Today's News |
Sierra Wireless Reports Third Quarter 2019 Results
Wednesday, November 6, 2019Company Profile | Careers | Follow Company
Richmond, BC, November 6, 2019--(T-Net)--Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) today reported results for its third quarter ended September 30, 2019.
All results are reported in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles (GAAP), except as otherwise indicated below.
"We continue to make strong progress on our transformation to an integrated IoT Solutions company," said Kent Thexton, President and CEO. "We had a record quarter in new recurring services wins and our services pipeline is growing. In addition, we are continuing to drive greater efficiencies in our business under our two-year cost reduction program."
Revenue for the third quarter of 2019 was $174.0 million compared to $203.4 million in the third quarter of 2018.
Quarterly revenue for the company's two business segments was as follows:
(i) Revenue from IoT Solutions was $93.4 million in the third quarter of 2019, a decrease of 2.1% compared to $95.5 million in the third quarter of 2018 due to lower Integrated IoT solutions module revenue, partially offset by stronger subscription, support and other services revenue and stronger sales of Enterprise gateway products. Within the IoT Solutions segment, recurring subscription revenue was up 6.7%; and
(ii) Revenue from Embedded Broadband was $80.6 million in the third quarter of 2019, down 25.3% compared to $107.9 million in the third quarter of 2018 mainly due to weaker demand from mobile computing, networking and automotive customers. Subscription, support and other services revenue in the third quarter was $24.6 million, representing 14% of consolidated revenue and Product revenue was $149.4 million, representing 86% of consolidated revenue.
GAAP RESULTS
NON-GAAP RESULTS(1)
(1) See "Non-GAAP Financial Measures" and "Reconciliation of GAAP and Non-GAAP Results by Quarter" below.
Cash and cash equivalents at the end of the third quarter of 2019 were $86.9 million, representing an increase of $2.1 million from the end of the second quarter of 2019. The increase in cash was primarily due to cash flow from operating activities, partially offset by capital expenditures.
In Q3 2019, we recorded $2.7 million in severance and $3.6 million in transitional costs related to the consolidation of engineering and product management resources as well as the outsourcing initiatives we previously announced.
Acquisition of M2M Group
On November 5, 2019, the company signed an agreement to purchase the M2M group of companies ("M2M Group") in Australia to expand their IoT Solutions business in the Asia-Pacific region. The M2M Group is focused on connectivity services and IoT cellular devices with a strong history of IoT leadership and solid carrier relations in the region.
The purchase price of $19.8 million is based on cash consideration of $18.8 million for 100% of the equity plus approximately $1.0 million for the retirement of certain obligations, subject to normal working capital adjustments.
"The business is an excellent strategic fit with our IoT Solutions business with slightly more than half of the M2M Group's revenue coming from subscription-based recurring revenue. This segment of the business has been growing rapidly over the last several years. The M2M Group's revenue in the last twelve months was US$17.9 million, of which $9.2 million was recurring subscription-based revenue. We expect the acquisition to be accretive to earnings immediately following closing in early 2020. The M2M Group has a solid platform for us to increase our IoT services and solutions in Australia and Southeast Asia. We expect the transaction to close early in January 2020, subject to the satisfaction of customary closing conditions" said the company in a release.
Accounting Standard Adoption
We adopted the new accounting standard for lease accounting (ASC 842) effective January 1, 2019. Our third quarter 2019 financial results reflect the adoption of this new standard.
Financial Guidance - Full Year
For our full year 2019 outlook, we now expect IoT Solutions segment revenue to increase approximately 3% to 4% year-over-year and Embedded Broadband segment revenue to decrease approximately 22% to 23% year-over-year. We expect this will result in full year 2019 revenue in the range of $708 million to $712 million. We are adjusting our profitability guidance of Adjusted EBITDA to be approximately $23 million and non-GAAP EPS to be in the range of zero to 3 cents. See "Non-GAAP Financial Measures" below.
