Exhibit 99.1
For more information, contact:
Novatel Wireless the blueshirt group, Investor Relations
Melvin Flowers Chris Danne, Brinlea Johnson
Chief Financial Officer (415) 217-7722
(858) 812-3415 chris@blueshirtgroup.com
www.novatelwireless.com brinlea@blueshirtgroup.com
FOR IMMEDIATE RELEASE
NOVATEL WIRELESS ANNOUNCES FIRST QUARTER RESULTS
REVENUES ABOVE GUIDANCE AND GROSS PROFIT MORE THAN DOUBLES
OPERATING EXPENSES REDUCED AND NET LOSS CUT IN HALF
SAN DIEGO, CA. -- April 30, 2003--Novatel Wireless, Inc. (Nasdaq: NVTL), a
leading provider of wireless data communications access solutions, today
reported financial results for the first quarter ended March 31, 2003.
Net revenues for the first quarter were approximately $7.5 million, ahead of
previous Company guidance. This compares to $7.3 million for the same period of
the prior year. Net loss under GAAP was $3.0 million, a significant improvement
over both $8.0 million for the first quarter of 2002 and $7.1 million for the
fourth quarter of 2002. 2003 first quarter results included a $413,000
restructuring charge and a $451,000 charge relating to the amortization of
deferred compensation.
Net loss applicable to common shareholders was $3.2 million, or $0.46 per basic
and diluted share, which includes a non-cash charge of $193,000 for the
accretion of dividends and beneficial conversion feature on the December 2001
Series A Preferred Stock issuance.
"The first quarter offered firm evidence that we are executing on plan, with
solid revenues and a dramatic improvement to our bottom line and business
model," commented Peter Leparulo, Chief Executive Officer of Novatel Wireless.
"Our focus on
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three clear goals started to show positive results in the first quarter as
revenues picked up significantly in March, margins increased impressively and we
continued to drive down costs. We are also optimistic that our $6.7 million
financing will be approved by shareholders on May 2nd, 2003 and believe this
deal will provide us with the capital to accomplish our goals - including
turning cash flow break even in 2003."
Recent highlights include:
- On April 17th, Novatel Wireless, Commerciant, and Sprint announced
the availability of MobileScape(TM), a wireless business process
application and payment processing system designed for business
critical transactions in the mobile workforce technology market.
- On April 1st, Sprint, HP and Novatel Wireless leveraged their IT and
wireless strengths to create a bundled offer to mobile
professionals.
- On February 18th, Lucent Technologies and Novatel Wireless unveiled
the jointly developed Merlin U530(TM) Wireless PC Card Modem, a
high-speed data device designed to enable mobile users to access the
Internet and corporate networks over third-generation (3G) Universal
Mobile Telecommunications System (UMTS) networks.
- On February 18th, the Company announced first commercial shipments
of the Merlin G300 (TM) Wireless PC Card Modem to Cingular Wireless.
"Importantly, we increased gross profit by over $1.5 million on a sequential
basis and more than doubled it from the prior year period," commented Melvin
Flowers, Chief Financial Officer of Novatel Wireless. "Additionally, we reduced
operating expenses by approximately $1.8 million sequentially and cut them by
48.9% from the same period of 2002. Our increasing margins and focus on
improving our business model resulted in a dramatic improvement in our net loss,
which was reduced by over $4 million or well over 50% when compared to both the
immediately preceding fourth quarter and the same period last year."
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Novatel Wireless will host a conference call for analysts and investors to
discuss its quarterly results at 5:00 p.m. ET on April 30th, 2003. Open to the
public, a live Web cast of the conference call will be accessible from the
"Investor Relations" section of Novatel Wireless' Web site
(www.novatelwireless.com). Following the live Web cast, an archived version will
be available on the Novatel Wireless Web site for 5 days.
ABOUT NOVATEL WIRELESS, INC.
Novatel Wireless, Inc. is a leading provider of wireless data modems and
software for use with portable personal computers and handheld computing
devices. The company delivers innovative and comprehensive solutions that enable
businesses and consumers to access personal, corporate and public information
through email (including attachments), enterprise networks and the Internet.
Novatel Wireless also offers wireless data modems and custom engineering
services for hardware integration projects in a wide range of vertical
applications. The Novatel Wireless product portfolio includes the Merlin(TM)
Family of Wireless PC Card Modems, the Minstrel(R) Family of Wireless Handheld
Modems, Sage(R) Wireless Serial Modems, Lancer 3W(TM) Family of Ruggedized
Modems and Expedite(TM) Family of Wireless Embedded Modems. Headquartered in San
Diego, California, Novatel Wireless is listed on The Nasdaq Stock Market
(Nasdaq:NVTL). For more information, please visit the Novatel Wireless Web site:
www.novatelwireless.com or call 888/888-9231.
