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Inseego Reports Third Quarter 2021 Financial Results

5G revenue growth of 260% year-over-year

Expanded relationship with T-Mobile for 5G fixed wireless access

Strong 5G enterprise pipeline growth across multiple regions

Inseego Corp. (Nasdaq: INSG) (the “Company”), a leader in 5G and intelligent IoT device-to-cloud solutions, today reported its results for the third quarter ended September 30, 2021. The Company reported third quarter net revenue of $66.2 million, GAAP operating loss of $10.0 million, GAAP net loss of $9.0 million, GAAP net loss of $0.09 per share, negative adjusted EBITDA of $0.8 million, and non-GAAP net loss of $0.08 per share. Cash and cash equivalents at quarter end, including restricted cash, was $61.6 million.

“We had a strong third quarter driven by our expanded relationship with T-Mobile for our 5G fixed wireless access solution and continued global momentum in our 5G mobile broadband hotspots,” said Dan Mondor, chairman and CEO of Inseego Corp. “Our enterprise pipeline grew substantially, and we continue to expand our channel footprint in multiple geographies to capitalize on those opportunities. Our combined 5G and cloud solutions contributed greater than 60% of total revenue in the quarter, a 124% increase from a year ago. This spectacular growth is a direct result of our strategy to invest in next-generation products. Recent success with large mobile network operators in North America, Europe, the Middle East, and Asia-Pacific regions underlines our continued 5G momentum across our target geographic segments.”

Corporate Highlights

  • Q3 revenue of $66.2 million, up 0.8% sequentially; 9% sequentially on a pro forma basis after the divestiture of Ctrack South Africa
  • Cash balance of $61.6 million, including restricted cash
  • Robert Barbieri appointed Chief Financial Officer

Business Highlights

  • 5G revenue up 260% year-over-year
  • Cloud software revenue up 25% year-over-year
  • Began volume shipments of the Inseego Wavemaker™ FX2000 5G CPE to support launch by T-Mobile for Business
  • New 5G FWA launch with Telstra in Australia in the fourth quarter
  • New 5G mobile broadband launches with Optus Enterprise in Australia and Sunrise UPC in Switzerland
  • Continued 5G pipeline growth in enterprise markets
  • Ritesh Mukherjee appointed SVP, Enterprise Networking Solutions

“Pro forma revenue was up a robust 9% sequentially, driven predominantly by accelerating demand for our 5G and cloud solutions portfolio. Looking ahead, our global supply chain, despite the current environment, is a source of competitive advantage. I believe the company is poised for another quarter of sequential growth,” said Bob Barbieri, CFO of Inseego. “We are confident in our ability to achieve approximately 25% revenue growth in 2022 pro forma after the sale of our Ctrack South Africa business. I look forward to working closely with our leadership team as we continue to execute on our strategic and financial priorities to drive shareholder value.”

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:

An audio replay of the conference call will be available beginning one hour after the call through November 17, 2021. To hear the replay, parties in the United States may call 1-877-344-7529 and enter access code 10159503 followed by the # key. International parties may call 1-412-317-0088. In addition, the Inseego Corp. press release will be accessible from the Company's website before the conference call begins.

About Inseego Corp.

Inseego Corp. (Nasdaq: INSG) is an industry leader in smart device-to-cloud solutions that extend the 5G network edge, enabling broader 5G coverage, multi-gigabit data speeds, low latency and strong security to deliver highly reliable internet access. Our innovative mobile broadband, fixed wireless access (FWA) solutions, and software platform incorporate the most advanced technologies (including 5G, 4G LTE, Wi-Fi 6 and others) into a wide range of products that provide robust connectivity indoors, outdoors and in the harshest industrial environments. Designed and developed in the USA, Inseego products and SaaS solutions build on the company’s patented technologies to provide the highest quality wireless connectivity for service providers, enterprises, and government entities worldwide. www.inseego.com #Putting5GtoWork

©2021. Inseego Corp. All rights reserved. The Inseego name and logo, MiFi and Inseego Wavemaker are registered trademarks and trademarks of Inseego Corp. Other Company, product or service names mentioned herein are the trademarks of their respective owners.

