Roumell Asset Management Discloses 8.3% Stake in KVH Industries (KVHI), Urges Buyback

In a 13D filing after the close on KVH Industries Inc. (Nasdaq: KVHI), Roumell Asset Management disclosed an 8.31% stake (1,246,000 shares) and disclosed a letter to the company urging the company to buyback shares at the current level.

The firm said, "We respectively urge the Board to seriously weigh any acquisition idea against the very compelling investment opportunity presented by buying back KVH stock at current levels. To wit, we note the following valuation metrics: 40%+ of market capitalization is represented by cash; the enterprise value to sales ratio is less than 1x; and free-cash flow is positive while overall commercial business continues to improve and new defense programs provide reason for optimism. In our view, KVHI common stock is a compelling investment that would be hard to duplicate."

A Copy of the Letter:

Attention:Arent H. Kits van Heyningen, Chairman of the Board
Martin A. Kits van Heyningen, Chief Executive Officer

We currently own 1,246,000 shares of KVH Industries, Inc. stock, or roughly 8.3%of outstanding shares. We are impressed with the company's history of technology innovation, its multiple commercial end-market opportunities as well as its defense business, particularly with the emergence of remote controlled weapons systems. The company has long been conservatively managed; and we appreciate that aspect of its history as well.

Although truly strategic opportunities should not be overlooked, it would behard for us to imagine a more compelling acquisition opportunity than repurchasing KVHI stock at a price below $10/share. Given the menu of commercial products (serving the marine, RV and automobile markets), and the emergence of new applications for the company's gyroscopes because of the CROWS program and others like it, we feel the company's plate is full and that the opportunities for organic growth are plentiful.

We respectively urge the Board to seriously weigh any acquisition idea against the very compelling investment opportunity presented by buying back KVH stock at current levels. To wit, we note the following valuation metrics: 40%+ of market capitalization is represented by cash; the enterprise value to sales ratio is less than 1x; and free-cash flow is positive while overall commercial business continues to improve and new defense programs provide reason for optimism. In our view, KVHI common stock is a compelling investment that would be hard to duplicate.

Sincerely,
James C. Roumell

Roumell Asset Management, LLC