Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 28, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | MIFI | |
Entity Registrant Name | NOVATEL WIRELESS INC | |
Entity Central Index Key | 1,022,652 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 53,854,656 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 18,541 | $ 12,570 |
Accounts receivable, net of allowance for doubtful accounts of $724 at June 30, 2016 and $601 at December 31, 2015 | 35,515 | 35,263 |
Short-term investments | 0 | 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 of accumulated depreciation of $64,579 at June 30, 2016 and $62,832 at December 31, 2015 | 7,686 | 8,812 |
Rental assets, net of accumulated depreciation of $1,783 at June 30, 2016 and $1,034 at December 31, 2015 | 6,626 | 6,155 |
Intangible assets, net of accumulated amortization of $20,655 at June 30, 2016 and $17,380 at December 31, 2015 | 42,508 | 43,089 |
Goodwill | 31,119 | 29,520 |
Other assets | 771 | 201 |
Total assets | 182,969 | 198,753 |
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 | 0 | 0 |
Deferred tax liabilities, net | 3,267 | 3,475 |
Other long-term liabilities | 13,079 | 18,142 |
Total liabilities | 161,844 | 168,290 |
Commitments and Contingencies | ||
Stockholders’ equity: | ||
Preferred stock, par value $0.001; 2,000,000 shares authorized and none outstanding | 0 | 0 |
Common stock, par value $0.001; 150,000,000 shares authorized at June 30, 2016 and December 31, 2015, respectively, 53,853,148 and 53,165,024 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively | 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 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 724 | $ 601 |
Accumulated depreciation, Property, plant and equipment | 64,579 | 62,832 |
Accumulated depreciation, Rental assets | 1,783 | 1,034 |
Accumulated amortization, Intangible assets | $ 20,655 | $ 17,380 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 53,853,148 | 53,165,024 |
Common stock, shares outstanding | 53,853,148 | 53,165,024 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 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 | 0 | 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) | 0 | (13) | 0 |
Net loss attributable to Novatel Wireless, Inc. | $ (2,701) | $ (9,220) | $ (14,605) | $ (17,046) |
Net loss per share: | ||||
Basic and diluted ($ per share) | $ (0.05) | $ (0.17) | $ (0.27) | $ (0.34) |
Weighted average shares used in computation of net loss per share: | ||||
Basic and diluted (in shares) | 53,622,554 | 53,403,148 | 53,436,611 | 49,852,411 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (2,693) | $ (9,220) | $ (14,592) | $ (17,046) |
Foreign currency translation adjustment | 317 | 0 | 2,595 | 0 |
Total comprehensive loss | $ (2,376) | $ (9,220) | $ (11,997) | $ (17,046) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (14,592) | $ (17,046) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 7,233 | 2,393 |
Amortization of acquisition-related inventory step-up | 1,829 | 586 |
Provision for bad debts, net of recoveries | 134 | (43) |
Provision for excess and obsolete inventory | 1,553 | 299 |
Share-based compensation expense | 2,322 | 1,973 |
Amortization of debt discount and debt issuance costs | 4,223 | 469 |
Gain on divestiture and sale of other assets, net of loss on disposal of assets | (6,888) | 0 |
Deferred income taxes | (208) | 0 |
Unrealized foreign currency transaction loss, net | 2,071 | 0 |
Other | 895 | 0 |
Changes in assets and liabilities, net of effects from acquisitions and divestitures: | ||
Accounts receivable | 4,458 | (5,832) |
Inventories | 12,392 | 7,904 |
Prepaid expenses and other assets | (473) | 765 |
Accounts payable | (17,216) | (14,916) |
Accrued expenses, income taxes, and other | 1,499 | 4,268 |
Net cash used in operating activities | (768) | (19,180) |
Cash flows from investing activities: | ||
Acquisition-related escrow | 0 | (88,274) |
Acquisitions, net of cash acquired | (1,875) | (9,063) |
Purchases of property, plant and equipment | (493) | (613) |
Proceeds from the sale of property, plant and equipment | 145 | 0 |
Proceeds from the sale of divested assets | 9,250 | 0 |
Proceeds from the sale of short-term investments | 1,210 | 0 |
Purchases of intangible assets and additions to capitalized software costs | (1,318) | (224) |
Net cash provided by (used in) investing activities | 6,919 | (98,174) |
Cash flows from financing activities: | ||
Gross proceeds from the issuance of convertible senior notes | 0 | 120,000 |
Payment of issuance costs related to convertible senior notes | 0 | (3,540) |
Proceeds from the exercise of warrant to purchase common stock | 0 | 8,644 |
Net borrowings on DigiCore bank facilities | 45 | 0 |
Net repayments on revolving credit facility | 0 | (5,158) |
Payoff of acquisition-related assumed liabilities | 0 | (2,633) |
Principal payments under capital lease obligations | (450) | 0 |
Principal payments on mortgage bond | (112) | 0 |
Proceeds from stock option exercises and employee stock purchase plan, net of taxes paid on vested restricted stock units | 329 | 315 |
Net cash provided by (used in) financing activities | (188) | 117,628 |
Effect of exchange rates on cash and cash equivalents | 8 | (214) |
Net increase in cash and cash equivalents | 5,971 | 60 |
Cash and cash equivalents, beginning of period | 12,570 | 17,853 |
Cash and cash equivalents, end of period | 18,541 | 17,913 |
Cash paid during the year for: | ||
Interest | 3,598 | 106 |
Income taxes | $ 57 | $ 106 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The information contained herein has been prepared by Novatel Wireless, Inc. (the “Company”) in accordance with the rules of the Securities and Exchange Commission (the “SEC”). The information at June 30, 2016 and the results of the Company’s operations for the three and six months ended June 30, 2016 and 2015 are unaudited. The condensed consolidated financial statements reflect all adjustments, consisting of only normal recurring accruals, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods presented. These condensed consolidated financial statements and notes hereto should be read in conjunction with the audited financial statements from which they were derived and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . Except as set forth below, the accounting policies used in preparing these unaudited condensed consolidated financial statements are the same as those described in the Company’s Annual Report on Form 10-K. The results of operations for the interim periods presented are not necessarily indicative of results to be expected for any other interim period or for the year as a whole. For the three months ended June 30, 2016 and 2015 , the Company incurred a net loss of $2.7 million and $9.2 million , respectively. The Company’s ability to transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support its evolving cost structure. If events or circumstances occur such that the Company does not meet its operating plan as expected, the Company may be required to reduce planned research and development activities, incur additional restructuring charges or reduce other operating expenses which could have an adverse impact on its ability to achieve its intended business objectives. These additional reductions in expenditures, if required, could have an adverse impact on the Company’s ability to achieve certain of its business objectives. The Company’s management believes that its cash and cash equivalents and availability under its senior secured revolving credit facility, together with anticipated cash flows from operations, will be sufficient to meet its working capital needs for the next twelve months and the foreseeable future. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Segment Information Management has determined that the Company has one reportable segment. The Chief Executive Officer, who is also the Chief Operating Decision Maker, does not manage any part of the Company separately, and the allocation of resources and assessment of performance is based solely on the Company’s consolidated operations and operating results. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent liabilities. Actual results could differ materially from these estimates. Significant estimates include allowance for doubtful accounts receivable, provision for excess and obsolete inventory, valuation of intangible and long-lived assets, valuation of goodwill, valuation of debt obligations, royalty costs, accruals relating to litigation and restructuring, provision for warranty costs, income taxes and share-based compensation expense. New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”), which are adopted by the Company as of the specified date. Unless otherwise discussed, management believes the impact of recently issued standards, some of which are not yet effective, will not have a material impact on its unaudited condensed consolidated financial statements upon adoption. In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting , which affects entities that issue share-based payment awards to their employees. The guidance is designed to identify areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently assessing the impact of this guidance. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. This guidance results in the Company providing a more faithful representation of the rights and obligations arising from operating and capital leases by requiring lessees to recognize the lease assets and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the impact of this guidance. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments , which eliminates the requirement for an acquirer to retrospectively adjust provisional amounts recorded in a business combination to reflect new information about the facts and circumstances that existed as of the acquisition date and that, if known, would have affected the measurement or recognition of amounts initially recognized. As an alternative, the update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The update requires that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The Company implemented this guidance during the first quarter of 2016. This guidance did not have a material impact on the Company’s unaudited condensed consolidated financial statements upon adoption. In April 2015, the FASB issued ASU 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . Under this standard, if a cloud computing arrangement includes a software license, the software license element of the arrangement should be accounted for consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. The Company implemented this guidance during the first quarter of 2016. This guidance did not have a material impact on the Company’s unaudited condensed consolidated financial statements upon adoption. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides guidance for revenue recognition. The new standard will require revenue recognized to represent the transfer of promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. The standard also requires new, expanded disclosures regarding revenue recognition. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of Effective Date . The standard defers the effective date of adoption of ASU 2014-09 to interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted but not before the original effective date of December 15, 2016. There are two adoption methods available for implementation of this guidance. Under one method, the guidance is applied retrospectively to contracts for each reporting period presented, subject to allowable practical expedients. Under the other method, the guidance is applied only to the most current period presented, recognizing the cumulative effect of the change as an adjustment to the beginning balance of retained earnings, and also requires additional disclosures comparing the results to the previous guidance. The Company is currently evaluating the adoption methods and assessing the impact of this guidance. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions DigiCore Holdings Limited (DBA Ctrack) On June 18, 2015, the Company entered into a transaction implementation agreement (the “TIA”) with DigiCore Holdings Limited (“DigiCore” or “Ctrack”). Pursuant to the terms of the TIA, the Company acquired 100% of the issued and outstanding ordinary shares of DigiCore (with the exception of certain excluded shares, including treasury shares) for 4.40 South African Rand per ordinary share outstanding on October 5, 2015. Upon consummation of the acquisition, DigiCore became an indirect wholly-owned subsidiary of the Company. Upon the closing of the transaction, holders of unvested in-the-money DigiCore stock options received stock options to purchase shares of the Company’s common stock as replacement awards. In connection with the acquisition, the Company incurred $1.7 million in total transaction costs and expenses, all of which were recognized in 2015. Purchase Price The total purchase price was approximately $80.0 million and included a cash payment for all of the outstanding ordinary shares of DigiCore and the purchase of in-the-money vested stock options held by Ctrack employees on the closing date of the transaction and the portion of the fair value of replacement equity awards issued to Ctrack employees that related to services performed prior to the date the transaction closed. Set forth below is supplemental purchase consideration information related to the Ctrack acquisition (in thousands): Cash payments $ 79,365 Fair value of replacement equity awards issued to Ctrack employees for preacquisition services 623 Total purchase price $ 79,988 Allocation of Fair Value The Company accounted for the transaction using the acquisition method and, accordingly, the consideration has been allocated to the tangible and intangible assets acquired and liabilities assumed on the basis of their respective estimated fair values on the acquisition date. Goodwill resulting from this acquisition is largely attributable to the experienced workforce of Ctrack and synergies expected to arise after the integration of Ctrack’s products and operations into those of the Company. Goodwill resulting from this acquisition is not deductible for tax purposes. Identifiable intangible assets acquired as part of the acquisition included definite-lived intangible assets for developed technologies, customer relationships and trade names, which are being amortized using the straight-line method over their estimated useful lives, as well as indefinite-lived intangible assets. Liabilities assumed from Ctrack included a mortgage bond and capital lease obligations. The fair value has been allocated based on the estimated fair values of assets acquired and liabilities assumed as follows (in thousands): October 5, 2015 Cash $ 2,437 Accounts receivable 15,052 Inventory 11,361 Property, plant and equipment 5,924 Rental assets 6,603 Intangible assets 28,270 Goodwill 29,273 Other assets 5,695 Bank facilities (2,124 ) Accounts payable (7,446 ) Accrued and other liabilities (15,018 ) Noncontrolling interests (39 ) Net assets acquired $ 79,988 The above fair value allocation is considered preliminary and is subject to revision during the measurement period. Management is in the process of completing its evaluation of obligations related to income tax. Valuation of Intangible Assets Acquired The following table sets forth the components of definite-lived intangible assets acquired in connection with the Ctrack acquisition (in thousands): Amount Assigned Amortization Period (in years) Developed technologies $ 10,170 6.0 Trade name 14,030 10.0 Customer relationships 4,070 5.0 Total intangible assets acquired $ 28,270 R.E.R. Enterprises, Inc. (DBA Feeney Wireless) On March 27, 2015, the Company entered into an asset purchase agreement (“APA”) with R.E.R. Enterprises, Inc. (“RER”) to acquire all of the issued and outstanding shares of RER and its wholly-owned subsidiary and principal operating asset, Feeney Wireless, LLC, an Oregon limited liability company (collectively, “FW”), which develops and sells solutions for the Internet of Things that integrate wireless communications into business processes. This strategic acquisition expanded the Company’s product and solutions offerings to include private labeled cellular routers, in-house designed and assembled cellular routers, high-end wireless surveillance systems, modems, computers and software, along with associated hardware, purchased from major industry suppliers. Additionally, FW’s services portfolio includes consulting, systems integration and device management services. In connection with the acquisition, the Company incurred $0.9 million in total costs and expenses, all of which were recognized in 2015. Purchase Price The total consideration was approximately $24.8 million and included a cash payment at closing of approximately $9.3 million , $1.5 million of which was placed into an escrow fund to serve as partial security for the indemnification obligations of RER and its former shareholders, the Company’s assumption of $0.5 million in certain transaction-related expenses incurred by FW, and the future issuance of shares of the Company’s common stock valued at $15.0 million , which would have been payable in March 2016. The total consideration of $24.8 million did not include amounts, if any, payable under an earn-out arrangement pursuant to which the Company may have been required to pay up to an additional $25.0 million to the former shareholders of RER contingent upon FW’s achievement of certain financial targets for the years ending December 31, 2015, 2016, and 2017 (the “Earn-Out Arrangement”). Such payments, if any, under the Earn-Out Arrangement would have been payable in either cash or shares of the Company’s common stock at the discretion of the Company, and would have been recorded as compensation expense during the service period earned. Set forth below is supplemental purchase consideration information related to the FW acquisition (in thousands): Cash payments $ 9,268 Future issuance of common stock 15,000 Other assumed liabilities 509 Total purchase price $ 24,777 On January 5, 2016, the Company and RER amended certain payment terms of the APA. Under the amended agreement, the $1.5 million placed into escrow on the date of acquisition was released to RER and its former shareholders on January 8, 2016, and the $15.0 million that was payable in shares of the Company’s common stock in March 2016 will now be paid in five cash installments over a four -year period, beginning in March 2016. In addition, the Earn-Out Arrangement has been amended as follows: (a) any amount earned under the Earn-Out Arrangement for the achievement of financial targets for the year ended December 31, 2015 will now be paid in five cash installments over a four -year period, beginning in March 2016 and (b) in replacement of the potential earn-out contingent upon FW’s achievement of certain financial targets for the years ended December 31, 2016 and 2017 the Company will issue to the former shareholders of RER approximately 2.9 million shares of the Company’s common stock in three equal