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 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 asset management software and services; (2) the growth of wireless wide-area networking and asset 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) the impact that new or adjusted tariffs may have on the cost of components or our products, and our ability to sell products internationally; (7) the impact of fluctuations of foreign currency exchange rates; (8) the impact of geopolitical instability and supply chain challenges on our ability to source components and manufacture our products; (9) unexpected liabilities or expenses; (10) the Company’s ability to introduce new products and services in a timely manner, including the ability to develop and launch 5G products at the speed and functionality required by our customers; (11) litigation, regulatory and IP developments related to our products or components of our products; (12) dependence on a small number of customers for a significant portion of the Company’s revenues; (13) the Company’s ability to raise additional financing when the Company requires capital for operations or to satisfy corporate obligations; (14) 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 implementations; (15) the global semiconductor shortage and any related price increases or supply chain disruptions, and (16) the potential impact of COVID-19 on the business.

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. Adjusted EBITDA, non-GAAP net loss, non-GAAP net loss per share and non-GAAP operating costs and expenses exclude 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, loss on debt conversion and extinguishment relating to convertible senior notes, and fair value adjustments on derivative instruments. Adjusted EBITDA also excludes interest, taxes, depreciation and amortization (unrelated to acquisitions, the convertible senior notes), fair value adjustment on derivative, gain on sale of Ctrack South Africa, non-recurring costs, and other.

Adjusted EBITDA, non-GAAP net loss, non-GAAP net loss per share and non-GAAP operating costs and expenses 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 these non-GAAP financial measures 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 financial measures, 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 these non-GAAP financial measures 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.

INSEEGO CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended

September 30,

Nine Months Ended

September 30,

 

2021

2020

2021

2020

Net revenues:

 

 

 

 

IoT & Mobile Solutions

$

56,975

 

$

77,342

 

$

151,770

 

$

189,071

 

Enterprise SaaS Solutions

 

9,242

 

 

12,898

 

 

37,737

 

 

38,698

 

Total net revenues

 

66,217

 

 

90,240

 

 

189,507

 

 

227,769

 

Cost of net revenues:

 

 

 

 

IoT & Mobile Solutions

 

43,595

 

 

60,135

 

 

116,777

 

 

148,414

 

Enterprise SaaS Solutions

 

3,679

 

 

4,935

 

 

14,965

 

 

14,958

 

Total cost of net revenues

 

47,274

 

 

65,070

 

 

131,742

 

 

163,372

 

Gross profit

 

18,943

 

 

25,170

 

 

57,765

 

 

64,397

 

Operating costs and expenses:

 

 

 

 

Research and development

 

12,626

 

 

10,684

 

 

38,954

 

 

29,448

 

Sales and marketing

 

9,172

 

 

8,446

 

 

29,997

 

 

25,849

 

General and administrative

 

6,599

 

 

8,699

 

 

22,657

 

 

23,257

 

Amortization of purchased intangible assets

 

519

 

 

779

 

 

1,649

 

 

2,358

 

Impairment of capitalized software

 

 

 

 

 

1,197

 

 

 

Total operating costs and expenses

 

28,916

 

 

28,608

 

 

94,454

 

 

80,912

 

Operating loss

 

(9,973

)

 

(3,438

)

 

(36,689

)

 

(16,515

)

Other income (expense):

 

 

 

 

Gain on sale of Ctrack South Africa

 

5,262

 

 

 

 

5,262

 

 

 

Loss on debt conversion and extinguishment, net

 

 

 

(1,180

)

 

(432

)

 

(76,354

)

Interest expense, net

 

(1,655

)

 

(1,657

)

 

(5,178

)

 

(8,197

)

Other income (expense), net

 

(828

)

 

1,053

 

 

291

 

 

2,818

 

Loss before income taxes

 

(7,194

)

 

(5,222

)

 

(36,746

)

 

(98,248

)

Income tax provision (benefit)

 

(4

)

 

217

 

 

445

 

 

193

 

Net loss

 

(7,190

)

 

(5,439

)

 

(37,191

)

 

(98,441

)

Less: Net income attributable to noncontrolling interests

 

 

 

(3

)

 

(214

)

 

(29

)

Net loss attributable to Inseego Corp.

