SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                    FORM 10-Q



[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 for the quarterly period ended September 30, 1996

                         Commission file number: 0-28082


                              KVH Industries, Inc.
             (Exact name of registrant as specified in its charter)



             Delaware                                       05-0420589
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                           Identification No.)


                  110 Enterprise Center, Middletown, RI. 02842
                    (Address of principal executive offices)


        Registrant's telephone number, including area code (401) 847-3327



         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No



The number of outstanding shares of the Registrant's Common Stock on October 25,
1996 was 6,910,833.







                       KVH INDUSTRIES, INC. AND SUBSIDIARY
                                      INDEX

                                                                   Page No.
PART I.   FINANCIAL INFORMATION

   ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

     Consolidated Balance Sheets as of  September 30, 1996 and
      December 31, 1995                                                3

     Consolidated Statements of  Income for the
      three and nine months ended September 30, 1996 and 1995          4

     Consolidated Statements of Cash Flows for the
      nine months ended September 30, 1996 and 1995                    5

     Notes to Consolidated Financial Statements                        6


   ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS               7

PART II. OTHER INFORMATION

   ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                           10

         SIGNATURES                                                   11







Part I. Financial Information

Item 1.  Financial Statements.

                         KVH INDUSTRIES, INC. AND SUBSIDIARY
                             CONSOLIDATED BALANCE SHEETS

                                            September 30,      December 31,
                                                1996              1995
                                             (Unaudited)        (Audited)
                  Assets

Cash and cash equivalen                    $  6,974,151     $     895,677
Accounts receiva                              5,989,634         2,187,916
Contract receiv                                  34,200           994,056
Costs and estimated earnings in
 excess of billings on 
 uncompleted contracts                        1,381,659           916,194
Inventories                                   3,163,774         1,753,172
Prepaid expenses and other deposits             181,106           156,675
Deferred income taxes                           515,285           515,285
                                             -----------       ----------
  Total current assets                       18,239,809         7,418,975
                                             -----------       ----------
Property and equipment, net                   3,170,175           423,842
Other assets, less accumulated amortization      35,720            64,946
Deferred income taxes                            23,510            23,510
                                            ------------      -----------
  Total assets                              $21,469,214       $ 7,931,273
                                            ============      ===========


       Liabilities and stockholders' equity

Current liabilities:
Current lease obligation                $       47,653     $      40,787
Accounts payable                             2,383,662           958,507
Accrued expenses                               968,303           335,896
Customer deposits                            2,621,095         2,869,595
                                            ----------        ----------
  Total current liabilit                     6,020,713         4,204,785
                                            ----------        ----------
Obligations under capital leases,
 excluding current installments                 30,364            72,439
                                            ----------        ----------
  Total liabilities                          6,051,077         4,277,224
                                            ----------        ----------
Stockholders' equity:
Preferred stock                                      0            12,982
Common stock                                    69,108            16,160
Additional paid-in capital                  14,768,985         4,473,045
Accumulated deficit                            580,044          (848,138)
                                           -----------        -----------
  Total stockholders' equity                 15,418,137         3,654,049
                                           ------------       -----------
Total liabilities and stockholders' equity  $21,469,214       $ 7,931,273
                                            ===========       ===========

                       See accompanying notes to financial statements.






Item 1.  Financial Statements.

                         KVH INDUSTRIES, INC. AND SUBSIDIARY
                          CONSOLIDATED STATEMENTS OF INCOME
                                     (Unaudited)

                                Three months ended         Nine months ended
                                   September 30,              September 30,
                                 1996        1995           1996         1995
                                 ----        ----           ----         ----

Net sales                   $7,147,270  $3,278,670     $17,041,532   $9,127,400

Cost of goods sold           4,228,801   1,924,934        9,750,437   5,355,053
                             ---------   ---------        ----------  ---------

Gross profit                 2,918,469   1,353,736        7,291,095   3,772,347

Operating expenses:
 Research and development     433,890     321,513         1,717,908     687,200
 Sales and marketing          628,249     585,882         2,272,171   1,612,901
 General and administrativ    414,456      243,89         1,124,875     682,622
                             --------     -------        ----------  ----------
                                                 

