3SOF

Press Release Source: Novatel Wireless, Inc.


Novatel Wireless Increases Second Quarter Guidance
Friday June 8, 8:15 am ET 
Company Announces Resignation of CFO Dan Halvorson


SAN DIEGO--(BUSINESS WIRE)--Novatel Wireless, Inc. (Nasdaq:NVTL - News), a leading provider of wireless broadband access solutions, today raised guidance for its second quarter ended June 30, 2007 and announced the resignation of Chief Financial Officer Dan Halvorson, effective June 15th, to pursue another opportunity.
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Revenues are expected to be approximately $95 million, ahead of previous guidance of $90 million and representing year-over-year growth of over 100%. Non-GAAP EPS is expected to be $0.29 - $0.31 per diluted share, ahead of previous non-GAAP EPS guidance of $0.20 - $0.22 per diluted share and compares to non-GAAP EPS of $0.02 per diluted share in the second quarter of last year. Non-GAAP EPS excludes FAS 123R share-based compensation expense.

"We are currently seeing strong demand across our major product lines, most notably for our ExpressCards and Ovation USB devices," commented Brad Weinert, Novatel Wireless' acting Chief Executive Officer. "Wireless data is clearly becoming a vital component of carrier plans, as enterprises and consumers increasingly recognize the benefits of the technology."

Mr. Weinert continued, "We thank Dan for all of his contributions in the past as Novatel Wireless has grown and diversified over the last three years. We wish him well in the future. An active search for Dan's replacement is ongoing and we expect to complete this search in the near future."

About Novatel Wireless

Novatel Wireless, Inc. is revolutionizing wireless communications. The Company is a leader in the design and development of innovative wireless broadband access solutions based on 3G WCDMA (HSDPA & UMTS), CDMA and GSM technologies. Novatel Wireless' Merlin(TM) PC Cards and ExpressCards, Expedite® Embedded Modules, MobiLink(TM)Communications Software Suite, Ovation(TM) Fixed Mobile Convergence Products and Conversa(TM) Software Suite enable high-speed wireless access. The company delivers innovative 3G solutions to operators, distributors and vertical markets worldwide. Headquartered in San Diego, California, Novatel Wireless is listed on NASDAQ: NVTL. For more information please visit www.novatelwireless.com. (NVTLE)

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. 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.

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, without limitation, (1) the future demand for wireless broadband access to data, (2) the future growth of wireless wide-area networking, (3) changes in commercially adopted wireless transmission standards and technologies, (4) continued acceptance of the Company's current products and market demand for the Company's anticipated new product offerings in 2007, (5) increased competition and pricing pressure from current or new wireless market participants, (6) dependence on third party manufacturers in Asia and key component suppliers worldwide, (7) unexpected liabilities or expenses, ( the Company's ability to introduce new products in a timely manner, (9) litigation, regulatory and IP developments, (10) dependence on a small number of customers, (11) the effect of changes in accounting standards and in aspects of our critical accounting policies and (12) 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 detailed from time to time in the Company's SEC reports and filings (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.

Non-GAAP Financial Measures; GAAP EPS

Novatel Wireless has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP diluted earnings per share. Novatel Wireless uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Novatel Wireless's ongoing operational performance. Novatel Wireless believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial measures with other companies in Novatel Wireless' industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial measures discussed above exclude FAS 123R share-based compensation expense.

The Company continues to evaluate the factors that might impact diluted GAAP EPS, which consist primarily of FAS 123R share-based compensation expenses and accruals for income tax expense. The FAS 123R share-based compensation expenses are expected to vary depending on the number of new grants issued to both current and new employees, and changes in the Company's stock price, stock market volatility, expected option life, and risk-free interest rates (all of which are difficult to estimate). In addition, the factors that impact the Company's deferred tax assets are expected to vary from period to period, also making diluted GAAP EPS difficult to estimate.

©2007 Novatel Wireless. All rights reserved. The Novatel Wireless logo, Merlin, Expedite, MobiLink, Ovation and Conversa are trademarks of Novatel Wireless, Inc. Other product or service names mentioned herein are the trademarks of their respective owners.



Contact:
Novatel Wireless
Marcy Graham, 858-320-8837
Director, Investor Relations
[email protected]
or
The Blueshirt Group
Chris Danne, Rakesh Mehta, 415-217-7722
Investor Relations
[email protected]
[email protected]

--------------------------------------------------------------------------------

Thanks soxguy, as expected, NVTL raised 2nd quarter guidance:

• Novatel Wireless Increases Second Quarter Guidance
Business Wire (Fri 8:15am)

But the CFO is resigning. Since the stock has been up so much, I guess people will use the CFO excuse to take profits, as they're always looking for an excuse to do that.

Longer term, fundamentals keep improving, NVTL goes higher.

