NVTL filed an 8K today to announce 2nd Qtr results...
The stock opened at 5.00, took a small hit, but took a major hit after hours.........closed at 4.25
SAN DIEGO, CA. -- July 30, 2003--Novatel Wireless, Inc. (Nasdaq: NVTL), a
leading provider of wireless data communications access solutions, today
reported financial results for the second quarter ended June 30, 2003.
Net revenues for the second quarter were approximately $7.7 million, which
compares to $7.7 million in the same period last year. The net loss under GAAP,
including a $1.9 million inventory charge primarily related to products the
Company no longer manufactures, was $5.0 million as compared to $8.4 million in
the prior year period. Net loss applicable to common shareholders was $8.0
million, or $1.12 per basic and diluted share, which includes non-cash charges
of $3.0 million for the accretion of dividends and beneficial conversion feature
on the December 2001 Series A Preferred Stock issuance and the May 2003 Series B
equity and debt financing transaction.
During the quarter, non-GAAP gross margins were 20.1%, an improvement on a
sequential and year-over-year basis, while the Company cut operating expenses by
36% from the prior year period. The non-GAAP net loss was $1.6 million, an
improvement over a non-GAAP net loss of $6.9 million for the second quarter of
2002. Non-GAAP results exclude $3.4 million in charges related to inventory, restructuring
expenses and amortization of deferred compensation.
"The second quarter demonstrates that we continue to advance the Company, with
significant long term improvements to our business model and operations,"
commented Peter Leparulo, Chief Executive Officer of Novatel Wireless.
"Sell-through appears to be improving and we have strengthened our relationships
with key customers, resulting in steady revenues. Additionally, our R&D program
is highly productive and we are planning on launching several major new products
in the second half of the year. Our gross margins, excluding inventory charges,
continued to improve over the last couple quarters and we have managed to
significantly cut operating expenses since the end of last year. Additionally,
we have strengthened our balance sheet primarily as a result of the recent
financing, converting $3 million in debt to future equity, paying down our
revolving line of credit and increasing our cash position."
Recent highlights include:
- On May 28th, Lucent Technologies introduced the latest software
release for its end-to-end high-speed data solution for 3G UMTS
networks, also known as W-CMDA, supporting the Merlin U530(TM)
Wireless PC Card Modem.
- During the quarter, the Company completed its $6.7 million
financing, which included $3.5 million in convertible debt.
- On May 7th, Peter Leparulo, the CEO of Novatel Wireless, joined the
Board of Directors.
"This quarter, we posted improved non-GAAP gross margins of 20.1% and were able
to substantially reduce our operating expenses by over 8.6% sequentially,"
commented Melvin Flowers, Chief Financial Officer of Novatel Wireless. "We were
also able to reduce outstanding borrowings under our line of credit by
approximately $800,000 and increase our cash position by $1.4 million. With
these improvements in place, we continue to focus on driving toward cash flow
break even." To supplement consolidated financial statements presented in accordance with
GAAP, Novatel Wireless uses non-GAAP financial results, which are adjusted from
results based on GAAP to exclude certain items. The presentation of this
additional information is not meant to be considered in isolation or as a
substitute for results prepared in accordance with United States GAAP. These
non-GAAP results are provided to enhance the user's overall understanding of the
current financial performance of Novatel Wireless and its prospects in the
future. Specifically, the Company believes the non-GAAP results provide useful
information to both management and investors by excluding certain items that it
believes are not indicative of its core operating results.
Novatel Wireless will host a conference call for analysts and investors to
discuss its quarterly results at 5:00 p.m. ET on July 30th, 2003. Open to the
public, a live Web cast of the conference call will be accessible from the
"Investor Relations" section of Novatel Wireless' Web site
(www.novatelwireless.com). Following the live Web cast, an archived version will
be available on the Novatel Wireless Web site.
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