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Inseego Reports Second Quarter 2018 Financial ResultsInseego Corp. (Nasdaq: INSG) (the "Company"), an industry leader in solutions for intelligent mobile enterprises, today reported the following results for the second quarter ended June 30, 2018. The Company reports second quarter revenues of $49.1 million, GAAP operating loss of $0.8 million, GAAP net loss of $6.7 million, or a net loss of $0.11 per share, adjusted EBITDA of $3.8 million and non-GAAP net loss of $0.02 per share. Cash and cash equivalents at the end of the period, including restricted cash, was $18.9 million. "Inseego met the top end of guidance and delivered record adjusted EBITDA, which demonstrates the continued progress we're making on our strategy. The infusion of close to $20 million in cash from the financing led by Tavistock Group, and the settlement of a former lawsuit, significantly deleverages the balance sheet and provides ample liquidity to accelerate development of 5G and IoT Cloud products, and to further strengthen our go-to-market capability," said Dan Mondor, Chairman and CEO of Inseego. "We are winning new customers and launching new products into high growth 5G and IoT Cloud markets." Recent Corporate Highlights - Closed a $19.7 million private placement transaction led by Tavistock Group, providing additional investment and working capital to be used towards accelerating development in next generation products - Reduced total liabilities associated with a former lawsuit by approximately $17 million with a settlement agreement, including a potential reduction of cash liabilities from approximately $15.8 million to as low as $1.0 million - Solid progress on adjusted EBITDA growth, reaching an annualized run rate in excess of $15 million IoT & Mobile Solutions - Q2 2018 revenue of $31.7 million - Continued expansion of our IoT & Mobile Solutions customer base:
- Launched new Skyus product portfolio for Industrial IoT device-to-cloud use cases - Announced a joint solution with Riverbed Technologies to expand our reach in the SD-WAN market Enterprise SaaS Solutions - Q2 2018 revenue of $17.3 million - Ctrack SaaS subscription revenue continued year-over-year growth in the quarter - Signed a 3-year contract extension with T-Mobile for the DMS subscription management SaaS solution - Announced partnership with KLM Equipment Services (KES) for the global aviation vertical market - Awarded two aviation solution contracts in the UK and EMEA and engaged in a successful trial with a global logistics provider at Brussels International Airport "We continue to see positive forward progress in adjusted EBITDA and our strategic initiatives," said Steve Smith, CFO of Inseego. "The improvements in our financial performance and new financing with long term strategic investors enhances liquidity, deleverages the balance sheet and increases operational flexibility." Third Quarter Outlook The following statements are forward-looking and actual results may differ materially. Please see the section titled "Cautionary Note Regarding Forward-Looking Statements" at the end of this news release. A more detailed description of risks related to our business is included in the reports filed by the Company with the Securities and Exchange Commission (the "SEC"). Our guidance for the third quarter of 2018 reflects current business indicators and expectations as of the date of this news release, including current exchange rates for foreign currencies.
Conference Call Information Inseego will host a conference call and live webcast for analysts and investors today at 5:00 p.m. ET. A Q&A session with analysts will be held live directly after the prepared remarks. To access the conference call:
Inseego will offer a live audio webcast of the conference call, which will be accessible from the "Investors" section of the Company's website at investor.inseego.com. The webcast will be archived for a period of two weeks. An audio replay of the conference call will also be available beginning one hour after the call, through August 21, 2018. To hear the replay, parties in the United States may call 1-877-344-7529 and enter access code 10122312#. International parties may call 1-412-317-0088 and enter the same code. About Inseego Corp. Inseego Corp. (Nasdaq: INSG) enables high performance mobile applications for large enterprise verticals, service providers and small-medium businesses around the globe. Our product portfolio consists of Enterprise SaaS Solutions and IoT & Mobile Solutions, which together form the backbone of compelling, intelligent, reliable and secure IoT services with deep business intelligence. Inseego powers mission critical applications with a "zero unscheduled downtime" mandate, such as asset tracking, fleet management, industrial IoT, SD WAN failover management and mobile broadband services. Our solutions are powered by our key innovations in IoT, purpose-built SaaS cloud platforms and mobile technologies, including the newly emerging 5G technology. Inseego is headquartered in San Diego, California with offices worldwide. www.inseego.com Twitter @inseego Cautionary Note Regarding Forward-Looking Statements Some of the information presented in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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. The information presented in this news release related to our outlook for the third quarter ending September 30, 2018 and our future business outlook, the future demand for our products, as well as other statements that are not purely statements of historical fact, are forward-looking in nature. These forward-looking statements are made on the basis of management's current expectations, assumptions, estimates and projections and are subject to significant risks and uncertainties that could cause actual