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Executives

Julie Cunningham - VP of IR

Peter Leparulo - CEO

Ken Leddon - CFO

Analysts

Matthew Hoffman - Cowen and Company

Anthony Stoss - Craig-Hallum

Charles John - Piper Jaffray

Doug Ireland - JMP Securities

Tom Kucera - Avondale Partners

Anthony Stoss - Craig-Hallum

Novatel Wireless, Inc. (NVTL) Q1 2009 Earnings Call Transcript May 7, 2009 5:00 PM ET

Operator

Welcome to the Novatel Wireless first quarter conference call. (Operator Instructions).

I'd like to turn the conference over to Ms. Julie Cunningham, Please go ahead.

Julie Cunningham

Good afternoon, everyone. Thanks for joining us. The agenda for today's call is as follows; Peter Leparulo, our Chairman and CEO, will provide an overview of the quarter, and Ken Leddon, Chief Financial Officer, will review financial results.

As a reminder, this conference call is being broadcast on Thursday, May 7, 2009 over the phone and the Internet to all interested parties. The information shared on this call is effective as of today's date and will not be updated.

During this call, non-GAAP financial measures will be discussed. Reconciliations to the most recent comparable GAAP financial measures are included in our first quarter earnings release, which is available on the Investor Relations page of our website at www.novatelwireless.com. The audio replay of this call will be archived there.

Today's discussion may contain forward-looking statements. These forward-looking statements are not historical facts, but rather are based on the company's current expectations and beliefs. The company's actual results may differ materially. Please refer to our SEC filings for a detailed discussion of potential risks.

Now, I'd like to introduce Peter Leparulo, Chairman and CEO of Novatel Wireless.

Peter Leparulo

Thanks to all of you for joining us today. First quarter's revenues increased 8% sequentially to $70.4 million. Gross margins nearly doubled on a sequential basis, and we substantially improved our bottom line, reducing our non-GAAP and GAAP net loss to $0.04 and $0.08 per share, respectively.

We have also returned to positive EBITDA and free cash flow. While we continue to be impacted by the slowdown in the global economy, our results significantly improved on a sequential basis, and our outlook for next quarter is for continued improvement. Overall, I believe that we are executing well in a tough environment.

We are well into the leading edge of commercializing our strongest product cycle in history in all areas, including embedded, mobile Internet devices, end-to-end solutions, beginning with our MiFi product line, and our core USBs and PC ExpressCard products. Embedded and mobile Internet devices have led the way in commercialization and deployment.

Driving our performance in the first quarter was our embedded business, which accounted for over $41 million in revenues. The biggest contributor to this increase was sales to a key mobile content customer, which accounted for about 51% of our overall revenues. We were very pleased with the ramp for this customer and expect them to again be an important contributor in the second quarter, although, we don't have visibility beyond that at this time.

Our focus on developing mobile content partners over the past year is now coming to fruition, as our new product introductions, which will begin to have a positive impact in coming quarters.

As expected, USB product sales declined in the first quarter, most notably in Europe. A slowdown in demand tied to the global economy, along with increased competition, were major factors. We also believe that certain operators are waiting for the technology shift to HSPA+, which is happening sooner than expected.

We believe we are at the forefront of the shift to HSPA+ in both North America and Europe, having already demonstrated the technology and introduced our HSPA+ Ovation, MC996D USB modem. We believe that this technology shift is the next opportunity to capture the USB market share in the EMEA region.

Now, I'd like to briefly return to our key strategic focus areas for 2009, as we move forward to becoming an end-to-end provider of mobile broadband solutions.

First, we are in the midst of transforming our device product line to the emerging phase of the technology lifecycle, and we'll do this through innovative new product offerings and creating a brand install base and distribution channels around those new product offerings.

The initial spearhead of this effort is our MiFi product line, the industry's first high-speed intelligent mobile hotspot. This is a product that David Pogue of The New York Times calls remarkable for its tiny size, its sleek good looks, its 30-foot range, and the fact that it's cordless and rechargeable. Mr. Pogue goes on to say that, "It's always exciting when someone invents a new product category, and this one is a jaw-dropper."

We developed MiFi on both EVDO and HSPA standards and have already begun shipments. We expect MiFi to launch with Verizon and Telefonica Spain as announced today, as well as a third Tier 1 carrier in the second quarter. We also expect MiFi to ramp to volume revenues in the second half of the year.

