Company Achieves Third Consecutive Quarter of
Improved Profitability
Novatel Wireless, Inc. (NASDAQ:MIFI), a leading provider of
solutions for the Internet of Things (“IoT”), including
software-as-a-service (“SaaS”) solutions for the fleet telematics
market, announced financial results for the second quarter ended
June 30, 2016.
“The momentum for Novatel Wireless’ transformation
into a provider of comprehensive IoT solutions continued in the
second quarter, with increased high-margin SaaS, software and
services revenue. Total subscribers to the Company’s solutions grew
to 557,000 during the second quarter, highlighted by 24% annualized
growth in subscribers to the Company’s Ctrack fleet management
telematics solutions,” said Sue Swenson, Chair and CEO of Novatel
Wireless. “SaaS, software and services once again achieved non-GAAP
gross margins of more than 74%, representing a record 22% of the
Company’s total revenues for the second quarter, and driving the
Company to another improved quarter for adjusted EBITDA. With
continued emphasis on an improved mix of higher margin revenues,
combined with our ongoing focus on expense management, I believe
that the Company’s quarterly adjusted EBITDA will double to more
than $4 million in the fourth quarter of this year and continue to
improve during 2017.”
Second Quarter 2016 Financial
Highlights
The Company announced the following U.S. GAAP
(“GAAP”) financial results for the second quarter of 2016:
- Revenue increased by 21.5% to $62.8 million in the second
quarter of 2016, compared to $51.7 million in the second
quarter of 2015.
- Revenue from SaaS, software and services increased to $13.7
million in the second quarter of 2016, from $2.4 million in
the second quarter of 2015, due to the Company’s continued
dedication to growing revenue from SaaS, software and services with
solutions focused on IoT, which included the acquisitions of
DigiCore Holdings Limited, with its Ctrack® telematics solutions
(“Ctrack”), and Feeney Wireless (“FW”) during 2015. Revenue from
Ctrack solutions was $15.7 million in the second quarter of
2016, driving revenue from SaaS, software and services to a record
21.8% of the Company’s total revenue in the second quarter of 2016,
compared to 4.6% of total revenue in the second quarter of
2015.
- Revenue from hardware products was $49.1 million in the
second quarter of 2016, a decrease of 0.4% from $49.3 million
in the second quarter of 2015, as the Company continues to
strategically de-emphasize lower margin hardware-only sales in
favor of bundled solutions that include higher-margin SaaS,
software and services offerings. Revenue from hardware
products also declined in the second quarter as a result of the
Company’s divestiture of certain hardware modules and related
assets in April 2016.
- Net loss was ($2.7 million), or ($0.05) per share, in the
second quarter of 2016, compared to a net loss of
($9.2 million), or ($0.17) per share, in the second quarter of
2015. The net loss for the second quarter of 2016 included a
$6.9 million gain in connection with the Company’s divestiture
of certain hardware modules and related assets in April 2016, a
$2.1 million charge for amortization of the debt discount and
debt issuance costs associated with the Company’s convertible notes
issued in June 2015, $1.3 million in share-based compensation
expense, $0.3 million of restructuring charges, and
$1.1 million in acquisition- and divestiture-related
expenses.
- As of June 30, 2016, the Company had cash and cash
equivalents of $18.5 million, with no amounts drawn down on its
revolving credit facility with Wells Fargo Bank.
The Company also announced the following non-GAAP
financial results for the second quarter of 2016. A reconciliation
of these non-GAAP financial measures to the Company’s GAAP
financial results is included in the tables accompanying this news
release:
- Non-GAAP gross profit increased by 48.8% to $23.8 million in
the second quarter of 2016, from $16.0 million in the second
quarter of 2015, driven by a combination of increased total
revenues and non-GAAP gross margins from the Company’s Ctrack and
FW-branded SaaS, software and services. Overall non-GAAP gross
margin increased to a record 37.9% in the second quarter of 2016,
compared to 30.9% in the second quarter of 2015, as the Company
continued its transition toward an improved mix of higher-margin
IoT solutions with significant SaaS and recurring revenue
components.
