Novatel Wireless Reports Fourth Quarter and Fiscal Year 2012 Preliminary Financial Results

  Novatel Wireless Reports Fourth Quarter and Fiscal Year 2012 Preliminary
  Financial Results

Business Wire

SAN DIEGO -- February 21, 2013

Novatel Wireless, Inc. (NASDAQ: NVTL), a leading provider of intelligent
wireless solutions, announced preliminary financial results for the fourth
quarter and fiscal year ended December 31, 2012.

Fourth quarter revenue was $70.7 million, as compared to $109.8 million in the
fourth quarter of 2011. GAAP net loss in the quarter was $14.9 million, or
$(0.45) per share. The GAAP net loss includes the impact of non-cash items
including $1.1 million in share-based compensation expense; $1.0 million of
employee stock purchase plan cancellation charges; $0.3 million of an
intangible asset valuation increase; $2.6 million of depreciation and
amortization expense; and, $0.3 million in deferred tax asset charges. On a
non-GAAP basis, a reconciliation of which can be identified in the attached
schedule, net loss for the quarter was $12.6 million, or $(0.38) per share.

“We believe the fundamental progress we made on our strategic initiatives in
the fourth quarter has positioned us for a stronger 2013, and currently
anticipate significant sequential revenue growth and bottom line improvement
in the first quarter,” said Peter Leparulo, CEO of Novatel Wireless. “Our M2M
business grew sequentially by 16% in the fourth quarter due to the positive
impact of our new product introductions, customer wins and the changes we made
to our sales channels. We believe this business is well-poised to benefit from
strong growth in key verticals for our M2M asset management solutions, and
growing contributions from our M2M embedded solutions. In mobile computing, we
are pleased to have introduced two new products, the MiFi® Liberate™ with AT&T
and the MiFi® 5510L with Verizon Wireless, and expect to see the benefits of
these in the first quarter.”

Fiscal year 2012 revenue was $344.3 million. GAAP net loss for the year was
$89.3 million, or $(2.72) per share. The GAAP net loss includes the impact of
non-cash items including $6.5 million in share-based compensation expense;
$1.0 million of employee stock purchase plan cancellation charges; $49.5
million in goodwill and intangible asset impairment charges; $12.3 million of
depreciation and amortization expense; and, $0.4 million of net deferred tax
asset charges. On a non-GAAP basis, a reconciliation of which can be
identified in the attached schedule, net loss for the year was $28.2 million,
or $(0.86) per share.

Recent Business Highlights

  *On November 16, 2012, Novatel Wireless announced the commercial
    availability of the MiFi® Liberate being sold through AT&T, the first
    Intelligent Mobile Hotspot device with a touchscreen display, and the
    first launch of the Company’s MiFi® 2 next generation product.The MiFi
    Liberate™ includes a new user interface based on 2.8" multi-touch
    interactive color display, connectivity for up to 10 devices, 11 hours of
    continuous use, and other capabilities beyond pure connectivity such as a
    DLNA-certified media center.
  *On January 29, 2013, Novatel Wireless announced the new MiFi 5510L
    Intelligent Mobile Hotspot to be launched on theVerizon Wirelessnetwork
    as the Verizon Jetpack™ 4G LTE Mobile Hotspot MiFi® 5510L. The device
    exterior is based on Verizon Wireless' new iconic design with a red
    translucent lens.The MiFi 5510L is a personal mobile hotspot providing
    Internet connectivity on the go and capable of sharing high-speed 4G LTE
    broadband Internet connectivity with up to 10 Wi-Fi enabled devices
    simultaneously. The MiFi 5510L features capacitive touch navigation keys
    for quick and easy access to essential device details and supports the
    latest security requirements that some of the strictest corporate VPNs
    require, includingVPN Pass-through and SPI Firewall.
  *Recently, Novatel Wireless announced the commercialization of its MT 3050
    asset management solution on the Verizon Wireless network. The MT 3050 is
    a mobile tracking OBD-II device which reduces up-front costs for insurance
    telematics and fleet management applications with easy, plug-and-play
    installation and industry-leading small form factor. The new MT 3050 also
    features integrated disconnect alert supported by an in-device backup
    battery. The MT 3050 is an ideal solution for insurance telematics and
    fleet management providers who are looking for information on the vehicle,
    vehicle location or driver behavior resulting in productivity improvements
    and cost reductions for customers.