installments over a three -year period, beginning in March 2017, contingent upon the retention of certain key personnel. The Company recognized approximately $0.8 million in expense during the six months ended June 30, 2016 in connection with the potential payment, in the form of shares of the Company’s common stock to the former shareholders of RER, which is contingent upon FW’s retention of certain key personnel. As of June 30, 2016 , the total amount earned pursuant to the Earn-Out Arrangement was $6.9 million , $6.1 million of which remained outstanding and is included in accrued expenses and other current liabilities and other long-term liabilities in the unaudited condensed consolidated balance sheets. Allocation of Fair Value The Company accounted for the transaction using the acquisition method and, accordingly, the consideration has been allocated to the tangible and intangible assets acquired and liabilities assumed on the basis of their respective estimated fair values on the acquisition date as set forth below. Goodwill resulting from this acquisition is largely attributable to the experienced workforce of FW and synergies expected to arise after the integration of FW’s products and operations into those of the Company. Goodwill resulting from this acquisition is deductible for tax purposes. Identifiable intangible assets acquired as part of the acquisition included definite-lived intangible assets for developed technologies, customer relationships, and trademarks, which are being amortized using the straight-line method over their estimated useful lives, as well as indefinite-lived intangible assets, including in-process research and development. Liabilities assumed from FW included a term loan and capital lease obligations. The term loan and certain capital lease obligations were paid in full by the Company immediately following the closing of the acquisition on March 27, 2015 . The fair value has been allocated based on the estimated fair values of assets acquired and liabilities assumed as follows (in thousands): March 27, 2015 Cash $ 205 Accounts receivable 3,331 Inventory 10,008 Property, plant and equipment 535 Intangible assets 18,880 Goodwill 3,949 Other assets 544 Accounts payable (7,494 ) Accrued and other liabilities (1,916 ) Deferred revenues (270 ) Note payable (2,575 ) Capital lease obligations (420 ) Net assets acquired $ 24,777 Valuation of Intangible Assets Acquired The following table sets forth the components of intangible assets acquired in connection with the FW acquisition (dollars in thousands): Amount Assigned Amortization Period (in years) Definite-lived intangible assets: Developed technologies $ 3,660 6.0 Trademarks 4,700 10.0 Customer relationships 8,500 10.0 Indefinite-lived intangible assets: In-process research and development 2,020 Total intangible assets acquired $ 18,880 Pro Forma Summary The unaudited consolidated pro forma results for the three and six months ended June 30, 2016 and 2015 are set forth in the table below (in thousands). These pro forma consolidated results combine the results of operations of the Company, Ctrack and FW as though Ctrack and FW had been acquired as of January 1, 2015 and include amortization charges for the acquired intangibles for both acquisitions and interest expense related to the Company’s borrowings to finance the Ctrack acquisition. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2015. Three Months Ended Six Months Ended 2016 2015 2016 2015 Net revenues $ 62,811 $ 67,861 $ 129,755 $ 143,782 Net loss $ (2,693 ) $ (9,310 ) $ (14,592 ) $ (20,318 ) Divestiture On April 11, 2016, the Company signed a definitive asset purchase agreement with Telit Technologies (Cyprus) Limited and Telit Wireless Solutions, Inc. (collectively, “Telit”) pursuant to which the Company sold, and Telit acquired, certain hardware modules and related assets for an initial purchase price of $11.0 million in cash, which includes $9.0 million that was paid to the Company on the closing date of the transaction, $1.0 million that will be paid to the Company in equal quarterly installments over a two -year period in connection with the provision by the Company of certain transition services and $1.0 million that will be paid to the Company following the satisfaction of certain conditions by the Company, including the assignment of specified contracts and the delivery of certain certifications and approvals. The Company also has the potential to receive an additional cash payment of approximately $3.8 million from Telit related to their purchase of module product inventory from the Company, $1.0 million of which will be paid to the Company in equal quarterly installments over the two -year period following the closing date in connection with the provision by the Company of certain transition services. In addition to the above, the Company may be entitled to receive a subsequent earn-out payment following the closing of the transaction if certain conditions are met. During the three months ended June 30, 2016 , the Company received approximately $9.3 million in cash and recognized a gain of approximately $6.9 million in connection with the fulfillment of certain obligations pursuant to the agreement, which is included in other income (expense), net, in the unaudited condensed consolidated statements of operations. The Company also recorded a liability for the fair value of the obligations that have yet to be fulfilled by the Company, which was $3.7 million as of June 30, 2016 , and is included in accrued expenses and other current liabilities in the unaudited condensed consolidated balance sheets, and a receivable for the remainder of the cash to be received from Telit pursuant to the agreement, which was $5.4 million as of June 30, 2016 , and is included in other assets and prepaid expenses and other in the unaudited condensed consolidated balance sheets. |
Balance Sheet Details
Balance Sheet Details | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | Balance Sheet Details Inventories Inventories consist of the following (in thousands): June 30, December 31, Finished goods $ 29,123 $ 47,094 Raw materials and components 5,138 8,743 Total inventories $ 34,261 $ 55,837 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): June 30, December 31, Royalties $ 2,893 $ 2,740 Payroll and related expenses 5,087 4,406 Warranty obligations 788 932 Market development funds and price protection 2,539 2,805 Professional fees 1,647 1,060 Deferred revenue 1,635 1,836 Restructuring 866 1,044 Acquisition-related liabilities 8,689 5,274 Divestiture-related liabilities 3,686 — Other 7,538 5,516 Total accrued expenses and other current liabilities $ 35,368 $ 25,613 Accrued Warranty Obligations Accrued warranty obligations activity during the six months ended June 30, 2016 was as follows (in thousands): Warranty liability at December 31, 2015 $ 932 Additions charged to operations 358 Deductions from liability (502 ) Warranty liability at June 30, 2016 $ 788 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The balances in goodwill and intangible assets were primarily a result of the Company’s acquisitions of Ctrack, FW and Enfora, Inc. See Note 4, Intangible Assets , in the Company's 2015 Annual Report on Form 10-K for a discussion of the components of goodwill and additional information regarding intangible assets. |
Fair Value Measurement of Asset
Fair Value Measurement of Assets and Liabilities | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement of Assets and Liabilities | Fair Value Measurement of Assets and Liabilities Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). A fair value measurement reflects the assumptions market participants would use in pricing an asset or liability based on the best available information. These assumptions include the risk inherent in a particular valuation technique (such as a pricing model) and the risks inherent in the inputs to the model. The Company classifies inputs to measure fair value using a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) and is defined as follows: Level 1: Pricing inputs are based on quoted market prices for identical assets or liabilities in active markets (e.g., NYSE or NASDAQ). Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs include benchmark yields, trade data, reported trades and broker dealer quotes, two-sided markets and industry and economic events, yield to maturity, Municipal Securities Rule Making Board reported trades and vendor trading platform data. Level 2 includes those financial instruments that are valued using various pricing services and broker pricing information including Electronic Communication Networks and broker feeds. Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources, including the Company’s own assumptions. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There have been no transfers of assets or liabilities between fair value measurement classifications during the six months ended June 30, 2016 . The following table summarizes the Company’s financial instruments measured at fair value on a recurring basis in accordance with the authoritative guidance for fair value measurements as of June 30, 2016 (in thousands): Balance as of Level 1 Assets: Cash equivalents Money market funds $ 35 $ 35 Total cash equivalents $ 35 $ 35 The following table summarizes the Company’s financial instruments measured at fair value on a recurring basis in accordance with the authoritative guidance for fair value measurements as of December 31, 2015 (in thousands): Balance as of Level 1 Assets: Cash equivalents Money market funds $ 35 $ 35 Total cash equivalents 35 35 Short-term investments 1,267 1,267 Total assets at fair value $ 1,302 $ 1,302 Other Financial Instruments The Company’s financial assets and liabilities are carried at fair value or at amounts that, because of their short-term nature, approximate current fair value, with the exception of its $120.0 million in 5.50% convertible senior notes due on June 15, 2020 (the “Convertible Notes”) (see Note 6 ). The Company carries its Convertible Notes at amortized cost. The debt and equity components of the Convertible Notes were measured using Level 3 inputs and are not measured on a recurring basis. The fair value of the liability component of the Convertible Notes, which approximated its carrying value on the valuation date due to the recent issuance of such Convertible Notes, was $86.7 million as of June 30, 2016 . |