 

(7,190

)

 

(5,442

)

 

(37,405

)

 

(98,470

)

Series E preferred stock dividends and deemed dividends from the preferred stock redemption

 

(1,843

)

 

(829

)

 

(3,596

)

 

(2,056

)

Net loss attributable to common stockholders

$

(9,033

)

$

(6,271

)

$

(41,001

)

$

(100,526

)

Per share data:

 

 

 

 

Net loss per common share:

 

 

 

 

Basic and diluted

$

(0.09

)

$

(0.06

)

$

(0.40

)

$

(1.06

)

Weighted-average shares used in computation of net loss per common share:

 

 

 

 

Basic and diluted

 

103,430,083

 

 

98,016,798

 

 

102,586,121

 

 

95,136,713

 

INSEEGO CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

September 30,

2021

December 31,

2020

 

 

 

ASSETS

 

 

Current assets:

 

 

Cash and cash equivalents

$

58,114

 

$

40,015

 

Restricted cash

 

3,495

 

 

 

Accounts receivable, net

 

23,065

 

 

29,940

 

Inventories

 

33,701

 

 

33,952

 

Prepaid expenses and other

 

11,666

 

 

10,201

 

Total current assets

 

130,041

 

 

114,108

 

Property, plant and equipment, net

 

8,705

 

 

13,699

 

Rental assets, net

 

4,487

 

 

6,109

 

Intangible assets, net

 

47,710

 

 

51,487

 

Goodwill

 

21,196

 

 

32,511

 

Right-of-use assets, net

 

8,010

 

 

9,092

 

Other assets

 

380

 

 

388

 

Total assets

$

220,529

 

$

227,394

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

Current liabilities:

 

 

Accounts payable

$

44,451

 

$

52,339

 

Accrued expenses and other current liabilities

 

24,403

 

 

23,373

 

Total current liabilities

 

68,854

 

 

75,712

 

Long-term liabilities:

 

 

2025 Notes, net

 

157,879

 

 

165,147

 

Deferred tax liabilities, net

 

1,042

 

 

4,505

 

Other long-term liabilities

 

8,086

 

 

9,929

 

Total liabilities

 

235,861

 

 

255,293

 

Commitments and Contingencies

 

 

Stockholders’ deficit:

 

 

Preferred stock

 

 

 

 

Common stock

 

105

 

 

99

 

Additional paid-in capital

 

766,736

 

 

711,487

 

Accumulated other comprehensive loss

 

(7,242

)

 

(6,972

)

Accumulated deficit

 

(774,931

)

 

(732,422

)

Total stockholders’ deficit attributable to Inseego Corp.

 

(15,332

)

 

(27,808

)

Noncontrolling interests

 

 

 

(91

)

Total stockholders’ deficit

 

(15,332

)

 

(27,899

)

Total liabilities and stockholders’ deficit

$

220,529

 

$

227,394

 

INSEEGO CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Three Months Ended

September 30,

Nine Months Ended

September 30,

 

2021

2020

2021

2020

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

Net loss

$

(7,190

)

$

(5,439

)

$

(37,191

)

$

(98,441

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

Depreciation and amortization

 

6,080

 

 

6,256

 

 

19,131

 

 

15,948

 

Provision for bad debts, net of recoveries

 

80

 

 

166

 

 

346

 

 

240

 

Provision for excess and obsolete inventory

 

91

 

 

250

 

 

587

 

 

430

 

Share-based compensation expense

 

3,062

 

 

2,207

 

 

14,467

 

 

8,188

 

Amortization of debt discount and debt issuance costs

 

371

 

 

387

 

 

1,117

 

 

3,632

 

