimum | ||||||
Accounting Policies [Line Items] | ||||||
Limited product warranty period | 1 year | |||||
Minimum | Building and improvements | ||||||
Accounting Policies [Line Items] | ||||||
Useful lives | 5 years | |||||
Minimum | Machinery, satellite hubs and equipment | ||||||
Accounting Policies [Line Items] | ||||||
Useful lives | 4 years | |||||
Minimum | Office and computer equipment | ||||||
Accounting Policies [Line Items] | ||||||
Useful lives | 3 years | |||||
Maximum | ||||||
Accounting Policies [Line Items] | ||||||
Limited product warranty period | 2 years | |||||
Maximum | Building and improvements | ||||||
Accounting Policies [Line Items] | ||||||
Useful lives | 40 years | |||||
Maximum | Machinery, satellite hubs and equipment | ||||||
Accounting Policies [Line Items] | ||||||
Useful lives | 10 years | |||||
Maximum | Office and computer equipment | ||||||
Accounting Policies [Line Items] | ||||||
Useful lives | 7 years |
Summary of Significant Accounting Policies - Allowance For Doubtful Accounts Rollforward (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Accounting Policies [Abstract] | ||
Beginning balance | $ 1,596 | $ 1,589 |
Additions (subtractions) | 530 | 333 |
Deductions (write-offs/recoveries) from reserve | (490) | (326) |
Ending balance | $ 1,636 | $ 1,596 |
Summary of Significant Accounting Policies - Product Warranty (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Summary of product warranty activity | ||
Beginning balance | $ 1,812 | $ 2,194 |
Charges to expense | 457 | 1,091 |
Costs incurred | (1,090) | (1,473) |
Ending balance | $ 1,179 | $ 1,812 |
Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Research and Development | ||
Customer-funded service sales | $ 363 | $ 2,043 |
Customer-funded costs included in costs of service sales | $ 803 | $ 2,935 |
Summary of Significant Accounting Policies - Weighted Average Shares Outstanding (Details) - shares shares in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Accounting Policies [Abstract] | ||
Weighted average number of shares outstanding - basic (in shares) | 18,217 | 17,669 |
Dilutive common shares issuable in connection with stock plans (in shares) | 0 | 0 |
Weighted average number of shares outstanding - diluted (in shares) | 18,217 | 17,669 |
Marketable Securities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 13,147 | $ 25,141 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 13,147 | 25,141 |
Money market mutual funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 13,147 | 20,142 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 13,147 | 20,142 |
United States treasuries | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 4,999 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | $ 4,999 |
Marketable Securities - Maturity Schedule (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Investments, Debt and Equity Securities [Abstract] | ||
Interest income from cash equivalents and marketable securities | $ 6 | $ 135 |
Inventories (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Components of inventories | ||
Raw materials | $ 15,772 | $ 13,957 |
Work in process | 4,035 | 3,996 |
Finished goods | 4,833 | 6,721 |
Inventories | $ 24,640 | $ 24,674 |
Property and Equipment (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 124,374 | $ 114,265 |
Less accumulated depreciation | (64,260) | (57,992) |
Property and equipment, net | 60,114 | 56,273 |
Depreciation | 13,574 | 10,659 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,828 | 3,828 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 24,271 | 24,197 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 472 | 482 |
Revenue-generating assets | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 63,587 | 56,336 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 16,790 | 15,536 |
Office and computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,395 | 13,855 |
Motor vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 31 | $ 31 |
Debt and Line of Credit - Schedule of Long-Term debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
May 31, 2020 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Total long-term debt | $ 0 | $ 6,927 | |
Less amounts classified as current | 0 | 4,992 | |
Long-term debt, excluding current portion | 0 | 1,935 | |