Debt
Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt Revolving Credit Facility On October 31, 2014, the Company entered into a five -year senior secured revolving credit facility in the amount of $25.0 million (the “Revolver”) with Wells Fargo Bank, National Association, as lender. Concurrently with the acquisition of FW, the Company amended the Revolver to include FW as a borrower and Loan Party, as defined by the agreement. On November 17, 2015, the Revolver was amended to increase the maximum borrowing capacity to $48.0 million . The amount of borrowings that may be made under the Revolver is based on a borrowing base comprised of a specified percentage of eligible receivables. If, at any time during the term of the Revolver, the amount of borrowings outstanding under the Revolver exceeds the borrowing base then in effect, the Company is required to repay such borrowings in an amount sufficient to eliminate such excess. The Revolver includes $3.0 million available for letters of credit, $1.0 million of which was available for letters of credit at June 30, 2016 . The Company may borrow funds under the Revolver from time to time, with interest payable monthly at a base rate determined by using the daily three month LIBOR rate, plus an applicable margin of 3.00% to 3.50% depending on the Company’s liquidity as determined on the last day of each calendar month. The Revolver is secured by a first priority lien on substantially all of the assets of the Company and certain of its subsidiaries, subject to certain exceptions and permitted liens. The Revolver includes customary representations and warranties, as well as customary reporting and financial covenants. There was no outstanding balance on the Revolver at June 30, 2016 or December 31, 2015 . Based on the Company’s eligible receivables at June 30, 2016 , the Company has available borrowings of approximately $7.8 million . As of June 30, 2016 , the Company was in compliance with all financial covenants contained in the credit agreement. Convertible Senior Notes On June 10, 2015, the Company issued $120.0 million aggregate principal amount of Convertible Notes. The Company incurred issuance costs of approximately $3.9 million . The Company used a portion of the proceeds from the offering to finance its acquisition of Ctrack, to pay fees and expenses related to the acquisition, and for general corporate purposes. The Convertible Notes are governed by the terms of an indenture, dated June 10, 2015, entered into between the Company, as issuer, and Wilmington Trust, National Association, as trustee. The Convertible Notes are senior unsecured obligations and bear interest at a rate of 5.50% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2015. The Convertible Notes will mature on June 15, 2020, unless earlier repurchased or converted. The Convertible Notes will be convertible into cash, shares of the Company’s common stock, or a combination thereof, at the election of the Company, at an initial conversion price of $5.00 per share of the Company’s common stock. The Convertible Notes consisted of the following at June 30, 2016 (in thousands): Liability component: Principal $ 120,000 Less: unamortized debt discount and debt issuance costs (33,316 ) Net carrying amount $ 86,684 Equity component $ 38,305 The Company determined the expected life of the debt was equal to the five -year term of the Convertible Notes. The effective interest rate on the liability component was 17.36% for the six months ended June 30, 2016 . The following table sets forth total interest expense recognized related to the Convertible Notes during the three and six months ended June 30, 2016 and 2015 (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Contractual interest expense $ 1,650 $ 367 $ 3,300 $ 367 Amortization of debt discount 1,980 440 3,960 440 Amortization of debt issuance costs 131 29 263 29 Total interest expense $ 3,761 $ 836 $ 7,523 $ 836 |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | Share-based Compensation The Company included the following amounts for share-based compensation awards in the unaudited condensed consolidated statements of operations (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Cost of revenues $ 55 $ 37 $ 107 $ 58 Research and development 212 187 461 402 Sales and marketing 213 143 423 183 General and administrative 776 816 1,331 1,330 Total $ 1,256 $ 1,183 $ 2,322 $ 1,973 Stock Options The following table summarizes the Company’s stock option activity: Outstanding — December 31, 2014 3,064,880 Granted 6,656,737 Exercised (273,005 ) Canceled (3,363,776 ) Outstanding — December 31, 2015 6,084,836 Granted 1,051,550 Exercised (9,568 ) Canceled (392,577 ) Outstanding — June 30, 2016 6,734,241 Exercisable — June 30, 2016 1,554,152 At June 30, 2016 , total unrecognized compensation expense related to stock options was $6.1 million , which is expected to be recognized over a weighted-average period of 3.04 years . Restricted Stock Units The following table summarizes the Company’s restricted stock unit (“RSU”) activity: Non-vested at December 31, 2014 1,628,179 Granted 1,042,659 Vested (926,308 ) Forfeited (784,327 ) Non-vested at December 31, 2015 960,203 Granted 2,914,000 Vested (342,123 ) Forfeited (54,028 ) Non-vested at June 30, 2016 3,478,052 At June 30, 2016 , total unrecognized compensation expense related to RSUs was $5.4 million , which is expected to be recognized over a weighted-average period of 3.17 years . Employee Stock Purchase Plan During the three months ended June 30, 2016 and 2015 , the Company recognized $0.1 million and $0.1 million , respectively, of stock-based compensation expense related to the employee stock purchase plan (the “ESPP”). During the six months ended June 30, 2016 and 2015 , the Company recognized $0.2 million and $0.2 million , respectively, of stock-based compensation expense related to the ESPP. |
Geographic Information and Conc
Geographic Information and Concentrations of Risk | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Geographic Information and Concentrations of Risk | Geographic Information and Concentrations of Risk Geographic Information The following table details the Company’s concentration of net revenues by geographic region based on shipping destination: Three Months Ended Six Months Ended 2016 2015 2016 2015 United States and Canada 73.8 % 96.3 % 75.4 % 96.2 % Latin America 0.1 0.7 0.2 0.7 Europe, Middle East, Africa and other 24.5 2.8 22.9 3.0 Asia and Australia 1.6 0.2 1.5 0.1 100.0 % 100.0 % 100.0 % 100.0 % Concentrations of Risk Historically, a significant portion of the Company’s net revenues comes from a small number of customers. For the three months ended June 30, 2016 , sales to the Company's largest customer accounted for 56.1% of net revenues. In the same period in 2015 , sales to its two largest customers accounted for 56.5% and 12.0% , respectively, of net revenues. For the six months ended June 30, 2016 and 2015 , sales to the Company’s largest customer accounted for 54.3% and 52.0% , respectively, of net revenues. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income (loss) attributable to Novatel Wireless, Inc. by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock using the treasury stock method. Potentially dilutive securities (consisting of warrants, stock options and RSUs calculated using the treasury stock method) are excluded from the diluted EPS computation in loss periods and when the applicable exercise price is greater than the market price on the period end date as their effect would be anti-dilutive. The calculation of basic and diluted EPS was as follows (in thousands, except share and per share data): Three Months Ended Six Months Ended 2016 2015 2016 2015 Net loss attributable to Novatel Wireless, Inc. $ (2,701 ) $ (9,220 ) $ (14,605 ) $ (17,046 ) Weighted-average common shares outstanding 53,622,554 53,403,148 53,436,611 49,852,411 Basic and diluted net loss per share $ (0.05 ) $ (0.17 ) $ (0.27 ) $ (0.34 ) For the three and six months ended June 30, 2016 , the computation of diluted EPS excluded 12,098,923 shares related to warrants, stock options and RSUs as their effect would have been anti-dilutive. For the three and six months ended June 30, 2015 , the computation of diluted EPS excluded 8,654,028 shares related to warrants, stock options and RSUs as their effect would have been anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases On June 10, 2016, the Company entered into a lease agreement for approximately 41,400 square feet in San Diego, CA to serve as the Company’s new corporate headquarters. The lease will commence on December 15, 2016 and has a term of approximately 36 months . The monthly rent expense for this lease agreement will be approximately $0.1 million . Legal The Company is, from time to time, party to various legal proceedings arising in the ordinary course of business. For example, the Company is currently named as a defendant or co-defendant in some patent infringement lawsuits in the U.S. and is indirectly participating in other U.S. patent infringement actions pursuant to its contractual indemnification obligations to certain customers. Based on an evaluation of these matters and discussions with the Company’s intellectual property litigation counsel, the Company currently believes that liabilities arising from or sums paid in settlement of these existing matters, if any, would not have a material adverse effect on its consolidated results of operations or financial condition. Indemnification In the normal course of business, the Company periodically enters into agreements that require the Company to indemnify and defend its customers for, among other things, claims alleging that the Company’s products infringe third-party patents or other intellectual property rights. The Company’s maximum exposure under these indemnification provisions cannot be estimated but the Company does not believe that there are any matters individually or collectively that would have a material adverse effect on its financial condition, results of operation or cash flows. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective income tax rate was 0.4% and (0.8)% for the three months ended June 30, 2016 and 2015 , respectively, and (2.2)% and (0.6)% for the six months ended June 30, 2016 and 2015 , respectively. The Company’s effective income tax rates are significantly lower than the statutory tax rate primarily due to an increase in the Company’s valuation allowance related to its U.S.-based deferred tax amounts, resulting from carryforward net operating losses generated during the three and six months ended June 30, 2016 and 2015 . Pursuant to Internal Revenue Code (“IRC”) Sections 382 and 383, annual use of the Company’s net operating loss and research and development credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. The Company is in the process of completing an IRC Section 382 analysis, and the Company expects to have this analysis completed within the next three months. |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In September 2013, the Company commenced certain restructuring initiatives including the closure of the Company’s development site in Calgary, Canada, and the consolidation of certain supply chain management activities (the “2013 Initiatives”). The 2013 Initiatives are expected to cost a total of approximately $6.6 million and be completed when the facility leases expire in December 2016. In August 2015, the Company approved a restructuring initiative to better position the Company to operate in current market conditions and more closely align operating expenses with revenues, which included employee severance costs and facility exit related costs. In the fourth quarter of 2015, the Company commenced certain initiatives relating to the reorganization of executive level management, which included, among other actions, the replacement of the former Chief Executive Officer (collectively, the “2015 Initiatives”). The Company continued these initiatives in 2016 with a reduction-in-force and the completion of the closure of its facility in Richardson, TX. The 2015 Initiatives are expected to cost a total of approximately $4.6 million and be completed when the Richardson, TX lease expires in June 2020. In April 2016, the Company commenced certain restructuring initiatives to consolidate the operations of Ctrack with those of the Company, including the closure of the Company’s manufacturing operations in Durban, South Africa resulting in a reduction-in-force. In July 2016, subsequent to the balance sheet date, the Company commenced certain restructuring initiatives intended to improve its strategic focus on its most profitable business lines while de-prioritizing certain hardware-only product lines to non-carrier customers, including a reduction-in-force (collectively with the Durban facility closure, the “2016 Initiatives”). The 2016 Initiatives are expected to cost a total of approximately $0.7 million and be completed in September 2016. The following table sets forth activity in the restructuring liability for the six months ended June 30, 2016 (in thousands): Balance at December 31, 2015 Costs Incurred Payments Non-cash Translation Adjustment Balance at June 30, 2016 Cumulative Costs Incurred to Date 2013 Initiatives Employee Severance Costs $ — $ — $ — $ — $ — $ — $ 3,986 Facility Exit Related Costs 72 4 (39 ) — — 37 2,629 2015 Initiatives Employee Severance Costs 1,330 538 (1,083 ) — 14 799 4,129 Facility Exit Related Costs 328 122 (164 ) 159 — 445 503 2016 Initiatives Employee Severance Costs — 227 (227 ) — — — 227 Total $ 1,730 $ 891 $ (1,513 ) $ 159 $ 14 $ 1,281 $ 11,474 The balance of the restructuring liability at June 30, 2016 consists of approximately $0.9 million in current liabilities and $0.4 million in long-term liabilities. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The information contained herein has been prepared by Novatel Wireless, Inc. (the “Company”) in accordance with the rules of the Securities and Exchange Commission (the “SEC”). The information at June 30, 2016 and the results of the Company’s operations for the three and six months ended June 30, 2016 and 2015 are unaudited. The condensed consolidated financial statements reflect all adjustments, consisting of only normal recurring accruals, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods presented. These condensed consolidated financial statements and notes hereto should be read in conjunction with the audited financial statements from which they were derived and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . Except as set forth below, the accounting policies used in preparing these unaudited condensed consolidated financial statements are the same as those described in the Company’s Annual Report on Form 10-K. The results of operations for the interim periods presented are not necessarily indicative of results to be expected for any other interim period or for the year as a whole. For the three months ended June 30, 2016 and 2015 , the Company incurred a net loss of $2.7 million and $9.2 million , respectively. The Company’s ability to transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support its evolving cost structure. If events or circumstances occur such that the Company does not meet its operating plan as expected, the Company may be required to reduce planned research and development activities, incur additional restructuring charges or reduce other operating expenses which could have an adverse impact on its ability to achieve its intended business objectives. These additional reductions in expenditures, if required, could have an adverse impact on the Company’s ability to achieve certain of its business objectives. The Company’s management believes that its cash and cash equivalents and availability under its senior secured revolving credit facility, together with anticipated cash flows from operations, will be sufficient to meet its working capital needs for the next twelve months and the foreseeable future. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Segment Information | Segment Information Management has determined that the Company has one reportable segment. The Chief Executive Officer, who is also the Chief Operating Decision Maker, does not manage any part of the Company separately, and the allocation of resources and assessment of performance is based solely on the Company’s consolidated operations and operating results. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent liabilities. Actual results could differ materially from these estimates. Significant estimates include allowance for doubtful accounts receivable, provision for excess and obsolete inventory, valuation of intangible and long-lived assets, valuation of goodwill, valuation of debt obligations, royalty costs, accruals relating to litigation and restructuring, provision for warranty costs, income taxes and share-based compensation expense. |
