Company: KVHI
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001007587-25-000008
Chunk: 59

Company: KVH INDUSTRIES INC \DE\
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 8
Chunk 59
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 lease term. As a result, and in light of other factors indicated in ASC 842, these leases are classified as operating leases.As of March 31, 2025, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $1,767 and $1,352, respectively. They are depreciated on a straight-line basis over a five-year estimated useful life. Depreciation expense for these operating leases was $89 for the three months ended March 31, 2025.Lease revenue recognized was $19 for the three months ended March 31, 2025, respectively, in service sales in the consolidated statements of operations.As of March 31, 2025, minimum future lease payments to be recognized on the operating leases are as follows:Remainder of 2025$6 Total $6 

(17)     Restructuring

On February 9, 2024, the Board of Directors of the Company voted to implement a staged wind-down of the Company’s manufacturing activities at its facility in Middletown, Rhode Island. The Board made this determination following a strategic review of the Company’s manufacturing operations, driven by reduced demand for the Company’s hardware products in the face of intensifying competition during the third and fourth quarters of 2023. The Board concluded that the Company should discontinue its capital-intensive manufacturing activities and concentrate its efforts on growing sales of its multi-orbit, multi-channel, integrated communications solutions, which in recent years have constituted the largest portion of the Company’s overall revenues.The Company expects that it will continue its product manufacturing activities for a period of time in order to generate a targeted amount of inventory of maritime satellite connectivity and satellite television terminals to meet anticipated demand and that it will cease substantially all manufacturing activity at the Middletown, Rhode Island facility by the end of 2025. The Company expects to continue to facilitate customer transition to third-party hardware products compatible with the Company’s mobile satellite communications services. The Company also plans to continue to conduct maintenance, refurbishment service, warehousing, shipping and receiving activities at the Middletown, Rhode Island location until the Company's anticipated relocation by early next year.As part of this restructuring, the Company reduced its headcount by approximately 75 employees, or approximately 20% of its total workforce as of the time the Company announced the restructuring. In 2024, the Company incurred aggregate severance charges of approximately $3.9 million, consisting of