NVTL's management gave the following guidance at the Q1 earnings presentation:



And on Friday they said this:



The revenue guidance rose just 5.55%, not very significant, but the EPS guidance revision was a 42.8% revision, which is quite significant and in line with what we've been expecting here at 3Stocks.

I believe there will be one more upward revision before the quarter ends, and of course, they'll have to revise their full year guidance higher too.

If the share base compensation stays at 6 cents per share, we're looking at about $0.24 EPS for Q2 2007 (but I expect more than this, the company will issue another guidance or beat expectations). Plus $0.34 from the first quarter, we get $0.58 EPS for the first half of the year.

Analysts pushed their average full year 2007 estimate higher, to $0.89 ...



... up from $0.82, but since the company already has $0.58 in the pocket, I don't think it is appropriate to expect just $0.89 for the full year. Even more so considering the second half is seasonally stronger. I see $1.16 as the very minimum. It could be $1.3 or more.

I'll keep holding NVTL.

upgrade here we go!
Novatel Wireless "buy," target price raised

Monday, June 11, 2007 2:58:05 AM ET
Montgomery & Co

NEW YORK, June 11 (newratings.com) - Analysts at Montgomery & Co maintain their "buy" rating on Novatel Wireless Inc (NVTL.NAS), while raising their estimates for the company.
The target price has been raised from $24 to $30.

In a research note published this morning, the analysts mention that the company has raised its guidance for the June quarter due to robust demand for its ExpressCard products and its Ovation product family. The Ovation product line is likely to continue to boost Novatel Wireless' top-line growth and gross margins, the analysts say. The sudden resignation of CFO Dan Halvorson does not indicate any substantial issues at the company, Montgomery & Co adds. The EPS estimates for 2007 and 2008 have been raised from $1.05 to $1.26 and from $1.25 to $1.47, respectively.

&

DivX Names Dan L. Halvorson as Senior Vice President and Chief Financial Officer
Monday , June 11, 2007 08:30ET

SAN DIEGO, Jun 11, 2007 (BUSINESS WIRE) -- DivX, Inc. (NASDAQ:DIVX) today announced that it has named Dan L. Halvorson as the Company's Senior Vice President and Chief Financial Officer. Mr. Halvorson brings nearly 20 years of experience, joining DivX from Novatel Wireless (NASDAQ:NVTL) where he was Chief Financial Officer as that company diversified and experienced rapid revenue growth.

"We are very pleased to welcome Dan to the DivX team," said Jordan Greenhall, CEO and co-Founder of DivX. "With his strong mix of public company, finance and accounting experience, Dan will play an important role helping to guide us through our next growth wave as we seek to expand our business and penetrate new product categories. I am confident that Dan will be a strong fit with our mission to innovate, execute and deliver new products and services designed to improve the experience of media."

Mr. Halvorson added, "The DivX organization demonstrated a tremendous level of optimism, energy and passion for their community that motivated me to take on this opportunity. I believe the company is in the early stages of a tremendous market opportunity and I am energized to join the team at this important time."

During his 19-year career, Mr. Halvorson has served many senior finance and accounting roles at a number of public companies. Mr. Halvorson was named Chief Financial Officer and Chief Accounting Officer at Novatel Wireless in early 2004 and served those roles during a time when the company grew its annual revenue from $33 million to a current run rate of nearly $400 million. He joined Novatel Wireless in 2000 prior to its IPO, serving in a variety of financial roles including Vice President of Finance, Chief Accounting Officer and Treasurer. From 1998 to 2000, he was Director of Finance at Dura Pharmaceuticals, which was acquired by Elan in 2000. He was also Director of Finance at Alliance Pharmaceuticals from 1996 to 1998. Previous to his public company roles, Mr. Halvorson spent eight years in public accounting at Deloitte & Touche and PriceWaterhouseCoopers, serving both public and private client companies. Mr. Halvorson is a Certified Public Accountant and holds a Bachelor of Science from San Diego State University.

Mr. Halvorson will officially join the company on June 18 in a transitional role, and will assume full time duties on July 16.
cheers
Oliver

Thanks for posting that analyst upgrade la-onda

I especially enjoyed the following part:

QuoteThe EPS estimates for 2007 and 2008 have been raised from $1.05 to $1.26 and from $1.25 to $1.47, respectively.

Montgomery & Co is a lot more optimistic than others, since the average analyst is expecting just $0.89 for 2007 and $1.04 for 2008.

I would go more with Montgomery numbers, since the company already had EPS of about $0.58 for the first half of the year.

If we multiply the $1.26 EPS estimate by 31.53, which is the Business Software & Services industry average earnings multiple, we get to a share price of $39.73. I need to revise my EPS multiple estimate higher. Done, the optimal selling price rose to $36.56.

I'll keep holding NVTL.

So, NVTL's CFO went to work for DIVX:

• DivX names new CFO
at MarketWatch (Mon 9:26am)

Probably DIVX paid more. Not a problem for NVTL. From the page views I'm getting on this thread I know NVTL is the least of your worries, let me move on to the next, I'll keep holding NVTL.

support is at around $22.00

If you look at the Main Portfolio's table you see that NVTL, despite being so attractive, both from a technical and fundamental standpoint, has the lowest "% to Exit", at just 49%.