PPP Loan | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 0 | $ 6,927 | $ 6,927 |
Debt and Line of Credit (Details) |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 29, 2021
USD ($)
|
Oct. 30, 2018
USD ($)
covenant
|
Sep. 30, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
May 31, 2020
USD ($)
|
|
Debt Instrument [Line Items] | ||||||
Total long-term debt | $ 0 | $ 6,927,000 | ||||
PPP loan forgiveness | $ 6,979,000 | 6,979,000 | 0 | |||
PPP Loan | ||||||
Debt Instrument [Line Items] | ||||||
Total long-term debt | 0 | $ 6,927,000 | $ 6,927,000 | |||
Senior Credit Facility | Line of Credit | 2018 term notes | ||||||
Debt Instrument [Line Items] | ||||||
Term of debt instrument | 3 years | |||||
Senior Credit Facility | Line of Credit | Revolving loan agreement | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 15,000 | $ 20,000,000 | 15,000,000 | |||
Remaining balance available for borrowing | $ 10,900,000 | |||||
Number of financial covenants | covenant | 2 | |||||
Consolidated fixed charge coverage ratio | 1.25 | |||||
Minimum trailing four quarter consolidated adjusted EBITDA | $ 3,000,000 | |||||
Debt Covenant Period, One | Senior Credit Facility | Line of Credit | Revolving loan agreement | ||||||
Debt Instrument [Line Items] | ||||||
Consolidated leverage ratio | 2.50 | |||||
Debt Covenant Period, Two | Senior Credit Facility | Line of Credit | Revolving loan agreement | ||||||
Debt Instrument [Line Items] | ||||||
Consolidated leverage ratio | 2.00 |
Commitment and Contingencies - Schedule of Operating Lease Liabilities and Other Commitments (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 29,679 |
2023 | 28,190 |
2024 | 5,041 |
2025 | 44 |
2026 | 2 |
Total minimum payments | $ 62,956 |
Commitment and Contingencies (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Purchase Commitment | ||
Operating Leased Assets [Line Items] | ||
Unconditional purchase order obligations | $ 26,371 | |
Facility | ||
Operating Leased Assets [Line Items] | ||
Operating lease rent | 868 | $ 875 |
Satellite Capacity and Equipment | ||
Operating Leased Assets [Line Items] | ||
Operating lease rent | $ 39,216 | $ 34,990 |
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Stock-Based Compensation (Textual) [Abstract] | ||
Stock-based compensation expense | $ 4,109 | $ 3,462 |
Number of shares authorized (in shares) | 4,800,000 | |
Number of additional shares authorized (in shares) | 1,800,000 | |
Stock options | ||
Stock-Based Compensation (Textual) [Abstract] | ||
Stock-based compensation expense | $ 1,740 | $ 1,401 |
Stock award, vesting period | 4 years | |
Stock award, exercise period | 5 years | |
Awards other than options, decrease in number of shares reserved for issuance (in shares) | 2 | |
Common stock, shares reserved for issuance (in shares) | 14,215,000 | |
Number of shares available for future grants (in shares) | 458,000 | |
Dividend yield | 0.00% | 0.00% |
Weighted-average fair value (in dollars per share) | $ 4.70 | $ 2.88 |
Stock options, total intrinsic value of options exercised | $ 914 | $ 269 |
Unrecognized compensation expense | $ 3,599 | |
Weighted-average period of recognition | 2 years 5 months 1 day | |
Cash received under stock option plans for exercises | $ 2,709 | 880 |
Restricted stock | ||
Stock-Based Compensation (Textual) [Abstract] | ||
Stock-based compensation expense | $ 2,313 | $ 2,013 |
Stock award, vesting period | 4 years | |
Unrecognized compensation expense | $ 3,838 | |
Weighted-average period of recognition | 2 years 2 months 15 days | |
Granted (in shares) | 217,000 | 317,000 |
Weighted-average grant-date fair value (in dollars per share) | $ 12.23 | $ 8.19 |
Employee stock purchase plan | ||
Stock-Based Compensation (Textual) [Abstract] | ||
Stock-based compensation expense | $ 56 | $ 48 |
Number of shares available for future grants (in shares) | 821,000 | |
Shares issued (in shares) | 26,000 | 44,000 |
Employee stock purchase plan, discount percentage attributable to compensation expense | 15.00% | |
Cash received under the employee stock purchase plan | $ 230 | $ 336 |
Employee stock purchase plan | Maximum | ||
Stock-Based Compensation (Textual) [Abstract] | ||
Employee election percentage of pre-tax compensation withheld to purchase Company's common stock shares | 6.00% | |