- Non-GAAP gross margin on SaaS, software and services increased
to 74.2% in the second quarter of 2016, compared sequentially to
71.5% in the first quarter of 2016, primarily driven by revenues
from high-margin SaaS and software solutions delivered by Ctrack
and FW. SaaS, software and services revenues were not a meaningful
contributor to the Company’s revenues last year. Non-GAAP gross
margin on hardware products declined to 27.8% in the second quarter
of 2016, compared to 28.5% in the second quarter of 2015, primarily
as a result of increased sales of lower-margin legacy mobile
computing products in the second quarter of 2016. The Company’s
Ctrack telematics solutions which include a mix of hardware, SaaS
and services, generated non-GAAP gross margins of 67.1% in the
second quarter of 2016, increasing for the second consecutive
quarter since the Ctrack telematics solutions were acquired by the
Company in October 2015.
- Non-GAAP operating expenses were $24.3 million in the second
quarter of 2016, compared to $19.3 million in the second
quarter of 2015, an increase of 25.9%, due to the acquisitions and
integration of Ctrack and FW in 2015. The Company has announced
that it is currently implementing restructuring actions intended to
improve its strategic focus on its most profitable business lines
while de-prioritizing certain hardware-only product lines to
non-carrier customers.
- Adjusted EBITDA increased to $1.7 million in the second quarter
of 2016, compared sequentially to $1.3 million in the first quarter
of 2016, and also compared year-over-year to ($2.3 million) in the
second quarter of 2015. Adjusted EBITDA improved in the second
quarter of 2016 due to the Company’s emphasis on growing SaaS,
software and services revenue, while also rationalizing the costs
associated with its hardware business, in an effort to generate
improved performance across multiple areas of the Company. Adjusted
EBITDA contributed by Ctrack’s telematics solutions was $2.4
million in the second quarter of 2016.
- Non-GAAP net loss for the second quarter of 2016 was ($3.4
million), or ($0.06) per share, compared to
($4.3 million), or ($0.08) per share, in the second quarter of
2015, as the Company continues to integrate its two acquisitions
from 2015 and transition toward an improved mix of higher-margin
IoT solutions with significant SaaS and recurring revenue
components.
Other Key Metrics
| |
|
Q2-2016 |
|
Q1-2016 |
|
Q2-2015 |
|
Revenue |
|
|
|
|
|
|
| SaaS, Software and
Services Revenue |
|
$13.7 million |
|
|
$12.8 million |
|
|
$2.4 million |
|
|
Non-GAAP Gross Margin |
|
|
74.2 |
% |
|
|
71.5 |
% |
|
|
80.5 |
% |
| Hardware Revenue |
|
$49.1 million |
|
|
$54.1 million |
|
|
$49.3 million |
|
|
Non-GAAP Gross Margin |
|
|
27.8 |
% |
|
|
26.6 |
% |
|
|
28.5 |
% |
| IoT Revenue(1) |
|
$23.9 million |
|
|
$27.0 million |
|
|
$16.7 million |
|
|
Non-GAAP Gross Margin |
|
|
57.8 |
% |
|
|
49.6 |
% |
|
|
36.4 |
% |
| MiFi Revenue(1) |
|
$38.9 million |
|
|
$39.9 million |
|
|
$35.0 million |
|
|
Non-GAAP Gross Margin |
|
|
25.7 |
% |
|
|
25.4 |
% |
|
|
28.2 |
% |
|
Subscribers |
|
|
|
|
|
|
| Ctrack Fleet
Subscribers |
|
|
174,000 |
|
|
|
164,000 |
|
|
n/a |
|
| Ctrack Non-Fleet
Subscribers |
|
|
215,000 |
|
|
|
206,000 |
|
|
n/a |
|
| FW Subscribers |
|
|
168,000 |
|
|
|
164,000 |
|
|
|
156,000 |
|
| Total Consolidated
Subscribers |
|
|
557,000 |
|
|
|
534,000 |
|
|
|
156,000 |
|
|
|
| (1)
The Company currently places primary emphasis on its mix of
SaaS, software and services revenues as compared to its hardware
revenues. However, since the Company has historically reported its
mix of MiFi (or mobile computing) revenues as compared to its IoT
(or M2M) revenues, these metrics are presented as well. |
Restructuring Actions to Improve Strategic
Focus, Reduce Operating Costs and Improve
Profitability
The Company is currently implementing targeted
restructuring actions intended to improve its strategic focus on
its most profitable business lines while de-prioritizing certain
hardware-only product lines to non-carrier customers. The reduced
operating costs from these restructuring activities are expected to
exceed any associated revenue impact, resulting in operating margin
improvements and enhanced profitability. These restructuring
actions solely relate to Novatel Wireless employees, and not Ctrack
or FW employees, and is precipitated by the Company's strategic
intent to transform itself into a subscriber-based business focused
on delivering high margin SaaS, software and service solutions for
its customers. The Company’s development and sales activities for
hardware-only product lines, including its flagship MiFi mobile
hotspot products, now will be directed toward its largest carrier
customer.
