Novatel Wireless Announces Third Quarter Results
October 25, 2001
SAN DIEGO, CA. - October 25, 2001--Novatel Wireless, Inc. (Nasdaq: NVTL), a leading provider of wireless data communications access solutions, today reported financial results for the third quarter and nine months ended September 30, 2001.
Net revenues for the third quarter were $4.1 million, within its previously forecasted range and pro forma net loss, excluding non-cash charges, was $10.1 million or $0.19 per share. This compared to revenues of $17.5 million and a pro forma net loss of $8.1 million, or $0.18 per share in the third quarter of 2000.
"As we noted on September 28th, our third quarter sales were impacted by delays in carrier certification for our next generation products," commented John Major, Chairman and Chief Executive Officer of Novatel Wireless. "While we are disappointed that these product introductions have proved more difficult than we originally envisioned, we are pleased to say that these products are now shipping. With the current softness in the global economy, the key for Novatel Wireless is to execute on three main goals: introduce and commercially ship next generation 2.5 and 3.0G products, partner with leading wireless carriers and leading PDA and PC manufacturers and continue to improve our business model. Even in an extremely difficult quarter, I am pleased to announce progress on all three fronts."
Novatel Wireless has commenced shipping GPRS PC card modems and announced earlier in the week that it is shipping CDMA 2000 1X PC cards. The company currently has a backlog of significantly over $50 million on its next generation products. On September 28th, Novatel Wireless announced that it had signed two contracts for GPRS products with one of the world's leading telecommunications carriers and with one of the largest PC manufacturers. These new contracts combined were valued at significantly over $15 million. Additionally, the company has signed a licensing agreement for its device dialer software with Motorola, Inc.
"GPRS and 1X shipments and our first license deal with a major customer represents important milestones for us," Mr. Major added. "With a strong backlog and leading customers, we feel we are positioned to continue to execute on our vision as a leader in packet wireless connectivity. The progress we have made on improving our financial model is reflected in the fact that we were able to reduce operating expenses by over 12% sequentially and over 32% from the first quarter. In addition, while expenses continued to decrease, product margins for both our shipments and backlog increased."
Given its current backlog, Novatel Wireless currently anticipates revenues between $7 and $9 million in the fourth quarter and continued quarterly improvements in 2002.
Reported net loss, including the provision for excess inventory and non-cash charges, was $17.4 million, or $0.32 per share, compared to $15.4 million, or $1.51 per share, in the same period of 2000.
Net revenues for the nine months ended September 30, 2001 were $36.4 million, a 9% increase over the $33.4 million reported for the nine months ended September 30, 2000. Pro forma net loss for the nine months ended September 30, 2001, excluding restructuring and non-cash charges and a provision for excess inventory was $31.7 million, or $0.58 per share based on 54.3 million shares outstanding, compared to a pro forma net loss of $23.7 million, or $0.59 per share based on 40.6 million pro forma shares outstanding, for first nine months of 2000. Reported net loss for the nine month period, including the provision for excess inventory and non-cash charges, was $68.5 million, or $1.26 per share, compared to $33.6 million, or $3.31 per share, in the same period of 2000 Novatel Wireless will host a conference call for analysts and investors to discuss its quarterly results at 5:30 p.m. EDT on October 25, 2001. Open to the public, a live Web cast of the conference call will be accessible from the ?Investor Relations? section of Novatel Wireless?s Web site (www.novatelwireless.com). Following the live Web cast, an archived version will be available on the Novatel Wireless Web site for 5 days.
About Novatel Wireless
Novatel Wireless, Inc. is a leading provider of wireless data modems and software for use with handheld computing devices and portable personal computers. The Company delivers innovative and comprehensive solutions that enable businesses and consumers to access personal, corporate and public information through email, enterprise networks and the Internet. Novatel Wireless also offers wireless data modems and custom engineering services for hardware integration projects in a wide range of vertical applications. The Novatel Wireless product portfolio includes the Minstrel® family of Wireless Palmtop Modems, MerlinTM Wireless PC Cards, Sage® Wireless Serial Modems, Lancer 3WTM Wireless 3 Watt Modems and ExpediteTM family of Wireless Embedded Modules. Headquartered in San Diego, California, Novatel Wireless is listed on the Nasdaq Stock Market (Nasdaq: NVTL). For more information, please visit the Novatel Wireless web site: www.novatelwireless.com or call 888-888-9231.
Safe Harbor Under the Private Securities Litigation Reform Act of 1995:
The results of operations for the third quarter and nine months ending September 30, 2001 are not necessarily indicative of the results that may be expected for any other future period. Period-to-period comparisons of results of operations should not be relied upon as indications of future performance. Certain statements made in this news release are forward?looking statements and, in some cases, can be identified by terms such as ?may,? ?will,? ?expect,? ?plan,? ?believe,? ?estimate,? ?predict? or the like. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward?looking statements. Factors that may cause future results to differ materially include, among other things: the timing of new product releases, our success in developing and producing new products, market acceptance of our products, competitive pressures including competition for limited source components and consistency of orders from significant customers. These and other risk factors that may affect Novatel Wireless?s financial results in the future are discussed in Novatel Wireless?s filings with the Securities and Exchange Commission. Novatel Wireless undertakes no obligation to update any forward-looking statements.