Novatel Wireless, Inc. (NASDAQ: NVTL), a leading provider of intelligent wireless solutions, announced financial results for the first quarter ended March 31, 2014.
++ Reports M2M revenue of $12.1 million, a sequential increase of approximately 45%
++ Makes progress on realignment of operational and go-to-market strategy in Mobile Computing
++ Completed additional restructuring initiatives expected to achieve approximately $10 million in annualized cost savings
Revenue in the first quarter was $48.3 million.
GAAP net loss in the quarter was $9.0 million, or $(0.26) per share.
On a non-GAAP basis, net loss for the quarter was $7.1 million, or $(0.21) per share.
Adjusted EBITDA in the first quarter was a loss of $5.2 million. A reconciliation of GAAP to non-GAAP measures is included in the accompanying tables.
Peter Leparulo, CEO of Novatel Wireless, said:
“During the first quarter, we continued to make solid progress in our M2M business, growing sequential revenue by approximately 45%, launching with new customers, advancing major prospects by integrating with their platforms, and building our sales pipeline.”
“Our targeted vertical approach in M2M, our investments in product innovation, sales, and integration are beginning to produce meaningful results. We are at the center of what we believe are high growth verticals, have the right products and sales and service infrastructure in place, and continue to execute on our high impact growth initiatives.”
“In mobile computing, we made progress on our strategy to retrench this business, moving it toward a more targeted product development approach with a more variable operating model. Relatedly, we furthered our restructuring initiatives in the quarter, which we expect to yield annualized cost savings of approximately $10 million beginning in the second quarter.
Mobile computing revenue in the quarter was largely driven by sales of our MiFi 5510, which would have been an even larger contributor but was muted by a supply chain component shortage.”
“As we move through 2014, we have a substantial, growing pipeline of opportunities in M2M. We will be expanding our partner relationships as we deepen our presence in our targeted verticals.
In mobile computing, we will begin to see our targeted channel approach play out as we focus our development investments on products that we are confident will achieve our required returns, while certain products currently in the channel will come to the end or the long-tail of their planned life cycle. Beyond that, we continue to see opportunities in mobile computing which we will selectively evaluate with our new variable cost model.
We have launch plans for a carrier aggregation product release in the second half of the year, as well as other opportunities we are pursuing for 2015, all of which meet our rigid criteria for returns on our development investments.
Lastly, we will continue to evaluate our cost structure, commensurate with our opportunities, and remain focused on returning to profitability,” concluded Leparulo.
Second Quarter 2014 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 2014 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.
|Second Quarter 2014|
|Total Revenue||$37 – $43 million|
|Mobile Computing Revenue||$27 – $32 million|
|M2M Revenue||$10 – $11 million|
|Non-GAAP Gross Margin||21% – 23%|
|Non-GAAP EPS||$(0.22) – $(0.15)|