Fair value adjustment on derivative instrument

 

(1,612

)

 

(546

)

 

(3,435

)

 

(1,372

)

Impairment of capitalized software

 

 

 

 

 

1,197

 

 

 

Gain on sale of Ctrack South Africa

 

(5,262

)

 

 

 

(5,262

)

 

 

Loss on debt conversion and extinguishment, net

 

 

 

1,180

 

 

432

 

 

76,354

 

Deferred income taxes

 

137

 

 

100

 

 

175

 

 

110

 

Other

 

19

 

 

(108

)

 

572

 

 

50

 

Changes in assets and liabilities:

 

 

 

 

Accounts receivable

 

(3,649

)

 

2,433

 

 

2,834

 

 

(19,065

)

Inventories

 

(7,055

)

 

(4,803

)

 

(7,889

)

 

(2,078

)

Prepaid expenses and other assets

 

271

 

 

1,380

 

 

1,429

 

 

(3,918

)

Accounts payable

 

8,809

 

 

2,836

 

 

(7,206

)

 

25,170

 

Accrued expenses, income taxes, and other

 

3,121

 

 

5,751

 

 

3,939

 

 

11,464

 

Net cash (used in) provided by operating activities

 

(2,727

)

 

12,050

 

 

(14,757

)

 

16,712

 

Cash flows from investing activities:

 

 

 

 

Acquisition of noncontrolling interest

 

 

 

 

 

(116

)

 

 

Purchases of property, plant and equipment

 

(1,844

)

 

(2,253

)

 

(4,299

)

 

(5,084

)

Proceeds from the sale of property, plant and equipment

 

637

 

 

92

 

 

1,143

 

 

327

 

Proceeds from sale of Ctrack South Africa, net of sold cash1

 

31,526

 

 

 

 

31,526

 

 

 

Additions to capitalized software development costs and purchases of intangible assets

 

(5,220

)

 

(9,579

)

 

(20,589

)

 

(20,216

)

Net cash provided by (used in) investing activities

 

25,099

 

 

(11,740

)

 

7,665

 

 

(24,973

)

Cash flows from financing activities:

 

 

 

 

Gross proceeds from the issuance of 2025 Notes

 

 

 

 

 

 

 

100,000

 

Payment of issuance costs related to 2025 Notes

 

 

 

(1,056

)

 

 

 

(3,600

)

Payoff of term loan and related extinguishment costs

 

 

 

 

 

 

 

(48,830

)

Cash paid to investors in private exchange transactions

 

 

 

 

 

 

 

(32,062

)

Gross proceeds received from issuance of Series E preferred stock

 

 

 

 

 

 

 

25,000

 

Repurchase of Series E preferred stock

 

 

 

 

 

 

 

(2,354

)

Proceeds from the exercise of warrants to purchase common stock

 

 

 

 

 

 

1,861

 

Net borrowing of bank and overdraft facilities

 

20

 

 

6

 

 

315

 

 

110

 

Principal payments under finance lease obligations

 

(965

)

 

(781

)

 

(3,138

)

 

(2,243

)

Proceeds from a public offering, net of issuance costs

 

1

 

 

 

 

29,370

 

 

 

Proceeds from stock option exercises and employee stock purchase plan, net of taxes paid on vested restricted stock units

 

412

 

 

1,441

 

 

2,432

 

 

2,872

 

Net cash (used in) provided by financing activities

 

(532

)

 

(390

)

 

28,979

 

 

40,754

 

Effect of exchange rates on cash

 

(614

)

 

(26

)

 

(293

)

 

(2,573

)

Net increase in cash, cash equivalents and restricted cash

 

21,226

 

 

(106

)

 

21,594

 

 

29,920

 

Cash, cash equivalents and restricted cash, beginning of period

 

40,383

 

 

42,100

 

 

40,015

 

 

12,074

 

Cash, and cash equivalents, end of period

$

61,609

 

$

41,994

 

$

61,609

 

$

41,994

 

INSEEGO CORP.

