Release Details

MIDDLETOWN, R.I.--(BUSINESS WIRE)--July 20, 2000--KVH Industries, Inc. (NASDAQ:KVHI) today announced financial results for the second quarter ending June 30, 2000. Revenues for the second quarter of 2000 increased 22 percent to $8.0 million from $6.5 million in the comparable 1999 quarter. The increase was due to growth in mobile satellite communications and fiber optic sales.

A net loss of $170,000 or $0.02 a share for the second quarter compares to a loss of $310,000 or $0.04 a share in the 1999 quarter. An increase in the six-month loss to $1.0 million or $0.14 a share in 2000 from $0.45 million or $0.06 a share in 1999 was due to declines of military sales during the 2000 first quarter.

"Second-quarter increases of 47 percent in communications sales and 300 percent in fiber optic sales more than offset a decline in military revenues from the 1999 period," said Martin Kits van Heyningen, president and chief executive officer. "These growth trends are very encouraging and are expected to continue."

KVH Industries utilizes its proprietary fiber optic and sensor technologies to produce navigation and mobile satellite communications systems for commercial, military, marine and land mobile applications. The company has headquarters in Middletown, RI, (USA) with offices in Illinois, Florida and Denmark.

This press release may contain certain forward looking statements that involve risks and uncertainties. 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: volatility and uncertainties in communications, defense and fiber optics, the primary three industries targeted by the Company; failure to develop and market fiber optic products; lack of reliable vendors, service providers and outside products; continued slow military sales cycles; unforeseen changes in competing technologies and products; worldwide economic variances; poor or delayed research and development results; and disparities between forecast and realized sales. Additional factors are discussed in the company's Annual Report on Form 10K filed with the Securities and Exchange Commission on March 27, 2000. Copies are available from the company's Corporate Communications Department.

                  KVH Industries, Inc. and Subsidiary
                 Consolidated Statements of Operations
                              (Unaudited)

                         Three months ended       Six months ended
                              June 30,                June 30,
                          2000        1999        2000         1999
Net sales              $7,951,254   6,525,644  13,647,769  12,498,814
Cost of sales           5,051,034   4,283,824   8,869,310   8,053,582
Gross profit            2,900,220   2,241,820   4,778,459   4,445,232

Operating expenses:

Research & development  1,015,841   1,040,299   2,090,283   1,909,840
Sales & marketing       1,622,368   1,241,469   3,040,756   2,394,200
Administration            564,327     482,776   1,092,061   1,051,959
    Total operating
     expense            3,202,536   2,764,544   6,223,100   5,355,999

Loss from operations     (302,316)   (522,724) (1,444,641)   (910,767)

Other (income) loss       (12,982)    (32,039)    194,559     (47,655)

Loss before
 income taxes            (289,334)   (490,685) (1,639,200)   (863,112)

Income tax benefit        119,692     183,565     603,311     410,375

Net loss                $(169,642)   (307,120) (1,035,889)   (452,737)

Per share information:

Loss per share-basic       $(0.02)      (0.04)      (0.14)      (0.06)
Loss per share-diluted     $(0.02)      (0.04)      (0.14)      (0.06)

Shares - basic          7,621,919   7,207,007   7,528,917   7,206,474
Shares - diluted        7,621,919   7,207,007   7,528,917   7,206,474


                  KVH Industries, Inc. and Subsidiary
                      Consolidated Balance Sheets

                                               June 30,   December 31,
                                                 2000         1999
                                              (Unaudited)   (Audited)

Assets:

Current assets:

Cash and cash equivalents                        $765,403   2,047,838
Accounts receivable, net                        4,799,288   3,362,390
Costs and estimated earnings in excess
 of billings on uncompleted contracts             699,180     444,492
Inventories                                     3,766,870   3,672,269
Prepaid expenses and other deposits               382,165     292,793
Deferred income taxes                             376,628     376,628

    Total current assets                       10,789,534  10,196,410

Property and equipment, net                     6,886,101   7,227,778
Other assets, less accumulated amortization       772,785     839,113
Deferred income taxes                           2,169,690   1,571,409

    Total assets                              $20,618,110  19,834,710

Liabilities and stockholders' equity:

Current liabilities:
Current portion long term debt                    $75,961      75,643
Line of credit                                    508,547        --
Accounts payable                                2,047,819   1,599,770
Accrued expenses                                1,074,711     792,086

    Total current liabilities                   3,707,038   2,467,499

Long term debt                                  2,834,032   2,865,232

    Total liabilities                           6,541,070   5,332,731

Stockholders' equity:
Common stock                                       76,674      72,969
Additional paid-in capital                     16,175,125  15,567,880
Accumulated deficit                            (2,174,759) (1,138,870)

    Total stockholders' equity                 14,077,040  14,501,979

    Total liabilities and
     stockholders' equity                     $20,618,110  19,834,710

*T


    CONTACT: KVH Industries, Inc.
             Richard Forsyth, Chief Financial Officer
             Alice Andrews, Director, Corporate Communications
             401-847-3327