The restructuring activities are expected to yield
approximately $8 million of annual cost savings, and include
reducing the Company's headcount by 45, or approximately 24% of the
total Notavel Wireless workforce (excluding the Ctrack and FW
workforces), along with additional strategies to reduce costs. The
Company expects to record a restructuring charge of approximately
$0.5 million in the third quarter of 2016 as a result of
implementing this plan, and expects to achieve the $8 million
run-rate of cost reductions in the full fourth quarter of 2016.
“The Company’s restructuring actions are intended
to better align our operating costs toward our higher-margin and
higher-volume products, including our SaaS, software and service
offerings, along with our flagship MiFi mobile hotspot products to
our largest carrier customer,” said Sue Swenson, CEO. “Through
these efforts, we will be able to drive profitability through all
areas of the business, targeting sustained growth in profitability
and cash flow.”
Third 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 (the “SEC”).
Our guidance for the third quarter of 2016 reflects
current business indicators and expectations as of the date of this
news release, including current exchange rates for foreign
currencies.
| |
|
|
|
Third Quarter
2016 Outlook |
| Revenue |
|
|
|
$60 million - $66
million |
| Non-GAAP Gross
Margin |
|
|
|
36.5% - 38.5% |
| Non-GAAP Operating
Expenses |
|
|
|
$23.0 million - $25.0
million |
| Adjusted EBITDA |
|
|
|
$1.3 million - $2.3
million |
| Non-GAAP Net Loss Per
Share |
|
|
|
$(0.07) - $(0.04) |
| Weighted-Average Shares
Outstanding |
|
|
|
approximately 54
million |
Our consolidated third quarter outlook above is
inclusive of the following anticipated contribution from
Ctrack:
| Revenue |
|
|
|
$15.0 million - $17.0
million |
| Non-GAAP Gross
Margin |
|
|
|
63% - 68% |
| Adjusted EBITDA |
|
|
|
$2.0 million - $3.0
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 1-844-881-0135
- International parties can access the call at
1-412-317-6727
Novatel Wireless will offer a live audio webcast of
the conference call, which will be accessible from the “Investors”
section of the Company's website at www.novatelwireless.com. An
audio replay of the conference call will also be available
beginning one hour after the call, through August 17, 2016. To hear
the replay, parties in the United States may call 1-877-344-7529
and enter access code 10088493#. International parties may call
1-412-317-0088 and enter the same code.
ABOUT NOVATEL WIRELESS
Novatel Wireless, Inc. (Nasdaq:MIFI) is a leading
global provider of solutions for the Internet of Things (IoT),
including software-as-a-service (SaaS) solutions for the fleet
telematics market. Our innovative products and solutions
provide anywhere, anytime communications and analytics for
consumers and businesses of all sizes, with approximately 174,000
subscribed fleet vehicles for Ctrack among the Company’s 557,000
global subscribers. Novatel Wireless, Inc. is headquartered in
San Diego, California. www.novatelwireless.com. @MIFI
(Twitter)
Cautionary Note Regarding Forward-Looking
Statements
Some of the information presented in this news
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 news
release related to our outlook for the third and fourth quarters
ending September 30, 2016 and December 31, 2016,
respectively, future demand for our products, the expected impact
of acquisition and restructuring activities, statements made by Sue
Swenson, 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. We therefore cannot guarantee future
results, performance or achievements. Actual results could differ
materially from our expectations.
Factors that could cause actual results to differ
materially from the Company’s 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
and fleet management software and services, (2) the growth of
wireless wide-area networking and fleet management software and
services, (3) customer and end-user acceptance of the
Company's current product and service offerings and market demand
for the Company's anticipated new product and service offerings,
(4) increased competition and pricing pressure from
participants in the markets in which the Company is engaged,
(5) dependence on third party manufacturers and key component
suppliers worldwide, (6) the success of the Company’s
corporate development activities, including integration of Ctrack
and FW and divestitures of lines of business that are not essential
to the Company’s strategy, (7) unexpected liabilities or
expenses, (8) the Company's ability to introduce new products
and services in a timely manner, (9) litigation, regulatory
and IP developments related to our products or components of our
products, (10) dependence on a small number of customers for a
significant portion of the Company’s revenues and (11) the
Company's plans and expectations relating to acquisitions,
divestitures, strategic relationships, international expansion,
software and hardware developments, personnel matters and cost
containment initiatives, including restructuring activities.
