Revenues Increase 25% From Third Quarter of
2014
Company Exceeds Profitability Targets;
Establishes Foundation for Growth in 2015
Novatel Wireless (Nasdaq:MIFI), a leading provider of solutions for
the Internet of Things (IoT) and inventors of MiFi® technology,
announced financial results for the fourth quarter ended December
31, 2014.
The Company announced the following GAAP results for the fourth
quarter of 2014:
- Revenue increased by 24.9% to $55.4 million in the fourth
quarter, compared to $44.3 million in the third quarter of 2014.
Revenue from mobile computing products was $47.0 million in the
fourth quarter, compared with $34.8 million in the third quarter of
2014. Revenue from M2M products was $8.4 million in the fourth
quarter compared to $9.5 million in the third quarter of 2014.
- Net loss was ($4.4 million), or ($0.10) basic net loss
per share, in the fourth quarter compared to a net loss of
($8.8 million), or ($0.23) basic net loss per share, in the
third quarter of 2014. The net loss for the fourth quarter of 2014
included charges of $0.3 million for restructuring activities, $0.8
million for the final payment by the Company in its shareholder
litigation, $0.4 million for recognition of a beneficial conversion
feature on convertible preferred stock that converted to common
stock in the quarter, and $5.5 million related to an all-employee
retention bonus plan adopted in 2014 as part of the Company's
turnaround efforts. The net loss for the fourth quarter also
included a $1.5 million gain associated with the change in fair
value of a Company-issued warrant to purchase common stock, and a
$1.6 million gain from an escrow account refund related to a
historic acquisition (net of claims against the escrow
account).
"We successfully executed our strategy in the fourth quarter to
leverage our MiFi® business into a return to profitability, with
enhanced product sales and rationalized expenses," said Alex
Mashinsky, CEO of Novatel Wireless. "We anticipate continued growth
in 2015, as we expect to increase our MiFi revenues by more than
20% compared to 2014. Also, as we commence 2015, we are focused
squarely on enhancing our leadership in the expanding IoT
ecosystem. Demand continues to build for our innovative IoT
solutions, and we are excited about our prospects to drive sales
growth throughout 2015 with our robust IoT technology. We expect to
achieve double-digit organic growth in IoT revenue in 2015, with
acquisition activity also anticipated to increase our IoT business
into volumes more closely aligned with our MiFi business volumes by
year-end."
The Company also announced the following non-GAAP results for
the fourth quarter of 2014. A reconciliation of GAAP to non-GAAP
measures is included in the tables accompanying this news
release:
- Non-GAAP gross profit increased by 24.5% to $13.2 million in
the fourth quarter, from $10.6 million in the third quarter of
2014, with relatively flat non-GAAP gross margin of 23.8% in the
fourth quarter compared to 23.9% in the third quarter of 2014.
Non-GAAP gross margin on mobile computing products was 23.4% in the
fourth quarter, compared to 23.1% in the third quarter of 2014, and
non-GAAP gross margin on M2M products was 26.0% in the fourth
quarter, compared to 26.6% in the third quarter of 2014.
- Non-GAAP operating expenses remained relatively flat at $12.7
million in the fourth quarter, compared to $12.8 million in the
third quarter of 2014.
- Adjusted EBITDA was $1.8 million in the fourth quarter compared
to $(0.6 million) in the third quarter of 2014. This improvement
was driven by increased revenue in the fourth quarter combined with
ongoing expense discipline. Adjusted EBITDA excludes restructuring
charges, the final payment by the Company in its shareholder
litigation, the recognition of a beneficial conversion feature on
convertible preferred stock that converted to common stock in the
quarter, accruals related to an all-employee retention bonus plan
adopted in 2014 as part of the Company's turnaround efforts, a gain
associated with a change in fair value of a Company-issued warrant
to purchase common stock, a refund from an escrow account related
to a historic acquisition (net of claims against the escrow
account), share-based compensation expense, interest, taxes,
depreciation and amortization.