We expect these carriers to launch MiFi through multiple channels, including direct sales, major retail outlets, and enterprise channels, and to couple their launches with major awareness and promotional campaigns. It's interesting to note that Verizon today announced a $15 DayPass, the first evidence we've seen of session-based pricing.

We also expect the initial launches to focus on MiFi's ease of use, flexible secure access, and universal connectivity of MiFi devices, which allow simultaneous use by up to five individuals, as well as simultaneous connectivity to multiple devices. These include cameras, laptops, music players, mobile Internet devices, and gaming consoles.

Part of our efforts in this initiative has been to create a brand and an install base. We are working with operators on broadcast marketing campaigns, which we believe will begin at launch. In addition, the MiFi product line has received enormous industry recognition for innovation, functionality, and technological importance, including Gear of the Year by PCWorld, CTIA E-Tech Award, and the European Plus X Award. This is one more example of how we have been successful to date with creating interest, awareness and branding around MiFi.

Our second initiative is to develop an open platform ecosystem for applications and services delivery. As we mentioned last quarter, we expect to develop these applications internally with technology partners and in collaboration with third-party developers. The first example of these efforts is with Alcatel-Lucent, to integrate its Nonstop Laptop Guardian platform on the HSPA version of MiFi.

NLG is a security application that sits on Novatel's onboard applications processor platform and allows enterprise IT managers to track, troubleshoot and manage mobile hotspot laptops 24/7, even when they are powered off or offline. We're at the final stages of this integration effort and will begin operator certifications with Alcatel-Lucent in the third quarter of this year.

In addition, with the launch of the MiFi platform, we will launch the first phase of our content delivery portal; a native application enabled by the intelligent server onboard the MiFi device. This portal will be a mash-up Web application, where data and functionality from multiple sources are integrated into a single application that delivers customized information to the end user.

Ultimately, this service will provide personalized content, which provides us an opportunity to generate new revenue streams by selling mobile content to our carrier customers. We believe this is the beginning of a complete and dynamic end-to-end user experience. Other initiatives in this area are well underway.

Our third strategic focus for the year is on our core business, where we are rolling out new products that we believe lead technology transitions for both the coming technology upgrade cycles and for product cost reductions. We expect USB sales to increase in Q2 as we benefit from carrier awareness campaigns and in-store promotions.

By the end of Q2, we will have rolled out several new products, including the Ovation 935D HSPA USB modem, and three next-generation embedded modules. The E760D embedded module was commercially launched in Q2 by our largest PC OEM customer in 10 laptop and network platforms. In addition, we have design wins and have begun shipping our worldwide Gobi-based embedded module for enterprise platforms. We have also achieved HSPA+ design wins as operators migrate to this next generation technology.

While the market remains highly challenging and competitive, we believe that our core product portfolio is now completely refreshed and we're well positioned for future technology transitions.

Finally, we're also very focused on improving our execution in the current macroeconomic situation. Gross margins improved substantially in Q1 to our highest level in three quarters, and we continue to improve our bottom line results to return to profitability. We accomplished these goals, while making substantial investments in R&D to support our growing product roadmap.

Longer term, we expect to lower operating expenses as a percentage of sales, but we must strike a balance between spending and building this competitive advantage for the future. While we are cautious, given current global market conditions, we are confident that we have put the wheels in motion to significantly improve our long-term position.

Now, I'd like to turn the call over to Ken, who is going to provide some more details on the financials.

Ken Leddon

Thank you, Peter. I will begin with a financial overview of the first quarter and then we'll provide our second quarter outlook. Unless specifically noted, all comments about our financial results exclude the impact of share-based compensation expense under FAS 123(NYSE:R). Share-based compensation expense net of taxes was approximately $1.3 million in the first quarter of 2009. Let's begin with the first quarter results.

Revenues for the first quarter were $70.4 million, a decrease from the $87.8 million reported in a prior year period, and an 8% increase above last quarter.

Revenue by product category is as follows; USB products accounted for $23.9 million, or 34%. Embedded products were $41 million, or 58%. PC and ExpressCards were $5.1 million, or 7% of revenues. Revenues by technology; EVDO products were 86%, and HSPA products were 13% of revenues.

From a geographic perspective, domestic revenue accounted for approximately 91% of total revenues, and international revenue was 9%. During the first quarter we shipped to nine operators and nine OEMs in 20 countries. Leading customers in the quarter included, Dell Distribution, Dell, Foxconn, Sprint, Telefonica and Verizon.