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. The
Company 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, Inc. has provided financial
information in this news release that has not been prepared in
accordance with GAAP. Non-GAAP gross profit, gross margin,
operating expenses, adjusted EBITDA, net loss and net loss per
share exclude restructuring charges, share-based compensation
expense, amortization of the debt discount and debt issuance costs
associated with the Company’s convertible notes, gains in
connection with the Company’s divestiture of certain hardware
modules and related assets in April 2016, and charges related to
the Company’s acquisition and divestiture activities, including the
amortization of the step-up to fair value of finished goods from
acquisitions and other compensation expense related to the
acquisitions. Adjusted EBITDA also excludes interest, taxes,
depreciation and amortization (unrelated to acquisitions and the
convertible notes), and foreign currency transaction gains and
losses.
Non-GAAP gross profit, gross margin, operating
expenses, adjusted EBITDA, net loss and net 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 have limitations as an analytical tool and are not
intended to be used in isolation or as a substitute for gross
profit, gross margin, operating expenses, net loss, net loss per
share or any other performance measure determined in accordance
with GAAP. We present non-GAAP gross profit, gross margin,
operating expenses, adjusted EBITDA, net loss and net 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. Share-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 term 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 loss and net loss per share, management excludes
certain 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 view, related to the Company's ongoing operating
performance. Management uses this view of the Company’s operating
performance for purposes of comparison with its business plan and
individual operating budgets and in the allocation of
resources.
The Company further believes 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. The Company believes that the use of
non-GAAP gross profit, gross margin, operating expenses, adjusted
EBITDA, net loss and net loss per share also facilitates a
comparison of our underlying operating performance with that of
other companies in our industry, which use similar non-GAAP
financial measures to supplement their GAAP results.
In the future, the Company expects 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. The limitations of 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 our non-GAAP financial measures
contained within this news release with our GAAP financial
results.
(C) 2016 Novatel Wireless, Inc. All rights
reserved. The Novatel Wireless, Ctrack and FW names and logos are
trademarks of Novatel Wireless, Inc.
| NOVATEL WIRELESS, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (In thousands, except per share data) |
| (Unaudited) |
| |
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| Net revenues: |
|
|
|
|
|
|
|
| Hardware |
$ |
49,145 |
|
|
$ |
49,272 |
|
|
$ |
103,306 |
|
|
$ |
102,283 |
|
| SaaS, software and services |
13,666 |
|
|
2,395 |
|
|
26,449 |
|
|
2,878 |
|
| Total net revenues |
62,811 |
|
|
51,667 |
|
|
129,755 |
|
|
105,161 |
|
| Cost of net
revenues: |
|
|
|
|
|
|
|
| Hardware |
35,758 |
|
|
35,775 |
|
|
76,627 |
|
|
76,598 |
|
| SaaS, software and services |
3,815 |
|
|
569 |
|
|
8,707 |
|
|
606 |
|
| Total cost of net revenues |
39,573 |
|
