0001193125-12-225847 | 10-Q | XBRL Viewer

Document And Entity Information - shares	3 Months Ended
Document And Entity Information - shares	Mar. 31, 2012	May 01, 2012
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Entity Registrant Name	NOVATEL WIRELESS INC
Entity Central Index Key	0001022652
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		32,403,594

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2012	Dec. 31, 2011
ASSETS
Cash and cash equivalents	$ 21,780	$ 47,069
Marketable securities	30,816	28,267
Accounts receivable, net of allowance for doubtful accounts of $283 at March 31, 2012 and $245 at December 31, 2011	49,796	36,849
Inventories	43,275	42,279
Deferred tax assets, net	2,012	2,011
Prepaid expenses and other	5,442	3,712
Total current assets	153,121	160,187
Property and equipment, net of accumulated depreciation of $61,625 at March 31, 2012 and $59,217 at December 31, 2011	17,259	18,496
Marketable securities	16,641	13,495
Intangible assets, net of accumulated amortization of $10,508 at March 31, 2012 and $10,899 at December 31, 2011	11,460	35,702
Goodwill	13,225	19,772
Deferred tax assets, net	1,024	1,023
Other assets	639	504
Total assets	213,369	249,179
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	51,578	54,030
Accrued expenses	27,956	25,044
Total current liabilities	79,534	79,074
Other long-term liabilities	4,084	4,080
Total liabilities	83,618	83,154
Stockholders' equity:
Preferred stock, par value $0.001; 2,000 shares authorized and none outstanding
Common stock, par value $0.001; 50,000 shares authorized, 32,385 and 32,262 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively	32	32
Additional paid-in capital	431,436	429,813
Accumulated other comprehensive income (loss)	16	(8)
Accumulated deficit	(276,733)	(238,812)
Total stockholders' equity before treasury stock	154,751	191,025
Treasury stock at cost; 2,436 common shares at March 31, 2012 and December 31, 2011, respectively	(25,000)	(25,000)
Total stockholders' equity	129,751	166,025
Total liabilities and stockholders' equity	$ 213,369	$ 249,179

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 283	$ 245
Property and equipment, accumulated depreciation	61,625	59,217
Intangible assets, accumulated amortization	$ 10,508	$ 10,899
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	50,000,000	50,000,000
Common stock, shares issued	32,385,000	32,262,000
Common stock, shares outstanding	32,385,000	32,262,000
Treasury stock, shares	2,436,000	2,436,000

Condensed Consolidated Statements Of Operations And Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Condensed Consolidated Statements Of Operations And Comprehensive Income (Loss) [Abstract]
Net revenues	$ 100,150	$ 61,784
Cost of net revenues	79,162	55,790
Gross profit	20,988	5,994
Operating costs and expenses:
Research and development	15,829	15,559
Sales and marketing	7,678	7,384
General and administrative	5,534	4,593
Goodwill and intangible assets impairment losses	29,337
Amortization of purchased intangible assets	437	528
Total operating costs and expenses	58,815	28,064
Operating loss	(37,827)	(22,070)
Other income:
Interest income, net	83	158
Other income, net	7	122
Loss before income taxes	(37,737)	(21,790)
Income tax expense	184	298
Net loss	$ (37,921)	$ (22,088)
Per share data:
Basic	$ (1.17)	$ (0.69)
Diluted	$ (1.17)	$ (0.69)
Weighted average shares used in computation of basic and diluted net loss per share:
Basic	32,296	31,900
Diluted	32,296	31,900
Comprehensive loss	$ (37,897)	$ (22,165)

Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash flows from operating activities:
Net loss	$ (37,921)	$ (22,088)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	3,993	4,908
Loss on goodwill and intangible assets impairments	29,337
Loss on disposal of fixed assets	(13)
Provision for bad debts	38	22
Inventory provision	251	120
Share-based compensation expense	1,834	1,295
Excess tax benefits from equity based compensation		(50)
Non-cash income tax expense (benefit)	111	(658)
Changes in assets and liabilities:
Accounts receivable	(12,984)	19,406
Inventories	(1,247)	(12,404)
Prepaid expenses and other assets	(1,865)	2,515
Accounts payable	(2,683)	(25,926)
Accrued expenses, income taxes, and other	2,926	(3,665)
Net cash used in operating activities	(18,223)	(36,525)
Cash flows from investing activities:
Purchases of property and equipment	(1,170)	(1,412)
Purchases of securities	(11,145)	(10,878)
Securities maturities/sales	5,474	45,644
Net cash provided by (used in) investing activities	(6,841)	33,354
Cash flows from financing activities:
Principal payments under capital lease obligations	(29)	(28)
Proceeds from stock option exercises net of taxes paid on vested restricted stock units	(211)	(568)
Excess tax benefits from equity based compensation		50
Net cash used in financing activities	(240)	(546)
Effect of exchange rates on cash and cash equivalents	15	55
Net decrease in cash and cash equivalents	(25,289)	(3,662)
Cash and cash equivalents, beginning of period	47,069	17,375
Cash and cash equivalents, end of period	21,780	13,713
Supplemental disclosures of cash flow information:
Interest	1	2
Income taxes	$ 20
Supplemental disclosures of non-cash financing activities:
Marketable equity securities received in settlement of note receivable		$ 384

Basis Of Presentation	3 Months Ended
Basis Of Presentation	Mar. 31, 2012
Basis Of Presentation [Abstract]
Basis Of Presentation	1. 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 information at March 31, 2012 and the results of the Company's operations for the three months ended March 31, 2012 and 2011 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, 2011. The accounting policies used in preparing these condensed consolidated financial statements are the same as those described in the Company's Form 10-K with the exception of new accounting pronouncements adopted in 2012. 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. 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. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues, expenses and disclosures of contingent assets and 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, litigation, provision for warranty costs, income taxes and share-based compensation expense. Difficult global economic conditions, tight credit markets, volatile equity, foreign currency and energy markets and declines in consumer spending have combined to increase the uncertainty inherent in these estimates and assumptions. As future events and their effects cannot be determined with precision, particularly those related to the condition of the economy, actual results could differ significantly from these estimates. New Accounting Pronouncements In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-08 "Intangibles-Goodwill and Other (Topic 350) — Testing Goodwill for Impairment." ASU 2011-08 amends the previous guidance under Topic 350 which required an entity to test goodwill for impairment, on at least an annual basis, by performing the two-step goodwill impairment test described in Topic 350. The amendments in ASU 2011-08 permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more likely than not threshold is defined as having likelihood of more than 50 percent. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We have adopted ASU 2011-08 for our financial statement results beginning January 1, 2012 and there was no material impact on the consolidated financial statements upon adoption. In June 2011, the FASB issued ASU No. 2011-05 "Comprehensive Income (Topic 220) — Presentation of Comprehensive Income." ASU 2011-05 requires that all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2011. We have adopted ASU 2011-05 and for the 2012 interim periods we elected to present comprehensive income (loss) along with our condensed consolidated statements of operations in a single continuous statement.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Publisher AICPA
-Number 94-6
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Number 46R
-Paragraph 4, 14, 15
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Balance Sheet Details

3 Months Ended

Mar. 31, 2012

Balance Sheet Details [Abstract]

Balance Sheet Details

2. Balance Sheet Details

Marketable Securities

The Company's portfolio of available-for-sale securities by contractual maturity consists of the following (in thousands):


March 31, 2012	Maturity in Years		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-sale:
Government agency securities		1 or less	$	3,125	$	—	$	(1	)	$	3,124
Municipal bonds		1 or less		8,953		—		(1	)		8,952
Certificates of deposit		1 or less		5,518		2		—			5,520
Corporate debentures / bonds		1 or less		13,185		—		(3	)		13,182
Marketable equity securities		N/A		38		—		—			38

Total short-term marketable securities				30,819		2		(5	)		30,816

Available-for-sale:
Government agency securities		1 to 2		4,498		4		—			4,502
Municipal bonds		1 to 2		5,926		14		—			5,940
Certificates of Deposit		1 to 2		3,077		6		—			3,083
Corporate debentures / bonds		1 to 2		3,121		—		(5	)		3,116

Total long-term marketable securities				16,622		24		(5	)		16,641

			$	47,441	$	26	$	(10	)	$	47,457


December 31, 2011	Maturity in Years		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-sale:
Corporate debentures/bonds		1 or less	$	8,615	$	—	$	(3	)	$	8,612
Municipal bonds		1 or less		8,390		—		(6	)		8,384
Certificates of deposit		1 or less		4,319		2		—			4,321
Government agency securities		1 or less		6,913		—		(1	)		6,912
Marketable equity securities		1 or less		38		—		—			38