Income from operations      1,441,874     202,442         2,176,141     789,624

Other (income) deductions:
 Interest (income) 
    expense, net             (93,201)      14,998         (195,861)      42,422
 Other (income) 
    expense, net               14,331       (752)             4,106      18,459
 Foreign currency 
   (gain) loss                13,152       13,526           35,598      (7,325)
                           ----------   ---------         ---------   ---------

Income before income taxes 1,507,592      174,670         2,332,298     736,068

Income tax expense           587,079            0           904,117           0
                          ----------    ---------         ---------    --------
 
Net income                 $ 920,513    $ 174,670         $1,428,181  $ 736,068
                          ==========    ==========        ==========  ==========

Net income per share:
 Primary                       $0.12        $0.03              $0.21      $0.13
                              ======       ======              ======     =====
 Fully diluted                 $0.12        $0.03              $0.21      $0.13
                               ======      ======              ======     =====

Weighted average number of 
 common and common equivalent 
 shares outstanding:
  Primary                  7,530,231   5,710,177         6,847,102    5,710,177
                          =========== ===========       ===========   =========
  Fully diluted            7,574,037   5,710,177         6,892,793    5,710,177
                          =========== ===========       ===========   =========

                        See accompanying notes to financial statements.






Item 1. Financial Statements.

                        KVH INDUSTRIES, INC. AND SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (Unaudited)
                                                           Nine months ended
                                                             September 30,
                                                           1996         1995
Cash flows from operating activities:

Net income                                         $   1,428,181   $   734,114

Adjustments to reconcile net income
 to net cash provided by operating
 activities:
Depreciation and amortization                            142,788       100,902
(Increase) in accounts receivable                     (2,841,862)     (987,455)
(Increase) decrease in costs and 
 estimated earningsin excess of 
 billings on uncompleted contracts                     (465,465)       677,579
(Increase) in inventories                             (1,410,602)     (788,376)
(Increase) in prepaid expenses 
 and other deposits                                      (24,431)      (77,082)
Increase in accounts payable                           1,425,155      (215,365)
Increase (decrease) in accrued expenses                  632,407       (52,190)
Increase (decrease) in customer deposits                (248,500)     3,076,000
                                                     ------------    ----------

Net operating cash provided by operating
 activities                                          (1,362,329)      2,468,127
                                                     -----------     ----------

Cash flows from investing activities:
Capital expenditures                                 (2,859,895)      (154,785)
                                                     -----------      ---------

Net cash (used in) investing activities              (2,859,895)      (154,785)
                                                     -----------      ---------

Cash flows from financing activities:
(Repayments) incurrence of 
 obligations under capital lease                        (35,209)          4,027
Issuance of capital stock,  
 exercise of warrants and stoc                        10,335,907          8,624
                                                     -----------      ---------

Net cash provided by financing activities             10,300,698         12,651
                                                      -----------     ---------

Net increase in cash and cash equivalents              6,078,474      2,325,993

Cash and cash equivalents at beginning of year           895,677        191,438
                                                      -----------    ----------

Cash and cash equivalents at end of period           $ 6,974,151    $ 2,517,431
                                                    =============  ============

Supplemental disclosure of cash flow information:
 Cash paid during the period for interest               $  8,916      $ 45,403
                                                      ==========      =========


                       See accompanying notes to financial statements.






Item 1.  Financial Statements.
                       KVH INDUSTRIES, INC. AND SUBSIDIARY
                   Notes to Consolidated Financial Statements
                           September 30, 1996 and 1995
                                   (Unaudited)

(1.) The  unaudited  interim  financial  statements  presented  herein have been
prepared in accordance with generally  accepted  accounting  principles and with
the instructions to Form 10-Q and Regulation S-X pertaining to interim financial
statements.  The financial  statements  reflect all  adjustments  (consisting of
normal recurring  adjustments and accruals) which, in the opinion of management,
are  considered  necessary  for a fair  presentation  of  financial  position at
September 30, 1996 and results of operations for the three and nine months ended
September  30,  1996  and  September  30,  1995.  These  consolidated  financial
statements  do not  include all  disclosures  associated  with annual  financial
statements and accordingly  should be read in conjunction  with the consolidated
financial  statements and notes thereto  included in the Company's  Registration
Statement on Form S-1 filed with the  Securities and Exchange  Commission  (file
number  333-01258)  declared  effective  March  28,  1996,  a copy of  which  is
available  from the Company.  The results of  operations  for the three and nine
months ended  September 30, 1996 are not  necessarily  indicative of the results
that may be expected for the full year ending December 31, 1996.