ESPP Plan | Stock options | ||
Stock-Based Compensation (Textual) [Abstract] | ||
Stock-based compensation expense | $ 4,053 | $ 3,414 |
ESPP Plan | Employee stock purchase plan | ||
Stock-Based Compensation (Textual) [Abstract] | ||
Number of shares authorized (in shares) | 1,650,000 | |
Percentage of Company's common stock share price | 85.00% |
Stockholders' Equity - Weighted-Average Assumptions (Details) - Stock options |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Schedule of weighted-average assumptions used to value options as of their grant date | ||
Risk-free interest rate | 0.92% | 0.21% |
Expected volatility | 44.98% | 44.03% |
Expected life (in years) | 4 years 3 months 10 days | 4 years 3 months 14 days |
Dividend yield | 0.00% | 0.00% |
Stockholders' Equity - Stock Options Outstanding Rollforward (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Number of Options | ||
Outstanding at December 31 (in shares) | 2,034 | 1,624 |
Granted (in shares) | 497 | 654 |
Exercised (in shares) | (274) | (110) |
Expired, canceled or forfeited (in shares) | (130) | (134) |
Outstanding at December 31 (in shares) | 2,127 | 2,034 |
Exercisable at December 31 (in shares) | 858 | 611 |
Options vested or expected to vest, number of option (in shares) | 2,127 | 2,034 |
Weighted Average Exercise Price | ||
Outstanding at December 31 (in dollars per share) | $ 9.25 | $ 9.86 |
Granted (in dollars per share) | 12.68 | 8.12 |
Exercised (in dollars per share) | 9.86 | 8.02 |
Expired, canceled or forfeited (in dollars per share) | 9.96 | 12.14 |
Outstanding at December 31 (in dollars per share) | 9.93 | 9.25 |
Exercisable at December 31 (in dollars per share) | 9.41 | 9.83 |
Options vested or expected to vest, weighted average exercise price (in shares) | $ 9.93 | $ 9.25 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Stock options, Outstanding, Weighted Average Remaining Contractual Life | 2 years 8 months 4 days | 3 years 2 months 15 days |
Options vested or expected to vest, Weighted Average Remaining Contractual Life | 2 years 8 months 4 days | 3 years 2 months 15 days |
Stock options, Exercisable, Weighted Average Remaining Contractual Life | 1 year 7 months 24 days | 2 years 2 months 8 days |
Stock options, Outstanding, Aggregate Intrinsic Value | $ 931 | $ 4,288 |
Stock options, Exercisable, Aggregate Intrinsic Value | 453 | 939 |
Options vested or expected to vest, Aggregate Intrinsic Value | $ 931 | $ 4,288 |
Stockholders' Equity - Restricted Stock Outstanding Rollforward (Details) - Restricted stock - $ / shares shares in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Number of Shares | ||
Outstanding at December 31, unvested (in shares) | 556 | |
Granted (in shares) | 217 | 317 |
Vested (in shares) | (247) | |
Forfeited (in shares) | (37) | |
Outstanding at December 31, unvested (in shares) | 489 | 556 |
Weighted- average grant date fair value | ||
Outstanding at December 31, unvested (in dollars per share) | $ 8.90 | |
Granted (in dollars per share) | 12.23 | $ 8.19 |
Vested (in dollars per share) | 9.18 | |
Forfeited (in dollars per share) | 9.46 | |
Outstanding at December 31, unvested (in dollars per share) | $ 10.19 | $ 8.90 |
Stockholders' Equity - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 4,109 | $ 3,462 |
Cost of product sales | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 271 | 165 |
Cost of service sales | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 10 | 0 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 644 | 593 |
Sales, marketing and support | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 898 | 682 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 2,286 | $ 2,022 |
Stockholders' Equity - AOCI Disclosure (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | $ 131,884 | $ 149,989 | ||
Net other comprehensive loss | [1] | (177) | (465) | |
Ending Balance | 128,977 | 131,884 | ||
Foreign Currency Translation | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | (3,232) | (2,767) | ||
Other comprehensive loss | (177) | (465) | ||
Net other comprehensive loss | (177) | (465) | ||
Ending Balance | (3,409) | (3,232) | ||
Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | (3,232) | (2,767) | ||
Other comprehensive loss | (177) | (465) | ||