- Non-GAAP net income for the fourth quarter was $0.3 million, or
$0.01 per fully-diluted share, compared to a net loss of ($2.4
million), or ($0.06) per share, in the third quarter of 2014. As
with adjusted EBITDA, non-GAAP net income improved during the
fourth quarter due primarily to the Company's revenue growth
combined with ongoing expense discipline. Non-GAAP net income
excludes the same items as adjusted EBITDA, except it includes
interest, taxes, depreciation and amortization (unrelated to
acquisitions).
Quarterly Highlights
The Company's business and organizational highlights since the
beginning of the fourth quarter include:
- On January 7, 2015, the Company introduced the MT 1200, a
competitively-priced mobile tracking telematics solution for fleet
management, usage-based insurance and other connected vehicle
applications. Designed to simplify integration and use, the compact
MT 1200 offers "tried and true" vehicle tracking and driver
behavior monitoring features combined with an open platform option
and a best-in-class user experience designed for swift integration
and efficient management. The MT 1200 supports GPRS, CDMA2000®
1xRTT, and HSDPA technologies.
- The Company's award-winning line of MiFi-powered SA 2100 LTE
IoT gateways for telemetry and telematics was certified by Verizon
Wireless for AWS/Band 4 LTE and support for Private Network. This
was the third Novatel Wireless AWS/Band 4 solution certified
through Verizon Wireless since the network enabled AWS/Band 4
earlier in 2014.
- In November, the Company was named a 2015 CES Innovation Awards
Honoree for the Verizon 4G LTE Mobile Hotspot MiFi® 6620L, the most
powerful hotspot ever. Products entered in this prestigious program
were judged by a preeminent panel of independent industrial
designers, independent engineers and members of the trade media to
honor outstanding design and engineering in cutting-edge consumer
electronics products across 28 product categories. The global-ready
MiFi 6620L mobile hotspot is the first Verizon Wireless Jetpack®
that connects up to 15 devices to the Verizon XLTE network
supporting up to 20 hours of use on a single charge, and has
received accolades and awards from a number of industry outlets.
- The Company strengthened its global distribution network and
customer base, supplying IoT solutions internationally. In the
fourth quarter, the Company announced distribution agreements in
the Middle East with Server Corner GlobalTech and NOMD Telecom, and
in February, the Company announced an extended agreement with GPS
Chile, offering telematics solutions throughout the region.
- In December, the Company's MT 3060 OBD II telematics solution
for Chipin's "Fairzekering" usage-based insurance offering was
awarded Most Innovative Solution by two separate prestigious
programs in the Netherlands: The Accenture Innovation Awards and
the Generali AM Innovation Awards.
- On October 31, 2014, the Company obtained a $25.0 million
revolving credit facility with Wells Fargo Bank. The credit
facility provides the Company with enhanced capital flexibility for
its growth initiatives and general corporate purposes.
- The Company strengthened its leadership team in the fourth
quarter. In October, the Company announced the appointment to the
Company's Board of Directors of Philip Falcone, Chairman and CEO of
Harbinger Group Inc., and Robert Pons, Executive Vice President of
Business Development of HC2. In November, Alex Mashinsky was
appointed permanent CEO of the Company, after having served as
interim CEO since June 13, 2014.
First Quarter 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 news
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 first quarter of 2015 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.
|
First Quarter 2015
Outlook |
|
|
Revenue |
$50 -- $55 million |
|
|
Non-GAAP Gross Margin |
23.5% - 25.5% |
|
|
Non-GAAP Operating Expenses |
$13 -- $14 million |
|
|
Adjusted EBITDA |
$0.0 -- $1.0 million |
|
|
Non-GAAP Earnings Per Share |
$(0.03) -- $0.00 |
|
|
Weighted Average Shares Outstanding |
approximately 46 million |
Conference Call Information
Novatel Wireless will host a conference call and live webcast
for analysts and investors today at 5:00 p.m. ET. To access the
conference call:
- In the United States, call 1-877-317-6789
- International parties can access the call at
1-412-317-6789
Novatel Wireless will offer a live webcast of the conference
call, which will be accessible from the "Investors" section of the
Company's website at www.novatelwireless.com. A telephonic replay
of the conference call will also be available one hour after the
call and will be available until February 27, 2015. To hear the
replay, parties in the United States may call 1-877-344-7529 and
enter conference code 10059616#. International parties may call
1-412-317-0088 and enter the same code.
