Expects Third Quarter Revenue to be Within Range of Previously
Provided Outlook
SAN DIEGO--(BUSINESS WIRE)--
Novatel Wireless (NASDAQ: NVTL), a leading provider of intelligent
wireless solutions, today announced it is implementing restructuring
initiatives designed to refine its business operations and capitalize on
synergies in its target markets with the goal of driving long-term
profitability. In connection with the restructuring plan, Novatel
Wireless is making strategic organizational changes across some of its
Mobile Computing and Machine-to-Machine (M2M) business operations that
will streamline its research and development resources and consolidate
several global manufacturing activities to drive efficiencies.
The company anticipates that the restructuring initiatives will be
substantially completed within the next 30-45 days. Once fully
implemented, Novatel Wireless estimates that the restructuring
initiatives will generate annualized, pre-tax savings of $10 to 11
million, which will begin to be realized in the fiscal fourth quarter of
2013.
Cost savings will be achieved through the consolidation of one of the
company's development sites and certain manufacturing and other
activities, which the company expects to result in a headcount reduction
of approximately 75 to 80 employees.
"The initiatives we announced today are intended to maximize
efficiencies and optimize business operations," said Peter Leparulo, CEO
of Novatel Wireless. "We are seeing an increasing overlap in our mobile
computing and M2M segments, which allows us to leverage development
resources across our business units while still developing the strongest
product portfolio for both segments. These initiatives also will help
ensure our business model is well positioned for the long-term. We
believe we are at the center of several new growth markets, and our aim
with this plan is to optimize our operations as we sharpen our focus on
those key growth areas."
The company expects to record an associated, pre-tax restructuring
charge in its GAAP financial results of approximately $3.2 to $4.6
million in the second half of 2013, the majority of which is expected to
occur in the fiscal third quarter. This estimated charge includes
termination benefits and associated costs, relocation costs, and
expenses associated with the facilities consolidation. The charges will
be disclosed in the company's upcoming earnings conference calls and
quarterly Form 10-Q filings.
The company expects revenue for the third quarter of 2013 to be within
the outlook range it provided on August 7, 2013. Guidance reflects the
risks and uncertainties associated with the certification, production,
commercialization and launch of major new products. All figures are
approximations based on management's beliefs and assumptions as of the
date of this release.
ABOUT NOVATEL WIRELESS
Novatel Wireless, Inc. is a leader in the design and development of
intelligent wireless solutions based on 2G, 3G and 4G technologies. The
company delivers specialized wireless solutions to carriers,
distributors, retailers, OEMs and vertical markets worldwide. Product
lines include MiFi® Intelligent Mobile Hotspots, Ovation™ USB modems,
Expedite® embedded modules, Mobile Tracking Solutions, Asset Tracking
Solutions, and Enabler® smart M2M modules. These innovative products
provide anywhere, anytime communications solutions for consumers and
enterprises. Headquartered in San Diego, California, Novatel Wireless is
listed on NASDAQ: NVTL. For more information please visit www.nvtl.com.
(NVTLF)
(C) 2013 Novatel Wireless. All rights reserved. The Novatel Wireless
name and logo are trademarks of Novatel Wireless, Inc. Other product or
service names mentioned herein are the trademarks of their respective
owners.
Cautionary Note Regarding Forward-Looking Statements
Some of the information presented in this release constitutes
forward-looking statements based on management's current expectations,
assumptions, estimates and projections. In this context, forward-looking
statements often address expected future business and financial
performance and often contain words such as "may," "estimate,"
"anticipate," "believe," "expect," "intend," "plan," "project," "will"
and similar words and phrases indicating future results. The information
presented in this release related to our outlook for the third quarter
of 2013 as well as estimated annualized cost savings and estimated
charges related to our restructuring initiatives are forward-looking.
Forward-looking statements involve risks and uncertainties that could
cause actual results to differ materially from those anticipated in such
forward-looking statements. The Company therefore cannot guarantee
future results, performance or achievements. Actual results could differ
materially from the Company's expectations.
Factors that could cause actual results to differ materially from
Novatel Wireless' expectations are set forth as risk factors in the
Company's SEC reports and filings and include (1) the future demand for
wireless broadband access to data, (2) the growth of wireless wide-area
networking, (3) changes in commercially adopted wireless transmission
standards and technologies including 3G and 4G standards, (4) continued
customer and end user acceptance of the Company's current products and
market demand for the Company's anticipated new product offerings, (5)
increased competition and pricing pressure from current or future
wireless market participants, (6) dependence on third party
manufacturers in Asia and key component suppliers worldwide, (7)
unexpected liabilities or expenses, (8) uncertainties and risks
associated with component procurement, production, manufacture and
assembly of new products, (9) uncertainties and risks associated with
the development, certification and launch of new products, (10) the
Company's ability to commercialize and introduce new products in a
timely manner, (11) litigation, regulatory and IP developments related
to our products or component parts of our products, (12) the outcome of
pending or future litigation, including the current class action
securities litigation, (13) the continuing impact of the global credit
crisis on the value and liquidity of the securities in our investment
portfolio, (14) dependence on a small number of customers, (15) the
effect of changes in accounting standards and in aspects of our critical
accounting policies and (16) the Company's plans and expectations
relating to strategic relationships, international expansion, software
and hardware developments, personnel matters and cost containment
initiatives.
These factors, as well as other factors described in the reports filed
by the Company with the SEC (available at www.sec.gov),
could cause actual results to differ materially. Novatel Wireless
assumes no obligation to update publicly any forward-looking statements
for any reason, even if new information becomes available or other
events occur in the future, except as otherwise required pursuant to
applicable law and our on-going reporting obligations under the
Securities Exchange Act of 1934, as amended.
Investor contact:
The Blueshirt Group for Novatel Wireless
Chris
Danne and Matthew Hunt
415-217-5865 or 415-489-2194
chris@blueshirtgroup.com
matt@blueshirtgroup.com
or
Media
contact:
Novatel Wireless
Charlotte Rubin, 858-812-3431
crubin@nvtl.com
Source: Novatel Wireless
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