Net other comprehensive loss | (177) | (465) | ||
Ending Balance | $ (3,409) | $ (3,232) | ||
|
Income Taxes - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income Tax Expense (Benefit) [Abstract] | ||
Current federal tax expense (benefit) | $ 27 | $ 240 |
Deferred federal income tax expense (benefit) | 0 | 0 |
Federal income tax expense (benefit), continuing operations | 27 | 240 |
Current state and local tax expense (benefit) | 0 | 0 |
Deferred state and local income tax expense (benefit) | 0 | 0 |
State and local income tax expense (benefit), continuing operations | 0 | 0 |
Current foreign tax expense (benefit) | 44 | 321 |
Deferred foreign income tax expense (benefit) | (179) | (387) |
Foreign income tax expense (benefit), continuing operations | (135) | (66) |
Current income tax expense (benefit) | 71 | 561 |
Deferred income tax expense (benefit) | (179) | (387) |
Income tax (benefit) expense | $ (108) | $ 174 |
Income Taxes - Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Increase (decrease) in income taxes resulting from: | ||
Income tax benefit at Federal statutory income tax rate | $ (2,073) | $ (4,571) |
State income tax benefit, net of federal benefit | (342) | (600) |
State research and development, investment credits | (137) | (213) |
Non-deductible meals & entertainment | 1 | 22 |
Non-deductible stock compensation expense | (194) | 19 |
Non-deductible compensation under 162(m) | 35 | 0 |
Foreign tax rate differential | 58 | 235 |
Federal research and development credits | (607) | (707) |
Uncertain tax positions | 32 | 39 |
Provision to tax return adjustments | 33 | 144 |
Change in valuation allowance | 4,648 | 3,980 |
PPP loan forgiveness | (1,455) | 0 |
Impairment of goodwill and intangibles | 0 | 1,834 |
Prior period adjustments | (117) | 0 |
Other | 10 | (8) |
Income tax (benefit) expense | $ (108) | $ 174 |
Income Taxes - Income (Loss) From Continuing Operations Before Income Tax (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | ||
United States | $ (10,040) | $ (11,862) |
Foreign | 169 | (9,904) |
Loss before income tax (benefit) expense | $ (9,871) | $ (21,766) |
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Deferred tax assets: | ||
Accounts receivable, due to allowance for doubtful accounts | $ 373 | $ 221 |
Inventories | 1,211 | 1,209 |
Operating loss carry-forwards | 5,784 | 2,744 |
Stock-based compensation expense | 1,106 | 874 |
Property and equipment, due to difference in depreciation | 1,978 | 841 |
Research and development tax credit carry-forwards | 6,247 | 5,640 |
Foreign tax credit carry-forwards | 2,345 | 2,345 |
State tax credit carry-forwards | 3,975 | 3,838 |
Capitalized research and development | 2,690 | 3,154 |
Warranty reserve | 277 | 429 |
Accrued expenses | 1,174 | 1,216 |
Lease liability | 700 | 1,574 |
Gross deferred tax assets | 27,860 | 24,085 |
Less valuation allowance | (27,080) | (22,432) |
Total deferred tax assets | 780 | 1,653 |
Deferred tax liabilities: | ||
Purchased intangible assets | (199) | (384) |
Property and equipment, due to differences in depreciation | (52) | (50) |
Right of use asset | (688) | (1,564) |
Total deferred tax liabilities | (939) | (1,998) |
Net deferred tax liability | (159) | (345) |
Deferred income tax asset | 56 | 73 |
Deferred income tax liability | $ (215) | $ (418) |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Tax Credit Carryforward [Line Items] | ||
General business credit | $ 9 | |
Foreign tax credit carry-forwards | 2,345 | $ 2,345 |
Valuation allowance increase | 4,648 | |
Interest and penalties | 46 | 61 |
Non-current income taxes payable | 255 | $ 208 |
Decrease in unrecognized tax benefits is reasonably possible | 19 | |
Federal | ||
Tax Credit Carryforward [Line Items] | ||
Operating loss carryforwards | 22,103 | |
Federal | Research Tax Credit Carryforward | ||
Tax Credit Carryforward [Line Items] | ||
Unrecognized excess tax benefit | 6,238 | |
State Tax Authority | ||
Tax Credit Carryforward [Line Items] | ||
Operating loss carryforwards | 16,878 | |
Unrecognized excess tax benefit | 114 | |
State Tax Authority | Research Tax Credit Carryforward | ||
Tax Credit Carryforward [Line Items] | ||
Unrecognized excess tax benefit | $ 4,918 |
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Expenses) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits as of January 1 | $ 1,771 | $ 1,897 |