Total short-term marketable securities				28,275		2		(10	)		28,267

Available-for-sale:
Corporate debentures/bonds		1 to 2		5,967		2		—			5,969
Certificates of deposit		1 to 2		3,797		—		(9	)		3,788
Government agency securities		1 to 2		3,734		4		—			3,738

Total long-term marketable securities				13,498		6		(9	)		13,495

			$	41,773	$	8	$	(19	)	$	41,762

The Company's available-for-sale securities are carried on the condensed consolidated balance sheet at fair market value with the related unrealized gains and losses included in accumulated other comprehensive income (loss) on the consolidated balance sheet, which is a separate component of stockholders' equity. Realized gains and losses on the sale of available-for-sale marketable securities are determined using the specific-identification method.

As of March 31, 2012, the Company recorded a net unrealized gain of $16,000. The Company's net unrealized gain is the result of market conditions affecting its fixed-income, debt and equity securities, which are included in accumulated other comprehensive income (loss) in the condensed consolidated balance sheet for the period then ended.

Inventories

Inventories consist of the following (in thousands):


	March 31, 2012		December 31, 2011
Finished goods	$	38,268	$	35,211
Raw materials and components		5,007		7,068

	$	43,275	$	42,279

Accrued Expenses

Accrued expenses consist of the following (in thousands):


	March 31, 2012		December 31, 2011
Royalties	$	5,419	$	5,861
Payroll and related expenses		10,797		8,706
Product warranty		1,738		1,525
Market development fund and price protection		1,816		1,750
Deferred rent		1,266		1,135
Professional fees		554		1,213
Other		6,366		4,854

	$	27,956	$	25,044

Accrued Warranty Obligations

Accrued warranty obligations consist of the following (in thousands):


	Three Months Ended March 31,
	2012			2011
Warranty liability at beginning of period	$	1,525		$	2,279
Additions charged to operations		1,267			864
Deductions from liability		(1,054	)		(794	)

Warranty liability at end of period	$	1,738		$	2,349

The Company accrues warranty costs based on estimates of future warranty-related replacement, repairs or rework of products. The Company generally provides one to three years of coverage for products following the date of purchase and the Company accrues the estimated cost of warranty coverage as a component of cost of revenues in the condensed consolidated statements of operations and comprehensive income (loss) at the time revenue is recognized. In estimating our future warranty obligations we consider various relevant factors, including the historical frequency and volume of claims, and the cost to replace or repair products under warranty.

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

+ References + Details

Intangible Assets

3 Months Ended

Mar. 31, 2012

Intangible Assets [Abstract]

Intangible Assets

3. Intangible Assets

The Company's amortizable purchased intangible assets resulting from its acquisition of Enfora are composed of (in thousands):


	March 31, 2012										December 31, 2011
	Gross		Accumulated Amortization			Impairment			Net		Gross		Accumulated Amortization			Net
Developed technologies	$	26,000	$	(5,123	)	$	(15,477	)	$	5,400	$	26,000	$	(4,163	)	$	21,837
Trade name		12,800		(1,707	)		(5,693	)		5,400		12,800		(1,387	)		11,413
Other		3,720		(1,727	)		(1,620	)		373		3,720		(1,609	)		2,111

Total amortizable purchased intangible assets	$	42,520	$	(8,557	)	$	(22,790	)	$	11,173	$	42,520	$	(7,159	)	$	35,361

The following table presents details of the amortization of purchased intangible assets included in the cost of net revenues and general and administrative expense categories (in thousands):


	Three Months Ended March 31,
	2012		2011
Cost of net revenues	$	961	$	1,319
General and administrative expenses		437		528

Total amortization expense	$	1,398	$	1,847

At March 31, 2012, the Company performed a preliminary interim impairment assessment of its purchased intangible assets. The resulting estimated impairment of $22.8 million has been recorded as a loss in the current quarter and the intangible asset values have been recorded at their estimated fair value. See Note 4.

