This excerpt taken from the NVTL 8-K filed Feb 26, 2009.
YEAR 2008 FINANCIAL RESULTS
SAN DIEGO, CA Feb. 26, 2009 Novatel Wireless, Inc. (Nasdaq: NVTL), a leading provider of wireless broadband access solutions, today reported preliminary financial results for the fourth quarter and full year ended December 31, 2008. The Company has not finalized its income tax provision and certain accounting estimates. These preliminary financial results are subject to change when the Company files its audited financial statements.
Revenues for the fourth quarter of 2008 were $65.1 million compared to $118.0 million in the fourth quarter of the prior year. GAAP net loss was approximately $3.0 million, or $(0.10) per diluted share, including $1.2 million in stock-based compensation expenses, net of taxes. These results compare to GAAP net income of $11.5 million, or $0.35 per diluted share, in the prior year period. Excluding FAS 123R stock-based compensation charges, fourth quarter 2008 non-GAAP net loss was $1.8 million or ($0.06) per diluted share, compared to non-GAAP net income of $13.8 million, or $0.42 per diluted share, for the prior year period.
Both GAAP and non-GAAP fourth quarter results include charges of approximately $3.4 million in inventory valuation reductions and approximately $830,000 in asset impairments that were driven by changes in our market conditions. These adjustments were partially offset by a reduction of approximately $2.3 million in a reserve for contingent royalty obligations and are included in cost of goods sold.
For the full year, the Company reported revenue of $321 million, GAAP net loss of $1.2 million or ($0.04) per diluted share, and non-GAAP net income, excluding FAS 123R stock-based compensation expenses, of $3.8 million or $0.12 per diluted share.
Despite the challenging economic environment, we achieved the mid-point of our top line guidance in the fourth quarter. Our revenues were impacted by decreased consumer demand and tighter carrier inventory control, said Peter Leparulo, chairman and CEO of Novatel
Wireless. We are focused on improving our near term results by pursuing a corporate strategy that broadens our product offerings and addressable market by providing end-to-end mobile broadband solutions. During the fourth quarter we launched three new products, received our first significant revenues from a major content delivery customer, and introduced a completely new category of mobile broadband solutions. While we continue to expect the current global economy to impact our results, we currently expect sales and gross margins to increase in the first quarter compared to the fourth quarter of 2008, based primarily on a higher percentage of revenues from newly introduced products and current forecast visibility into our content delivery products.
In addition to the inventory valuation and asset impairment charges, the fourth quarter gross margin was negatively impacted by competitive pricing pressures, currency fluctuations for Euro denominated sales, and higher shipping and fulfillment costs. stated Ken Leddon, chief financial officer of Novatel Wireless. Operating expenses in the fourth quarter reflect the favorable impact of $3.6 million in engineering reimbursements and adjustments related to compensation expense accruals. Our balance sheet remains strong with cash and cash equivalents and short term investments of over $143.2 million, or $4.72 per share, at year end, consistent with the prior quarter end.
In December, we introduced the widely acclaimed MiFiTM line of Intelligent Mobile Hotspots, which will begin shipping late in the first quarter, Mr. Leparulo stated. MiFi is a unique ultra-portable wireless device that creates a mobile Wi-Fi cloud capable of connecting multiple users and devices. We expect that the market for our core products will remain challenging for some time; however, we believe that demand from our content delivery customers, as well as the initial ramp of our MiFi products, will help bridge the gap. Looking further out, we believe that the continued introduction of new products and the development of innovative applications and services for our MiFi products will improve our competitive position.