First Quarter 2013 Business 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 press 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.

Our guidance for the first quarter of 2013 reflects current business
indicators and expectations as of the date of this release. All figures are
approximations based on management’s beliefs and assumptions as of the date of
this release.

We are currently forecasting sequential improvement in both our mobile
computing and M2M businesses, driven by recent product launches. The
relatively wide guidance range is attributable to the uncertainty related to
forecasting the sell-through volumes for two of the new MiFi products, and the
uncertain timing of other product launches during the quarter.

                          First Quarter 2013
Revenue                       $83 - $93 million
                              
Non-GAAP Gross Margin         22% - 24%
                              
Non-GAAP EPS                  $(0.19) - $(0.07)

Conference Call Information

Novatel Wireless will host a conference call and live webcast for analysts and
investors today at 5:00 p.m. ET. To access the conference call:

  *In the United States, call 1-877-317-6789
  *International parties can access the call at 1-412-317-6789

Novatel Wireless will offer a live webcast of the conference call, which will
be accessible from the "Investors" section of the company's website at
www.NVTL.com. A telephonic replay of the conference call will also be
available one hour after the call and will run through March 1, 2013. To hear
the replay, parties in the United States may call 1- 877-344-7529 and enter
conference code 100 245 86#. International parties may call 1-412-317-0088 and
enter the same code.

ABOUT NOVATEL WIRELESS

Novatel Wireless, Inc.is a leader in the design and development of
intelligent wireless solutions based on 2G, 3G and 4G technologies providing
wireless connectivity. The company delivers specialized wireless solutions to
carriers, distributors, retailers, OEMs and vertical markets worldwide.
Product lines include MiFi® Intelligent Mobile Hotspots, Ovation™ USB modems,
Expedite® embedded modules, Enfora® smart M2M modules, and Enforaintegrated
M2M solutions. These innovative products provide anywhere, anytime
communications solutions for consumers and enterprises. Headquartered inSan
Diego, California,Novatel Wirelessis listed on NASDAQ: NVTL. For more
information please visitwww.novatelwireless.com. (NVTLF)

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. The information presented in this release related to our financial
results for the fourth quarter ended December 31, 2012 and our outlook for the
first quarter of 2013, as well as statements regarding new product launches,
are forward-looking. 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. Actual results could
differ materially from the Company’s expectations.

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 (1) the future demand for wireless broadband
access to data, (2) the growth of wireless wide-area networking, (3) changes
in commercially adopted wireless transmission standards and technologies
including 3G and 4G standards, (4) continued customer and end user acceptance
of the Company's current products and market demand for the Company's
anticipated new product offerings, (5) increased competition and pricing
pressure from current or future wireless market participants, (6) dependence
on third party manufacturers in Asia and key component suppliers worldwide,
(7) unexpected liabilities or expenses, (8) the Company’s ability to introduce
new products in a timely manner, (9) litigation, regulatory and IP
developments related to our products or component parts of our products, (10)
the outcome of pending or future litigation, including the current class
action securities litigation, (11) the continuing impact of the recent global
credit crisis on the value and liquidity of the securities in our investment
portfolio, (12) dependence on a small number of customers, (13) the effect of
changes in accounting standards and in aspects of our critical accounting
policies and (14) 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 described in the reports filed by the
Company with the SEC (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

Novatel Wireless has provided in this release financial information that has
not been prepared in accordance with GAAP. Non-GAAP operating expenses, net
income and earnings per share exclude stock-based compensation expenses,
charges and benefits related to M&A activities, acquisition-related
intangible-asset amortization, a litigation accrual, and merger integration
costs. Non-GAAP net income and earnings per share for the full year also
exclude the impact of establishing a valuation allowance related to deferred
tax assets and assume a tax rate which management believes reflects its
long-term effective tax rate.

Adjusted EBITDA and Non-GAAP net income, earnings per share, operating
expenses, and gross margin are supplemental measures of our performance that
are not required by, or presented in accordance with, GAAP. These non-GAAP
financial measures are not intended to be used in isolation and, moreover,
they should not be considered as a substitute for net income, diluted earnings
per share, operating expenses, gross margin or any other performance measure
determined in accordance with GAAP. We present adjusted EBITDA and non-GAAP
net income, earnings per share, operating expenses, and gross margin 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.
The stock-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
calculating non-GAAP operating expenses, net income and earnings per share,
management excludes stock-based compensation expenses and charges related to
M&A activity to facilitate comparability of the Company's operating
performance on a period-to-period basis because such expenses are not, in
management's review, related to the Company's ongoing operating performance.
Management uses this view of its operating performance for purposes of
comparison with its business plan and individual operating budgets and
allocation of resources.