(2.) On March 28, 1996,  the  Company's  registration  statement  for an initial
public  offering  of common  stock  was  declared  effective.  An  aggregate  of
1,800,000 shares of common stock were issued by the Company in April, 1996 at an
initial public offering price of $6.50 per share.

(3.)  Inventories  at September 30, 1996 and December 31, 1995 include the costs
of material, labor and factory overhead.  Inventories are stated at the lower of
cost (first-in, first-out) or market and consist of the following:
                                      (in thousands of dollars)
                                         1996           1995
             Raw materials              $2,795         $1,256
             Work in progress              149            101
             Finished Goods                220            396
                                       -------        -------
                Total                   $3,164         $1,753
                                       =======        =======
 

(4.) On May 10, 1996 the Company  purchased a 75,000  square foot  manufacturing
and  office  facility  adjacent  to  the  Company's   existing   operations  for
$2,000,000.  The  Company  is in the  process  of  renovating  the  facility  to
accommodate  engineering,  manufacturing and office areas. The Company estimates
the cost of renovation at approximately  $1,200,000 and that the Company expects
to occupy the renovated facility in the first quarter of 1997. The addition of a
second  facility  will increase the  Company's  available  facility area to over
100,000  square  feet  and is  expected  to be  sufficient  to  accommodate  the
Company's operating needs for the next three years.

(5.) Through  December 31, 1995 the Company had  available  net  operating  loss
carry-forwards for both tax return and financial reporting purposes. In 1995 the
full benefit of the net operating loss carry-forward  deduction was realized for
financial  reporting  purposes  and as a  consequence  of income taxes have been
accrued for  financial  reporting  purposes in 1996.  Income tax expense for the
three-and nine month periods ended September 30, 1996 were  calculated  using an
estimated annual effective tax rate of 40%.

The  effective  tax rate for the three and nine months ended  September 30, 1996
differs  from the  federal  statutory  rate of 34%  primarily  due to state  tax
expense net of federal tax benefit.  The Company  believes that its net deferred
tax assets  will more likely than not be fully  realized,  based upon  estimated
future taxable income projections.




Item 2. Management's Discussion and Analysis of Financial Condition and Results 
        of Operations.

This  report may  contain  forward-looking  statements  which  involve  risks or
uncertainties.  The  Company's  actual  results may differ  materially  from the
results discussed in the forward-looking  statements.  Factors which might cause
such  differences  include,  but are not limited to, those discussed under "Risk
Factors"  in  the  Company's  Registration  Statement  on  Form  S-1  (file  No.
333-01258)  declared effective March 28, 1996, a copy of which is available from
the Company.


Net Income and  Earnings  Per Share - Net  income  and  earnings  per share were
$920,513 and $0.12 per share as compared  with  $174,670 and $0.03 per share for
the three months ended September 30, 1996 and 1995 respectively.  Net income for
the third  quarter of 1996  increased by $745,843 or 427% over the third quarter
of 1995.  Net income and earnings per share were  $1,428,181 and $0.21 per share
as  compared  with  $736,068  and  $0.13 per  share  for the nine  months  ended
September 30, 1996 and 1995 respectively.  Net income and earnings per share for
the three and nine months ended September 30, 1996 were  negatively  affected by
the  provision  for income  taxes  resulting  from the full  utilization  of net
operating  loss  income  tax  carryforwards  in 1995 and a 21%  increase  in the
weighted  average  number of shares  outstanding  resulting  from the  Company's
initial public offering in April of 1996.


Net Sales - Net sales for the three month period ended  September  30, 1996 grew
to $7,147,270 or a 118% increase when compared with third quarter 1995 net sales
of $3,278,670. Net sales growth was comprised of communications products such as
the TracPhone  which is supplied to American  Mobile  Satellite  Corporation and
navigation  products such as the TacNav military land navigation system which is
supplied  to the  governments  of Sweden,  Canada,  Saudi-Arabia  and the United
States.  Quarterly  product growth was somewhat  offset by a planned  decline in
engineering  development  net sales of  $695,635 or 70% when  compared  with the
third  quarter  of  1995.  The  planned  decline  in  lower  margin  engineering
development  revenues  results form the  transition of military land  navigation
systems  from  customer-funded  engineering  development  sales to  manufactured
product shipments that yield higher product gross margins.

