KVH Provides Third Quarter Update

MIDDLETOWN, R.I., Oct. 2, 2008 - KVH Industries, Inc., reported today that preliminary, unaudited results indicate the company will report revenue in the range of approximately $15.6 million to $16 million for the third quarter of 2008 compared to revenues of $17.6 million in the year earlier period. As a result of the lower revenue levels, the company now anticipates that its bottom line results will be well below its original expectations of $0.01 to $0.05 per share for the third quarter. In 2007, KVH reported breakeven results of $0.00 per share for the third quarter.

Three key issues contributed to these estimated results being well below the company's previously announced expectations of $19 million to $20.5 million in revenue for the third quarter. First, the final qualification process for KVH's fiber optic gyros for use in remote weapon stations has taken longer than expected, which prevented shipments during the third quarter. Second, the company did not receive an anticipated follow-on order during the quarter for its TG-6000 inertial measurement units, which are used in the MK54 torpedo program, due to ongoing negotiations between the U.S. Navy and the prime contractor. Finally, the challenging macroeconomic conditions, especially in the recreational vehicle market, increasingly constrained sales of KVH's mobile satellite products with a pronounced impact in the final weeks of the quarter.

Looking ahead to the remainder of the year, larger-scale revenue shipments of KVH's fiber optic gyros for use in remote weapon stations are expected to begin in October. In addition, the company anticipates receiving the follow-on order for TG-6000 systems and beginning shipments during the fourth quarter. Although economic conditions will continue to be a challenge, the company expects to see year-over-year revenue growth and profitable results for the fourth quarter. The company's revenue expectations for the full year are now lowered by the amount of the shortfall in the third quarter.

KVH's third quarter closed on September 30, 2008, and all statements in this release reflect a preliminary analysis of the company's quarterly financial results. The company expects to release its third quarter 2008 results on October 21, 2008.