New Accounting Pronouncements | New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”), which are adopted by the Company as of the specified date. Unless otherwise discussed, management believes the impact of recently issued standards, some of which are not yet effective, will not have a material impact on its unaudited condensed consolidated financial statements upon adoption. In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting , which affects entities that issue share-based payment awards to their employees. The guidance is designed to identify areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently assessing the impact of this guidance. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. This guidance results in the Company providing a more faithful representation of the rights and obligations arising from operating and capital leases by requiring lessees to recognize the lease assets and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the impact of this guidance. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments , which eliminates the requirement for an acquirer to retrospectively adjust provisional amounts recorded in a business combination to reflect new information about the facts and circumstances that existed as of the acquisition date and that, if known, would have affected the measurement or recognition of amounts initially recognized. As an alternative, the update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The update requires that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The Company implemented this guidance during the first quarter of 2016. This guidance did not have a material impact on the Company’s unaudited condensed consolidated financial statements upon adoption. In April 2015, the FASB issued ASU 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . Under this standard, if a cloud computing arrangement includes a software license, the software license element of the arrangement should be accounted for consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. The Company implemented this guidance during the first quarter of 2016. This guidance did not have a material impact on the Company’s unaudited condensed consolidated financial statements upon adoption. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides guidance for revenue recognition. The new standard will require revenue recognized to represent the transfer of promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. The standard also requires new, expanded disclosures regarding revenue recognition. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of Effective Date . The standard defers the effective date of adoption of ASU 2014-09 to interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted but not before the original effective date of December 15, 2016. There are two adoption methods available for implementation of this guidance. Under one method, the guidance is applied retrospectively to contracts for each reporting period presented, subject to allowable practical expedients. Under the other method, the guidance is applied only to the most current period presented, recognizing the cumulative effect of the change as an adjustment to the beginning balance of retained earnings, and also requires additional disclosures comparing the results to the previous guidance. The Company is currently evaluating the adoption methods and assessing the impact of this guidance. |
Fair Value Measurement | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). A fair value measurement reflects the assumptions market participants would use in pricing an asset or liability based on the best available information. These assumptions include the risk inherent in a particular valuation technique (such as a pricing model) and the risks inherent in the inputs to the model. The Company classifies inputs to measure fair value using a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) and is defined as follows: Level 1: Pricing inputs are based on quoted market prices for identical assets or liabilities in active markets (e.g., NYSE or NASDAQ). Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs include benchmark yields, trade data, reported trades and broker dealer quotes, two-sided markets and industry and economic events, yield to maturity, Municipal Securities Rule Making Board reported trades and vendor trading platform data. Level 2 includes those financial instruments that are valued using various pricing services and broker pricing information including Electronic Communication Networks and broker feeds. Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources, including the Company’s own assumptions. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Business Acquisition [Line Items] | |
Business Acquisition, Pro Forma Information | The unaudited consolidated pro forma results for the three and six months ended June 30, 2016 and 2015 are set forth in the table below (in thousands). These pro forma consolidated results combine the results of operations of the Company, Ctrack and FW as though Ctrack and FW had been acquired as of January 1, 2015 and include amortization charges for the acquired intangibles for both acquisitions and interest expense related to the Company’s borrowings to finance the Ctrack acquisition. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2015. Three Months Ended Six Months Ended 2016 2015 2016 2015 Net revenues $ 62,811 $ 67,861 $ 129,755 $ 143,782 Net loss $ (2,693 ) $ (9,310 ) $ (14,592 ) $ (20,318 ) |
Feeney Wireless | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | The fair value has been allocated based on the estimated fair values of assets acquired and liabilities assumed as follows (in thousands): March 27, 2015 Cash $ 205 Accounts receivable 3,331 Inventory 10,008 Property, plant and equipment 535 Intangible assets 18,880 Goodwill 3,949 Other assets 544 Accounts payable (7,494 ) Accrued and other liabilities (1,916 ) Deferred revenues (270 ) Note payable (2,575 ) Capital lease obligations (420 ) Net assets acquired $ 24,777 Set forth below is supplemental purchase consideration information related to the FW acquisition (in thousands): Cash payments $ 9,268 Future issuance of common stock 15,000 Other assumed liabilities 509 Total purchase price $ 24,777 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table sets forth the components of intangible assets acquired in connection with the FW acquisition (dollars in thousands): Amount Assigned Amortization Period (in years) Definite-lived intangible assets: Developed technologies $ 3,660 6.0 Trademarks 4,700 10.0 Customer relationships 8,500 10.0 Indefinite-lived intangible assets: In-process research and development 2,020 Total intangible assets acquired $ 18,880 |
DigiCore | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | The fair value has been allocated based on the estimated fair values of assets acquired and liabilities assumed as follows (in thousands): October 5, 2015 Cash $ 2,437 Accounts receivable 15,052 Inventory 11,361 Property, plant and equipment 5,924 Rental assets 6,603 Intangible assets 28,270 Goodwill 29,273 Other assets 5,695 Bank facilities (2,124 ) Accounts payable (7,446 ) Accrued and other liabilities (15,018 ) Noncontrolling interests (39 ) Net assets acquired $ 79,988 Set forth below is supplemental purchase consideration information related to the Ctrack acquisition (in thousands): Cash payments $ 79,365 Fair value of replacement equity awards issued to Ctrack employees for preacquisition services 623 Total purchase price $ 79,988 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table sets forth the components of definite-lived intangible assets acquired in connection with the Ctrack acquisition (in thousands): Amount Assigned Amortization Period (in years) Developed technologies $ 10,170 6.0 Trade name 14,030 10.0 Customer relationships 4,070 5.0 Total intangible assets acquired $ 28,270 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Inventories | Inventories consist of the following (in thousands): June 30, December 31, Finished goods $ 29,123 $ 47,094 Raw materials and components 5,138 8,743 Total inventories $ 34,261 $ 55,837 |
Summary of Accrued Expenses | Accrued expenses and other current liabilities consist of the following (in thousands): June 30, December 31, Royalties $ 2,893 $ 2,740 Payroll and related expenses 5,087 4,406 Warranty obligations 788 932 Market development funds and price protection 2,539 2,805 Professional fees 1,647 1,060 Deferred revenue 1,635 1,836 Restructuring 866 1,044 Acquisition-related liabilities 8,689 5,274 Divestiture-related liabilities 3,686 — Other 7,538 5,516 Total accrued expenses and other current liabilities $ 35,368 $ 25,613 |
Summary of Accrued Warranty Obligations | Accrued warranty obligations activity during the six months ended June 30, 2016 was as follows (in thousands): Warranty liability at December 31, 2015 $ 932 Additions charged to operations 358 Deductions from liability (502 ) Warranty liability at June 30, 2016 $ 788 |
Fair Value Measurement of Ass22
Fair Value Measurement of Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Company's Financial Instruments, Fair Value on a Recurring Basis | The following table summarizes the Company’s financial instruments measured at fair value on a recurring basis in accordance with the authoritative guidance for fair value measurements as of June 30, 2016 (in thousands): Balance as of Level 1 Assets: Cash equivalents Money market funds $ 35 $ 35 Total cash equivalents $ 35 $ 35 The following table summarizes the Company’s financial instruments measured at fair value on a recurring basis in accordance with the authoritative guidance for fair value measurements as of December 31, 2015 (in thousands): Balance as of Level 1 Assets: Cash equivalents Money market funds $ 35 $ 35 Total cash equivalents 35 35 Short-term investments 1,267 1,267 Total assets at fair value $ 1,302 $ 1,302 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Debt | The Convertible Notes consisted of the following at June 30, 2016 (in thousands): Liability component: Principal $ 120,000 Less: unamortized debt discount and debt issuance costs (33,316 ) Net carrying amount $ 86,684 Equity component $ 38,305 |
Interest Expense Summary | The following table sets forth total interest expense recognized related to the Convertible Notes during the three and six months ended June 30, 2016 and 2015 (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Contractual interest expense $ 1,650 $ 367 $ 3,300 $ 367 Amortization of debt discount 1,980 440 3,960 440 Amortization of debt issuance costs 131 29 263 29 Total interest expense $ 3,761 $ 836 $ 7,523 $ 836 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | The Company included the following amounts for share-based compensation awards in the unaudited condensed consolidated statements of operations (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Cost of revenues $ 55 $ 37 $ 107 $ 58 Research and development 212 187 461 402 Sales and marketing 213 143 423 183 General and administrative 776 816 1,331 1,330 Total $ 1,256 $ 1,183 $ 2,322 $ 1,973 |