We further believe 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. We believe that the use of
non-GAAP operating expenses, net income and earnings per share also
facilitates a comparison of Novatel Wireless’ underlying operating performance
with that of other companies in our industry, which use similar non-GAAP
financial measures to supplement their GAAP results.

Calculating non-GAAP operating expenses, net income and earnings per share
have limitations as an analytical tool, and you should not consider these
measures in isolation or as substitutes for GAAP operating expenses, net
income and earnings per share. In the future, we expect 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. Some of the limitations in relying on non-GAAP operating
expenses, net income and earnings per share are:

  *Other companies, including other companies in our industry, may calculate
    non-GAAP operating expenses, net income and earnings per share differently
    than we do, limiting their usefulness as a comparative tool.
  *The Company's income tax expense will be ultimately based on its GAAP
    taxable income and actual tax rates in effect, which may differ
    significantly from the effective tax rate used in our non-GAAP financial
    measures.

In addition, the adjustments to our GAAP operating expenses, net income and
earnings per share reflect the exclusion of stock-based compensation expenses
that are recurring and will be reflected in the Company's financial results
for the foreseeable future. The Company compensates for these limitations by
providing specific information regarding the GAAP amount excluded from the
non-GAAP financial measures. The Company further compensates for the
limitations of our use of non-GAAP financial measures by presenting comparable
GAAP measures more prominently. The Company evaluates the non-GAAP financial
measures together with the most directly comparable GAAP financial measures.

Investors and potential investors are encouraged to review the reconciliation
of non-GAAP financial measures contained within this press release with our
GAAP operating expenses, net income, earnings per share and gross margin. For
more information, see the consolidated statements of operations and the
"Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income" contained in
this press release.

(C) 2013 Novatel Wireless. All rights reserved. MiFi, Expedite, Enabler,
Enfora, N4A, and the Novatel Wireless name and logo are trademarks of Novatel
Wireless, Inc. Other product or service names mentioned herein are the
trademarks of their respective owners.

                                                              
NOVATEL WIRELESS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
                                                            
                                                                  
                                             December 31,         December 31,
                                             2012                 2011
                                             (Preliminary and
                                             unaudited)
ASSETS
                                                                  
Current assets:
                                                                  
Cash and cash equivalents                    $   16,044           $ 47,069
Marketable securities                            38,064             28,267
Accounts receivable, net                         42,652             36,849
Inventories                                      39,016             42,279
Deferred tax assets, net                         126                2,011
Prepaid expenses and other                      4,829            3,712    
Total current assets                             140,731            160,187
                                                                  
Property and equipment, net                      15,229             18,496
                                                                  
Marketable securities                            1,201              13,495
                                                                  
Intangible assets, net                           3,163              35,702
                                                                  
Goodwill                                         -                  19,772
                                                                  
Deferred tax assets, net                         584                1,023
                                                                  
Other assets                                    623              504      
Total assets                                 $   161,531         $ 249,179  
                                                                  
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                  
Current liabilities:
                                                                  
Accounts payable                             $   45,732           $ 54,030
Accrued expenses                                27,800           25,044   
Total current liabilities                        73,532             79,074
                                                                  
Other long-term liabilities                     2,552            4,080    
                                                                  
Total liabilities                               76,084           83,154   
                                                                  
Stockholders' equity:
                                                                  
Common stock                                     34                 32
Additional paid-in capital                       438,477            429,813
Accumulated other comprehensive income           14                 (8       )
(loss)
Accumulated deficit                             (328,078  )       (238,812 )
                                                 110,447            191,025
Treasury stock at cost                          (25,000   )       (25,000  )
Total stockholders' equity                      85,447           166,025  
                                                                  
Total liabilities and stockholders'          $   161,531         $ 249,179  
equity
                                                                             
                                                                             

