Novatel Wireless Reports First Quarter 2013 Financial Results

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Novatel Wireless Reports First Quarter 2013 Financial Results

Consolidated first quarter revenue increases 22% sequentially | Mobile Computing revenue increases 18% sequentially | Machine-to-Machine revenue increases 52% sequentially

Novatel Wireless, Inc. (NASDAQ: NVTL), a leading provider of intelligent wireless solutions, announced financial results for the first quarter ended March 31, 2013.

Revenue in the first quarter was $85.9 million, up 22% compared to $70.7 million in the fourth quarter of 2012.
GAAP net loss in the quarter was $9.1 million, or $(0.27) per share, up from a loss of $14.9 million, or $(0.44) per share, in the fourth quarter of 2012.
On a non-GAAP basis, net loss for the quarter was $7.4 million, or $(0.22) per share, up from a loss of $12.6 million, or $(0.38) per share, in the fourth quarter of 2012. A reconciliation of GAAP to non-GAAP measures is included in the accompanying tables.

“In the first quarter we experienced solid demand for our new product lines in both M2M and mobile computing, driving double-digit sequential revenue growth and bottom line improvement,” said Peter Leparulo, CEO of Novatel Wireless.

“Our M2M business improved significantly in the first quarter, growing over 50% sequentially, the majority of which came from sales of our next generation CDMA products.”

“We are expanding our footprint with existing key customers and have several design wins with industry-leading prospects, underscoring the effectiveness of our increasingly direct sales model. In mobile computing, we saw healthy sales order cycles, particularly for the successful introduction of our MiFi® 5510, which launched during the quarter. We are also pleased to have launched the MiFi 2 with Bell, the latest carrier offering this critically acclaimed product. Both of these products are built on our highly extendable MiFi technology platform, the applications for which are just beginning to be tapped with the proliferation of 4G network availability.”

Recent Business Highlights

  • Novatel Wireless commercially launched its MiFi 2 — the first mobile hotspot with a touchscreen display and the most feature rich mobile hotspot in the market — with Bell on Canada’s largest 4G LTE Network in March 2013.
  • On February 24, 2013, Novatel Wireless introduced the N4A® cloud-based Device Manager 4.1 which provides enterprise customers with improved time-to-market and tools to effectively manage M2M assets through their entire lifecycle. The N4A Device Manager assists with activation, deployment, maintenance and day-to-day operation in one single, robust, secure and scalable platform.
  • Recently, Novatel Wireless received technical approval for its machine-to-machine (M2M) CDMA2000® 1X Enabler® HS 3001 module on Aeris Communications’ network. The Enabler HS 3001 is ideal for markets such as security, alarm, telemetry, asset tracking, POS, mHealth, AVL and AMI/AMR looking for high reliability.
  • Novatel Wireless recently announced that its MT 3050 device has been selected by Quatenus, a leading Portuguese Systems Integrator, to be integrated into its front-end application platform and bundled with M2M subscription SIM services from Optimus, one of Portugal’s largest mobile operators.
  • Lastly, Novatel Wireless recently announced additional software advancements to its MiFi technology platform, improving the MiFi user experience with optimized power management software so MiFi users on platforms with enhanced software will be able to enjoy greatly extended usage time, and Content Delivery Optimization for even faster access to their data.

Second Quarter 2013 Business Outlook

The following statements are forward-looking and actual results may differ materially. Please see the section titled, “Cautionary Note Regarding Forward-Looking Statements” at the end of this press release. A more detailed description of risks related to our business is included in the reports filed by the company with the Securities and Exchange Commission.

Our guidance for the second quarter of 2013 reflects current business indicators and expectations as of the date of this release. All figures are approximations based on management’s beliefs and assumptions as of the date of this release.

We enter the second quarter with a healthy order pipeline across our growth initiatives, and are currently forecasting another sequential improvement to our top and bottom lines. We are currently seeing an increase in demand for our new products, as reflected by customer forecasts and orders on hand, which exceeds component supplies because of lead time requirements. Our guidance reflects our current view of our ability to deliver against this greater than expected demand.

Second Quarter 2013
Revenue $90 – $98 million
Non-GAAP Gross Margin 21% – 22%
Non-GAAP EPS $(0.13) – $(0.06)
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