The following table presents details of the amortization of existing purchased intangible assets that is currently estimated to be expensed in the remainder of 2012 and thereafter (in thousands):


Fiscal year:	Amount
2012 (remaining 9 months)	$	1,527
2013		1,805
2014		1,805
2015		1,741
2016		1,041
2017		1,039
Thereafter		2,215

Total	$	11,173

Additionally, at March 31, 2012 and December 31, 2011, the Company had $287,000 and $341,000, respectively, of acquired software licenses, net of accumulated amortization of $2.0 million and $3.7 million, respectively. The acquired software licenses represent rights to use certain software necessary for commercial sale of the Company's products.

Goodwill

3 Months Ended

Mar. 31, 2012

Goodwill [Abstract]

Goodwill

4. Goodwill

The changes in the carrying amount of goodwill for the three month periods ended March 31, 2012 and 2011 are as follows (in thousands):


	M2M Products and Solutions
	2012			2011
Balance at January 1,	$	19,772		$	22,258
Goodwill impairment during the period		(6,547	)		—

Balance at March 31,	$	13,225		$	22,258

During the first quarter of 2012, based on actual operating results, and reductions in management's estimates of forecasted operating results of the M2M products and solutions reporting unit principally due to an updated view of competitive pressures impacting average selling prices, customer product and technology selections, and the loss of certain customers, the Company determined there were sufficient indicators of impairment present to require an interim impairment analysis.

Based upon fair value tests performed with the assistance of a third party independent appraisal, the Company recorded a preliminary pre-tax goodwill impairment charge of approximately $6.5 million and a preliminary purchased intangible asset charge of approximately $22.8 million during the first quarter of 2012. As of May 10, 2012, the Company had not finalized its review of these impairments analyses due to the limited time period from the first indication of the potential impairments to the date of this filing and the complexities involved in estimating the fair value of certain assets and liabilities. Any adjustments to those estimated charges resulting from the completion of the measurement of the impairment losses will be recognized in the second quarter of 2012.

Fair Value Measurement Of Assets And Liabilities

3 Months Ended

Mar. 31, 2012

Fair Value Measurement Of Assets And Liabilities [Abstract]

Fair Value Measurement Of Assets And Liabilities

5. Fair Value Measurement of Assets and Liabilities

The Company's fair value measurements relate to its cash equivalents, marketable debt securities, and marketable equity securities, which are classified pursuant to authoritative guidance for fair value measurements. The Company places its cash equivalents and marketable debt securities in instruments that meet credit quality standards, as specified in its investment policy guidelines. These guidelines also limit the amount of credit exposure to any one issue, issuer or type of instrument.

Our financial instruments consist principally of cash and cash equivalents, short-term and long-term marketable securities, and short-term and long-term debt securities. The Company's cash and cash equivalents consist of its investment in money market securities and treasury bills. The Company's marketable securities consist primarily of government agency securities, municipal bonds, time deposits and investment-grade corporate bonds. From time to time, the Company may utilize foreign exchange forward contracts. These contracts are valued using pricing models that take into account the currency rates as of the balance sheet date (Level 2 of the fair value hierarchy).

Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree to which the inputs are observable. 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) defined as follows:

Level 1: Pricing inputs are based on quoted market prices for identical assets or liabilities in active markets (e.g., NYSE). 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 & 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 fair value of the majority of our cash and cash equivalents and marketable equity securities were determined based on Level 1 inputs. The fair value of our marketable debt securities was determined based on Level 2 inputs. We do not have any securities in the Level 3 category. 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.

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 March 31, 2012 (in thousands):


Description	March 31, 2012		Level 1		Level 2
Assets:
Cash equivalents
Money market funds	$	10,143	$	10,143	$	—
US Treasury notes		59		—		59

Total cash equivalents		10,202		10,143		59

Short-term marketable securities:
Available-for-sale:
Corporate debentures/bonds		13,182		—		13,182
Municipal bonds		8,952		—		8,952
Certificates of deposit		5,520		—		5,520
Government agency securities		3,124		—		3,124
Marketable equity securities		38		38		—

Total short-term marketable securities		30,816		38		30,778

Long-term marketable securities:
Available-for-sale:
Municipal bonds		5,940		—		5,940
Certificates of deposit		3,083		—		3,083
Government agency securities		4,502		—		4,502
Corporate debentures / bonds		3,116		—		3,116

Total long-term marketable securities		16,641		—		16,641


Total financial assets	$	57,659	$	10,181	$	47,478

There were no transfers between Level 1 and Level 2 securities during the three months ended March 31, 2012. All of our long-term marketable debt securities had maturities of between one and two years in duration at March 31, 2012.