Summary of Stock Option Activity | The following table summarizes the Company’s stock option activity: Outstanding — December 31, 2014 3,064,880 Granted 6,656,737 Exercised (273,005 ) Canceled (3,363,776 ) Outstanding — December 31, 2015 6,084,836 Granted 1,051,550 Exercised (9,568 ) Canceled (392,577 ) Outstanding — June 30, 2016 6,734,241 Exercisable — June 30, 2016 1,554,152 |
Summary of Restricted Stock Unit Activity | The following table summarizes the Company’s restricted stock unit (“RSU”) activity: Non-vested at December 31, 2014 1,628,179 Granted 1,042,659 Vested (926,308 ) Forfeited (784,327 ) Non-vested at December 31, 2015 960,203 Granted 2,914,000 Vested (342,123 ) Forfeited (54,028 ) Non-vested at June 30, 2016 3,478,052 |
Geographic Information and Co25
Geographic Information and Concentrations of Risk (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Geographic Concentration of Net Revenues | The following table details the Company’s concentration of net revenues by geographic region based on shipping destination: Three Months Ended Six Months Ended 2016 2015 2016 2015 United States and Canada 73.8 % 96.3 % 75.4 % 96.2 % Latin America 0.1 0.7 0.2 0.7 Europe, Middle East, Africa and other 24.5 2.8 22.9 3.0 Asia and Australia 1.6 0.2 1.5 0.1 100.0 % 100.0 % 100.0 % 100.0 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The calculation of basic and diluted EPS was as follows (in thousands, except share and per share data): Three Months Ended Six Months Ended 2016 2015 2016 2015 Net loss attributable to Novatel Wireless, Inc. $ (2,701 ) $ (9,220 ) $ (14,605 ) $ (17,046 ) Weighted-average common shares outstanding 53,622,554 53,403,148 53,436,611 49,852,411 Basic and diluted net loss per share $ (0.05 ) $ (0.17 ) $ (0.27 ) $ (0.34 ) |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring Liability | The following table sets forth activity in the restructuring liability for the six months ended June 30, 2016 (in thousands): Balance at December 31, 2015 Costs Incurred Payments Non-cash Translation Adjustment Balance at June 30, 2016 Cumulative Costs Incurred to Date 2013 Initiatives Employee Severance Costs $ — $ — $ — $ — $ — $ — $ 3,986 Facility Exit Related Costs 72 4 (39 ) — — 37 2,629 2015 Initiatives Employee Severance Costs 1,330 538 (1,083 ) — 14 799 4,129 Facility Exit Related Costs 328 122 (164 ) 159 — 445 503 2016 Initiatives Employee Severance Costs — 227 (227 ) — — — 227 Total $ 1,730 $ 891 $ (1,513 ) $ 159 $ 14 $ 1,281 $ 11,474 |
Basis of Presentation Narrative
Basis of Presentation Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)Segments | Jun. 30, 2015USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Net loss attributable to Novatel Wireless, Inc. | $ | $ (2,701) | $ (9,220) | $ (14,605) | $ (17,046) |
Number of reportable segments | Segments | 1 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Narrative - Acquisitions (Details) $ in Thousands, shares in Millions | Jan. 05, 2016installmentshares | Oct. 05, 2015USD ($) | Mar. 27, 2015USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 18, 2015ZAR / shares |
Business Acquisition [Line Items] | |||||||
Acquisition-related liabilities | $ 5,274 | $ 8,689 | $ 5,274 | ||||
DigiCore | |||||||
Business Acquisition [Line Items] | |||||||
Voting interests acquired | 100.00% | ||||||
Acquisition share price (ZAR per share) | ZAR / shares | ZAR 4.40 | ||||||
Cash payments | 79,365 | ||||||
Total purchase price | $ 80,000 | 79,988 | |||||
Future issuance of common stock | 623 | ||||||
DigiCore | General and Administrative Expense | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition costs | 1,700 | ||||||
Feeney Wireless | |||||||
Business Acquisition [Line Items] | |||||||
Cash payments | $ 9,300 | 9,268 | |||||
Total purchase price | 24,800 | 24,777 | |||||
Escrow amount and certain other pre-closing adjustments | 1,500 | ||||||
Other assumed liabilities | 500 | 509 | |||||
Future issuance of common stock | 15,000 | 15,000 | |||||
Maximum contingent earn-out | $ 25,000 | ||||||
Acquisition-related liabilities | $ 6,900 | 6,900 | |||||
Number of cash installment payments | installment | 5 | ||||||
Period for cash installments | 4 years | ||||||
Issued to former shareholders (shares) | shares | 2.9 | ||||||
Number of share installments | installment | 3 | ||||||
Period for share installments | 3 years | ||||||
Contingent consideration expense | 800 | ||||||
Feeney Wireless | Other Liabilities | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition-related liabilities | $ 6,100 | ||||||
Feeney Wireless | General and Administrative Expense | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition costs | $ 900 |
Acquisitions - Consideration (D
Acquisitions - Consideration (Details) - USD ($) $ in Thousands | Oct. 05, 2015 | Mar. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2015 |
DigiCore | ||||
Business Acquisition [Line Items] | ||||
Cash payments | $ 79,365 | |||
Future issuance of common stock | 623 | |||
Total purchase price | $ 80,000 | $ 79,988 | ||
Feeney Wireless | ||||
Business Acquisition [Line Items] | ||||
Cash payments | $ 9,300 | $ 9,268 | ||
Future issuance of common stock | 15,000 | 15,000 | ||
Other assumed liabilities | 500 | 509 | ||
Total purchase price | $ 24,800 | $ 24,777 |
Acquisitions - Allocation Table
Acquisitions - Allocation Table (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Oct. 05, 2015 | Mar. 27, 2015 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 31,119 | $ 29,520 | ||
DigiCore | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 2,437 | |||
Accounts receivable | 15,052 | |||
Inventory | 11,361 | |||
Property, plant and equipment | 5,924 | |||
Rental assets | 6,603 | |||
Intangible assets | 28,270 | |||
Goodwill | 29,273 | |||
Other assets | 5,695 | |||
Bank facilities | (2,124) | |||
Accounts payable | (7,446) | |||
Accrued and other liabilities | (15,018) | |||
Noncontrolling interests | (39) | |||
Net assets acquired | $ 79,988 | |||
Feeney Wireless | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 205 | |||
Accounts receivable | 3,331 | |||
Inventory | 10,008 | |||
Property, plant and equipment | 535 | |||
Intangible assets | 18,880 | |||
Goodwill | 3,949 | |||
Other assets | 544 | |||
Accounts payable | (7,494) | |||
Accrued and other liabilities | (1,916) | |||
Deferred revenues | (270) | |||
Note payable | (2,575) | |||
Capital lease obligations | (420) | |||
Net assets acquired | $ 24,777 |
Acquisitions - Intangibles Tabl
Acquisitions - Intangibles Table (Details) - USD ($) $ in Thousands | Oct. 05, 2015 | Mar. 27, 2015 |
DigiCore | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount Assigned | $ 28,270 | |
DigiCore | Developed technologies | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount Assigned | $ 10,170 | |
Amortization Period (in years) | 6 years | |
DigiCore | Trademarks and Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount Assigned | $ 14,030 | |
Amortization Period (in years) | 10 years | |
DigiCore | Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount Assigned | $ 4,070 | |
Amortization Period (in years) | 5 years | |
Feeney Wireless | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount Assigned | $ 18,880 | |
Feeney Wireless | Developed technologies | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount Assigned | $ 3,660 | |
Amortization Period (in years) | 6 years | |
Feeney Wireless | Trademarks and Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount Assigned | $ 4,700 | |
Amortization Period (in years) | 10 years | |
Feeney Wireless | Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount Assigned | $ 8,500 | |
Amortization Period (in years) | 10 years | |
In-process research and development | Feeney Wireless | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
In-process research and development | $ 2,020 |
Acquisitions - Pro Forma Table
Acquisitions - Pro Forma Table (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net revenues | $ 62,811 | $ 67,861 | $ 129,755 | $ 143,782 |
Net loss | $ (2,693) | $ (9,310) | $ (14,592) | $ (20,318) |
Acquisitions and Divestitures34
Acquisitions and Divestitures - Narrative - Divestiture (Details) - USD ($) $ in Thousands | Apr. 11, 2016 | Jun. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds | $ 9,250 | $ 0 | ||
Gain | $ 6,900 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Initial purchase price | $ 11,000 | |||
Proceeds | 9,000 | 9,300 | ||
Receivables | 5,400 | 5,400 | ||
Fair value of obligations to be fulfilled by the Company | $ 3,700 | $ 3,700 | ||
Certain Transition Services | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Receivables | $ 1,000 | |||
Payout period | 2 years | |||
Satisfaction Of Certain Conditions | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Receivables | $ 1,000 | |||
Purchase Of Module Product Inventory | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Receivables | 3,800 | |||
Purchase Of Module Product Inventory - Certain Transition Services | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Receivables | $ 1,000 | |||
Payout period | 2 years |
Balance Sheet Details - Summary
Balance Sheet Details - Summary of Inventories (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 29,123 | $ 47,094 |
Raw materials and components | 5,138 | 8,743 |
Total inventories | $ 34,261 | $ 55,837 |
Balance Sheet Details - Summa36
Balance Sheet Details - Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Royalties | $ 2,893 | $ 2,740 |