|
36,344 |
|
|
85,334 |
|
|
77,204 |
|
| Gross profit |
23,238 |
|
|
15,323 |
|
|
44,421 |
|
|
27,957 |
|
| Operating costs and
expenses: |
|
|
|
|
|
|
|
| Research and development |
8,281 |
|
|
9,690 |
|
|
16,306 |
|
|
20,448 |
|
| Sales and marketing |
8,356 |
|
|
4,231 |
|
|
16,109 |
|
|
8,455 |
|
| General and administrative |
9,994 |
|
|
8,988 |
|
|
20,193 |
|
|
14,352 |
|
| Amortization of purchased
intangible assets |
976 |
|
|
656 |
|
|
1,904 |
|
|
823 |
|
| Restructuring charges, net of
recoveries |
269 |
|
|
— |
|
|
891 |
|
|
(164 |
) |
| Total operating costs and
expenses |
27,876 |
|
|
23,565 |
|
|
55,403 |
|
|
43,914 |
|
| Operating loss |
(4,638 |
) |
|
(8,242 |
) |
|
(10,982 |
) |
|
(15,957 |
) |
| Other income
(expense): |
|
|
|
|
|
|
|
| Interest expense, net |
(3,907 |
) |
|
(838 |
) |
|
(7,835 |
) |
|
(912 |
) |
| Other income (expense), net |
5,842 |
|
|
(66 |
) |
|
4,546 |
|
|
(83 |
) |
| Loss before income
taxes |
(2,703 |
) |
|
(9,146 |
) |
|
(14,271 |
) |
|
(16,952 |
) |
| Income tax provision
(benefit) |
(10 |
) |
|
74 |
|
|
321 |
|
|
94 |
|
| Net loss |
(2,693 |
) |
|
(9,220 |
) |
|
(14,592 |
) |
|
(17,046 |
) |
| Less: Net income
attributable to noncontrolling interests |
(8 |
) |
|
— |
|
|
(13 |
) |
|
— |
|
| Net loss attributable
to Novatel Wireless, Inc. |
$ |
(2,701 |
) |
|
$ |
(9,220 |
) |
|
$ |
(14,605 |
) |
|
$ |
(17,046 |
) |
| |
|
|
|
|
|
|
|
| Per share data: |
|
|
|
|
|
|
|
| Net loss per
share: |
|
|
|
|
|
|
|
| Basic and diluted |
$ |
(0.05 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.27 |
) |
|
$ |
(0.34 |
) |
| Weighted-average shares
used in computation of net loss per share: |
|
|
|
|
|
|
|
| Basic and diluted |
53,622,554 |
|
|
53,403,148 |
|
|
53,436,611 |
|
|
49,852,411 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| NOVATEL WIRELESS, INC. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (In thousands) |
| |
| |
June 30, 2016 |
|
December 31, 2015 |
| |
(Unaudited) |
|
|
|
ASSETS |
|
|
|
| Current assets: |
|
|
|
| Cash and cash equivalents |
$ |
18,541 |
|
|
$ |
12,570 |
|
| Accounts receivable, net |
35,515 |
|
|
35,263 |
|
| Short-term investments |
— |
|
|
1,267 |
|
| Inventories |
34,261 |
|
|
55,837 |
|
| Prepaid expenses and other |
5,942 |
|
|
6,039 |
|
| Total current assets |
94,259 |
|
|
110,976 |
|
| Property, plant and equipment, net |
7,686 |
|
|
8,812 |
|
| Rental assets, net |
6,626 |
|
|
6,155 |
|
| Intangible assets, net |
42,508 |
|
|
43,089 |
|
| Goodwill |
31,119 |
|
|
29,520 |
|
| Other assets |
771 |
|
|
201 |
|
| Total assets |
$ |
182,969 |
|
|
$ |
198,753 |
|
| LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
| Current liabilities: |
|
|
|
| Accounts payable |
$ |
19,905 |
|
|
$ |
35,286 |
|
| Accrued expenses and other current
liabilities |
35,368 |
|
|
25,613 |
|
| DigiCore bank facilities |
3,541 |
|
|
3,313 |
|
| Total current liabilities |
58,814 |
|
|
64,212 |
|
| Long-term liabilities: |
|
|
|
| Convertible senior notes, net |
86,684 |
|
|
82,461 |
|
| Revolving credit facility |
— |
|
|
— |
|
| Deferred tax liabilities, net |
3,267 |
|
|
3,475 |
|
| Other long-term liabilities |
13,079 |
|
|
18,142 |
|
| Total liabilities |
161,844 |
|
|
168,290 |
|
| Stockholders’ equity: |
|
|
|
| Common stock |
54 |
|
|
53 |
|
| Additional paid-in capital |
504,990 |
|
|
502,337 |
|
| Accumulated other comprehensive
loss |
(5,912 |
) |
|
(8,507 |
) |
| Accumulated deficit |
(478,054 |
) |
|
(463,451 |
) |
| Total stockholders’ equity
attributable to Novatel Wireless, Inc. |
21,078 |
|
|
30,432 |
|
| Noncontrolling interests |