Description	Balance as of December 31, 2011		Level 1		Level 2
Assets:
Cash equivalents:
Money market funds	$	25,137	$	25,137	$	—
US Treasury notes		5,784		—		5,784

Total cash equivalents		30,921		25,137		5,784

Short-term marketable securities:
Corporate debenture/bonds		8,612		—		8,612
Municipal bonds		8,384		—		8,384
Certificates of deposit		4,321		—		4,321
Government agency securities		6,912		—		6,912
Marketable equity securities		38		38		—

Total short-term marketable securities		28,267		38		28,229

Long-term marketable securities:
Municipal bonds		5,969		—		5,969
Certificates of deposit		3,788		—		3,788
Government agency securities		3,738		—		3,738

Total long-term marketable securities		13,495		—		13,495

Total financial assets	$	72,683	$	25,175	$	47,508

- Definition

Tabular disclosure of the fair value measurement of assets and liabilities which includes [financial] instruments measured at fair value that are classified in stockholders' equity. Such assets and liabilities may be measured on a recurring or nonrecurring basis. The disclosures which may be required or desired include: (1) for assets and liabilities measured on a recurring basis, disclosure may include: (a) the fair value measurements at the reporting date; (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); (c) for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (ii) purchases, sales, issuances, and settlements (net); (iii) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs); (d) the amount of the total gains or losses for the period in subparagraph (c) (i) above included in earnings (or changes in net assets) that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of income (or activities); (e) the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period and (2) for assets and liabilities that are measured at fair value on a nonrecurring basis (for example, impaired assets) disclosure may include, in addition to (a) above: (a) the reasons for the fair value measurements recorded; (b) the same as (b) above; (c) for fair value measurements using significant unobservable inputs (Level 3), a description of the inputs and the information used to develop the inputs; and (d) the valuation technique(s) used to measure fair value and a discussion of changes, if any, in the valuation technique(s) used to measure similar assets and/or liabilities in prior periods. Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 33
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 6
-Footnote 4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19190-110258

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-Publisher FASB
-Name Accounting Standards Codification
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-Publisher FASB
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-Topic 820
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19296-110258

+ Details

Share-Based Compensation

3 Months Ended

Mar. 31, 2012

Share-Based Compensation [Abstract]

Share-Based Compensation

6. Share-Based Compensation

The Company included the following amounts for share-based compensation awards in the accompanying unaudited condensed consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2012 and 2011 (in thousands):


	Three Months Ended March 31,
	2012		2011
Cost of revenues	$	194	$	126
Research and development		695		425
Sales and marketing		362		279
General and administrative		583		465

Totals	$	1,834	$	1,295

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

+ Details

Segment Information And Concentrations Of Risk

3 Months Ended

Mar. 31, 2012

Segment Information And Concentrations Of Risk [Abstract]

Segment Information And Concentrations Of Risk

7. Segment Information and Concentrations of Risk

Segment Information

The Company reports segment information based on the "management" approach. The management approach designates the internal reporting used by senior management for making decisions and assessing performance as the source of the Company's reportable segments.

The Company operates in the wireless broadband technology industry and senior management makes decisions about allocating resources based on the following reportable segments:

•

Mobile Computing Products segment—includes our MiFi products, USB and PC-card modems and Embedded Modules that enable data transmission and services via cellular wireless networks. All products within the segment represent a single product family.

•

M2M Products and Solutions segment—includes our intelligent asset-management solutions utilizing cellular wireless technology and M2M communication devices acquired with our acquisition of Enfora.