ABOUT NOVATEL WIRELESS
Novatel Wireless, Inc. (Nasdaq:MIFI) is a leader in the design
and development of M2M wireless solutions based on 3G and 4G
technologies. The Company delivers Internet of Things (IoT) and
Cloud SaaS services to carriers, distributors, retailers, OEMs and
vertical markets worldwide. Product lines include MiFi® Mobile
Hotspots, USB modems, Expedite® and Enabler embedded modules,
Mobile Tracking Solutions and Asset Tracking Solutions. These
innovative products provide anywhere, anytime communications
solutions for consumers and enterprises. Novatel Wireless is
headquartered in San Diego, California. For more information please
visit www.novatelwireless.com. @MIFI
Cautionary Note Regarding Forward-Looking
Statements
Some of the information presented in this release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. In this context,
forward-looking statements often address expected future business
and financial performance and often contain words such as "may,"
"estimate," "anticipate," "believe," "expect," "intend," "plan,"
"project," "will" and similar words and phrases indicating future
results. The information presented in this release related to our
outlook for the Company's first quarter ending March 31, 2015,
future demand for our products and the expected impact of
acquisition activity, the quotation of Alex Mashinsky, as well as
other statements that are not purely statements of historical fact,
are forward-looking in nature. These forward-looking statements are
made on the basis of management's current expectations,
assumptions, estimates and projections and are subject to
significant risks and uncertainties that could cause actual results
to differ materially from those anticipated in such forward-looking
statements. The Company therefore cannot guarantee future results,
performance or achievements. Actual results could differ materially
from the Company's expectations.
Factors that could cause actual results to differ materially
from Novatel Wireless' expectations are set forth as risk factors
in the Company's SEC reports and filings and include (1) the future
demand for wireless broadband access to data, (2) the growth of
wireless wide-area networking, (3) changes in commercially adopted
wireless transmission standards and technologies including 3G and
4G standards, (4) continued customer and end user acceptance of the
Company's current products and market demand for the Company's
anticipated new product offerings, (5) increased competition and
pricing pressure from current or future wireless market
participants, (6) dependence on third party manufacturers in Asia
and key component suppliers worldwide, (7) unexpected liabilities
or expenses, (8) the Company's ability to introduce new products in
a timely manner, (9) litigation, regulatory and IP developments
related to our products or component parts of our products, (10)
dependence on a small number of customers, (11) the effect of
changes in accounting standards and in aspects of our critical
accounting policies and (12) the Company's plans and expectations
relating to acquisitions, strategic relationships, international
expansion, software and hardware developments, personnel matters
and cost containment initiatives.
These factors, as well as other factors described in the reports
filed by the Company with the SEC (available at www.sec.gov), could
cause actual results to differ materially from those expressed in
the Company's forward-looking statements. Novatel Wireless assumes
no obligation to update publicly any forward-looking statements for
any reason, even if new information becomes available or other
events occur in the future, except as otherwise required pursuant
to applicable law and our on-going reporting obligations under the
Securities Exchange Act of 1934, as amended.
Non-GAAP Financial Measures
Novatel Wireless has provided in this release financial
information that has not been prepared in accordance with GAAP.
Non-GAAP gross profit, gross margin, operating expenses, adjusted
EBITDA, net income (loss) and net income (loss) per share exclude
restructuring charges, the final payment by the Company in its
shareholder litigation, the recognition of a beneficial conversion
feature on convertible preferred stock that converted to common
stock in the quarter, accruals related to an all-employee retention
bonus plan adopted in 2014 as part of the Company's turnaround
efforts, a gain associated with a change in fair value of a
Company-issued warrant to purchase common stock, a refund from an
escrow account related to a historic acquisition (net of claims
against the escrow account), share-based compensation expenses, and
amortization of intangibles associated with a historic acquisition.