Gross decrease in unrecognized tax benefits - prior year tax position | (104) | (105) |
Lapse of statute of limitations | (14) | (21) |
Unrecognized tax benefits as of December 31 | $ 1,653 | $ 1,771 |
Goodwill and Intangible Assets (Details) - USD ($) |
1 Months Ended | 12 Months Ended | 120 Months Ended | |
---|---|---|---|---|
Jan. 31, 2017 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2026 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Assets acquired | $ 62,000 | |||
Amortization expense | $ 1,027,000 | |||
Weighted average remaining useful life | 1 year 6 months | |||
Goodwill expected tax deductible amount | $ 0 | |||
General and administrative | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 1,027,000 | $ 1,004,000 | ||
Subscriber relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average remaining useful life | 1 year 6 months | |||
Acquisition Prior to 2013 | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Useful life | 7 years | |||
Headland Media Limited | Subscriber relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Useful life | 10 years | |||
Headland Media Limited | Distribution rights | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Useful life | 1 year | 15 years | ||
Q1 2017 Acquisition | Subscriber relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Useful life | 10 years | |||
Assets acquired | $ 100,000 | $ 408,000 | ||
Assets consideration | $ 62,000 | $ 75,000 | ||
Forecast | Q1 2017 Acquisition | Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Assets consideration | $ 114,000 |
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 11,231 | $ 11,171 |
Accumulated Amortization | 9,944 | 8,917 |
Net Carrying Value | 1,287 | 2,254 |
Amortization of Intangible Assets | 1,027 | |
Subscriber relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 8,033 | 7,977 |
Accumulated Amortization | 6,746 | 5,958 |
Net Carrying Value | 1,287 | 2,019 |
Distribution rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 315 | 311 |
Accumulated Amortization | 315 | 76 |
Net Carrying Value | 0 | 235 |
Internally developed software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 446 | 446 |
Accumulated Amortization | 446 | 446 |
Net Carrying Value | 0 | 0 |
Proprietary content | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 153 | 153 |
Accumulated Amortization | 153 | 153 |
Net Carrying Value | 0 | 0 |
Intellectual property | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,284 | 2,284 |
Accumulated Amortization | 2,284 | 2,284 |
Net Carrying Value | 0 | 0 |
General administrative expense | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of Intangible Assets | $ 1,027 | $ 1,004 |
Goodwill and Intangible Assets - Intangible Asset Remaining Useful Life (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Remaining Useful Life in Years | 1 year 6 months |
Subscriber relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Remaining Useful Life in Years | 1 year 6 months |
Goodwill and Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2022 | $ 782 | |
2023 | 315 | |
2024 | 60 | |
2025 | 60 | |
2026 | 60 | |
Thereafter | 10 | |
Net Carrying Value | $ 1,287 | $ 2,254 |
Goodwill and Intangible Assets - Intangibles Rollforward (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Intangible Assets [Roll Forward] | |
Balance at December 31, 2020 | $ 2,254 |
Amortization expense | (1,027) |
Intangibles assets acquired in asset acquisition | 62 |
Foreign currency translation adjustment | (2) |
Balance at December 31, 2021 | $ 1,287 |
Goodwill and Intangible Assets - Goodwill Rollforward (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Goodwill [Roll Forward] | |
Balance at January 1 | $ 6,592 |
Foreign currency translation adjustment | (22) |
Balance at December 31 | $ 6,570 |
401(k) Plan (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Retirement Benefits [Abstract] | ||
Employer matching contribution, percent | 6.00% | |
Vesting period | 5 years | |
Employer matching contribution, amount | $ 900,000 | $ 561,000 |
Discretionary contributions | $ 0 | $ 0 |
Revenue from Contracts with Customers (ASC 606) - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Revenue from External Customer [Line Items] | ||