Gross margins were 23.1%, above our guidance range of 21% to 22%, as we benefited from a product mix shift. We expect to benefit from increasing revenues from new products in upcoming quarters, but also expect it to continue to be a highly competitive market.

First quarter operating expenses were 26.5% of revenues, or $18.6 million, with the increase primarily in R&D, related to new product development. Total operating expenses in absolute dollars were up 1% compared to the prior year period. R&D expenses totaled $10.4 million, or 14.7% of revenues. Sales and marketing was $4.2 million, or 6% of revenues. And G&A was $4.1 million, or 5.8% of revenues.

Including the share-based compensation charges of $1.3 million net of taxes, we reported a GAAP net loss for the first quarter of approximately $2.5 million, or $0.08 per share. On a non-GAAP basis, excluding the non-cash compensation charges, we reported a net loss of $1.1 million, or $0.04 per share.

GAAP cash flow from operations was a use of $1.9 million that was driven by an increase in accounts receivables that reflected the sequential increase in revenue and a slight increase in DSO. EBITDA totaled approximately $1.3 million and free cash flow was approximately $700,000.

Now, I will review some balance sheet highlights. At March 31, 2009, we had approximately $133 million, or $4.38 per share in cash and investments with no debt. AR was up from last quarter at $57.4 million due to the linearity of the quarter and DSO was at 64 days. We continue to believe that with the strength of our customer base, the quality of our receivables is excellent. Inventory increased sequentially by $4 million in the first quarter to $27.2 million, which equates to about 8 turns per year.

Turning to second quarter 2009 guidance; we remain cautious given the current global economic concerns. At the same time, we believe our visibility has substantially improved for the second quarter based on current order flow. We are pleased with the ramp of our OEM products and expect these levels to continue in the second quarter.

In addition, we have several new product introductions that should start to contribute meaningful revenues in Q2 and ramp in the second half of the year. Given these factors, our guidance for the second quarter of 2009 is as follows; we expect revenues of approximately $75 million to $80 million. We expect gross margin in the range of 23% to 25%, depending on product mix. And we expect operating expenses to decrease slightly as a percentage of revenues.

Based on our current view, we expect GAAP results in the range of $0.04 to $0.01 loss per share, and non-GAAP results to be in the range of breakeven to $0.03 net income per diluted share. These estimates are based on approximately 30.7 million shares outstanding. We estimate that EBITDA will be in the range of $2 million to $4 million, and free cash flow will be about $1 million to $3 million.

Now, I will turn the call back to Peter.

Peter Leparulo

We are pleased to have demonstrated significant progress during the first quarter and we continue to focus on execution. Our overall product portfolio has never been better, and we look forward to the commercial launch of MiFi with multiple Tier 1 carriers over the coming months.

Now, Ken and I will answer your questions. Operator, please open it up for Q&A.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from the line of Matthew Hoffman with Cowen and Company. Please go ahead.

Matthew Hoffman - Cowen and Company

Hey, good afternoon and congratulations on the launch of the MiFi today. So, let's talk about the competitive environment for MiFi. You're getting a lot of good press, but the competitive environment, when do you see it heating up? I see that Sierra is talking about maybe the Helix line. Can you talk about the competitive advantages right now you have with MiFi beyond time to market over some of the products you see coming to compete in this niche maybe by the fourth quarter?

Peter Leparulo

Sure. That's a good question, Matt. There's not a science to this, but we think based on the hardware side of MiFi, just as a hardware connectivity device, that we have probably approximately a six-month lead. And there are barriers to entry on all sides of it. As you probably know, we've been working on the MiFi product line across all technologies and bandwidths that address all regions for many months, nine to 12 months. And it's not a hardware solution. It's an entire ecosystem that we're putting together. What we anticipate happening despite what the competitor environment might be on the hardware side is to get an install base of users and then deploy the applications in software to make it even more defensible and to advance our lead by the time anybody else catches up.

On the IP side, we shot quite a few IP problems simply in the development of the MiFi. We've also put patent applications on file, which we would look to use in a defensible way when we see any of them crossed. So, with all that put together, we think we've got a very good competitive position. We think that we'll deploy through many operators, which will create an install base, and we also believe as we develop this ecosystem above others that we will advance that position going forward.