Note to Editors: The Novatel Wireless logo, Minstrel, Merlin, Sage, Lancer 3W
and Expedite are trademarks of Novatel Wireless, Inc. Minstrel and Sage are
registered with the U.S. Patent and Trademark Office. All other brands, products
and company names mentioned herein are trademarks of their respective holders.
This release may contain forward-looking statements, which are made pursuant to
the safe harbor provisions of the United States Private Securities Litigation
Reform Act of 1995. These forward-looking statements involve risks and
uncertainties. A number of important factors could cause actual results to
differ materially from those in the forward-looking statements. These factors
include risks relating to technological changes, continued acceptance of Novatel
Wireless' products and dependence on intellectual property rights. These
factors, as well
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as other factors that could cause actual results to differ materially, are
discussed in more detail in Novatel Wireless' filings with the United States
Securities and Exchange Commission and other regulatory agencies.
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NOVATEL WIRELESS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
MARCH 31, DECEMBER 31,
2003 2002
------------- -------------
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $ 1,030,000 $ 1,571,000
Restricted cash 105,000 105,000
Accounts receivable, net 4,733,000 6,937,000
Accounts receivable - related party 276,000 276,000
Inventories 3,058,000 4,250,000
Prepaid expenses and other 1,571,000 1,561,000
------------- -------------
Total current assets 10,773,000 14,700,000
Property and equipment, net 3,372,000 4,101,000
Intangible assets, net 4,765,000 5,054,000
Other assets 192,000 192,000
------------- -------------
$ 19,102,000 $ 24,047,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable $ 6,075,000 $ 6,919,000
Accrued expenses 1,336,000 1,266,000
Inventory purchase commitments 3,048,000 3,983,000
Borrowings under line of credit 959,000 2,234,000
Restructuring accrual 1,404,000 1,331,000
Deferred revenues 408,000 977,000
Current portion of capital lease obligations 111,000 133,000
Convertible notes payable 31,000
------------- -------------
Total current liabilities 13,372,000 16,843,000
------------- -------------
Capital lease obligations, net of current portion 19,000 38,000
Convertible and redeemable Series A preferred stock 858,000 665,000
STOCKHOLDERS' EQUITY:
Common stock 7,000 7,000
Additional paid-in capital 239,750,000 238,640,000
Deferred stock compensation (1,278,000) (1,729,000)
Accumulated Deficit (233,626,000) (230,417,000)
------------- -------------
Total stockholders' equity 4,853,000 6,501,000
------------- -------------
$ 19,102,000 $ 24,047,000
============= =============
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NOVATEL WIRELESS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
--------------------------------
2003 2002
----------- ------------
Revenue $ 7,482,000 $ 7,272,000
Revenue - related party 7,000
----------- ------------
Total revenue 7,489,000 7,272,000
----------- ------------
Cost of revenue 6,259,000 6,719,000
Cost of revenue - related party 7,000
----------- ------------
Total cost of revenue 6,266,000 6,719,000
----------- ------------
----------- ------------
Gross margin 1,223,000 553,000
----------- ------------
Operating costs and expenses:
Research and development 1,735,000 4,148,000
Sales and marketing 677,000 1,419,000
General and administrative 979,000 1,310,000
Restructuring charges 413,000 249,000
Amortization of deferred stock compensation* 451,000 1,343,000
----------- ------------
Total operating costs and expenses 4,255,000 8,469,000
----------- ------------
Operating loss (3,032,000) (7,916,000)
Other income (expense):
Interest income 1,000 104,000
Interest expense (70,000) (142,000)
Other, net 85,000
----------- ------------
Net loss $(3,016,000) $ (7,954,000)
=========== ============
Net loss applicable to common stockholders $(3,209,000) $(16,109,000)
Weighted average shares used in computation of basic and diluted
net loss per common share 6,985,369 3,954,774
Basic and diluted net loss per common share $ (0.46) $ (4.07)
(*) Amortization of deferred stock compensation:
Cost of revenue $ 19,000 $ 280,000
Research and development 51,000 97,000
Sales and marketing 50,000 94,000
General and administrative 331,000 872,000
----------- ------------
$ 451,000 $ 1,343,000
=========== ============
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