NOVATEL WIRELESS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                                                             
                                                                       
                   Three Months Ended                 Twelve Months Ended
                   December 31,                       December 31,
                     2012          2011             2012          2011    
                   (Preliminary                       (Preliminary
                   and              (Unaudited)       and
                   unaudited)                         unaudited)
                                                                       
Net revenues       $  70,675        $ 109,794         $  344,288       $ 402,862
Cost of net          57,117        84,068           271,845       318,270 
revenues
Gross profit         13,558        25,726           72,443        84,592  
                                                                       
Operating
costs and
expenses:
Research and          15,440          15,875             60,422          61,392
development
Sales and             6,246           7,025              27,501          29,830
marketing
General and           6,607           5,050              22,668          21,600
administrative
Goodwill and
intangible            (300    )       (237    )          49,521          3,277
assets
impairment
Amortization
of purchased         183           521              1,074         2,220   
intangible
assets
Total
operating            28,176        28,234           161,186       118,319 
costs and
expenses
                                                                       
Operating loss        (14,618 )       (2,508  )          (88,743 )       (33,727 )
                                                                       
Other income
(expense):
Interest              53              81                 291             384
income, net
Other income         (12     )      112              (203    )      (1,052  )
(expense), net
                                                                       
Loss before           (14,577 )       (2,315  )          (88,655 )       (34,395 )
income taxes
                                                                       
Income tax
(benefit)             335             1,089              611             (9,503  )
provision
                                                                    
Net loss           $  (14,912 )     $ (3,404  )       $  (89,266 )     $ (24,892 )
                                                                       
Per share
data:
                                                                       
Net loss per
share:
Basic and          $  (0.45   )     $ (0.11   )       $  (2.72   )     $ (0.78   )
diluted
                                                                       
Weighted
average shares
used in
computation of
net loss per
share:
Basic and            33,356        32,154           32,852        32,043  
diluted
                                                                                 
                                                                                 

NOVATEL WIRELESS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                                                             
                                                                     
                     Three Months Ended               Twelve Months Ended
                     December 31,                     December 31,
                     2012           2011              2012           2011
                     (Preliminary                     (Preliminary
                     and            (Unaudited)       and
                     unaudited)                       unaudited)
Cash flows from
operating
activities:
Net loss             $  (14,912 )   $ (3,404  )       $  (89,266 )   $ (24,892 )
Adjustments to
reconcile net
loss to
net cash
provided by
(used in)
operating
activities:
Depreciation and        2,590         4,086              12,337        17,868
amortization
Loss on goodwill
and purchased
intangible              (300    )     (237    )          49,521        3,277
assets
impairment
Impairment loss
on equipment and
software license        10            70                 100           203
intangible
assets
Provision for           400           (19     )          439           40
bad debts
Net impairment
loss on                 -             -                  39            346
marketable
securities
Inventory               1,180         113                2,843         689
provision
Share-based
compensation            2,091         1,926              7,500         5,983
expense
Non-cash income
tax expense             931           2,102              1,125         (9,185  )
(benefit)
Changes in
assets and
liabilities:
Accounts                (2,782  )     17,391             (6,242  )     26,437
receivable
Inventories             (3,669  )     6,756              420           122
Prepaid expenses        1             177                (1,237  )     3,661
and other assets
Accounts payable        4,741         (352    )          (10,367 )     (24,293 )
Accrued
expenses, income       2,632       (3,438  )         2,865       (1,787  )
taxes, and other
                                                                     
Net cash
provided by
(used in)              (7,087  )    25,171           (29,923 )    (1,531  )
operating
activities
                                                                     
Cash flows from
investing
activities:
Purchases of
property and            (514    )     (1,059  )          (4,535  )     (5,987  )
equipment
Purchases of
intangible              (104    )     (65     )          (104    )     (284    )
assets
Purchases of
marketable              (12,345 )     (15,626 )          (44,216 )     (36,992 )
securities
Marketable
securities             19,190      16,383           46,696      74,922  
maturities/sales
Net cash
provided by
(used in)              6,227       (367    )         (2,159  )    31,659  
investing
activities
Cash flows from
financing
activities:
Proceeds from
the issuance of
short-term debt,        9,000         -                  14,000        12,000
net of issuance
costs
Principal
repayments of           (9,000  )     -                  (14,000 )     (12,000 )
short-term debt
Principal
payments under          -             (28     )          (46     )     (109    )
capital lease
obligations
Proceeds from
stock option
exercises and
ESPP net of            583         421              1,166       (196    )
taxes paid on
vested
restricted stock
units
Net cash
provided by
(used in)               583           393                1,120         (305    )
financing
activities
Effect of
exchange rates         (20     )    (55     )         (63     )    (129    )
on cash and cash
equivalents
                                                                     