Net sales  through  nine months ended  September  30, 1996 was  $17,041,532,  an
increase of 87% when compared  with net sales of  $9,127,400  in the  comparable
period of 1995.  Net sales  growth  year to date  represents  the success of new
product introductions such as the TracPhone stabilized antenna platform used for
mobile marine based  satellite  communications  systems and the TacNav  tactical
military land navigation system used in armored vehicles.


Gross Profit - Third  quarter  gross profit as a  percentage  of sales  remained
unchanged  from the prior year at 41% of net  sales.  Third  quarter  1996 gross
margin was impacted by lower margin TacNav system  components  that are procured
for the customer on a "pass-through"  basis providing the Company with a minimal
mark-up over the components costs.  Gross margin grew to 43% of net sales in the
first  nine  months of 1996 from 41% of net sales for the  comparable  period of
1995. Year to date gross margin  improvement  represents a transition from lower
margin   customer-funded   engineering   development   sales  to  higher  margin
manufactured product sales.








Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.


Operating  Expenses - Research and development  expense increased by $112,377 or
35% in the third  quarter of 1996 when  compared  with the third quarter of 1995
and increased  $1,303,708 or 150% in the first nine months of 1996 compared with
the first nine months of 1995,  primarily as a result of a transition  away from
customer-funded  research and  development  (accounted  for as cost of sales) to
Company-funded   research  and  development   (accounted  for  as  research  and
development expense). Sales and marketing expense increased $42,367 or 7% in the
third quarter of 1996 when compared with the third quarter of 1995 and increased
$659,270  or 41% in the  first  nine  months  of 1996  when  compared  with  the
comparable  period of 1995,  due to  increases  in sales  support  costs such as
outside  sales  representative  commissions,   advertising  and  travel  expense
required to support increased sales volumes.  General and administrative expense
increased by $170,557 or 70% in the third quarter of 1996 when compared with the
third quarter of 1995 and increased  $442,253 or 65% in the first nine months of
1996,  primarily  as a result of new hires to support the  company's  growth and
increased  legal,  audit and  insurance  expenses that result from the Company's
status as a publicly traded company.


Other  (Income)  Deductions - Other  (income)  deductions is made up of interest
(income)  expense net, other (income)  expense net, and foreign  currency (gain)
loss.  The  quarterly  and nine  month  decrease  in other  deductions  resulted
primarily  from  interest  income  which off set other  expense  charges.  Third
quarter  1996  interest  income  results  from the  investment  of a portion  of
Company's  initial  public  offering  proceeds  in interest  bearing  short term
government securities.


Income Taxes - Income tax expense  increased by $587,079 in the third quarter of
1996 when compared with the third quarter of 1995 and increased $904,117 for the
first nine months of 1996 when compared with the comparable  period of the prior
year. No provision  for income taxes was recorded in 1995 as the entire  benefit
of the Company's net operating loss  carry-forward  deduction was fully realized
for  financial   reporting   purposes  in  1995.  In  1996  net  operating  loss
carry-forwards  are available for tax return  purposes only,  consequently  1996
financial reported operating results include a provision for income tax expense.


Liquidity and Capital Resources - Working capital increased by $9,004,906 in the
third  quarter of 1996 due to receipt of the proceeds of the  Company's  initial
public offering in April,  1996. In May 1996 the Company  purchased an operating
facility  in the amount of  $2,000,000  using a portion of the  proceeds  of the
Company's initial public offering. Cash and cash equivalents were $6,974,151 and
$895,677 on September 30, 1996 and December 31, 1995 respectively.

On June 28, 1996 the Company entered into a bank revolving line of credit in the
amount of  $2,500,000  to replace the bank line of credit  that  expired on that
date.  The revolving  line of credit is  collateralized  by all of the Company's
assets. The Company has not drawn upon the loan facility. The new loan agreement
expires on June 30, 1998.