Adjusted EBITDA also excludes interest, taxes, depreciation and
amortization.
Non-GAAP gross profit, gross margin, operating expenses,
adjusted EBITDA, net income (loss) and net income (loss) per share
are supplemental measures of our performance that are not required
by, or presented in accordance with, GAAP. These non-GAAP financial
measures are not intended to be used in isolation and, moreover,
they should not be considered as a substitute for net income,
diluted earnings per share, operating expenses, gross margin or any
other performance measure determined in accordance with GAAP. We
present non-GAAP gross profit, gross margin, operating expenses,
adjusted EBITDA, net income (loss) and net income (loss) per share
because we consider each to be an important supplemental measure of
our performance.
Management uses these non-GAAP financial measures to make
operational decisions, evaluate the Company's performance, prepare
forecasts and determine compensation. Further, management believes
that both management and investors benefit from referring to these
non-GAAP financial measures in assessing the Company's performance
when planning, forecasting and analyzing future periods. The
stock-based compensation expenses are expected to vary depending on
the number of new grants issued to both current and new employees,
and changes in the Company's stock price, stock market volatility,
expected option life and risk-free interest rates, all of which are
difficult to estimate. In calculating non-GAAP gross profit, gross
margin, operating expenses, adjusted EBITDA, net income (loss) and
net income (loss) per share, management excludes restructuring
charges and other non-cash and one-time items in order to
facilitate comparability of the Company's operating performance on
a period-to-period basis because such expenses are not, in
management's review, related to the Company's ongoing operating
performance. Management uses this view of its operating performance
for purposes of comparison with its business plan and individual
operating budgets and allocation of resources.
We further believe that these non-GAAP financial measures are
useful to investors in providing greater transparency to the
information used by management in its operational decision-making.
We believe that the use of non-GAAP gross profit, gross margin,
operating expenses, adjusted EBITDA, net income (loss) and net
income (loss) per share also facilitates a comparison of Novatel
Wireless' underlying operating performance with that of other
companies in our industry, which use similar non-GAAP financial
measures to supplement their GAAP results.
Calculating non-GAAP gross profit, gross margin, operating
expenses, adjusted EBITDA, net income (loss) and net income (loss)
per share have limitations as an analytical tool, and you should
not consider these measures in isolation or as substitutes for GAAP
metrics. In the future, we expect to continue to incur expenses
similar to the non-GAAP adjustments described above, and exclusion
of these items in the presentation of our non-GAAP financial
measures should not be construed as an inference that these costs
are unusual, infrequent or non-recurring. Investors and potential
investors are cautioned that there are material limitations
associated with the use of non-GAAP financial measures as an
analytical tool. Limitations in relying on non-GAAP financial
measures include, but are not limited to, the fact that other
companies, including other companies in our industry, may calculate
non-GAAP financial measures differently than we do, limiting their
usefulness as a comparative tool.
Investors and potential investors are encouraged to review the
reconciliation of non-GAAP financial measures contained within this
press release with our GAAP financial results.
(C) 2015 Novatel Wireless, Inc. All rights reserved. The Novatel
Wireless name and logo are trademarks of Novatel Wireless, Inc.