Net increase
(decrease) in           (297    )    25,142             (31,025 )     29,694
cash
Cash and cash
equivalents,           16,341      21,927           47,069      17,375  
beginning of
period
Cash and cash
equivalents, end     $  16,044    $ 47,069         $  16,044     $ 47,069  
of period
                                                                               
                                                                               

Novatel Wireless, Inc.
Preliminary Reconciliation of GAAP Net Loss to Non-GAAP Net Loss
Three Months and Twelve Months Ended December 31, 2012
(in thousands, except per share data)
(Unaudited)
                                                            
                                                                     
                     Three Months Ended             Twelve Months Ended
                     December 31, 2012              December 31, 2012
                                      Income                         Income
                     Net Income       (Loss)        Net Income       (Loss)
                     (Loss)           Per           (Loss)           Per
                                      Share,                         Share,
                                      Diluted                        Diluted
                                                                     
GAAP net loss        $  (14,912  )    $ (0.45 )       $ (89,266 )    $ (2.72 )
                                                                     
Adjustments:
Share-based
compensation            2,091           0.06            7,500          0.23
expense (a)
                                                                     
Acquisition
related                 267             0.01            2,697          0.08
charges (b)
                                                                     
Goodwill &
Intangibles             (300     )      (0.01 )         49,521         1.51
impairment (c)
                                                                     
Income tax
adjustments             297             0.01            429            0.01
(d)
                                                                     
Severance (e)          -             -             890          0.03  
Non-GAAP net         $  (12,557  )    $ (0.38 )       $ (28,229 )    $ (0.86 )
loss
                                                                     
(a) Adjustments reflect share-based compensation expense recorded under ASC
Topic 718. The adjustment in Q4 2012 includes $965k for employee stock
purchase plan cancellation charges.
                                                                     
(b) Adjustments reflect amortization of purchased intangibles.
                                                                     
(c) Adjustments reflect goodwill and purchased intangibles impairments
resulting from interim impairment analyses conducted during the 1st and 3rd
quarters of 2012.
                                                                     
(d) Adjustments for uncertain tax benefits and valuation provisions on
deferred tax assets.
                                                                     
(e) Adjustments reflect reduction in force costs.
                                                                     
See "Non -GAAP Financial Measures" for information regarding our use of
Non-GAAP financial measures.
                                                                     
                                                                     

Novatel Wireless, Inc.
Preliminary Reconciliation of GAAP Operating Costs and Expenses to Non-GAAP
Operating Costs and Expenses
Three Months Ended December 31, 2012
(in thousands)
(Unaudited)
                                                                    
                                                                          
                                                            Goodwill
                              Share-based    Purchased      and
                 GAAP         compensation   intangibles    purchased    Non-GAAP
                              expense (a)    amortization   intangibles
                                             (b)            impairments
                                                            (c)
                                                                          
Cost of net      $ 57,117    $    204       $     84       $  -        $ 56,829
revenues
                                                                          
Operating
costs and
expenses:
Research and       15,440          1,010           -           -            14,430
development
Sales and          6,246           336             -           -            5,910
marketing
General and        6,607           541             -           -            6,066
administrative
Goodwill and
intangible         (300   )        -               -           (300  )      -
assets
impairment
Amortization
of purchased      183           -              183        -         -
intangibles
Total
operating        $ 28,176        1,887          183        (300  )   $ 26,406
costs and
expenses
                                                                          
Total                         $    2,091     $     267      $  (300  )
                                                                          
                                                                          
(a) Adjustments reflect share-based compensation expense recorded under ASC Topic
718. The adjustment in Q4 2012 includes $965k for employee stock purchase plan
cancellation charges.
                                                                          
(b) Adjustments reflect amortization of purchased intangibles.
                                                                          
(c) Includes adjusted impairment charges for goodwill and purchased intangibles
                                                                          
See "Non -GAAP Financial Measures" for information regarding our use of Non-GAAP
financial measures.