results to differ materially from those anticipated in such forward-looking statements. We therefore cannot guarantee future results, performance or achievements. Actual results could differ materially from our expectations. Factors that could cause actual results to differ materially from the Company's expectations include: (1) the future demand for wireless broadband access to data and fleet management software and services; (2) the growth of wireless wide-area networking and fleet management software and services; (3) customer and end-user acceptance of the Company's current product and service offerings and market demand for the Company's anticipated new product and service offerings; (4) increased competition and pricing pressure from participants in the markets in which the Company is engaged; (5) dependence on third-party manufacturers and key component suppliers worldwide; (6) unexpected liabilities or expenses; (7) the Company's ability to introduce new products and services in a timely manner, including the ability to develop and launch 5G technology at the speed and functionality required by our customers; (8) litigation, regulatory and IP developments related to our products or components of our products; (9) dependence on a small number of customers for a significant portion of the Company's revenues; and (10) the Company's plans and expectations relating to acquisitions, divestitures, strategic relationships, international expansion, software and hardware developments, personnel matters and cost containment initiatives, including restructuring activities and the timing of their implementation. These factors, as well as other factors set forth as risk factors or otherwise described in the reports filed by the Company with the SEC (available at www.sec.gov), could cause actual results to differ materially from those expressed in the Company's forward-looking statements. The Company 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 Inseego Corp. has provided financial information in this news release that has not been prepared in accordance with GAAP. Non-GAAP operating expenses, adjusted EBITDA, net loss and net loss per share exclude restructuring charges, net of recoveries, share-based compensation expense, amortization of intangible assets purchased through acquisitions, amortization of discount and issuance costs related to the Company's convertible senior notes and term loan and an impairment charge related to certain product lines the Company abandoned, net of recoveries. Adjusted EBITDA also excludes interest, taxes, depreciation and amortization (unrelated to acquisitions, the convertible senior notes and the term loans) and foreign currency transaction gains and losses. Non-GAAP operating expenses, adjusted EBITDA, net loss and net loss per share are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. These non-GAAP financial measures have limitations as an analytical tool and are not intended to be used in isolation or as a substitute for operating expenses, net loss, net loss per share or any other performance measure determined in accordance with GAAP. We present non-GAAP operating expenses, adjusted EBITDA, net loss and net loss per share because we consider each to be an important supplemental measure of our performance. Management uses these non-GAAP financial measures to make operational decisions, evaluate the Company's performance, prepare forecasts and determine compensation. Further, management believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company's performance when planning, forecasting and analyzing future periods. Share-based compensation expenses are expected to vary depending on the number of new incentive award grants issued to both current and new employees, the number of such grants forfeited by former employees, and changes in the Company's stock price, stock market volatility, expected option term and risk-free interest rates, all of which are difficult to estimate. In calculating non-GAAP operating expenses, adjusted EBITDA, net loss and net loss per share, management excludes certain non-cash and one-time items in order to facilitate comparability of the Company's operating performance on a period-to-period basis because such expenses are not, in management's view, related to the Company's ongoing operating performance. Management uses this view of the Company's operating performance for purposes of comparison with its business plan and individual operating budgets and in the allocation of resources. The Company further believes that these non-GAAP financial measures are useful to investors in providing greater transparency to the information used by management in its operational decision-making. The Company believes that the use of non-GAAP operating expenses, adjusted EBITDA, net loss and net loss per share also facilitates a comparison of our underlying operating performance with that of other companies in our industry, which use similar non-GAAP financial measures to supplement their GAAP results. In the future, the Company expects to continue to incur expenses similar to the non-GAAP adjustments described above, and exclusion of these items in the presentation of our non-GAAP financial measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring. Investors and potential investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. The limitations of relying on non-GAAP financial measures include, but are not limited to, the fact that other companies, including other companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting their usefulness as a comparative tool. Investors and potential investors are encouraged to review the reconciliation of our non-GAAP financial measures contained within this news release with our GAAP financial results.
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