Segment revenues and segment operating income (loss) represent the primary financial measures used by senior management to assess performance and include the revenue, cost of goods sold, sales and other operating expenses for which management is held accountable. Segment expenses include sales and marketing, research and development, administration, and amortization expenses that are directly related to individual segments. Segment earnings (loss) also includes acquisition-related costs, purchase price amortization, restructuring, impairment and integration costs. The table below presents net revenue from external customers, income (loss) from operations and identifiable assets for our reportable segments (in thousands):


	Three Months Ended March 31,
	2012			2011
Net revenues by operating segment:
Mobile Computing Products	$	90,878		$	49,796
M2M Products and Solutions		9,272			11,988

Total	$	100,150		$	61,784


Operating loss:
Mobile Computing Products	$	(3,470	)	$	(16,681	)
M2M Products and Solutions⁽¹⁾		(34,357	)		(5,389	)

Total	$	(37,827	)	$	(22,070	)


	March 31, 2012		December 31, 2011
Identifiable assets by reportable segment:
Mobile Computing Products	$	175,327	$	181,180
M2M Products and Solutions		38,042		67,999

Total	$	213,369	$	249,179

(1)	Includes preliminary estimated impairment charges of $22.8 million against intangible assets and $6.5 million against goodwill.

The Company has operations in the United States, Canada, Europe, Latin America and Asia. The following table details the geographic concentration of the Company's assets in the United States, Canada, Europe, Latin America and Asia (in thousands):


	March 31, 2012		December 31, 2011
United States	$	207,936	$	243,030
Canada		3,933		4,764
Europe		142		280
Asia		1,358		1,105

	$	213,369	$	249,179

The following table details the concentration of the Company's net revenues by geographic region:


	Three Months Ended March 31,
	2012			2011
North America		91.6	%		94.1	%
Latin America		4.5			—
Europe / Middle East / Africa		3.3			5.8
Asia / Australia		0.6			0.1

		100.0	%		100.0	%

Concentrations of Risk

Substantially all of the Company's net revenues are derived from sales of cellular wireless access products. Any significant decline in market acceptance of the Company's products or in the financial condition of the Company's existing customers would have an adverse effect on the Company's results of operations and financial condition.

A significant portion of the Company's net revenues are derived from a small number of customers. For the three months ended March 31, 2012, sales to our three largest customers accounted for 55%, 13% and 8% of net revenues. In the same period in 2011, sales to our three largest customers accounted for 34% 22% and 10% of net revenues. The Company outsources its manufacturing to four third-party contract manufacturers. If one or more of these manufacturers were to experience delays, disruptions, capacity constraints or quality control problems in manufacturing operations, product shipments to the Company's customers could be delayed or its customers could consequently elect to cancel the underlying product purchase order, which would negatively impact the Company's revenues and results of operations.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Publisher FASB
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+ Details

Earnings Per Share	3 Months Ended
Earnings Per Share	Mar. 31, 2012
Earnings Per Share [Abstract]
Earnings Per Share	8. Earnings Per Share Basic earnings per share ("EPS") excludes dilution and is computed by dividing net income (loss) attributable to common stockholders 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 options and restricted stock units ("RSUs") and employee stock purchase plan ("ESPP") withholdings 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. As of March 31, 2012 and 2011, basic and diluted weighted-average common shares outstanding were 32,295,942 and 31,899,757, respectively. As of March 31, 2012 and 2011, weighted-average options, RSUs, and ESPP shares to acquire a total of 6,001,156 and 3,944,684 shares of common stock, respectively, were outstanding but not included in the computation of diluted earnings per share as their effect was anti-dilutive.

