Novatel Wireless, Inc. (NVTL)
Q4 2012 Earnings Call
February 21, 2013, 05:00 pm ET
Matthew Hunt - The Blueshirt Group
Peter Leparulo - Chairman & CEO
Ken Leddon - SVP & CFO
Bryan Prohm - Cowen & Company
Cobb Sadler - Catamount Advisors
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I would now like to turn the conference over to Matthew Hunt, Blueshirt Group for Investor Relations. Please go ahead.
Good afternoon and thank you for joining us on our fourth quarter and fiscal year 2012 conference call. We’ll begin with a business overview and outlook from Chairman and CEO, Peter Leparulo followed by a financial overview and guidance from Chief Financial Officer, Ken Leddon. We’ll then open the call for questions.
As a reminder, this conference call is being broadcast on Thursday, February 21, 2013 over the phone and internet to all interested parties. The information shared in this call is effective as of today’s date and will not be updated.
During this call, non-GAAP financial measures will be discussed. A reconciliation to the most directly comparable GAAP financial measures are included in the earnings release which is available on the Investors Relations section of our website. An audio replay of this call will also be archived there.
Please also be advised that today’s discussion will contain forward-looking statements. These forward-looking statements are not historical facts, but rather are based on the company’s current expectations and beliefs. For a discussion of factors that could cause actual results to differ materially from expectations, please refer to the risk factors described in our Forms 10-K, 10-Q and other SEC filings which are available on our website.
Now, I would like to introduce Peter Leparulo, Chairman and Chief Executive Officer of Novatel Wireless. Peter?
Good afternoon everyone and thank you for joining our call today. Our fourth quarter continued to be a period of building for the company as we executed on the strategy and businesses decisions that we outlined last quarter. We continue to make key progress on our strategic initiatives in both mobile computing and M2M and we are expecting significant sequential revenue growth and bottomline improvement in the first quarter as we realign the business to return to profitability and sustainable growth.
We believe the steps we have taken fundamentally position the company for a much better 2013. In mobile broadband, our focus remains to lead the market in innovation, expand our customer base, expand our product set at existing customers and address new markets enabled by 4G networks. We've made progress on these initiatives with two new product launches since our last report. MiFi 2 launched by AT&T as MiFi Liberate and our MiFi 5510L launched by Verizon Wireless.
MiFi 2 which launched in the middle of the fourth quarter with AT&T has taken mobile hotspots to the next levels. It is the first mobile hotspot with a touch-screen display, functionality that was once on a web page is now at the user’s fingertips. MiFi 2 has a breakthrough user experience in terms of discoverability and interactivity with one-touch features for accessing data usage summary, on-board shared storage, location based services and support. It's local media server allows users to share movies, music, presentations and photos from micro-SD cards and broadcast these files straight from the device to DLNA-enabled TVs or other devices. MiFi 2 also has a full work day of connectivity with live 4G streaming and supports global data connection.
The MiFi 2 has garnered critical acclaim from such publication as PC Magazine, ZDNet and GIZMODO, whose editor declared it the best mobile hotspot I’ve ever used. It is now approaching full channel launch, including AT&T stores and B2B channels and is just beginning to roll out with national retailers such as Best Buy with some expansion to additional national retailer’s plant. We are now working to launch MiFi 2 with other carriers in 2013.
More recently, we announced the launch of the MiFi 5510L with Verizon at the end of January; following the roll out of our extended battery MiFi 4620LE last quarter. The 5510L device is our fifth-generation 4G LTE Mobile hotspot and is positioned as the cost competitive value product at the carrier. While the extended battery MiFi 4620LE, which we discussed last quarter, is positioned as the premium product with this carrier. The 5510L is the first mobile hotspot launched with real-time data usage reporting on the Verizon network and also has key performance indicators to address this market segment.
As we move forward, we’re working to expand sales from our new product lines and are working closely with all three major U.S. carriers to bring new products to market in the future. Looking ahead, we continue to see the operators expand used cases by 4G data networks enable including in-vehicle services and advanced home connectivity services over 4G networks. We have the design wins and carriers for next-generation LTE solutions carrying us into 2014, and we look forward to sharing our progress.
In the M2M business, we believe that the work we did in 2012 has laid the foundation for significant improvement in 2013, building upon key design wins from 2012. Sequentially, we grew this business 16% principally as a result of our new asset management product portfolio as well as key design wins and new customer expansion.