(San Diego. September 11, 2013. Business Wire) — There are mixed fortunes at Novatel Wireless, an intelligent wireless solutions provider, which is “consolidating sites” and shedding 75-80 jobs to help save US$10 million per year. In better news, the company has just won an award for its SA 2100 M2M device.
The retructuring is, says the company, “designed to refine its business operations and capitalise on synergies in target markets with the goal of driving long-term profitability”. Novatel Wireless is making strategic organisational changes across some of its Mobile Computing and Machine-to-Machine (M2M) business operations thatare intended to streamline its research and development (R&D) resources and consolidate several global manufacturing activities to drive efficiencies.
The company anticipates that the restructuring initiatives will be substantially completed within the next 30-45 days. Once fully implemented, Novatel Wireless estimates that the restructuring initiatives will generate annualized, pre-tax savings of $10 to 11 million, which will begin to be realised in the fiscal fourth quarter of 2013.
Cost savings will be achieved through the “consolidation” of one of the company’s development sites and certain manufacturing and other activities, which the company expects will result in the loss of approximately 75 to 80 jobs.
“The initiatives we announced today are intended to maximise efficiencies and optimise business operations,” said Peter Leparulo, CEO of Novatel Wireless. “We are seeing an increasing overlap in our mobile computing and M2M segments, which allows us to leverage development resources across our business units while still developing the strongest product portfolio for both segments. These initiatives also will help ensure our business model is well positioned for the long-term. We believe we are at the centre of several new growth markets, and our aim with this plan is to optimise our operations as we sharpen our focus on those key growth areas.”
The company expects to record an associated, pre-tax restructuring charge in its GAAP (Generally Agreed Accounting Principles) financial results of approximately $3.2 to $4.6 million in the second half of 2013, the majority of which is expected to occur in the fiscal third quarter. This estimated charge includes termination benefits and associated costs, relocation costs, and expenses associated with the facilities consolidation. The charges will be disclosed in the company’s upcoming earnings conference calls and quarterly Form 10-Q filings.
The company expects revenue for the third quarter of 2013 to be within the outlook range it provided on August 7, 2013.
Novatel Wireless wins Mobile Merit Award
On a happier note, Novatel Wireless, Inc. (Nasdaq:NVTL), has won the Connected Life category of the 2013 Mobile Merit Award with its powerful SA 2100 device, a programmable M2M solution for commercial telematics such as fleet management, consumer telematics, and fixed telemetry vertical markets. The SA 2100 is managed by Novatel Wireless’ cloud-based N4A Device Manager.
The Mobile Merit Award recognises companies, individuals and technologies that have shaped the way in which the world communicates. This year’s winners were judged based on industry impact, innovation, technologies, social importance, implementation and overall success factor and SA 2100 by Novatel Wireless won as the best solution for the Connected Life category.
“We are honoured to receive this award and industry recognition for our generation-skipping integrated M2M solution,” says Peter Leparulo, CEO of Novatel Wireless. “The SA 2100 is a versatile and a powerful integrated solution allowing multiple connected life scenarios at once — including commercial telematics, in-vehicle connected car, and fixed telemetry applications,” Mr. Leparulo continues.
The SA 2100 by Novatel Wireless is an advanced MiFi® Powered™ M2M device that incorporates the industry leading MiFi technology platform with customisations for multiple vertical markets and multiple connected life scenarios.
Designed for high bandwidth M2M applications, the SA 2100 makes it easier than ever to connect Ethernet-based and Wi-Fi-enabled devices to the high speed internet via 4G LTE access. The SA 2100 provides always-on availability to the mobile Internet with end-to-end encryption and authentication for virtually any fixed or mobile application.
The SA 2100 connects machines with Ethernet, Wi-Fi, or micro-USB interfaces to the mobile internet in a simple way with high reliability and security. With default settings preconfigured and self-registration enabled, the SA 2100 is built with ‘power it up, and ready to connect’ in mind. Sized slightly bigger than two decks of cards, the SA 2100 can easily fit in a wide variety of installations. The internal antennas enable SA 2100’s compact size, and optional external cellular antennas provide flexibility when mounted in areas with poor signal reception. Additionally, the battery backup provides business continuity protection.