47 |
|
|
31 |
|
| Total stockholders’ equity |
21,125 |
|
|
30,463 |
|
| Total liabilities and stockholders’
equity |
$ |
182,969 |
|
|
$ |
198,753 |
|
| NOVATEL WIRELESS, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In thousands) |
| (Unaudited) |
| |
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| Cash flows from operating activities: |
|
|
|
|
|
|
|
| Net loss |
$ |
(2,693 |
) |
|
$ |
(9,220 |
) |
|
$ |
(14,592 |
) |
|
$ |
(17,046 |
) |
| Adjustments to reconcile net loss
to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
| Depreciation and amortization |
3,635 |
|
|
1,197 |
|
|
7,233 |
|
|
2,393 |
|
| Amortization of acquisition-related
inventory step-up |
— |
|
|
535 |
|
|
1,829 |
|
|
586 |
|
| Provision for bad debts, net of
recoveries |
245 |
|
|
(2 |
) |
|
134 |
|
|
(43 |
) |
| Provision for excess and obsolete
inventory |
242 |
|
|
93 |
|
|
1,553 |
|
|
299 |
|
| Share-based compensation
expense |
1,256 |
|
|
1,183 |
|
|
2,322 |
|
|
1,973 |
|
| Amortization of debt discount and
debt issuance costs |
2,111 |
|
|
469 |
|
|
4,223 |
|
|
469 |
|
| Gain on divestiture and sale of
other assets, net of loss on disposal of assets |
(6,939 |
) |
|
— |
|
|
(6,888 |
) |
|
— |
|
| Deferred income taxes |
(296 |
) |
|
— |
|
|
(208 |
) |
|
— |
|
| Unrealized foreign currency
transaction loss, net |
900 |
|
|
— |
|
|
2,071 |
|
|
— |
|
| Other |
501 |
|
|
— |
|
|
895 |
|
|
— |
|
| Changes in assets and liabilities,
net of effects from acquisitions and divestiture: |
|
|
|
|
|
|
|
| Accounts receivable |
4,080 |
|
|
279 |
|
|
4,458 |
|
|
(5,832 |
) |
| Inventories |
8,743 |
|
|
6,455 |
|
|
12,392 |
|
|
7,904 |
|
| Prepaid expenses and other
assets |
449 |
|
|
(387 |
) |
|
(473 |
) |
|
765 |
|
| Accounts payable |
(7,153 |
) |
|
(11,315 |
) |
|
(17,216 |
) |
|
(14,916 |
) |
| Accrued expenses, income taxes, and
other |
489 |
|
|
(1,334 |
) |
|
1,499 |
|
|
4,268 |
|
| Net cash provided by (used) in
operating activities |
5,570 |
|
|
(12,047 |
) |
|
(768 |
) |
|
(19,180 |
) |
| Cash flows from investing activities: |
|
|
|
|
|
|
|
| Acquisition-related escrow |
— |
|
|
(88,274 |
) |
|
— |
|
|
(88,274 |
) |
| Acquisitions, net of cash
acquired |
(1,875 |
) |
|
— |
|
|
(1,875 |
) |
|
(9,063 |
) |
| Purchases of property, plant and
equipment |
(45 |
) |
|
(502 |
) |
|
(493 |
) |
|
(613 |
) |
| Proceeds from the sale of property,
plant and equipment |
30 |
|
|
— |
|
|
145 |
|
|
— |
|
| Proceeds from the sale of divested
assets |
9,250 |
|
|
— |
|
|
9,250 |
|
|
— |
|
| Proceeds from the sale of
short-term investments |
1,210 |
|
|
— |
|
|
1,210 |
|
|
— |
|
| Purchases of intangible assets and
additions to capitalized software costs |
(662 |
) |
|
— |
|
|
(1,318 |
) |
|
(224 |
) |
| Net cash provided by (used in)
investing activities |
7,908 |
|
|
(88,776 |
) |
|
6,919 |
|
|
(98,174 |
) |
| Cash flows from financing activities: |
|
|
|
|
|
|
|
| Gross proceeds from the issuance of
convertible senior notes |
— |
|
|
120,000 |
|
|
— |
|
|
120,000 |
|
| Payment of issuance costs related
to convertible senior notes |
— |
|
|
(3,540 |
) |
|
— |
|
|
(3,540 |
) |
| Proceeds from the exercise of
warrant to purchase common stock |
— |
|
|
— |
|
|
— |
|
|
8,644 |
|
| Net borrowings on DigiCore bank
facilities |
201 |
|
|
— |
|
|
45 |
|
|
— |
|
| Net repayments on revolving credit
facility |
(3,400 |
) |
|
(7,158 |
) |
|
— |
|
|
(5,158 |
) |
| Payoff of acquisition-related
assumed liabilities |
— |
|
|
— |
|
|
— |
|
|
(2,633 |
) |
| Principal payments under capital
lease obligations |
(177 |
) |
|
— |
|
|