Total net sales | $ 171,767 | $ 158,733 |
Product | ||
Revenue from External Customer [Line Items] | ||
Total net sales | 66,870 | 64,619 |
Service | ||
Revenue from External Customer [Line Items] | ||
Total net sales | 104,897 | 94,114 |
Mobile Connectivity | Service | ||
Revenue from External Customer [Line Items] | ||
Total net sales | 103,899 | 91,590 |
Intertial Navigation | Product | ||
Revenue from External Customer [Line Items] | ||
Total net sales | 36,858 | 36,756 |
Intertial Navigation | Service | ||
Revenue from External Customer [Line Items] | ||
Total net sales | 998 | 2,524 |
Transferred at point in time | Mobile Connectivity | Product | ||
Revenue from External Customer [Line Items] | ||
Total net sales | 27,490 | 25,140 |
Transferred over time | Mobile Connectivity | Product | ||
Revenue from External Customer [Line Items] | ||
Total net sales | $ 2,522 | $ 2,723 |
Revenue from Contracts with Customers (ASC 606) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized | $ 2,281 | $ 2,586 |
Segment Reporting (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Non-US | ||
Segment Reporting Information [Line Items] | ||
Percent of consolidated net sales | 60.00% | 64.00% |
Singapore | ||
Segment Reporting Information [Line Items] | ||
Percent of consolidated net sales | 11.00% | |
Mobile Connectivity | Mobile Comm Product Sales | ||
Segment Reporting Information [Line Items] | ||
Percent of consolidated net sales | 17.00% | 18.00% |
Mobile Connectivity | VSAT Airtime Service Sales | ||
Segment Reporting Information [Line Items] | ||
Percent of consolidated net sales | 54.00% | 51.00% |
Intertial Navigation | FOG-based Guidance and Navigation Systems | ||
Segment Reporting Information [Line Items] | ||
Percent of consolidated net sales | 16.00% | 16.00% |
Segment Reporting - Net Sales and Operating Income (Loss) (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Segment Reporting Information [Line Items] | |||
Net sales | $ 171,767,000 | $ 158,733,000 | |
Operating income (loss) | (17,946,000) | (22,937,000) | |
Net interest and other income | 8,075,000 | 1,171,000 | |
Loss before income tax (benefit) expense | (9,871,000) | (21,766,000) | |
Impairment charge to goodwill and intangibles | $ 10,490,000 | 0 | 10,490,000 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Operating income (loss) | 4,398,000 | (5,272,000) | |
Operating Segments | Mobile Connectivity | |||
Segment Reporting Information [Line Items] | |||
Net sales | 133,911,000 | 119,453,000 | |
Operating income (loss) | 2,749,000 | (10,071,000) | |
Operating Segments | Intertial Navigation | |||
Segment Reporting Information [Line Items] | |||
Net sales | 37,856,000 | 39,280,000 | |
Operating income (loss) | 1,649,000 | 4,799,000 | |
Unallocated, net | |||
Segment Reporting Information [Line Items] | |||
Operating income (loss) | $ (22,344,000) | $ (17,665,000) |
Segment Reporting - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Segment Reporting Information [Line Items] | ||
Depreciation | $ 13,574 | $ 10,659 |
Amortization expense | 1,027 | 1,004 |
Operating Segments | Mobile Connectivity | ||
Segment Reporting Information [Line Items] | ||
Depreciation | 11,322 | 8,726 |
Amortization expense | 1,027 | 1,004 |
Operating Segments | Intertial Navigation | ||
Segment Reporting Information [Line Items] | ||
Depreciation | 1,569 | 1,325 |
Amortization expense | 0 | 0 |
Unallocated, net | ||
Segment Reporting Information [Line Items] | ||
Depreciation | 683 | 608 |
Amortization expense | $ 0 | $ 0 |
Share Buyback Program (Details) $ in Thousands |
1 Months Ended | 12 Months Ended | 27 Months Ended | |
---|---|---|---|---|
Jan. 31, 2020
USD ($)
shares
|
Dec. 31, 2021
Program
|
Dec. 31, 2021
USD ($)
shares
|
Oct. 04, 2019
shares
|
|
Share Buyback Program (Textual) [Abstract] | ||||
Common stock available for repurchase (in shares) | 1,000,000 | |||
Shares repurchased (in shares) | 36,000 | 151,000 | ||
Shares repurchased | $ | $ 390 | $ 1,690 | ||
Number of other repurchase programs outstanding | Program | 0 |
Fair Value Measurements (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Money market mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 13,147 | $ 20,142 |
United States treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 4,999 | |
Level 1 | Money market mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 13,147 | 20,142 |
Level 1 | United States treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 4,999 | |
Level 2 | Money market mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Level 2 | United States treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 3 | Money market mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 0 | 0 |
Level 3 | United States treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 0 |
Fair Value Measurements - Narrative (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Fair Value Disclosures [Abstract] | |||
Goodwill and intangible impairment charges | $ 10,490,000 | $ 0 | $ 10,490,000 |
Leases - Narrative (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021
satellite_hub
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
Mar. 31, 2018
hub
|
|
Lessee, Lease, Description [Line Items] | ||||
Lease expense | $ 3,963 | $ 3,413 | ||
Short-term operating lease costs | 237 | 244 | ||
Sublease Income | 134 | |||
Finance lease term | 5 years | |||
Number of satellite hubs leased | hub | 3 | |||
Number of satellite hubs disposed | satellite_hub | 2 | |||
Property and equipment, gross | 124,374 | 114,265 | ||
Capital assets, depreciation expense | 181 | |||
Net investment in lease, current | 3,881 | |||
Net investment in lease, noncurrent | 6,777 | |||
Interest income | $ 882 | 859 | ||
Lease term | 3 years | |||
Operating lease asset | $ 1,444 | |||
Lease, accumulated depreciation | 154 | |||
Operating lease depreciation | $ 154 | |||
Useful life | 5 years | |||
Lease revenue | $ 243 | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Sales-type leases, term of contracts | 3 years | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Sales-type leases, term of contracts | 5 years | |||
Assets held under capital leases | ||||
Lessee, Lease, Description [Line Items] | ||||
Leased assets, useful life | 7 years | |||
Assets Held Under Finance Leases | ||||
Lessee, Lease, Description [Line Items] | ||||
Property and equipment, gross | $ 1,268 | $ 710 |
Leases - Future Minimum Operating Lease Payments (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
2022 | $ 2,033 | |
2023 | 819 | |
2024 | 428 | |
2025 | 38 | |
Total undiscounted lease payments | 3,318 | |
Less amount representing interest | (182) | |
Present value of operating lease liabilities | 3,136 | |
Less current installments of obligation under current-operating lease liabilities | 1,912 | $ 3,826 |
Obligations under long-term operating lease liabilities, excluding current installments | $ 1,224 | $ 3,204 |
Weighted-average remaining lease term - operating leases | 1 year 11 months 19 days | |
Weighted-average discount rate - operating leases | 5.50% |
Leases - Future Minimum Finance Lease Payments (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Leases [Abstract] | |
2022 | $ 264 |
2023 | 22 |
Total undiscounted lease payments | 286 |
Less amount representing interest | (3) |
Present value of financing lease liabilities | 283 |
Less current installments of obligation under accrued other | $ 261 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other Accrued Liabilities, Current |
Obligations under other long-term liabilities, excluding current installments | $ 22 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent |
Weighted-average remaining lease term - finance leases (years) | 1 year 2 months 1 day |
Weighted-average discount rate - finance leases | 1.53% |
Leases - Sales-type Lease Future Undiscounted Cash Flows (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Leases [Abstract] | |
2022 | $ 4,589 |
2023 | 3,479 |
2024 | 2,540 |
2025 | 1,160 |
2026 | 340 |
Total undiscounted cash flows | 12,108 |
Present value of lease payments | 10,658 |
Difference between undiscounted cash flows and discounted cash flows | $ 1,450 |
Leases - Schedule of Future Minimum Lease Payments To Be Received (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Leases [Abstract] | |
2022 | $ 445 |
2023 | 444 |
2024 | 202 |
Total | $ 1,091 |
Subsequent Events (Details) |
Mar. 10, 2022 |
---|---|
Subsequent Event | |
Subsequent Event [Line Items] | |
Percent reduction in workforce | 10.00% |
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