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Start Time: 17:03
End Time: 17:32
Novatel Wireless, Inc. (NVTL)
Q3 2012 Earnings Call
November 7, 2012 05:00 pm ET
Matthew Hunt – Director, Investor Relations.
Peter V. Leparulo – Chairman and Chief Executive Officer
Kenneth Leddon – Senior Vice President and Chief Financial Officer
Peter Misek – Jefferies & Co., Inc.
Bryan Prohm – Cowen and Company, LLC
Previous Statements by NVTL
» Novatel Wireless' CEO Discusses Q2 2012 Results - Earnings Call Transcript
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I would now like to turn the conference over to Matthew Hunt of The Blueshirt Group Investor Relations. Please go ahead.
Good afternoon and thank you for joining us on our third quarter 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 Wednesday, November 7, 2012 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 section of our website, and 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 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 V. Leparulo
Good afternoon and thank you for joining our call today. While Q3 was a difficult and challenging period as we anticipated, we have made substantial progress towards our goals, a clear and driving focus of Novatel Wireless is to return to profitability and position the company for long-term and sustainable growth.
I want to spend our time today discussing some of our key business decisions of the quarter and how we believe this will positively impact our business moving forward. After our prepared comments, Ken and I will be happy to answer any questions that you might have.
As you know, we have three primary businesses, Mobile Broadband, our OEM business selling to laptop manufacturers and our M2M business, which consist of embedded solutions and integrated platforms. Mobile Broadband had a down quarter in Q3 and as expected, we experienced hike in competition on our largest customer, as we share the channel in the quarter to lower price Chinese competitor. This competition will continue in Q4.
Our products are in many channels, including company-owned stores, direct B2B sales, local and national retail and others. Although, year-to-date sales were actually higher in direct B2B channels for quality and security are highly valued, we have been impacted in consumer channels or differentiated device pricing impact sales at a more cost driven. Our focus to address all of these channels in Mobile Broadband is to continue to lead the market in innovation, expand our customer base and expand our product set at existing customers, all built up on our industry leading type of portfolio.
Earlier this quarter, we announce that we will be launching our touch screen MiFi 2 with AT&T, which individually achieved sort of these goals, technological leadership and expanding our customer base. Our MiFi 2 being marketed by AT&T as a MiFi Liberate introduces an entirely new user interface based on a large multi-touch interactive color display, setting users control the MiFi device with the touch of the finger, added functionality minimal its design, a great through user experience, and industry leading performance have been among the positive feedback that the product has received in preliminary reviews.
MiFi’s results were media hub, which allows users to share movies, music and presentations. Importantly, this is also our first joint development product with AT&T. As started what we heard will be a long-term partnership with this important customer. We’ll be happy to discuss the unique features and performance of the MiFi 2 after the formal launch of the product in select channels later this quarter, followed by a broader distribution rollout in the first quarter.
One of the advantages of developing products for the 4G frequency band is supported by AT&T is that, there is technology commonality with other carriers worldwide. As a result, we expect to launch the MiFi 2 with other carriers in 2013. Additionally, we are launching two new products with our partner Verizon Wireless, which we believe will allow us to recapture the two most important product slots at our largest customer.
The first product which we just launched is an expanded battery MiFi 4620, which takes over the best-in-class slot with this carrier. The second product which we hope to launch in the fourth quarter, but made cushion to the first quarter is a streamline MiFi, which will become Verizon’s lead product in those channels, which are more cost driven end user sales.