SAN DIEGO – Shares of Inseego Corp. (Nasdaq: INSG), the Sorrento Mesa maker of wireless communications gear, touched a 52-week high of $13.89 on Tuesday (Aug. 27) – up more than 500% for the year.
Shares of INSG hit a peak of $13.42 in early July but slumped to $7.97 by Aug. 7, when Inseego offered two pieces of good news. The business said it had restructured its debt and reported net income of $624,000 on revenue of $59.1 million for the second quarter.
Preferred stock dividends of $808,000 swung the company’s financial results slightly into the red. Net loss attributed to common stockholders was $184,000 or 2 cents per share.
Adjusted EBITDA was $8.4 million (the acronym refers to Earnings Before Interest, Taxes, Depreciation and Amortization).
It was an improvement from the same quarter one year ago, when Inseego reported $4.94 million in net loss attributed to common shareholders (51 cents per share) on revenue of $53.6 million. Adjusted EBITDA in the second quarter of 2023 was $12.2 million.
The business said Aug. 7 that it restructured its convertible debt by repurchasing or entering into agreements to repurchase and/or exchange approximately $141.9 million, or 87.7%, of face value of the company’s outstanding 3.25% convertible notes due 2025.
“Turnaround story continues to move in the right direction,” wrote Tore Svanberg, an analyst with Stifel, in an Aug. 8 research note.
Svanberg noted that the company’s second quarter financial results beat analysts’ expectations. “While we are encouraged by INSG’s solid results and strong execution on its debt restructuring, we maintain our Hold rating at this time, pending continued evidence of sustainability of the company’s turnaround, and resolution of its CEO search,” the analyst wrote.
Svanberg gave the stock a target price of $11 per share, but noted that shares remain volatile since a 1-for-10 reverse stock split on Jan. 24.
“Blowout revenues, gross margin suggest Inseego is on the right track,” read an Aug. 14 note from Lance Vitanza of TD Securities. The analyst had a more optimistic price target of $15.
For the third quarter, Inseego forecast revenue in the range of $54 million to $58 million. Adjusted EBITDA is expected to be in the range of $6.5 million to $7.5 million.
An Evolving Business
Inseego was previously known as Novatel Wireless, a company founded in 1996. It experienced growth as a partner to Qualcomm Inc. (Nasdaq: QCOM). Its specialty was wireless hotspots sold under the name MiFi by carriers such as Verizon and T-Mobile. At one point, MIFI was the company ticker symbol.
Novatel combined with other businesses, including DigiCore, a telematics company based in Johannesburg, South Africa, before rebranding as Inseego. Telematics companies monitor vehicles.
Today, Inseego describes itself as a technology leader in 5G mobile and fixed wireless solutions for mobile network operators, Fortune 500 enterprises and small and medium-sized businesses.
CEO Search Continues
Inseego has spent much of 2024 searching for a permanent leader.
Board member Philip Brace took on the executive chairman’s role Feb. 19 with the resignation of CEO and President Ashish Sharma, who departed Feb. 23 to pursue other interests. Part of Brace’s job is to find a permanent CEO. In late July, the board extended Brace’s term as executive chairman for two additional six-month terms. Brace is receiving $20,000 per month for his work as executive chairman, according to a securities filing.
Also in late July, the company announced new C-suite leadership and new vice presidents.
David Markland was named to the newly created role of chief product officer. Dean Antonilli was named as senior vice president of sales, service providers. Sal Aroon was named to the new role of vice president and head of operations.
Inseego shares spent the past 52 weeks trading between $1.60 and $13.89.
The business reported $49 million worth of cash and cash equivalents as of June 30.n
Inseego Corp.
FOUNDED: 2016 as a successor to Novatel Wireless, which was founded in 1996
EXECUTIVE CHAIRMAN: Philip Brace
HEADQUARTERS: Sorrento Mesa
BUSINESS: Wireless communications equipment and fleet tracking solutions
REVENUE: $195.7 million in 2023
STOCK: INSG (Nasdaq)
EMPLOYEES: 345 as of Dec. 31
WEBSITE: inseego.com
CONTACT: 858-812-3400
NOTABLE: As of February, the business owned 46 patents and had three patent applications pending