Commitments And Contingencies	3 Months Ended
Commitments And Contingencies	Mar. 31, 2012
Commitments And Contingencies [Abstract]
Commitments And Contingencies	9. Commitments and Contingencies Legal Matters 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 a number of 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 evaluation of these matters and discussions with Company's intellectual property litigation counsel, the Company believes that liabilities arising from or sums paid in settlement of these existing matters would not have a material adverse effect on its consolidated results of operations or financial condition. On September 15, 2008 and September 18, 2008, two putative securities class action lawsuits were filed in the United States District Court for the Southern District of California on behalf of persons who allegedly purchased our stock between February 5, 2007 and August 19, 2008. On December 11, 2008, these lawsuits were consolidated into a single action entitled Backe v. Novatel Wireless, Inc., et al., Case No. 08-CV-01689-H (RBB) (Consolidated with Case No. 08-CV-01714-H (RBB)) (U.S.D.C., S.D. Cal.). In May 2010, the district court re-captioned the case In re Novatel Wireless Securities Litigation. The plaintiffs filed the consolidated complaint on behalf of persons who allegedly purchased our stock between February 27, 2007 and November 10, 2008. The consolidated complaint names the Company and certain of our current and former officers as defendants. The consolidated complaint alleges generally that we issued materially false and misleading statements during the relevant time period regarding the strength of our products and market share, our financial results and our internal controls. The plaintiffs are seeking an unspecified amount of damages and costs. The court has denied defendants' motions to dismiss. In May 2010, the court entered an order granting the plaintiffs' motion for class certification and certified a class of purchasers of Company common stock between February 27, 2007 and September 15, 2008. On February 14, 2011, following extensive discovery, the Company filed a motion for summary judgment on all of plaintiffs' claims. A trial date had been set for May 10, 2011. On March 15, 2011, the case was reassigned to a new district judge, the Honorable Anthony J. Battaglia. Following the reassignment, the court vacated the trial date pending the court's consideration of dispositive motions. Oral argument on the motion for summary judgment was heard by the court on June 17, 2011. On November 23, 2011, the court issued an order granting in part and denying in part the motion for summary judgment. The court has set a final pretrial conference for June 15, 2012. The Company intends to defend this litigation vigorously. At this time, there can be no assurance as to the ultimate outcome of this litigation. We have not recorded any significant accruals for contingent liabilities associated with this matter based on our belief that a liability, while possible, is not probable. Further, any possible range of loss cannot be estimated at this time. On October 8, 2008, a purported shareholder, Jerry Rosenbaum, filed a derivative action in the Superior Court for the State of California, County of San Diego, against the Company, as nominal defendant, and certain of our current and former officers and directors, as defendants. Two other purported shareholders, Mark Campos and Chris Arnsdorf, separately filed substantially similar lawsuits in the same court on October 20, 2008 and November 5, 2008, respectively. On October 16, 2009, the plaintiffs filed a consolidated complaint. The consolidated complaint, Case No. 37-2008-00093576-CU-NP-CTL, alleges claims for breaches of fiduciary duties, violations of certain provisions of the California Corporations Code, unjust enrichment, and gross mismanagement. In February 2010, the court granted the defendants' motion to stay the action pending the resolution of the federal securities class action described above. In July 2010, the parties executed a memorandum of understanding setting forth the terms to be included in a contemplated settlement. Any settlement would be subject to court approval. The memorandum of understanding did not contemplate any restitution from the defendants. Following execution of the memorandum of understanding, plaintiffs conducted certain confirmatory discovery and sought to negotiate an award of legal fees as part of the terms to be included in a stipulation of settlement. Plaintiffs have since purported to terminate the memorandum of understanding. On January 28, 2011, the court held an informal status conference, at which plaintiffs requested that the court lift the stay of action. The court declined plaintiffs' request. Following certain additional confirmatory discovery and negotiations, on March 2, 2012, the parties executed a Stipulation of Settlement, which settlement was submitted to the court for approval. The court preliminarily approved the settlement pursuant to an order dated March 15, 2012. The settlement requires the Company to maintain and/or implement certain corporate governance measures and provides for the payment of fees and expenses to the plaintiffs' counsel of an amount not to exceed $900,000, $500,000 of which is to be paid out of insurance proceeds, and $400,000 to be paid by the Company. These fees have been paid in accordance with the March 15^th order and on May 4, 2012, the court granted final approval of the settlement. The Company recorded the $400,000 in fees in its 2011 financial results. 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 operations or cash flows. The Company has accrued $150,000 as of March 31, 2012 related to our best estimate of potential settlements on legal and indemnification matters for which we have deemed the outcome probable.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
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-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

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Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
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-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Comprehensive Loss

3 Months Ended

Mar. 31, 2012

Comprehensive Loss [Abstract]

Comprehensive Loss

10. Comprehensive Loss

Comprehensive loss consists of the following (in thousands):


	Three Months Ended
	March 31,
	2012			2011
Net loss	$	(37,921	)	$	(22,088	)
Unrealized gain (loss) on cash equivalents and marketable securities		24			(77	)

Comprehensive loss	$	(37,897	)	$	(22,165	)

- Definition

The entire disclosure for comprehensive income. Includes, but is not limited to, the following: 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income. Components of comprehensive income include: (1) foreign currency translation adjustments; (2) gains (losses) on foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity; (3) gains (losses) on intercompany foreign currency transactions that are of a long-term-investment nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting enterprise's financial statements; (4) change in the market value of a futures contract that qualifies as a hedge of an asset reported at fair value; (5) unrealized holding gains (losses) on available-for-sale securities and that resulting from transfers of debt securities from the held-to-maturity category to the available-for-sale category; (6) a net loss recognized as an additional pension liability not yet recognized as net periodic pension cost; and (7) the net gain (loss) and net prior service cost or credit for pension plans and other postretirement benefit plans.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
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+ Details