|
NOVATEL WIRELESS,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(In thousands, except per share
data) |
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2014 |
2013 |
2014 |
2013 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
|
|
|
|
|
Net revenues |
$ 55,361 |
$ 65,335 |
$185,245 |
$ 335,053 |
Cost of net revenues |
42,855 |
53,296 |
148,198 |
266,759 |
Gross profit |
12,506 |
12,039 |
37,047 |
68,294 |
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
Research and development |
10,150 |
8,979 |
34,314 |
48,246 |
Sales and marketing |
3,976 |
4,159 |
13,792 |
20,898 |
General and administrative |
2,522 |
4,970 |
15,402 |
24,179 |
Amortization of purchased intangible
assets |
140 |
140 |
562 |
562 |
Shareholder litigation loss |
790 |
14,326 |
790 |
14,326 |
Restructuring charges |
280 |
893 |
7,760 |
3,304 |
Total operating costs and expenses |
17,858 |
33,467 |
72,620 |
111,515 |
|
|
|
|
|
Operating loss |
(5,352) |
(21,428) |
(35,573) |
(43,221) |
|
|
|
|
|
Other income (expense): |
|
|
|
|
Change in fair value of warrant
liability |
1,508 |
-- |
(3,280) |
-- |
Interest income (expense), net |
(57) |
4 |
(85) |
113 |
Other expense, net |
(494) |
(139) |
(612) |
(222) |
|
|
|
|
|
Loss before income taxes |
(4,395) |
(21,563) |
(39,550) |
(43,330) |
Income tax provision (benefit) |
51 |
(257) |
124 |
83 |
Net loss |
$ (4,446) |
$ (21,306) |
$ (39,674) |
$ (43,413) |
|
|
|
|
|
Per share data: |
|
|
|
|
Net loss per share: |
|
|
|
|
Basic |
$ (0.10) |
$ (0.63) |
$ (1.05) |
$ (1.28) |
|
|
|
|
|
Weighted average shares used in computation
of net loss per share: |
|
|
|
|
Basic |
45,054 |
34,084 |
37,959 |
33,948 |
|
|
NOVATEL WIRELESS,
INC. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In thousands) |
|
|
December 31, |
December 31, |
|
2014 |
2013 |
|
(Unaudited) |
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 15,739 |
$ 2,911 |
Marketable securities |
2,114 |
16,612 |
Restricted marketable securities |
-- |
2,566 |
Accounts receivable, net |
24,213 |
39,985 |
Inventories |
37,803 |
27,793 |
Deferred tax assets, net |
34 |
100 |
Prepaid expenses and other |
7,878 |
5,662 |
Total current assets |
87,781 |
95,629 |
|
|
|
Property and equipment, net |
5,279 |
9,901 |
Marketable securities |
-- |
3,443 |
Intangible assets, net |
1,493 |
2,131 |
Deferred tax assets, net |
-- |
81 |
Other assets |
467 |
280 |
Total assets |
$ 95,020 |
$ 111,465 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
Accounts payable |
$ 34,540 |
$ 24,538 |
Accrued expenses |
23,844 |
23,271 |
Current portion of litigation settlement |
-- |
4,326 |
Short-term margin loan facility |
-- |
2,566 |
Total current liabilities |
58,384 |
54,701 |
|
|
|
Revolving credit facility |
5,158 |
-- |
Other long-term liabilities |
932 |
1,848 |
Non-current portion of litigation
settlement |
-- |
10,000 |
Total liabilities |
64,474 |
66,549 |
|
|
|
Commitments and Contingencies |
|
|
|
|
|
Stockholders' equity: |
|
|
Common stock |
46 |
34 |
Additional paid-in capital |
466,665 |
441,368 |
Accumulated other comprehensive income |
-- |
5 |
Accumulated deficit |
(411,165) |
(371,491) |
|
55,546 |
69,916 |
Treasury stock at cost |
(25,000) |
(25,000) |
Total stockholders' equity |
30,546 |
44,916 |
Total liabilities and stockholders'
equity |
$ 95,020 |
$ 111,465 |
|
|
NOVATEL WIRELESS,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(In thousands) |