Matthew Hoffman - Cowen and Company

Okay. You've talked about three operators, two in the US and Telefonica overseas. What are the barriers right now to ramping beyond that footprint? You've got two CDMA guys and one HSPA. What does it take for Novatel to ramp, say, in the third quarter substantially beyond those operators? Is there a volume? Is there a technical issue? What does it take to grow that beyond those three?

Peter Leparulo

Sure. That's a pretty robust question. The technology is fairly complicated on this. We've been working on this for quite a while, so in terms of deployment of the product, we're pretty comfortable with where we sit in order to be able to scale with multiple and simultaneous deployments. I'll tell you, going through the certification on this is a fairly complicated process, much more layered than our core products, and the core products of any competitors that we see on the hardware side coming onboard. So, we think that actually will create a barrier to entry.

There is also an optimization, because this product line is very, very flexible. As I tried to suggest in our prepared statements, there are many, many devices for connectivity-only for this product, which require optimization. And the operators really all have very different plans tapping into the flexibility of this device and want to put it on different channels, which create technology issues that need to be solved, as well as go-to-market plans, which make those operators development partners of ours as we bring those to market. So, all of those we believe put up barriers to the deployment with multiple operators.

On the build side, in this environment we managed our inventory fairly carefully in terms of MiFi builds, really benchmarking it to the orders that we have. So, that might migrate over into Q3 a little bit. The totality of that is we're pretty comfortable that we could ramp with multiple carriers simultaneously over the next couple of quarters. We've certainly been preparing to do that.

Matthew Hoffman - Cowen and Company

A couple of questions for Ken here, just housekeepers, really. The first one, Ken, can you go over the splits again? I didn't catch all of them, USB versus embedded and the PC data card?

Ken Leddon

Sure. In the core business, the ExpressCards and PC Cards, Matt, were about $5 million, or 7.3%. The embedded space was $41 million, or 58%. And then the Ovation products were about $24 million, or 34%.

Matthew Hoffman - Cowen and Company

Last question from me. As you look out to next quarter, you gave us nice top line guidance. Talk about the cash flow. Obviously (inaudible), was that late quarter business closing or was that a reflection of a bit of a challenge in actually collecting on the core business?

Ken Leddon

No, it's definitely not a challenge on collecting. Our collections are in good shape. We don't anticipate any significant collection problems at this point. It was really due to linearity of the quarter, the cycles of billing and collections. As you might have noticed, in Q4 we were down quite low, in the $40 million range in our AR, and then we billed a lot in the second half of the quarter that ended up in our balance sheet as AR, and we had a slight inventory build as we prepared to make shipments into Q2 of some new product.

Operator

And our next question comes from the line of Anthony Stoss with Craig-Hallum. Please go ahead.

Anthony Stoss - Craig-Hallum

Hi, guys. A couple of questions. Peter, if you won't mind expanding on the MiFi product advertising plans. What are you hearing from the carriers? How aggressive do you think they'll be? How quickly out of the gates? Will they do so without apps being launched? And then I have a couple of follow-ups for Ken.

Peter Leparulo

In terms of the advertising plans, we're pretty pleased with what we've seen. We think that the operators are going to be aggressive on this in terms of their promotional efforts. That means in terms of awareness campaigns, we expect them to go into all media, Internet as well as print, as well as broadcast media behind this. We also expect that they will do this simultaneous with their launch, even ahead of deployment of native applications that have independent functionality on the devices.

Anthony Stoss - Craig-Hallum

Okay. When do you expect those third-party apps to be certified, presumably Verizon and the other carriers?

Peter Leparulo

That will happen over time and we're going to be doing this in an incremental way over the second half of the year.

Anthony Stoss - Craig-Hallum

Okay. Ken, if you won't mind talking about operating expense, or even Peter, kind of just directionally back half of the year are we going to flatten out a little bit, or you still expect that to grow?

Ken Leddon

Operating expenses I think are going to be relatively flat. We will continue to invest maybe incrementally in absolute dollars in R&D in the near future as we launch additional products. We believe as the revenues ramp up, the R&D and operating expenses as a percent of revenue will drift downward again closer to our historical levels.

Anthony Stoss - Craig-Hallum

Okay. What's your total headcount right now?

Ken Leddon

It's about 320.

Anthony Stoss - Craig-Hallum

And one last question for you guys. Your biggest customer in the quarter, do you expect them to be up in Q2?

Ken Leddon

We expect our largest retail customer in the quarter to be a significant contributor again in 2Q, but beyond that we're not giving particulars on the guidance.