On March 28, 1996,  the Company's  registration  statement for an initial public
offering of common  stock was  declared  effective.  An  aggregate  of 1,800,000
shares of common  stock were issued by the Company in April,  1996 at an initial
public  offering  price of $6.50 per share that resulted in  approximately  $9.9
million dollars in net proceeds.  The Company  believes that cash generated from
operations,  amounts available under its credit facility and the net proceeds of
the initial public offering will be sufficient to fund its necessary  operations
and planned capital expenditures for at least the next twelve months.



Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.


Capital  Expenditures  - Net  property  and  equipment  increased  approximately
$2,746,333  through the first nine months of 1996 as compared  with net property
and equipment at December 31, 1995. Fixed assets increases reflects the purchase
of a  manufacturing  and office  facility in the amount of $2,000,000 as well as
the procurement of production  tooling related to communications  products.  The
Company  believes that the cost of renovating  the facility will  approximate an
additional $1,200,000 prior to occupancy.


Other  Matters  -  Effective  January  1,  1996 the  Company  adopted  Financial
Accounting  Standards Board Statements No. 121 "Accounting for the Impairment of
Long  Lived  Assets  and for Long Lived  Assets to be  Disposed  of" and No. 123
"Accounting for  Stock-Based  Compensation"  ("FAS 123").  The adoption of these
standards had no impact on the  financial  position or the results of operations
of the Company for the period  ended  September  30,  1996.  Under FAS 123,  the
Company has elected not to adopt the new accounting  method and will continue to
account  for its  stock-based  compensation  under the  existing  provisions  of
Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock Issued to
Employees".  Accordingly,  the Company will provide pro-forma disclosures of net
income and earnings per share for the year ended December 31, 1996, assuming FAS
123 had been adopted.






Part II. Other Information

Item 1. Legal Proceedings.

         None

Item 6. Exhibits and reports on Form 8-K.

1. Exhibit 11 - Computation of Earnings Per Common Share: Three and Nine Months 
   Ended September 30, 1996 and 1995.

2. Exhibit 27 - Financial Data Schedule: Nine Months Ended September 30, 1996.

3. No reports on Form 8-K were filed during the quarter for which this report
   was filed.










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, thereunto duly authorized.

KVH Industries, Inc.




By:_________________________________________________________
 Richard C. Forsyth   Chief Financial and Accounting Officer

  Date: October 25, 1996







Exhibit 11

                                    KVH INDUSTRIES, INC.
                         COMPUTATION OF NET EARNINGS PER SHARE
                         (in thousands, except per share data)
                                       (Unaudited)

                         For the three months ended: For the nine months ended:
                                 September 30,             September 30,
                                1996       1995           1996       1995
                                ----       ----           ----       ----

Primary earnings per share:
Net Earnings                 $  921      $ 175         $ 1,428      $ 736
Weighted average number of
 common shares outstanding    6,907       4,861         6,167       4,861

Additional shares assuming
conversion of:
Stock options and warrants      623        849            680         849
                                ---        ---            ---         ---
                                            
Average common shares and
equivalents outstanding       7,530       5,710         6,847       5,710
                              -----       -----         -----       -----
                             
Net earnings per common share $0.12       $0.03         $0.21       $0.13
                              ======      ======        ======      =====

Fully diluted earnings per share:
Net Earnings                $   921       $  175        $ 1,428    $  736
                                                             
Shares:
Weighted average number 
of common shares outstanding  6,907        4,861         6,167      4,861

Additional shares assuming
 conversion of:
 Stock options and warrants     667          849          726        849
                                ---          ---          ---        ---
                                              
Average common shares and
equivalents outstanding        7,574       5,710          6,893     5,710
                              =======     ========       =======   =======
                                          
Net earnings per common share   $0.12      $0.03         $0.21      $0.13
                               ======      ======        ======     ======


 

5 Financial Data Schedule September 30, 1996 9-MOS DEC-31-1996 SEP-30-1996 6,974,151 0 6,100,662 111,028 3,163,774 18,239,809 4,707,489 1,537,314 21,469,214 6,020,713 0 0 0 69,108 0 21,469,214 17,041,532 17,041,532 9,750,437 9,750,437 5,114,954 0 8,916 2,332,298 904,117 1,428,181 0 0 0 1,428,181 .21 .21