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2014 |
2013 |
2014 |
2013 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
Cash flows from operating activities: |
|
|
|
|
Net loss |
$ (4,446) |
$(21,306) |
$ (39,674) |
$ (43,413) |
Adjustments to reconcile net loss to net
cash used in operating activities: |
|
|
|
|
Depreciation and amortization |
1,519 |
2,175 |
7,408 |
8,949 |
Impairment loss on equipment, leasehold
improvements and software license intangible assets |
-- |
400 |
-- |
418 |
Provision for bad debts, net of
recoveries |
(101) |
931 |
86 |
1,936 |
Provision for excess and obsolete
inventory |
349 |
1,275 |
3,382 |
4,344 |
Share-based compensation
expense |
674 |
595 |
2,290 |
3,443 |
Change in fair value of warrant
liability |
(1,508) |
-- |
3,280 |
-- |
Shareholder litigation loss |
-- |
14,326 |
-- |
14,326 |
Non-cash income tax expense
(benefit) |
87 |
(46) |
87 |
220 |
Changes in assets and liabilities: |
|
|
|
|
Accounts receivable |
3,146 |
6,625 |
14,746 |
730 |
Inventories |
(10,013) |
(2,043) |
(13,392) |
6,879 |
Prepaid expenses and other
assets |
(3,703) |
1,680 |
(2,403) |
(489) |
Accounts payable |
4,536 |
(21,926) |
10,036 |
(19,237) |
Accrued expenses, income taxes, and
other |
2,923 |
(4,988) |
(1,867) |
(4,733) |
Net cash used in operating
activities |
(6,537) |
(22,302) |
(16,021) |
(26,627) |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Purchases of property and
equipment |
(240) |
(106) |
(1,753) |
(5,011) |
Purchases of intangible assets |
(288) |
-- |
(431) |
-- |
Purchases of marketable
securities |
(104) |
(2,024) |
(1,359) |
(24,262) |
Marketable securities
maturities/sales |
3,348 |
9,166 |
21,861 |
40,897 |
Net cash provided by investing
activities |
2,716 |
7,036 |
18,318 |
11,624 |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from the issuances of Series C
preferred and common stock, net of issuance costs |
-- |
-- |
14,163 |
-- |
Proceeds from the issuance of short-term
debt, net of issuance costs |
-- |
6,900 |
-- |
20,300 |
Principal repayments of short-term
debt |
-- |
(6,765) |
(2,566) |
(17,734) |
Repayment of Shareholder Note payable,
including interest |
(5,026) |
-- |
(5,026) |
-- |
Borrowings on revolving credit
facility |
5,158 |
-- |
5,158 |
-- |
Taxes paid on vested restricted stock
units, net of proceeds from stock option exercises |
(692) |
(37) |
(1,067) |
(552) |
Net cash provided by financing
activities |
(560) |
98 |
10,662 |
2,014 |
Effect of exchange rates on cash and cash
equivalents |
(43) |
(59) |
(131) |
(144) |
Net increase (decrease) in cash and cash
equivalents |
(4,424) |
(15,227) |
12,828 |
(13,133) |
Cash and cash equivalents, beginning of
period |
20,163 |
18,138 |
2,911 |
16,044 |
Cash and cash equivalents, end of period |
$ 15,739 |
$ 2,911 |
$ 15,739 |
$ 2,911 |
|
|
NOVATEL WIRELESS,
INC. |
Reconciliation of GAAP Net Loss
to Non-GAAP Net Income (Loss) |
Three and Twelve Months Ended
December 31, 2014 |
(In thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December 31,
2014 |
December 31,
2014 |
|
Net Income
(Loss) |
Income (Loss) Per
Share |
Net Income
(Loss) |
Income (Loss) Per
Share |
|
|
|
|
|
GAAP net loss |
$ (4,446) |
(0.10) |
$(39,674) |
$ (1.05) |
|
|
|
|
|
Adjustments: |
|
|
|
|
Share-based compensation expense (a) |
674 |
0.01 |
2,290 |
0.06 |
Acquisition related charges (b) |
223 |
0.00 |
895 |
0.02 |
Shareholder litigation loss (c) |