Operator

And our next question comes from the line of Charles John with Piper Jaffray. Please go ahead.

Charles John - Piper Jaffray

Congratulations on a strong quarter. Just a quick follow-on on one of the questions; previously, you have said you have only about a six-month lead, I am just surprised with that number. If you have a competitor coming into the space, wouldn't they need to be doing some kind of development and testing within the carriers and actually create the product? So, in terms of your time to market advantage, I was surprised at the six-month number you threw out there.

Peter Leparulo

Charles, like I said, this is not a science, and in some cases the paranoids survive. We look at this a lot. And six months is just something that we benchmarked internally, to make sure we keep the momentum going internally at Novatel. So, is that a number that we put together by any scientific method? No.

We are certainly prepared and have anticipated that there might be down the line a competition on MiFi as a hardware device. And what we've done is, we have queued ourselves up to deploy this and to create an install base with Tier 1 operators as soon as possible and get that install base, and then have even more of the barriers to entry that I mentioned sequentially start to get erected.

Charles John - Piper Jaffray

Okay. And then just talking about the product itself, any discussion with carriers? How are they thinking about this product and also maybe six months or a year down the line, if the pricing gets attractive, internally within the company, how are you all thinking about this product in cannibalization with some of your existing product lines? How are you approaching that issue?

Peter Leparulo

Sure. The operator really thinks about this product in very different ways, which we think is really a testament to the flexibility of this product. They're looking at it, number one, as a connectivity device, which is fairly transformative in the way that people will connect through laptops and other devices to either their corporate network or the e-mail or the Internet.

So, simply as a connectivity device, they are looking at different usage patterns. You see in the announcements from Telefonica, as well as from Verizon, that without a surcharge, up to five users will be allowed on this device. So, as a connectivity device, it will supplement the way the people currently attach to the Internet.

They're also looking at it as a software platform. The MiFi device, in some versions of it, has an onboard processor and it also has storage capabilities. So, they're looking within that context on those devices as additional revenue streams for themselves from both vertical markets and applications and functionality for end users that they've not been able to get to before.

In terms of the cannibalization of USBs, it's being marketed and promoted really for a different end-user experience. It's being marketed and positioned in a different market, but it's still early. We'll see how the consumer in the enterprise uses this and what use cases start to predominate, but right now we're pretty comfortable that this is incremental to our core business.

Charles John - Piper Jaffray

Thanks for that color. From the last quarter you talked about increase in the OpEx to support some of the R&D and the sales and marketing. Could you maybe give some more color on just your commitment to this launch by the carriers? Does it involve any kind of training at the store up level, or do you have any of the related expenses that we should start seeing in the next couple of quarters, if you have greater than expected ramp in unit volume for this new product?

Peter Leparulo

I think, overall, I'd say that we're, certainly, very disciplined in how we scale, as hopefully you can see operationally, on a historical basis. There is training that we'll do in conjunction with the operators. There is also some field support that we'll do with the operators. And we do have, what we believe will be, launches and certifications that we'll have to apply resources to. I'll tell you, we have already put most of that inside the company, that functionality. So, we expect OpEx to really stay, as Ken suggested, to calibrate to revenue and be in conformity with revenue and really not jump up.

Charles John - Piper Jaffray

Ken, maybe just one for you; have you all reset company targets for the gross margin and operating margin longer term with this new product cycle, or if you can just refresh us there on those two metrics?

Ken Leddon

Yes, that's a good question and there are a lot of variables here that we're all wrestling with. We definitely are launching some new products that usually have a higher margin than legacy products, and then there's the issue of mix and the phase in and phase out of products.

Secondly, there's the incremental or the additional incremental cost due to the time level of launch activity, but I think in the longer term we believe that margins could drift up a bit more as our total portfolio is a higher mix, or richer mix of new products later in the year, along with the fact that as revenues ramp, we believe, with the new products that the operating expenses as a percent of sales will drift downward.

So, again, we don't expect any big surprises for anybody. We see just a general small drift upward as we launch these products. And on the gross margin, again, I think the product mix with newer products will certainly make itself evident. So, we guided 23 or 25 this quarter. We can see it drifting up beyond that in subsequent quarters a little bit.

Operator

And our next question comes from the line of Samuel Wilson with JMP Securities.