(450 |
) |
|
— |
|
| Principal payments on mortgage
bond |
(58 |
) |
|
— |
|
|
(112 |
) |
|
— |
|
| Proceeds from stock option
exercises and employee stock purchase plan, net of taxes paid on
vested restricted stock units |
338 |
|
|
249 |
|
|
329 |
|
|
315 |
|
| Net cash provided by (used in)
financing activities |
(3,096 |
) |
|
109,551 |
|
|
(188 |
) |
|
117,628 |
|
| Effect of exchange rates on cash and cash
equivalents |
(102 |
) |
|
(185 |
) |
|
8 |
|
|
(214 |
) |
| Net increase in cash and cash
equivalents |
10,280 |
|
|
8,543 |
|
|
5,971 |
|
|
60 |
|
| Cash and cash equivalents, beginning of
period |
8,261 |
|
|
9,370 |
|
|
12,570 |
|
|
17,853 |
|
| Cash and cash equivalents, end of period |
$ |
18,541 |
|
|
$ |
17,913 |
|
|
$ |
18,541 |
|
|
$ |
17,913 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NOVATEL WIRELESS, INC. |
| Reconciliation of GAAP Net Income (Loss) to Non-GAAP
Net Income (Loss) |
| (In thousands, except per share data) |
| (Unaudited) |
| |
| |
Three Months Ended June 30, 2016 |
|
Six Months Ended June 30, 2016 |
| |
Net Income (Loss) |
|
Income (Loss) Per Share |
|
Net Income (Loss) |
|
Income (Loss) Per Share |
| GAAP net loss |
$ |
(2,693 |
) |
|
$ |
(0.05 |
) |
|
$ |
(14,592 |
) |
|
$ |
(0.27 |
) |
| Adjustments: |
|
|
|
|
|
|
|
| Share-based compensation
expense(a) |
1,256 |
|
|
0.02 |
|
|
2,322 |
|
|
0.04 |
|
| Purchased intangibles
amortization(b) |
1,517 |
|
|
0.03 |
|
|
2,946 |
|
|
0.05 |
|
| Acquisition- and
divestiture-related charges(c) |
1,134 |
|
|
0.02 |
|
|
3,487 |
|
|
0.07 |
|
| Convertible senior notes discount
and issuance costs amortization |
2,111 |
|
|
0.04 |
|
|
4,223 |
|
|
0.08 |
|
| Restructuring charges |
269 |
|
|
0.01 |
|
|
891 |
|
|
0.02 |
|
| Gain on divestiture of certain
hardware modules and related assets |
(6,946 |
) |
|
(0.13 |
) |
|
(6,946 |
) |
|
(0.13 |
) |
| Non-GAAP net loss |
$ |
(3,352 |
) |
|
$ |
(0.06 |
) |
|
$ |
(7,669 |
) |
|
$ |
(0.14 |
) |
| |
| (a) Includes share-based
compensation expense recorded under ASC Topic 718. |
| (b) Includes amortization of
intangibles purchased through acquisitions. |
| (c) Includes professional
fees, including legal, due diligence and other related charges for
acquisitions and divestitures, as well as the amortization of the
step-up to fair value of finished goods acquired through
acquisitions. |
| |
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 |
| Three Months Ended June 30, 2016 |
| (In thousands) |
| (Unaudited) |
| |
| |
GAAP |
|
Share-based compensation expense
(a) |
|
Purchased intangibles amortization
(b) |
|
Restructuring charges |
|
Acquisition- and divestiture-related charges
(c) |
|
Non-GAAP |
| Cost of net
revenues |
$ |
39,573 |
|
|
$ |
55 |
|
|
$ |
541 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
38,977 |
|
| Operating costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
| Research and development |
8,281 |
|
|
212 |
|
|
— |
|
|
— |
|
|
— |
|
|
8,069 |
|
| Sales and marketing |
8,356 |
|
|
213 |
|
|
— |
|
|
— |
|
|
— |
|
|
8,143 |
|
| General and administrative |
9,994 |
|
|
776 |
|
|
— |
|
|
— |
|
|
1,134 |
|
|
8,084 |
|
| Amortization of purchased
intangibles assets |
976 |
|
|
— |
|
|
976 |
|
|
— |
|
|
— |
|
|
— |
|
| Restructuring charges |
269 |
|
|
— |
|
|
— |
|
|
269 |
|
|
— |
|
|
— |
|
| Total operating costs and
expenses |
$ |
27,876 |
|
|
1,201 |
|
|
976 |
|
|
269 |
|
|
1,134 |
|
|
$ |
24,296 |
|
| Total |
|
|
$ |
1,256 |
|
|
$ |
1,517 |
|
|
$ |
269 |
|
|
$ |
1,134 |
|
|
|
|
|
| (a)
Includes share-based compensation expense recorded under ASC Topic
718. |