Reconciliation of GAAP Net Loss Attributable to Common Shareholders to Non-GAAP Net Loss

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

September 30, 2021

Nine Months Ended

September 30, 2021

 

Net Loss

Net Loss Per

Share

Net Loss

Net Loss Per

Share

GAAP net loss attributable to common shareholders

$

(9,033

)

$

(0.09

)

$

(41,001

)

$

(0.40

)

Adjustments:

 

 

 

 

Preferred stock dividends(a)

 

1,843

 

 

0.02

 

 

3,596

 

 

0.04

 

Net income attributable to noncontrolling interests(b)

 

 

 

 

 

214

 

 

 

Share-based compensation expense(c)

 

3,062

 

 

0.03

 

 

14,467

 

 

0.15

 

Purchased intangibles amortization(d)

 

737

 

 

0.01

 

 

2,840

 

 

0.03

 

Debt discount and issuance costs amortization(e)

 

371

 

 

 

 

1,117

 

 

0.01

 

Non-recurring costs(f)

 

1,651

 

 

0.02

 

 

2,411

 

 

0.02

 

Fair value adjustment on derivative instrument(g)

 

(1,612

)

 

(0.02

)

 

(3,435

)

 

(0.03

)

Gain on sale of Ctrack South Africa(h)

 

(5,262

)

 

(0.05

)

 

(5,262

)

 

(0.05

)

Loss on debt conversion and extinguishment(i)

 

 

 

 

 

432

 

 

 

Non-GAAP net loss

$

(8,243

)

$

(0.08

)

$

(24,621

)

$

(0.23

)

(a)

Includes accrued dividends on Series E Preferred Stock and deemed dividend as part of preferred stock exchange.

(b)

Includes net income attributable to noncontrolling interests at Ctrack South Africa.

(c)

Includes share-based compensation expense recorded under ASC Topic 718.

(d)

Includes amortization of intangible assets purchased through acquisitions.

(e)

Includes the debt discount and issuance costs amortization related to the 2025 Notes.

(f)

Includes transaction costs related to the sale of Ctrack South Africa and non-recurring legal expenses.

(g)

Includes the fair value adjustment related to the Company’s interest make-whole derivative instrument.

(h)

Includes the gain on sale of Ctrack South Africa.

(i)

Includes the loss on debt conversion and extinguishment of the 2025 Notes.

See “Non-GAAP Financial Measures” for information regarding our use of Non-GAAP financial measures.

INSEEGO CORP.

Reconciliation of GAAP Operating Costs and Expenses to Non-GAAP Operating Costs and Expenses

Three Months Ended September 30, 2021

(In thousands)

(Unaudited)

 

 

GAAP

 

Share-based

compensation

expense


(a)

 

Purchased

intangibles

amortization


(b)

 

Non-GAAP

Cost of net revenues

$

47,274

 

 

$

416

 

 

$

217

 

 

$

46,641

 

Operating costs and expenses:

 

 

 

 

 

 

 

Research and development

12,626

 

 

604

 

 

 

 

12,022

 

Sales and marketing

9,172

 

 

614

 

 

 

 

8,558

 

General and administrative

6,599

 

 

1,428

 

 

 

 

5,171

 

Amortization of purchased intangible assets

519

 

 

 

 

519

 

 

 

Total operating costs and expenses

$

28,916

 

 

$

2,646

 

 

$

519

 

 

$

25,751

 

Total

 

 

$

3,062

 

 

$

736

 

 

 

(a)

Includes share-based compensation expense recorded under ASC Topic 718.

(b)

Includes amortization of intangible assets purchased through acquisitions.

See “Non-GAAP Financial Measures” for information regarding our use of Non-GAAP financial measures.

INSEEGO CORP.

