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Novatel Wireless Reports Third Quarter 2012 Financial Results

Stocks in this article: NVTL

Novatel Wireless, Inc. (NASDAQ: NVTL), a leading provider of intelligent wireless solutions, announced financial results for the third quarter ended September 30, 2012.

Third quarter revenue was $71.0 million, as compared to $113.3 million in the third quarter of 2011. During the quarter, the Company took a non-cash estimated goodwill and intangible asset impairment charge of $20.5 million resulting from an interim impairment analysis. Including this charge, GAAP net loss in the quarter was $31.9 million, or $(0.97) per share. The GAAP net loss also includes the impact of $1.8 million in share-based compensation expense, and $94,000 of income tax adjustments. On a non-GAAP basis, which excludes the estimated impairment charges, and other items identified in the attached reconciliation schedule, net loss for the quarter was $9.1 million, or $(0.27) per share.

“As expected, the third quarter was a transitionary period for Novatel Wireless as we positioned the Company to return to profitability,” said Peter Leparulo, CEO of Novatel Wireless. “While it was a challenging period for legacy sales, we made fundamental progress during the quarter in the key segments and new product initiatives that will drive long term growth. Our primary focus remains on our market leading mobile broadband solutions and expanding our M2M segment. In both of these areas, we have a number of key growth drivers, including new product introductions, design wins and new customer acquisitions. During the quarter, we made the decision to change our OEM business model to focus only on new projects where our inventory and R&D investments will be adequately supported by our customers. This decision will both substantially improve our financial model and allow us to focus on our key growth areas.”

Recent Business Highlights

  • At the end of September, Novatel Wireless announced its next-generation MiFi ® Intelligent Mobile Hotspot, the first mobile hotspot with touchscreen display, soon being sold through AT&T as the MiFi ® Liberate. This marks the first launch of the MiFi ® 2 next generation product from Novatel Wireless, which includes a new user interface based on 2.8” multi-touch interactive color display, connectivity for up to 10 devices, 11 hours of continuous use, and other capabilities beyond pure connectivity such as on-board shared storage.
  • Thrifty Car Rental recently announced it has selected Novatel Wireless’s Mobile Tracking Device, the MT 2500, to manage and protect its fleet of rental vehicles against theft, damage, and loss in South Africa. The deployment will also have the capabilities to expand beyond Thrifty’s rental car fleets, providing services on new and leased vehicles as well.
  • Novatel Wireless recently announced it is filing an additional lawsuit against ZTE Corp., a Chinese company, and ZTE (USA), Inc. for infringing on one of its key patents related to the MiFi ® family of mobile hotspots and wireless data modems. The Company built the recently announced MiFi ® 2 product on its extensive portfolio of such MiFi ® product related patents.

Fourth Quarter 2012 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.

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