Payroll and related expenses | 5,087 | 4,406 |
Warranty obligations | 788 | 932 |
Market development funds and price protection | 2,539 | 2,805 |
Professional fees | 1,647 | 1,060 |
Deferred revenue | 1,635 | 1,836 |
Restructuring | 866 | 1,044 |
Acquisition-related liabilities | 8,689 | 5,274 |
Divestiture-related liabilities | 3,686 | 0 |
Other | 7,538 | 5,516 |
Total accrued expenses and other current liabilities | $ 35,368 | $ 25,613 |
Balance Sheet Details - Summa37
Balance Sheet Details - Summary of Accrued Warranty Obligations (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Warranty liability at December 31, 2015 | $ 932 |
Additions charged to operations | 358 |
Deductions from liability | (502) |
Warranty liability at June 30, 2016 | $ 788 |
Fair Value Measurement of Ass38
Fair Value Measurement of Assets and Liabilities - Summary of Company's Financial Instruments, Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 10, 2015 |
Convertible Debt | |||
Cash equivalents | |||
Principal | $ 120,000 | $ 120,000 | |
Stated interest rate of debt issued | 5.50% | ||
Fair Value, Measurements, Recurring | |||
Cash equivalents | |||
Cash equivalents | 35 | $ 35 | |
Assets, Fair Value Disclosure, Recurring | 1,302 | ||
Fair Value, Measurements, Recurring | Money market funds | |||
Cash equivalents | |||
Cash equivalents | 35 | 35 | |
Fair Value, Measurements, Recurring | Short-term investments | |||
Cash equivalents | |||
Short-term investments | 1,267 | ||
Fair Value, Measurements, Recurring | Level 1 | |||
Cash equivalents | |||
Cash equivalents | 35 | 35 | |
Assets, Fair Value Disclosure, Recurring | 1,302 | ||
Fair Value, Measurements, Recurring | Level 1 | Money market funds | |||
Cash equivalents | |||
Cash equivalents | 35 | 35 | |
Fair Value, Measurements, Recurring | Level 1 | Short-term investments | |||
Cash equivalents | |||
Short-term investments | $ 1,267 | ||
Fair Value, Measurements, Nonrecurring | |||
Cash equivalents | |||
Fair value of debt | $ 86,700 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Jun. 10, 2015 | Oct. 31, 2014 | Jun. 30, 2016 | Nov. 17, 2015 |
Debt Instrument [Line Items] | ||||
Conversion price ($ per share) | $ 5 | |||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Term of debt instrument | 5 years | |||
Principal | $ 120,000,000 | $ 120,000,000 | ||
Debt issuance costs | $ 3,900,000 | |||
Stated interest rate of debt issued | 5.50% | |||
Long-term debt | $ 86,684,000 | |||
Effective interest rate | 17.36% | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Term of debt instrument | 5 years | |||
Maximum amount of credit facility | $ 25,000,000 | $ 48,000,000 | ||
Outstanding borrowings under the credit facility | $ 0 | |||
Available borrowings | $ 7,800,000 | |||
Revolving Credit Facility | Minimum | ||||
Debt Instrument [Line Items] | ||||
Margin on LIBOR rate | 3.00% | |||
Revolving Credit Facility | Maximum | ||||
Debt Instrument [Line Items] | ||||
Margin on LIBOR rate | 3.50% | |||
Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum amount of credit facility | $ 3,000,000 | |||
Available borrowings | $ 1,000,000 |
Debt - Components (Details)
Debt - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 10, 2015 |
Debt Instrument [Line Items] | ||
Equity component | $ 38,305 | |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal | 120,000 | $ 120,000 |
Less: unamortized debt discount and debt issuance costs | (33,316) | |
Net carrying amount | $ 86,684 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - Convertible Debt - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 1,650 | $ 367 | $ 3,300 | $ 367 |
Amortization of debt discount | 1,980 | 440 | 3,960 | 440 |
Amortization of debt issuance costs | 131 | 29 | 263 | 29 |
Total interest expense | $ 3,761 | $ 836 | $ 7,523 | $ 836 |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 1,256 | $ 1,183 | $ 2,322 | $ 1,973 |
Cost of net revenues | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 55 | 37 | 107 | 58 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 212 | 187 | 461 | 402 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 213 | 143 | 423 | 183 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 776 | 816 | 1,331 | 1,330 |
Employee Stock Option | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Unrecognized cost | 6,100 | $ 6,100 | ||
Recognition period | 3 years 14 days | |||
Restricted Stock Units (RSUs) | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Recognition period | 3 years 2 months 2 days | |||
Unrecognized expense | 5,400 | $ 5,400 | ||
Employee Stock Purchase Plans | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 100 | $ 100 | $ 200 | $ 200 |
Share-based Compensation - Tabl
Share-based Compensation - Tables (Details) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding — beginning balance | 6,084,836 | 3,064,880 |
Granted | 1,051,550 | 6,656,737 |
Exercised | (9,568) | (273,005) |
Canceled | (392,577) | (3,363,776) |
Outstanding — ending balance | 6,734,241 | 6,084,836 |
Exercisable — June 30, 2016 | 1,554,152 | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Non-vested — beginning balance | 960,203 | 1,628,179 |
Granted | 2,914,000 | 1,042,659 |
Vested | (342,123) | (926,308) |
Forfeited | (54,028) | (784,327) |
Non-vested — ending balance | 3,478,052 | 960,203 |
Geographic Information and Co44
Geographic Information and Concentrations of Risk - Schedule of Geographic Concentration of Net Revenues (Detail) - Net Revenues - Geographic Concentration | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration percentage | 100.00% | 100.00% | 100.00% | 100.00% |
United States and Canada | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration percentage | 73.80% | 96.30% | 75.40% | 96.20% |
Latin America | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration percentage | 0.10% | 0.70% | 0.20% | 0.70% |
Europe, Middle East, Africa and other | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration percentage | 24.50% | 2.80% | 22.90% | 3.00% |
Asia and Australia | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration percentage | 1.60% | 0.20% | 1.50% | 0.10% |
Geographic Information and Co45
Geographic Information and Concentrations of Risk - Additional Information (Detail) - Net Revenues - Customer Concentration | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Customer One | ||||
Segment Reporting Information [Line Items] | ||||
Concentration percentage | 56.10% | 56.50% | 54.30% | 52.00% |
Customer Two | ||||
Segment Reporting Information [Line Items] | ||||
Concentration percentage | 12.00% |
Earnings Per Share - Earnings P
Earnings Per Share - Earnings Per Basic and Diluted Share Table (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Numerator | ||||
Net loss attributable to Novatel Wireless, Inc. | $ (2,701) | $ (9,220) | $ (14,605) | $ (17,046) |
Denominator | ||||
Weighted-average common shares outstanding (in shares) | 53,622,554 | 53,403,148 | 53,436,611 | 49,852,411 |
Basic and diluted net loss per share (dollars per share) | $ (0.05) | $ (0.17) | $ (0.27) | $ (0.34) |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive shares | 12,098,923 | 8,654,028 | 12,098,923 | 8,654,028 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2016USD ($) | Jun. 10, 2016ft² | |
Commitments and Contingencies Disclosure [Abstract] | ||
Area (square feet) | ft² | 41,400 | |
Lease term | 36 months | |
Monthly rent expense | $ | $ 0.1 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 0.40% | (0.80%) | (2.20%) | (0.60%) |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Liability (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2015 | $ 1,730 |
Costs Incurred | 891 |
Payments | (1,513) |
Non-cash | 159 |
Translation Adjustment | 14 |
Balance at June 30, 2016 | 1,281 |
Cumulative Costs Incurred to Date | 11,474 |
2013 Initiatives | Employee Severance Costs | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2015 | 0 |
Costs Incurred | 0 |
Payments | 0 |
Non-cash | 0 |
Translation Adjustment | 0 |
Balance at June 30, 2016 | 0 |
Cumulative Costs Incurred to Date | 3,986 |
2013 Initiatives | Facility Exit Related Costs | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2015 | 72 |
Costs Incurred | 4 |
Payments | (39) |
Non-cash | 0 |
Translation Adjustment | 0 |
Balance at June 30, 2016 | 37 |
Cumulative Costs Incurred to Date | 2,629 |
2015 Initiatives | Employee Severance Costs | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2015 | 1,330 |
Costs Incurred | 538 |
Payments | (1,083) |
Non-cash | 0 |
Translation Adjustment | 14 |
Balance at June 30, 2016 | 799 |
Cumulative Costs Incurred to Date | 4,129 |
2015 Initiatives | Facility Exit Related Costs | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2015 | 328 |
Costs Incurred | 122 |
Payments | (164) |
Non-cash | 159 |
Translation Adjustment | 0 |
Balance at June 30, 2016 | 445 |
Cumulative Costs Incurred to Date | 503 |
2016 Initiatives | Employee Severance Costs | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2015 | 0 |
Costs Incurred | 227 |
Payments | (227) |
Non-cash | 0 |
Translation Adjustment | 0 |
Balance at June 30, 2016 | 0 |
Cumulative Costs Incurred to Date | $ 227 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve, current | $ 866 | $ 1,044 |
Restructuring reserve, noncurrent | 400 | |
2013 Initiatives | ||
Restructuring Cost and Reserve [Line Items] | ||
Total expected cost | 6,600 | |
2015 Initiatives | ||
Restructuring Cost and Reserve [Line Items] | ||
Total expected cost | 4,600 | |
2016 Initiatives | ||
Restructuring Cost and Reserve [Line Items] | ||
Total expected cost | $ 700 |