But perhaps one of my variables is too low, and that's net profit margin. You see I estimate 8% long term net profit margin, but an expansion in selling of the company's Ovation products may lead to an higher net profit margin.

In fact, if we pay closer attention to the company's new Q2 guidance:

«Revenues are expected to be approximately $95 million, ahead of previous guidance of $90 million and representing year-over-year growth of over 100%. Non-GAAP EPS is expected to be $0.29 - $0.31 per diluted share, ahead of previous non-GAAP EPS guidance of $0.20 - $0.22 per diluted share and compares to non-GAAP EPS of $0.02 per diluted share in the second quarter of last year. Non-GAAP EPS excludes FAS 123R share-based compensation expense.»

So, about $0.30 Non-GAAP EPS. This probably means about $0.24 GAAP EPS on a fully diluted basis, and considering 30,422,945 shares outstanding this gives me $7.3 M net income. With $95 M in revenues, $7.3 M net income means net profit margin of 7.7%, so, roughly 8%, which is my long term estimate.

So far there's no reason to upgrade my estimates, the optimal selling price continues to be $36.56.

I'll keep holding NVTL.

http://www.evdoinfo.com/content/view/1973/64/

novatel device - message board yahoo.com of NVTL today:

Lots of people asking this question in various places.
This thread will maintain our official info about router compatibility with the 595U.

The Kyocera KR1 does NOT work with the 595U and judging from the fact that the KR1 still does not work with PC Card version (AC595), the KR1 is not likely to ever work with the 595 or 595U.

The TopGlobal MB6800 does work with the 595U but does not charge the internal battery, causing failed connection after about two hours.

Currently, the only way to use the 595U with an EVDO Router is a combination of the TopGlobal MB6800 and a powered USB hub. Read the following for more information:

http://www.evdoinfo.com/content/view/200...

If you don't like the idea of having to buy one more piece of equipment in addition to the router, and you are still within your 30-day trial period for the 595U, you may want to consider canceling that service and buying the Novatel u720 from us -- then we'll give you $35 off the compatible Kyocera KR1 router. (price after discount is $179.99)

http://www.evdoforums.com/thread6005.html

NVTLs product U720 looks like outselling because of huge demands.

fyi:
NVTL: Morgan Joseph Sets @ Hold; Analyst Notes
Tuesday , June 12, 2007 08:40ET
Issuer: Novatel Wireless Inc (NasdaqNM: NVTL)
Analyst Firm:  Morgan Joseph & Co. Inc.
Current Rating: Hold
Analyst Comments: The firm is transitioning coverage on the stock. They point out the company's superb execution, and strong 3G data adoption at both Sprint and Verizon, has renewed interest in the Novatel story. They expect overall industry dynamics to remain robust, but are cautious in that they believe near-term expectations for the company are fairly reflected in the shares at current levels, and therefore are returning investors' attention to the story, but with a Hold rating.

Quote from: nexta on June 14, 2007, 05:20:35 PM
http://www.evdoforums.com/thread6005.html

NVTLs product U720 looks like outselling because of huge demands.

Thanks for the interesting information nexta

QuoteAnalyst Comments: The firm is transitioning coverage on the stock. They point out the company's superb execution, and strong 3G data adoption at both Sprint and Verizon, has renewed interest in the Novatel story. They expect overall industry dynamics to remain robust, but are cautious in that they believe near-term expectations for the company are fairly reflected in the shares at current levels, and therefore are returning investors' attention to the story, but with a Hold rating.

Some analysts are more optimistic than others about NVTL. I just look at the recent history, project it for the future and get to an optimal selling price, let me see, of $35.88.

As expected, NVTL recently raised guidance. But I expect them to beat their updated guidance when they report Q2 results.

I'll keep holding NVTL.

As I look at my valuation model for NVTL, perhaps where I'm being too conservative is my revenue growth forecast, since I have a revenue CAGR estimate of 50% and revenue growth in Q1 2007 was 172%

Say NVTL's revenues grow 100% in 2007, 70% in 2008 and 40% in 2009, the final revenue number would then be $1,033 M. What I have on my valuation model is just $735.7 M.

If I consider that rough estimate of 100% revenue growth in 2007, 70% in 08 and 40% in 09, which seems reasonable, my revenue CAGR estimate should be 68% instead of 50% (1.68 instead of 1.5 in the valuation model).

This "slight" change increased the optimal selling price from $35.88 to $47.48.

NVTL's market price seems to be well below its potential, no doubts I'll keep holding the stock.

NVTL retreated 1% today because some people needed to take profits. There's nothing we can do, except keep holding the stock and ignore the short term fluctuations. 

0.53% advance day for NVTL. No news out. I'll keep holding.