Inseego Corp (NASDAQ:INSG)
Inseego Corp (NASDAQ:INSG) slump in the market shows no signs of slowing down especially on the company booking a first quarter net loss and sinking deeper into debt with financing. Net loss in the quarter rose to (-$16.1) million or (- $0.28) a share compared to (-$11.9) million posted a year ago.
Inseego Q1 Financial Results
Inseego Corp (NASDAQ:INSG)’s revenues also took a hit in the quarter declining by 17.2% to $55.4 million compared to $66.9 million as of Q1 2016. The leading provider of software-as-a-service and Internet of Things solution attributes the decrease to lower stand-alone hardware sales from the MiFi mobile broadband business.
Gross margin during the quarter dropped to 31.8% from 35.2% due to a decline in margins for the MiFi broadband products. The drop had a negative impact on Inseego Corp’s ongoing transition to an improved mix of higher-margin internet-of-things (IoT) solutions. The company exited the quarter with cash and cash equivalents amounting to $6.4 million – a decline from $9.9 million as of December 31, 2016.
Given the pending divestiture of the MiFi broadband business, Inseego says it won’t issue overall guidance for the full year. However, the company expects revenues of between $14 – $15 million from its SAAS unit. Ctrack telematics unit, on the other hand, should generate revenues of between $15 – $16.5 million
“Our first quarter business performance was not what we had hoped as the pending MiFi divestiture transaction resulted in management and operational distraction throughout the quarter. We continue to see financial strength and market opportunity for our portfolio of SaaS, software and services solutions for the Internet of Things, and we need to drive excellence in execution throughout the organization, “said the chief executive officer, Sue Swenson.
During the quarter Inseego Corp (NASDAQ:INSG) announced it had reached an agreement with T.C.L Industries and Jade Ideal Global Limited for the divestiture of its MiFi Broadband business with its subsidiary Novatel Wireless. The company also closed a long-term loan with Lakestar Semi Inc. that provides it with access of up to $20 million. The company consequently terminated a revolving credit facility with Wells Fargo Bank
Inseego Corp (NASDAQ:INSG) stock was up by 10.68% in Friday’s trading session ending the week at highs of $1.14 a share.
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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance.