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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=5><B>SECURITIES AND EXCHANGE
COMMISSION </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4><B>WASHINGTON, D.C. 20549</B> </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4><BR><B>FORM 8-K</B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4><BR><B>CURRENT REPORT</B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>PURSUANT TO SECTION 13
OR 15(d) OF THE</B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>SECURITIES EXCHANGE ACT
OF 1934</B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date of Report (Date of earliest
event reported) June 30, 2003 </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4><BR><B>KVH Industries, Inc.</B></font><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>(Exact Name of
Registrant as Specified in Charter)</FONT></P>

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<B>Delaware</B>
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(State or Other Jurisdiction of Incorporation)
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<B>0-28082</B>
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(Commission File Number)
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>05-0420589</B><BR>(IRS Employer
Identification No.)</FONT></P>

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<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;50 Enterprise Center</B>
<BR>
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Middletown, RI</B>
<BR>
&nbsp;(Address of Principal Executive Offices)
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<B>02842</B>
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(Zip Code)
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Registrant&#146;s
telephone number, including area code: <B>(401) 847- 3327</B>
<BR><BR>
N/A
<BR><BR>
(Former Name or Former
Address, if Changed Since Last Report)
<BR><BR><BR><BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 5.&nbsp;&nbsp;&nbsp;&nbsp;Other Events.</B></FONT><BR><BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
report is being filed by KVH Industries, Inc. (&#147;KVH&#148;) to report that, on July 17, 2003, KVH announced the quarterly results of operations for the period ended June 30, 2003. The press
release issued by KVH relating to the announcement is filed as Exhibit 99.1 to this report.
</FONT>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 7.&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements, Pro Forma Financial Information and Exhibits.</B></FONT><BR><BR>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Exhibits.</FONT></P>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following exhibit is filed with this report on Form 8-K:</FONT></P>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibit No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Description</FONT></P>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;99.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Press Release of KVH issued on July 17, 2003.</FONT></P>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>SIGNATURES</b> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
<BR><BR><BR>
<B>KVH Industries, Inc.</B>
</FONT></P>

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<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Date:</B>  July 17, 2003</FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
BY: /S/ Patrick J. Spratt
<BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;
<BR>
Patrick J. Spratt
<BR>
Chief Accounting &amp; Financial Officer
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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exhibit: 99.1 Press
Release Dated July 17, 2003 </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I>FOR IMMEDIATE RELEASE</I> </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=4><B><I>PRESS RELEASE </I></B></FONT></P>
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     <TD WIDTH="34%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">KVH Industries Contact: </FONT></TD>
     <TD WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD WIDTH="56%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Pat Spratt, Chief Financial Officer</FONT></TD></TR>
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     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">401-847-3327<BR><BR></FONT></TD></TR>
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     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Investor Relations Contact: </FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">FD Morgen-Walke</FONT></TD></TR>
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     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Jolinda Taylor, 617-747-3600</FONT></TD></TR>
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     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Paul Johnson, 212-850-5600<BR><BR></FONT></TD></TR>
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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=5><B>KVH Reports 14% Revenue
Growth and Increased Profitability in Second Quarter</B></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>&#149; Record Quarterly Revenues
of $14.4 Million; EPS $0.04 <BR>&#149; Company Reaffirms 2003 Growth Expectations </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>MIDDLETOWN, RI &#150; July 17,
2003 &#150;</B> KVH  Industries  (Nasdaq:  KVHI),  a leading  provider  of mobile  satellite
communications  products and defense-related  navigation and guidance systems,  today reported its results for
the second  quarter  ended June 30,  2003.  Net income for the period was $0.4  million,  or $0.04 per diluted
share.  By  comparison,  KVH  recorded a net loss of ($0.8)  million,  or ($0.07)  per share,  during the same
period last year.  Revenue for the period was $14.4 million,  up 14% from $12.6 million for the second quarter
ended June 30, 2002. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the six months ended June 30, 2003,  revenue  increased  23% to $27.5  million from $22.3  million for the
six months ended June 30, 2002. KVH also reported a net profit of
$0.6 million or $0.05 per share for the period,  versus a net loss of ($2.0) million,  or ($0.18) per share in
the prior year.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;We had another record-breaking
quarter and made excellent progress in our principal business areas,&#148; said Martin
Kits van Heyningen, KVH president and chief executive officer. &#147;These gains were
driven by solid year-over-year growth that was well balanced across our satellite,
defense, and fiber optic markets. Looking ahead, we are on track for strengthened
profitability and solid revenue growth in the second half of the year as our major new
satellite antenna product, the TracVision A5, enters volume production.&#148; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Overall, the company&#146;s satellite
products recorded year-over-year revenue growth of 18% for the second quarter, with
revenue of $9.3 million. Sales of defense-related solutions rose 13% over the same period
last year on revenue of $3.3 million. Year over year, second quarter sales of fiber optic
products were up 11% on revenue of $1 million while KVH&#146;s legacy products, which
include OEM sensors and marine navigation systems, declined approximately 14% for the
quarter on revenue of $0.8 million. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;Our existing satellite business
continued to thrive thanks to new marine product introductions and consistent growth in
our sales to the RV manufacturers and aftermarket resellers,&#148; continued Mr. Kits van
Heyningen. &#147;In the automotive market, I&#146;m pleased to report that we are on track
with the update we provided on June 30, 2003, and have now built the first TracVision A5
production units. These initial systems will be used for product demonstrations for key
accounts, strategic partners, and service providers. At the same time, we are preparing to
begin volume production of the TracVision A5 later this quarter as planned.&#148; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Commenting on the company&#146;s
defense-related business, Mr. Kits van Heyningen remarked, &#147;The performance of our
TACNAV systems aboard combat vehicles in Iraq clearly illustrates the value and
capabilities of our systems in the field and has supported the trend of strong
defense-related sales. During the second quarter, we also received our first-ever
production order for our new fiber optic gyro-based inertial measurement unit (IMU). The
rapid acceptance of our new IMU for production marks a milestone for KVH as we apply our
fiber optic technology for use in high-performance, integrated systems such as smart
munitions, torpedoes, unmanned aerial vehicles, platform stabilization, and integration
within our TACNAV product line.&#148; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>With regard to the company&#146;s
financial results, Pat Spratt, chief financial officer, said, &#147;We continued to show
improvement in essentially all areas of operations and asset management. Product cost
initiatives contributed to a strong increase in gross profit, which rose 24% to $6.6
million in the second quarter compared with the same period last year. Gross margin also
increased to 46%, up from 42% in the same quarter last year. We had indicated previously
that gross margin would not be quite this strong. However, we exceeded our expectations
for product cost improvements in the quarter, and benefited from the incremental leverage
that came with higher than expected total volume. Operating expenses, measured as a
percentage of revenue, declined to 42% compared to 48% in the second quarter of 2002.
Inventory was $0.9 million lower than at the end of the second quarter of 2002 and
resulted in annualized inventory turns of 7.5, or almost two full turns greater than last
year. Cash provided by operations was $1.2 million for the quarter.&#148; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr.&nbsp;&nbsp;&nbsp;&nbsp;
          Spratt added, &#147;We anticipate that revenues for the next two quarters will
          be up sequentially and reflect solid year-over-year growth. For the same period,
          gross margin will likely be 1 to 2 points lower than the third and fourth
          quarters of last year due to shifts in our product mix, and we will experience
          year-over-year growth in sales and marketing expenses to support higher sales
          volumes and the TracVision A5 roll-out.&#148; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr.&nbsp;&nbsp;&nbsp;&nbsp;
          Kits van Heyningen concluded, &#147;Thanks to the strength of our established
          product lines and the anticipated revenue from TracVision A5 sales, I remain
          confident that we will see ongoing improvement in earnings during the remainder
          of the year supported by revenue growth that is in line with our objective of 20
          to 30% growth for the year as a whole.&#148; </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Second Quarter
Highlights: </FONT></H1>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149; </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
On May 6, 2003, KVH received a $1.4 million order from the U.S. Special Operations Command
(SOCOM) for the company&#146;s TACNAV military vehicle navigation system. This order was
the latest component of a large-quantity, multi- year SOCOM program for the purchase and
fielding of TACNAV systems potentially worth in excess of $10 million over the life of the
program. </FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149; </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
On June 26, 2003, KVH announced that Tweeter Home Entertainment Group had signed on as the
first nationwide retailer for the new TracVision A5 satellite TV antenna. Tweeter will
sell, install, and support the TracVision A5 through a retailer network comprised of 147
stores under the Tweeter, HiFi Buys and Sound Advice names in the New England, Texas,
Southern California, Mid-Atlantic, Chicago, Southeast and Florida markets. </FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149; </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Throughout the quarter, KVH expanded its OEM customer base in the land mobile marketplace
as it announced that RV manufacturers Monaco, Triple E RV, Fleetwood, and Forest River had
all selected KVH&#146;s TracVision line of satellite TV antennas for 2004 model year
vehicles. </FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>KVH is webcasting its second quarter
conference call live at 10:30 a.m. Eastern Time today through the company&#146;s web site.
The conference call can be accessed at<I>http://www.kvh.com/InvRelations</I>. The audio
archive also will be available on the company web site within three hours of the
completion of the call. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>KVH Industries, Inc., designs and
manufactures products that enable mobile communication, navigation, and precision pointing
through the use of its proprietary mobile satellite antenna and fiber optic technologies.
The company is developing next-generation systems with greater precision, durability, and
versatility for communications, navigation, and industrial applications. An ISO
9001-registered company, KVH has headquarters in Middletown, Rhode Island, with a fiber
optic manufacturing facility in Tinley Park, Illinois, and a European sales, marketing,
and support office in Hoersholm, Denmark. </FONT></P>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>KVH INDUSTRIES, INC.
AND SUBSIDIARY</B> </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CONSOLIDATED BALANCE SHEETS<BR>JUNE 30, 2003, AND
DECEMBER 31, 2002<BR><BR>(Unaudited)</B> </FONT></P>


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     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></TH>
     <TH COLSPAN=3 valign="top"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>June 30, <BR>2003<BR>
</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3 valign="top"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>December 31, <BR>2002<BR></FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
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     <TD WIDTH=65% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Assets:</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH=12% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH=12% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Current assets:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   8,398,711</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7,239,255</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,482,958</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9,716,292</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Costs and estimated earnings</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in excess of billings on uncompleted contracts</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>219,146</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>377,058</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,174,622</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,947,207</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other deposits</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>636,761</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>587,647</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>565,871</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>616,877</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
        <TD COLSPAN=3></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD></TR>


<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24,478,069</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22,484,336</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7,754,280</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7,384,888</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets, less accumulated amortization</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>378,213</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>441,225</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,238,430</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,238,430</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>34,848,992</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>32,548,879</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=2></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=2></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Liabilities and stockholders' equity:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current liabilities:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current portion long-term debt</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>96,574</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>93,262</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,035,825</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,321,104</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,149,331</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,007,470</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customer deposits</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31,230</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>91,665</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,312,960</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,513,501</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,554,756</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,603,885</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
     <TD COLSPAN=3></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7,867,716</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7,117,386</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
     <TD COLSPAN=3></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Stockholders' equity:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>113,973</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>111,498</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>36,064,375</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>35,134,093</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(9,197,072)</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(9,818,025)</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,927</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>26,981,276</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25,431,493</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=1></TD></TR>
<TR VALIGN=Bottom  BGCOLOR="#CCEEFF">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>34,848,992</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>32,548,879</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=2></TD>
        <TD COLSPAN=3><HR WIDTH=95% NOSHADE COLOR=Black SIZE=2></TD></TR>
</TABLE>

<BR><BR><HR size="1" width="600" align="left"><BR><BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>
<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>KVH INDUSTRIES, INC.
AND SUBSIDIARY</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CONSOLIDATED STATEMENTS
OF OPERATIONS<BR>(Unaudited)</B> </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>


<TABLE WIDTH="600" BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TH>
     <TH colspan="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Three months ended<BR>June 30,</FONT></TH>
     <TH width="15"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TH>
     <TH colspan="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Six months ended<BR>June 30,</FONT></TH>
</TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2003</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></CENTER></TD>
     <TD align="right"><CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2002</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></CENTER></TD>
     <TD WIDTH="15"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2003</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></CENTER></TD>
     <TD align="right"><CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2002</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></CENTER></TD></TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Net sales</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;14,384,424&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">12,641,244&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">27,503,094&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">22,282,757&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Cost of sales</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7,808,259&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7,321,309&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">14,968,469&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">12,678,716&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD></TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Gross profit</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">6,576,165&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,319,935&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">12,534,625&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">9,604,041&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD colspan="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR>Operating expenses:</FONT></TD></TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Research &amp; development</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,311,062&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,432,512&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4,425,564&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4,766,211&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Sales &amp; marketing</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,600,100&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,775,751&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,232,780&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,094,015&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Administration</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,101,793&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">813,592&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,079,618&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,532,932&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Profit (loss) from operations</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">563,210&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(701,920)&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">796,663&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(1,789,117)&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD colspan="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR>Other income (expense):</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Other expense</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(44,680)&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(28,632)&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(46,469)&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(30,656)&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Interest expense, net</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(39,545)&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(29,985)&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(78,235)&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(52,634)&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Profit (loss) before income taxes</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">478,985&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(760,537)&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">671,959&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(1,872,407)&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR>Income tax expense</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR>41,020&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR>51,600&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR>51,006&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR>86,100&nbsp;</FONT><BR><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Net profit (loss)</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;437,965&nbsp;</FONT><BR><HR WIDTH=95% SIZE=2 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(812,137)&nbsp;</FONT><BR><HR WIDTH=95% SIZE=2 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">620,953&nbsp;</FONT><BR><HR WIDTH=95% SIZE=2 COLOR=BLACK NOSHADE></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(1,958,507)&nbsp;</FONT><BR><HR WIDTH=95% SIZE=2 COLOR=BLACK NOSHADE></TD></TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD colspan="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR>Per share information:</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD colspan="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Profit (loss) per share</FONT></TD></TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Basic</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;0.04&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(0.07)&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0.06&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(0.18)&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Diluted</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$&nbsp;&nbsp;&nbsp;&nbsp;0.04&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(0.07)&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0.05&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(0.18)&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD colspan="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR>Number of shares used in per share<BR>calculation:</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Basic</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11,329,443&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11,005,426&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11,283,661&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10,989,609&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Basic</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11,939,341&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11,005,426&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">11,845,926&nbsp;</FONT></TD>
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10,989,609&nbsp;</FONT></TD></TR>
</TABLE>


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<BR><BR>
<HR size=1><BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=1>This press release contains certain
forward-looking statements that involve risks and uncertainties. For example, the
statements regarding the company&#146;s financial and product development goals for 2003
are forward-looking statements. The actual results realized by the company could differ
materially from the statements made herein. Factors that might cause such differences
include, but are not limited to: failure to develop and market new products successfully; lack
of reliable vendors, service providers, and outside products; uneven military sales
cycles; unforeseen changes in competing technologies and products; worldwide economic
variances; and poor or delayed research and development results. Additional factors are
discussed in the company&#146;s 2002 Form 10-K filed with the Securities and Exchange
Commission on March 26, 2003. Copies are available through the company&#146;s Investor
Relations department and web site, www.kvh.com. KVH assumes no obligation to update its
forward-looking statements to reflect new information and developments. </FONT>
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</html>
[{"type": "8-K", "sequence": "1", "filename": "earningsrel2q03.htm", "description": "CURRENT REPORT ON FORM 8-K", "secsgml_size_bytes": 62141}]
{"company-data": {"conformed-name": "KVH INDUSTRIES INC \\DE\\", "cik": "0001007587", "assigned-sic": "3663", "irs-number": "050420589", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-28082", "film-number": "03790355"}, "business-address": {"street1": "110 ENTERPRISE CENTER", "city": "MIDDLETOWN", "state": "RI", "zip": "02842", "phone": "4018473327"}, "mail-address": {"street1": "110 ENTERPRISE CENTER", "city": "MIDDLETOWN", "state": "RI", "zip": "02842"}}
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13
OR 15(d) OF THE
SECURITIES EXCHANGE ACT
OF 1934
Date of Report (Date of earliest
event reported) June 30, 2003
KVH Industries, Inc.
(Exact Name of
Registrant as Specified in Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
0-28082
(Commission File Number)
05-0420589
(IRS Employer
Identification No.)
50 Enterprise Center
Middletown, RI
(Address of Principal Executive Offices)
02842
(Zip Code)
Registrant's
telephone number, including area code:
(401) 847- 3327
N/A
(Former Name or Former
Address, if Changed Since Last Report)
Item 5.    Other Events.
This
report is being filed by KVH Industries, Inc. ("KVH") to report that, on July 17, 2003, KVH announced the quarterly results of operations for the period ended June 30, 2003. The press
release issued by KVH relating to the announcement is filed as Exhibit 99.1 to this report.
Item 7.    Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
The following exhibit is filed with this report on Form 8-K:
Exhibit No.     Description
99.1     Press Release of KVH issued on July 17, 2003.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
KVH Industries, Inc.
Date:
July 17, 2003
BY: /S/ Patrick J. Spratt
——————————————
Patrick J. Spratt
Chief Accounting & Financial Officer
Exhibit: 99.1 Press
Release Dated July 17, 2003
FOR IMMEDIATE RELEASE
PRESS RELEASE
KVH Industries Contact:
Pat Spratt, Chief Financial Officer
401-847-3327
Investor Relations Contact:
FD Morgen-Walke
Jolinda Taylor, 617-747-3600
Paul Johnson, 212-850-5600
KVH Reports 14% Revenue
Growth and Increased Profitability in Second Quarter
• Record Quarterly Revenues
of $14.4 Million; EPS $0.04
• Company Reaffirms 2003 Growth Expectations
MIDDLETOWN, RI – July 17,
2003 –
KVH  Industries  (Nasdaq:  KVHI),  a leading  provider  of mobile  satellite
communications  products and defense-related  navigation and guidance systems,  today reported its results for
the second  quarter  ended June 30,  2003.  Net income for the period was $0.4  million,  or $0.04 per diluted
share.  By  comparison,  KVH  recorded a net loss of ($0.8)  million,  or ($0.07)  per share,  during the same
period last year.  Revenue for the period was $14.4 million,  up 14% from $12.6 million for the second quarter
ended June 30, 2002.
For the six months ended June 30, 2003,  revenue  increased  23% to $27.5  million from $22.3  million for the
six months ended June 30, 2002. KVH also reported a net profit of
$0.6 million or $0.05 per share for the period,  versus a net loss of ($2.0) million,  or ($0.18) per share in
the prior year.
"We had another record-breaking
quarter and made excellent progress in our principal business areas," said Martin
Kits van Heyningen, KVH president and chief executive officer. "These gains were
driven by solid year-over-year growth that was well balanced across our satellite,
defense, and fiber optic markets. Looking ahead, we are on track for strengthened
profitability and solid revenue growth in the second half of the year as our major new
satellite antenna product, the TracVision A5, enters volume production."
Overall, the company's satellite
products recorded year-over-year revenue growth of 18% for the second quarter, with
revenue of $9.3 million. Sales of defense-related solutions rose 13% over the same period
last year on revenue of $3.3 million. Year over year, second quarter sales of fiber optic
products were up 11% on revenue of $1 million while KVH's legacy products, which
include OEM sensors and marine navigation systems, declined approximately 14% for the
quarter on revenue of $0.8 million.
"Our existing satellite business
continued to thrive thanks to new marine product introductions and consistent growth in
our sales to the RV manufacturers and aftermarket resellers," continued Mr. Kits van
Heyningen. "In the automotive market, I'm pleased to report that we are on track
with the update we provided on June 30, 2003, and have now built the first TracVision A5
production units. These initial systems will be used for product demonstrations for key
accounts, strategic partners, and service providers. At the same time, we are preparing to
begin volume production of the TracVision A5 later this quarter as planned."
Commenting on the company's
defense-related business, Mr. Kits van Heyningen remarked, "The performance of our
TACNAV systems aboard combat vehicles in Iraq clearly illustrates the value and
capabilities of our systems in the field and has supported the trend of strong
defense-related sales. During the second quarter, we also received our first-ever
production order for our new fiber optic gyro-based inertial measurement unit (IMU). The
rapid acceptance of our new IMU for production marks a milestone for KVH as we apply our
fiber optic technology for use in high-performance, integrated systems such as smart
munitions, torpedoes, unmanned aerial vehicles, platform stabilization, and integration
within our TACNAV product line."
With regard to the company's
financial results, Pat Spratt, chief financial officer, said, "We continued to show
improvement in essentially all areas of operations and asset management. Product cost
initiatives contributed to a strong increase in gross profit, which rose 24% to $6.6
million in the second quarter compared with the same period last year. Gross margin also
increased to 46%, up from 42% in the same quarter last year. We had indicated previously
that gross margin would not be quite this strong. However, we exceeded our expectations
for product cost improvements in the quarter, and benefited from the incremental leverage
that came with higher than expected total volume. Operating expenses, measured as a
percentage of revenue, declined to 42% compared to 48% in the second quarter of 2002.
Inventory was $0.9 million lower than at the end of the second quarter of 2002 and
resulted in annualized inventory turns of 7.5, or almost two full turns greater than last
year. Cash provided by operations was $1.2 million for the quarter."
Mr.    
          Spratt added, "We anticipate that revenues for the next two quarters will
          be up sequentially and reflect solid year-over-year growth. For the same period,
          gross margin will likely be 1 to 2 points lower than the third and fourth
          quarters of last year due to shifts in our product mix, and we will experience
          year-over-year growth in sales and marketing expenses to support higher sales
          volumes and the TracVision A5 roll-out."
Mr.    
          Kits van Heyningen concluded, "Thanks to the strength of our established
          product lines and the anticipated revenue from TracVision A5 sales, I remain
          confident that we will see ongoing improvement in earnings during the remainder
          of the year supported by revenue growth that is in line with our objective of 20
          to 30% growth for the year as a whole."
Second Quarter
Highlights:
•
On May 6, 2003, KVH received a $1.4 million order from the U.S. Special Operations Command
(SOCOM) for the company's TACNAV military vehicle navigation system. This order was
the latest component of a large-quantity, multi- year SOCOM program for the purchase and
fielding of TACNAV systems potentially worth in excess of $10 million over the life of the
program.
•
On June 26, 2003, KVH announced that Tweeter Home Entertainment Group had signed on as the
first nationwide retailer for the new TracVision A5 satellite TV antenna. Tweeter will
sell, install, and support the TracVision A5 through a retailer network comprised of 147
stores under the Tweeter, HiFi Buys and Sound Advice names in the New England, Texas,
Southern California, Mid-Atlantic, Chicago, Southeast and Florida markets.
•
Throughout the quarter, KVH expanded its OEM customer base in the land mobile marketplace
as it announced that RV manufacturers Monaco, Triple E RV, Fleetwood, and Forest River had
all selected KVH's TracVision line of satellite TV antennas for 2004 model year
vehicles.
KVH is webcasting its second quarter
conference call live at 10:30 a.m. Eastern Time today through the company's web site.
The conference call can be accessed at
http://www.kvh.com/InvRelations
. The audio
archive also will be available on the company web site within three hours of the
completion of the call.
KVH Industries, Inc., designs and
manufactures products that enable mobile communication, navigation, and precision pointing
through the use of its proprietary mobile satellite antenna and fiber optic technologies.
The company is developing next-generation systems with greater precision, durability, and
versatility for communications, navigation, and industrial applications. An ISO
9001-registered company, KVH has headquarters in Middletown, Rhode Island, with a fiber
optic manufacturing facility in Tinley Park, Illinois, and a European sales, marketing,
and support office in Hoersholm, Denmark.
KVH INDUSTRIES, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2003, AND
DECEMBER 31, 2002
(Unaudited)
June 30,
2003
December 31,
2002
Assets:
Current assets:
Cash and cash equivalents
$
8,398,711
7,239,255
Accounts receivable, net
10,482,958
9,716,292
Costs and estimated earnings
in excess of billings on uncompleted contracts
219,146
377,058
Inventories
4,174,622
3,947,207
Prepaid expenses and other deposits
636,761
587,647
Deferred income taxes
565,871
616,877
Total current assets
24,478,069
22,484,336
Property and equipment, net
7,754,280
7,384,888
Other assets, less accumulated amortization
378,213
441,225
Deferred income taxes
2,238,430
2,238,430
Total assets
$
34,848,992
32,548,879
Liabilities and stockholders' equity:
Current liabilities:
Current portion long-term debt
$
96,574
93,262
Accounts payable
3,035,825
2,321,104
Accrued expenses
2,149,331
2,007,470
Customer deposits
31,230
91,665
Total current liabilities
5,312,960
4,513,501
Long-term debt
2,554,756
2,603,885
Total liabilities
7,867,716
7,117,386
Stockholders' equity:
Common stock
113,973
111,498
Additional paid-in capital
36,064,375
35,134,093
Accumulated deficit
(9,197,072)
(9,818,025)
Accumulated other comprehensive income
--
3,927
Total stockholders' equity
26,981,276
25,431,493
Total liabilities and stockholders' equity
$
34,848,992
32,548,879
KVH INDUSTRIES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS
OF OPERATIONS
(Unaudited)
Three months ended
June 30,
Six months ended
June 30,
2003
2002
2003
2002
Net sales
$    14,384,424
12,641,244
27,503,094
22,282,757
Cost of sales
7,808,259
7,321,309
14,968,469
12,678,716
Gross profit
6,576,165
5,319,935
12,534,625
9,604,041
Operating expenses:
Research & development
2,311,062
2,432,512
4,425,564
4,766,211
Sales & marketing
2,600,100
2,775,751
5,232,780
5,094,015
Administration
1,101,793
813,592
2,079,618
1,532,932
Profit (loss) from operations
563,210
(701,920)
796,663
(1,789,117)
Other income (expense):
Other expense
(44,680)
(28,632)
(46,469)
(30,656)
Interest expense, net
(39,545)
(29,985)
(78,235)
(52,634)
Profit (loss) before income taxes
478,985
(760,537)
671,959
(1,872,407)
Income tax expense
41,020
51,600
51,006
86,100
Net profit (loss)
$    437,965
(812,137)
620,953
(1,958,507)
Per share information:
Profit (loss) per share
Basic
$    0.04
(0.07)
0.06
(0.18)
Diluted
$    0.04
(0.07)
0.05
(0.18)
Number of shares used in per share
calculation:
Basic
11,329,443
11,005,426
11,283,661
10,989,609
Basic
11,939,341
11,005,426
11,845,926
10,989,609
This press release contains certain
forward-looking statements that involve risks and uncertainties. For example, the
statements regarding the company's financial and product development goals for 2003
are forward-looking statements. The actual results realized by the company could differ
materially from the statements made herein. Factors that might cause such differences
include, but are not limited to: failure to develop and market new products successfully; lack
of reliable vendors, service providers, and outside products; uneven military sales
cycles; unforeseen changes in competing technologies and products; worldwide economic
variances; and poor or delayed research and development results. Additional factors are
discussed in the company's 2002 Form 10-K filed with the Securities and Exchange
Commission on March 26, 2003. Copies are available through the company's Investor
Relations department and web site, www.kvh.com. KVH assumes no obligation to update its
forward-looking statements to reflect new information and developments.