790 |
0.02 |
790 |
0.02 |
Retention bonus (d) |
5,500 |
0.12 |
5,500 |
0.14 |
Restructuring charges (e) |
280 |
0.01 |
7,760 |
0.20 |
Change in fair value of warrant liability
(f) |
(1,508) |
(0.03) |
3,280 |
0.09 |
Fair value of beneficial conversion
feature (g) |
445 |
0.01 |
445 |
0.01 |
Gain on acquisition-related escrow
refund, net of related claims (h) |
(1,613) |
(0.04) |
(1,613) |
(0.04) |
Non-GAAP net income (loss) |
$ 345 |
$ 0.01 |
$(20,327) |
$ (0.54) |
|
|
|
|
|
(a) Adjustments reflect
share-based compensation expense recorded under ASC Topic 718 |
(b) Adjustments reflect
amortization of purchased intangibles |
(c) Adjustments reflect
shareholder litigation loss |
(d) Adjustments reflect accruals
for an all-employee retention bonus |
(e) Adjustments reflect
restructuring charges |
(f) Adjustments reflect change in
fair value of warrant liability |
(g) Adjustments reflect fair
value of the beneficial conversion feature of preferred shares |
(h) Adjustments reflect gain on
acquisition-related escrow refund, net of related claims |
See "Non-GAAP Financial Measures"
for information regarding our use of Non-GAAP financial
measures |
|
|
NOVATEL WIRELESS,
INC. |
Reconciliation of GAAP
Operating Costs and Expenses to Non-GAAP Operating Costs and
Expenses |
(In thousands) |
(Unaudited) |
|
|
|
Three Months
Ended December 31, 2014 |
|
GAAP |
Share-based compensation
expense (a) |
Purchased intangibles
amortization (b) |
Restructuring charges
(c) |
Shareholder litigation
(d) |
Retention bonus
(e) |
Other (f) |
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of net revenues |
$42,855 |
$ 11 |
$ 83 |
$ -- |
$ -- |
$ 570 |
$ -- |
$ 42,191 |
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
Research and development |
10,150 |
207 |
-- |
-- |
-- |
3,070 |
-- |
6,873 |
Sales and marketing |
3,976 |
47 |
-- |
-- |
-- |
930 |
-- |
2,999 |
General and administrative |
2,522 |
409 |
-- |
-- |
-- |
930 |
(1,613) |
2,796 |
Amortization of purchased intangibles
assets |
140 |
-- |
140 |
-- |
-- |
-- |
-- |
-- |
Shareholder litigation loss |
790 |
-- |
-- |
-- |
790 |
-- |
-- |
-- |
Restructuring charges |
280 |
-- |
-- |
280 |
-- |
-- |
-- |
-- |
Total operating costs and expenses |
$17,858 |
663 |
140 |
280 |
790 |
4,930 |
(1,613) |
$ 12,668 |
|
|
|
|
|
|
|
|
|
Total |
|
$ 674 |
$ 223 |
$ 280 |
$ 790 |
$ 5,500 |
$(1,613) |
|
|
|
|
|
|
|
|
|
|
(a) Adjustments reflect
share-based compensation expense recorded under ASC Topic
718 |
(b) Adjustments reflect
amortization of purchased intangibles |
(c) Adjustments reflect
restructuring charges |
(d) Adjustments reflects
shareholder litigation loss |
(e) Adjustments reflect accruals
for an all-employee retention bonus |
(f) Adjustments reflect gain on
acquisition-related escrow refund, net of related claims |
See "Non-GAAP Financial Measures"
for information regarding our use of Non-GAAP financial
measures |
|
|
NOVATEL WIRELESS,
INC. |
Reconciliation of GAAP
Operating Costs and Expenses to Non-GAAP Operating Costs and
Expenses |
(In thousands) |
(Unaudited) |
|
|
|
Twelve Months
Ended December 31, 2014 |
|
GAAP |
Share-based compensation
expense (a) |
Purchased intangibles
amortization (b) |
Restructuring charges
(c) |
Shareholder litigation
(d) |
Retention bonus
(e) |
Other (f) |
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of net revenues |
$148,198 |
$ 5 |
$ 333 |
$ -- |