Reconciliation of GAAP Operating Costs and Expenses to Non-GAAP Operating Costs and Expenses

Nine Months Ended September 30, 2021

(In thousands)

(Unaudited)

 

 

GAAP

 

Share-based

compensation

expense


(a)

 

Purchased

intangibles

amortization


(b)

 

Non-

recurring

costs

(c)

 

Non-GAAP

Cost of net revenues

$

131,742

 

 

$

2,229

 

 

$

1,190

 

 

$

 

 

$

128,323

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Research and development

38,954

 

 

4,366

 

 

 

 

 

 

34,588

 

Sales and marketing

29,997

 

 

3,161

 

 

 

 

 

 

26,836

 

General and administrative

22,657

 

 

4,711

 

 

 

 

150

 

 

17,796

 

Amortization of purchased intangible assets

1,649

 

 

 

 

1,649

 

 

 

 

 

Impairment of purchased intangible assets

1,197

 

 

 

 

 

 

 

 

1,197

 

Total operating costs and expenses

$

94,454

 

 

$

12,238

 

 

$

1,649

 

 

$

150

 

 

$

80,417

 

Total

 

 

$

14,467

 

 

$

2,839

 

 

$

150

 

 

 

(a)

Includes share-based compensation expense recorded under ASC Topic 718.

(b)

Includes amortization of intangible assets purchased through acquisitions.

(c)

Includes non-recurring legal settlement costs.

See “Non-GAAP Financial Measures” for information regarding our use of Non-GAAP financial measures.

INSEEGO CORP.

Reconciliation of GAAP Net Loss Attributable to Common Shareholders to Adjusted EBITDA

(In thousands)

(Unaudited)

 

 

Three Months Ended

September 30, 2021

Nine Months Ended

September 30, 2021

GAAP net loss attributable to common shareholders

$

(9,033

)

$

(41,001

)

Preferred stock dividends(a)

 

1,843

 

 

3,596

 

Income tax provision(b)

 

(4

)

 

445

 

Net income attributable to noncontrolling interests(c)

 

 

 

214

 

Depreciation and amortization(d)

 

6,080

 

 

19,131

 

Share-based compensation expense(e)

 

3,062

 

 

14,467

 

Non-recurring costs(f)

 

1,651

 

 

2,553

 

Fair value adjustment of derivative(g)

 

(1,612

)

 

(3,435

)

Gain on sale of Ctrack South Africa(h)

 

(5,262

)

 

(5,262

)

Loss on debt conversion and extinguishment(i)

 

 

 

432

 

Interest expense, net(j)

 

1,655

 

 

5,178

 

Other(k)

 

847

 

 

1,990

 

Adjusted EBITDA

$

(773

)

$

(1,692

)

(a)

Includes accrued dividends on Series E Preferred Stock and deemed dividend as part of preferred stock exchange.

(b)

Includes the provision for income taxes.

(c)

Includes net income attributable to non-controlling interests at Ctrack South Africa.

(d)

Includes depreciation and amortization charges, including amortization of intangible assets purchased through acquisitions.

(e)

Includes share-based compensation expense recorded under ASC Topic 718.

(f)

Includes transaction costs related to the sale of Ctrack South Africa and non-recurring legal expenses.

(g)

Includes the fair value adjustment related to the Company’s interest make-whole derivative instrument.

(h)

Includes the gain on sale of Ctrack South Africa.

(i)

Includes the loss on debt conversion and extinguishment of the 2025 Notes.

(j)

Includes interest expense including debt discount and issuance costs amortization related to the 2025 Notes.

(k)

Includes non-recurring write-down of assets and foreign currency transaction gains and losses.

See “Non-GAAP Financial Measures” for information regarding our use of Non-GAAP financial measures.

INSEEGO CORP.

Quarterly Net Revenues by Product Grouping

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

September 30,

2021

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

 

September 30,

2020

IoT & Mobile Solutions

$

56,975

 

 

$

51,836

 

 

$

42,959

 

 

$

72,098

 

 

$

77,342

 

Enterprise SaaS Solutions

9,242

 

 

13,857

 

 

14,638

 

 

13,965

 

 

12,898

 

Total net revenues

$

66,217

 

 

$

65,693

 

 

$

57,597

 

 

$

86,063

 

 

$

90,240

 

 

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