Novatel Wireless, Inc.
Preliminary Reconciliation of GAAP Operating Costs and Expenses to Non-GAAP Operating Costs and
Expenses
Twelve Months Ended December 31, 2012
(in thousands)
(Unaudited)
                                                                               
                                                                                       
                                                             Goodwill
                               Share-based    Purchased      and
                   GAAP        compensation   intangibles    purchased     Severance   Non-GAAP
                               expense (a)    amortization   intangibles   (d)
                                              (b)            impairments
                                                             (c)
                                                                                       
Cost of net        $ 271,845   $    747       $    1,623     $   -         $   53      $ 269,422
revenues
                                                                                       
Operating
costs and
expenses:
Research and         60,422         3,042          -             -             555       56,825
development
Sales and            27,501         1,403          -             -             85        26,013
marketing
General and          22,668         2,308          -             -             197       20,163
administrative
Goodwill and
intangible           49,521         -              -             49,521        -         -
assets
impairment
Amortization
of purchased        1,074         -             1,074        -            -        -
intangibles
Total
operating          $ 161,186       6,753         1,074        49,521       837     $ 103,001
costs and
expenses
                                                                                       
Total                          $    7,500     $    2,697     $   49,521    $   890
                                                                                       
                                                                                       
(a) Adjustments reflect share-based compensation expense recorded under ASC Topic 718. Q4 2012
includes $965k for employee stock purchase plan cancellation charges.
                                                                                       
(b) Adjustments reflect amortization of purchased intangibles.
                                                                                       
(c) Adjustments reflect goodwill and purchased intangibles impairment resulting from interim
impairment analyses conducted during the 1st and 3rd quarters of 2012.
                                                                                       
(d) Includes reduction in force costs.
                                                                                       
See "Non -GAAP Financial Measures" for information regarding our use of Non-GAAP financial
measures.



Novatel Wireless, Inc.
Preliminary Reconciliation of GAAP Loss before Income Taxes to Adjusted EBITDA
Three and Twelve Months Ended December 31, 2012
(in thousands)
(Unaudited)
                                                     
                                  Three Months Ended      Twelve Months Ended
                                  December 31, 2012       December 31, 2012
                                                          
Loss before income taxes          $     (14,577    )      $    (88,655    )
Depreciation and                        2,590                  12,337
amortization
Goodwill & purchased                    (300       )           49,521
intangibles impairment
Share-based compensation                2,091                  7,500
expense
Severance                               -                      890
Other expense (income)                 (41        )          (88        )
Adjusted EBITDA                   $     (10,237    )      $    (18,495    )
                                                          
See "Non -GAAP Financial Measures" for information regarding our use of
Non-GAAP financial measures.



NOVATEL WIRELESS, INC.
Segment Reporting
Three and Twelve Months Ended December 31, 2012
(in thousands)
                                                             
                                                                   
                  Three Months Ended               Twelve Months Ended
                  December 31,                     December 31,
                  2012             2011            2012            2011
                  (Preliminary                     (Preliminary
                  and              (Unaudited)     and
                  unaudited)                       unaudited)
Net revenues by
reportable
segment:
Mobile
Computing         $  63,888        $ 99,838        $  312,508      $ 358,106
Products
M2M Products        6,787         9,956          31,780       44,756  
and Solutions
Total             $  70,675       $ 109,794      $  344,288     $ 402,862 
                                                                   
Operating
income (loss) :
Mobile
Computing         $  (11,223  )    $ 595           $  (22,924  )   $ (13,764 )
Products
M2M Products        (3,395   )     (3,103  )       (65,819  )    (19,963 )
and Solutions
Total             $  (14,618  )    $ (2,508  )     $  (88,743  )   $ (33,727 )
                                                                   
                                                                   
                                                   December 31,    December
                                                                   31,
                                                   2012            2011
                                                   (Preliminary
                                                   and
                                                   unaudited)
Identifiable
assets by
reportable
segment:
Mobile
Computing                                          $  141,045      $ 181,180
Products
M2M Products                                         20,486       67,999  
and Solutions
Total                                              $  161,531     $ 249,179 

Contact:

Investor contact:
The Blueshirt Group for Novatel Wireless
Chris DanneandMatthew Hunt
415-217-5865 or 415-489-2194
chris@blueshirtgroup.com
matt@blueshirtgroup.com
or
Media contact:
Charlotte Rubin, 858-812-3431
crubin@nvtl.com