Doug Ireland - JMP Securities

This is Doug Ireland for Sam. I was wondering if you could talk a little bit about your plans for third-party applications in terms of developer outreach. From your description in using your install base of MiFis as a barrier to entry with the applications, I would think you would be pursuing some form of land grab with low pricing and really trying to push these out so that you could get the developers onboard. Do you have anything to talk about that?

Peter Leparulo

Sure. In terms of third-party applications, we expect to roll those out beginning in the second half of 2009. We've announced Lucent. We've also talked about the portal and landing page applications and somewhat native application tied to that, like (inaudible) and e-mail sync. Beyond that, the goal is to have an install base, and MiFi as a connectivity device also has many, many uses cases associated with it. So, in terms of a land grab, we think we're first to market with this and we also have done quite a bit of leg work on the application side to put the barrier to entry up into the life and the generation of new revenue streams. So, in that environment and given the enthusiasm that we believe the operators have received with a fairly differentiated product in the market, we're not really tempted to do a land grab by using pricing as a tool to do that. We think the device on its own, as we launch it, will get an install base.

Doug Ireland - JMP Securities

Okay. In terms of the developer outreach, are you thinking of going more broad, like the BlackBerry app store or the Apple app store? It sounds like so far it's very, very specific.

Peter Leparulo

It has been very specific. Really, the reason for that is, we have targeted places where we believe with both technology partners as well as the sales channels that we cultivated that we'll get some traction on that. It is really the leading edge of a third-party developer program, which we expect to deploy in the fairly near future. So, you're right, we intend to go that way with somewhat of an applications lounge environment and have a third-party developer program that we'll support. We have also been working on that, and that is also baked into the operating model that we've discussed.

Operator

(Operator Instructions) And our next question comes from the line of Tom Kucera with Avondale Partners. Please go ahead.

Tom Kucera - Avondale Partners

Good afternoon. Tom Kucera here for John Bright. Just a couple of questions; first, you are talking about orders from a content delivery customer, is there anything you can say about, how that customer is managing inventory, or if there is really some lumpiness in the sales, or whether you're buying your modules on more of an as-needed basis?

Peter Leparulo

Sure. We've been doing this for about two quarters now, so the order flow has moved out of, what I would call lumpy, although, some order flow on that is within and without lead times on it. But we've also acclimated to that, so I think relative to the overflow, we've managed our supply chain accordingly and can fulfill what other demand that we're reasonably seeing.

Tom Kucera - Avondale Partners

Okay. And did you give a percentage of sales from that customer for the quarter?

Peter Leparulo

Let me try to get you a number. 51%.

Tom Kucera - Avondale Partners

Okay. Then also on MiFi, obviously, a completely different kind of product here, and I'm wondering if you have anything. Understanding, I think you are targeting enterprises to a good degree. In terms of indications of interest, whether qualitative or quantitative for maybe some of your larger enterprise customers, is there anything tangible really you can point to there to say, hey, there are end users that are interested in this and that are looking to buy it?

Peter Leparulo

Sure. On MiFi, we are distributing this principally through our operator partners and development partners on it. Those operators have plans in turn to go into the enterprise space with this device, both as a connectivity solution as well as a software platform in various vertical markets.

Tom Kucera - Avondale Partners

Okay. I guess nothing through the carriers I guess tangibly you can point. I guess really they haven't done that legwork yet at this point, that's more post-launch?

Peter Leparulo

Based on the orders that we have on hand, we have seen pre-selling efforts by the operators, but if you give us another quarter for it to get into the hands of end users, I think we'd have more reliable information on that front.

Operator

And our next question is a follow-up from the line of Anthony Stoss from Craig-Hallum. Please go ahead.

Anthony Stoss - Craig-Hallum

Once again, if you can share a little bit more detail on your operating expense side, Peter or Ken, particularly if you could maybe give us more information on the amount that you could attribute to, let's say the MiFi product launch in the quarter or for Q2 or any other additional product launches versus headcount additions, et cetera?

Peter Leparulo

Sure. Breaking down OpEx at eye level, Tony is, we don't have that in front of us. We can try to get some of that, but I'm not sure we have anything that refined right now.

Operator

And I show no further questions in the queue. I'd like to give the call back over to management for any closing remarks.

Peter Leparulo

Thank you everybody. We look forward to updating you on the progress, as we move forward through the quarter and beyond, and we'll talk then. Operator, I think you can end the call right now.

Operator

Ladies and gentlemen, this concludes the Novatel Wireless first quarter results conference call. Thank you for your participation and you may now disconnect.

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