$ -- |
$ 570 |
$ -- |
$ 147,290 |
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
Research and development |
34,314 |
654 |
-- |
-- |
-- |
3,070 |
-- |
30,590 |
Sales and marketing |
13,792 |
247 |
-- |
-- |
-- |
930 |
-- |
12,615 |
General and administrative |
15,402 |
1,384 |
-- |
-- |
-- |
930 |
(1,613) |
14,701 |
Amortization of purchased intangibles
assets |
562 |
-- |
562 |
-- |
-- |
-- |
-- |
-- |
Shareholder litigation loss |
790 |
-- |
-- |
-- |
790 |
-- |
-- |
-- |
Restructuring charges |
7,760 |
-- |
-- |
7,760 |
-- |
-- |
-- |
-- |
Total operating costs and expenses |
$ 72,620 |
2,285 |
562 |
7,760 |
790 |
4,930 |
(1,613) |
$ 57,906 |
|
|
|
|
|
|
|
|
|
Total |
|
$ 2,290 |
$ 895 |
$ 7,760 |
$ 790 |
$ 5,500 |
$(1,613) |
|
|
|
|
|
|
|
|
|
|
(a) Adjustments reflect
share-based compensation expense recorded under ASC Topic 718 |
(b) Adjustments reflect
amortization of purchased intangibles |
(c) Adjustments reflect
restructuring charges |
(d) Adjustments reflects
shareholder litigation loss |
(e) Adjustments reflect accruals
for an all-employee retention bonus |
(f) Adjustments reflect gain on
acquisition-related escrow refund, net of related claims |
See "Non-GAAP Financial Measures"
for information regarding our use of Non-GAAP financial
measures |
|
|
NOVATEL WIRELESS,
INC. |
Reconciliation of GAAP Loss
before Income Taxes to Adjusted EBITDA |
Three and Twelve Months Ended
December 31, 2014 |
(In thousands) |
(Unaudited) |
|
|
|
|
Three Months Ended |
Twelve Months Ended |
|
December 31, |
December 31, |
|
2014 |
2014 |
Loss before income taxes |
$ (4,395) |
$ (39,550) |
Depreciation and amortization |
1,519 |
7,408 |
Share-based compensation expense |
674 |
2,290 |
Shareholder litigation loss |
790 |
790 |
Restructuring charges |
280 |
7,760 |
Retention bonus plan |
5,500 |
5,500 |
Change in fair value of warrant
liability |
(1,508) |
3,280 |
Gain on acquisition-related escrow refund,
net of related claims |
(1,613) |
(1,613) |
Fair value of beneficial conversion
feature |
445 |
445 |
Other expense, net |
106 |
252 |
Adjusted EBITDA |
$ 1,798 |
$ (13,438) |
|
|
|
See "Non-GAAP Financial Measures"
for information regarding our use of Non-GAAP financial
measures |
|
|
NOVATEL WIRELESS,
INC. |
Segment Reporting |
Three and Twelve Months Ended
December 31, 2014 and 2013 |
(In thousands) |
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2014 |
2013 |
2014 |
2013 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
|
|
|
|
|
Net revenues by reportable
segment: |
|
|
|
|
Mobile Computing Products |
$ 47,017 |
$ 56,989 |
$ 145,500 |
$297,499 |
M2M Products and Solutions |
8,344 |
8,346 |
39,745 |
37,554 |
Total |
$ 55,361 |
$ 65,335 |
$ 185,245 |
$335,053 |
|
|
|
|
|
Operating loss by reportable
segment: |
|
|
|
|
Mobile Computing Products |
$ (3,263) |
$ (18,138) |
$ (23,339) |
$ (27,939) |
M2M Products and Solutions |
(2,089) |
(3,290) |
(12,234) |
(15,282) |
Total |
$ (5,352) |
$ (21,428) |
$ (35,573) |
$ (43,221) |
|
|
|
|
|
|
|
|
|
|
|
December 31, |
December 31, |
|
|
|
2014 |
2013 |
|
|
|
|
|
|
|
Identifiable assets by
reportable segment: |
|
|
|
Mobile Computing Products |
$ 79,368 |
$ 96,516 |
|
|
M2M Products and Solutions |
15,652 |
14,949 |
|
|
Total |
$ 95,020 |
$ 111,465 |
|
|
CONTACT: Investor Relations Contact:
Michael Sklansky
(858) 431-0792
msklansky@nvtl.com
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