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2012
Income Taxes [Abstract]
Income Taxes	11. Income Taxes The Company recognizes federal, state and foreign current tax liabilities or assets based on its estimate of taxes payable to or refundable by tax authorities in the current fiscal year. The Company also recognizes federal, state and foreign deferred tax liabilities or assets based on the Company's estimate of future tax effects attributable to temporary differences and carry forwards. The Company records a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized. The Company assesses whether a valuation allowance should be recorded against its deferred tax assets based on the consideration of all available evidence, using a "more-likely-than-not" realization standard. The four sources of taxable income that must be considered in determining whether deferred tax assets will be realized are: (1) future reversals of existing taxable temporary differences (i.e., offset of gross deferred tax assets against gross deferred tax liabilities); (2) taxable income in prior carryback years, if carryback is permitted under the applicable tax law; (3) tax planning strategies; and (4) future taxable income exclusive of reversing temporary differences and carryforwards. In assessing whether a valuation allowance is required, significant weight is to be given to evidence that can be objectively verified. A significant factor in the Company's assessment is that the Company is in a three-year historical cumulative loss position. This fact, combined with uncertain near-term market and economic conditions, reduced the Company's ability to rely on projections of future taxable income in assessing the realizability of its deferred tax assets. After a review of the four sources of taxable income as of March 31, 2012 (as described above), the Company recognized an increase in the valuation allowance primarily related to its U.S.-based deferred tax amounts resulting from carryforward net operating losses and Canadian-based deferred tax amounts resulting from research and development tax credits generated during the quarter ended March 31, 2012. These deferred tax benefits, combined with a corresponding charge to income tax expense of $13.4 million related to the increased valuation allowance during the quarter ended March 31, 2012, resulted in an insignificant effective income tax rate for the quarter ended March 31, 2012. The Company's valuation allowance was $49.8 million on net deferred tax assets of $50.9 million at March 31, 2012. The net unreserved portion of the Company's remaining deferred tax assets at March 31, 2012 primarily related to research and development tax credits associated with the Company's Canadian subsidiary. For the three months ended March 31, 2012, the Company recorded income tax expense, including discrete items, of $184,000. This amount varies from the tax benefit that would be computed at the U.S statutory rate resulting from its operating losses during the same period primarily due to an offsetting increase in the Company's valuation allowance. The Company follows the accounting guidance related to financial statement recognition, measurement and disclosure of uncertain tax positions. The Company recognizes the impact of an uncertain income tax position on an income tax return at the largest amount that is "more-likely-than-not" to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. As of March 31, 2012 and December 31, 2011, the total liability for unrecognized tax benefits was $415,000 and $413,000, respectively, and is included in other long-term liabilities. For the three months ended March 31, 2012, the Company included $2,000 of interest expense related to uncertain tax positions in its consolidated statements of operations. In the third quarter of 2012, the Company may release $50,000 of its liability for unrecognized tax benefits due to the expiration of the statute of limitations applicable to the 2007 taxable year. The Company and its subsidiaries file U.S., state, and foreign income tax returns in jurisdictions with various statutes of limitations. The California Franchise Tax Board is currently conducting an examination of the Company's California income tax returns for 2006 and 2007. The State of Texas is currently conducting an examination of the Company's 2007 Texas Franchise tax return. The Company is also subject to various Federal income tax examinations for the 2003 through 2010 calendar years due to the availability of net operating loss carryforwards. The Company believes appropriate provisions for all outstanding issues have been made for all jurisdictions and all open years. However, because audit outcomes and the timing of audit settlements are subject to significant uncertainty, the Company's current estimate of the total amounts of unrecognized tax benefits could increase or decrease for all open years. During the first quarter of 2012, the Company recorded a preliminary estimated impairment charges of $22.8 million against intangible assets and $6.5 million against goodwill on a pre-tax basis against the M2M operating unit. The Company will finalize its estimate of the impairment charge during its second quarter of 2012, including the related impact to income taxes.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details