| (b)
Includes amortization of intangibles purchased through
acquisitions. |
| (c)
Includes professional fees, including legal, due diligence and
other related charges for acquisitions and divestitures. |
|
|
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 |
| Six Months Ended June 30, 2016 |
| (In thousands) |
| (Unaudited) |
| |
| |
GAAP |
|
Share-based compensation expense
(a) |
|
Purchased intangibles amortization
(b) |
|
Restructuring charges |
|
Acquisition- and divestiture-related charges
(c) |
|
Non-GAAP |
| Cost of net
revenues |
$ |
85,334 |
|
|
$ |
107 |
|
|
$ |
1,042 |
|
|
$ |
— |
|
|
$ |
1,829 |
|
|
$ |
82,356 |
|
| Operating costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
| Research and development |
16,306 |
|
|
461 |
|
|
— |
|
|
— |
|
|
— |
|
|
15,845 |
|
| Sales and marketing |
16,109 |
|
|
423 |
|
|
— |
|
|
— |
|
|
— |
|
|
15,686 |
|
| General and administrative |
20,193 |
|
|
1,331 |
|
|
— |
|
|
— |
|
|
1,658 |
|
|
17,204 |
|
| Amortization of purchased
intangibles assets |
1,904 |
|
|
— |
|
|
1,904 |
|
|
— |
|
|
— |
|
|
— |
|
| Restructuring charges |
891 |
|
|
— |
|
|
— |
|
|
891 |
|
|
— |
|
|
— |
|
| Total operating costs and
expenses |
$ |
55,403 |
|
|
2,215 |
|
|
1,904 |
|
|
891 |
|
|
1,658 |
|
|
$ |
48,735 |
|
| Total |
|
|
$ |
2,322 |
|
|
$ |
2,946 |
|
|
$ |
891 |
|
|
$ |
3,487 |
|
|
|
|
|
| (a)
Includes share-based compensation expense recorded under ASC Topic
718. |
| (b)
Includes amortization of intangibles purchased through
acquisitions. |
| (c)
Includes professional fees, including legal, due diligence and
other related charges for acquisitions and divestitures, as well as
the amortization of the step-up to fair value of finished goods
acquired through acquisitions. |
|
|
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 |
| (In thousands) |
| (Unaudited) |
| |
| |
Three Months Ended June 30, 2016 |
|
Six Months Ended June 30, 2016 |
| Loss before income
taxes |
$ |
(2,703 |
) |
|
$ |
(14,271 |
) |
| Depreciation and
amortization(a) |
3,635 |
|
|
7,233 |
|
| Share-based
compensation expense(b) |
1,256 |
|
|
2,322 |
|
| Restructuring
charges |
269 |
|
|
891 |
|
| Acquisition- and
divestiture-related charges(c) |
1,134 |
|
|
3,487 |
|
| Interest expense,
net(d) |
3,907 |
|
|
7,835 |
|
| Other income,
net(e) |
(5,842 |
) |
|
(4,546 |
) |
| Adjusted EBITDA |
$ |
1,656 |
|
|
$ |
2,951 |
|
| |
| (a) Includes depreciation and
amortization charges, including amortization of intangibles
purchased through acquisitions. |
| (b) Includes share-based
compensation expense recorded under ASC Topic 718. |
| (c) Includes professional fees,
including legal, due diligence and other related charges for
acquisitions and divestitures, as well as the amortization of the
step-up to fair value of finished goods acquired through
acquisitions. |
| (d) Includes the amortization
of the convertible senior notes discount and issuance costs. |
| (e) Primarily includes a gain
on the divestiture of certain hardware modules and other related
assets, partially offset by an unrealized foreign currency loss on
an outstanding intercompany loan between Ctrack and one of its
wholly-owned foreign subsidiaries, which is re-measured at each
reporting period. |
| |
See “Non-GAAP Financial Measures” for information
regarding our use of Non-GAAP financial measures.
Investor Relations Contact:
Michael Sklansky
(858) 431-0792
msklansky@nvtl.com
Novatel Wireless, Inc. (NASDAQ:MIFI)
과거 데이터 주식 차트
부터 11월(11) 2024 으로 12월(12) 2024
Novatel Wireless, Inc. (NASDAQ:MIFI)
과거 데이터 주식 차트
부터 12월(12) 2023 으로 12월(12) 2024