This non-GAAP guidance constitutes "forward-looking statements" within the meaning of applicable securities laws and reflects current business indicators and expectations. These statements are based on management's current beliefs and assumptions, which could prove to be significantly incorrect. Forward-looking statements, particularly those that relate to longer periods of time, are subject to substantial known and unknown risks and uncertainties that could cause actual events or results to differ significantly from those expressed or implied by our forward-looking statements, including those described in our regulatory filings. See "Cautionary Note Regarding Forward-Looking Statements" below.
SIERRA WIRELESS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE EARNINGS (LOSS)
(In thousands of U.S. dollars, except where otherwise stated)
(unaudited)
|
Three months ended |
|
Nine months ended |
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Revenue |
|
|
|
|
|
|
|
||||||||
IoT Solutions |
$ |
93,439 |
|
|
$ |
95,487 |
|
|
$ |
286,871 |
|
|
$ |
278,209 |
|
Embedded Broadband |
80,586 |
|
|
107,939 |
|
|
252,341 |
|
|
313,998 |
|
||||
|
174,025 |
|
|
203,426 |
|
|
539,212 |
|
|
592,207 |
|
||||
Cost of sales |
|
|
|
|
|
|
|
||||||||
IoT Solutions |
58,236 |
|
|
59,428 |
|
|
180,378 |
|
|
175,258 |
|
||||
Embedded Broadband |
60,746 |
|
|
76,731 |
|
|
190,212 |
|
|
218,273 |
|
||||
|
118,982 |
|
|
136,159 |
|
|
370,590 |
|
|
393,531 |
|
||||
Gross margin |
55,043 |
|
|
67,267 |
|
|
168,622 |
|
|
198,676 |
|
||||
Expenses |
|
|
|
|
|
|
|
||||||||
Sales and marketing |
23,523 |
|
|
21,743 |
|
|
69,784 |
|
|
66,234 |
|
||||
Research and development |
20,550 |
|
|
22,621 |
|
|
65,458 |
|
|
71,477 |
|
||||
Administration |
11,937 |
|
|
14,998 |
|
|
37,227 |
|
|
47,066 |
|
||||
Restructuring |
6,274 |
|
|
227 |
|
|
25,851 |
|
|
4,770 |
|
||||
Acquisition-related and integration |
291 |
|
|
570 |
|
|
700 |
|
|
3,349 |
|
||||
Amortization |
5,027 |
|
|
6,255 |
|
|
15,238 |
|
|
19,858 |
|
||||
|
67,602 |
|
|
66,414 |
|
|
214,258 |
|
|
212,754 |
|
||||
Earnings (loss) from operations |
(12,559 |
) |
|
853 |
|
|
(45,636 |
) |
|
(14,078 |
) |
||||
Foreign exchange loss |
(2,964 |
) |
|
(159 |
) |
|
(2,962 |
) |
|
(3,092 |
) |
||||
Other (expense) income |
(121 |
) |
|
7 |
|
|
(192 |
) |
|
70 |
|
||||
Earnings (loss) before income taxes |
(15,644 |
) |
|
701 |
|
|
(48,790 |
) |
|
(17,100 |
) |
||||
Income tax expense |
4,577 |
|
|
1,738 |
|
|
10,830 |
|
|
3,684 |
|
||||
Net loss |
$ |
(20,221 |
) |
|
$ |
(1,037 |
) |
|
$ |
(59,620 |
) |
|
$ |
(20,784 |
) |
Other comprehensive gain (loss): |
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments, net of taxes of $nil |
(3,727 |
) |
|
322 |
|
|
(7,247 |
) |
|
(6,919 |
) |
||||
Comprehensive loss |
$ |
(23,948 |
) |
|
$ |
(715 |
) |
|
$ |
(66,867 |
) |
|
$ |
(27,703 |
) |
|
|
|
|
|
|
|
|
||||||||
Net loss per share (in dollars) |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
(0.56 |
) |
|
$ |
(0.03 |
) |
|
$ |
(1.65 |
) |
|
$ |
(0.58 |
) |
Diluted |
(0.56 |
) |
|
(0.03 |
) |
|
(1.65 |
) |
|
(0.58 |
) |
||||
Weighted average number of shares outstanding (in thousands) |
|
|
|
|
|
|
|
||||||||
Basic |
36,179 |
|
|
36,085 |
|
|
36,147 |
|
|
36,007 |
|
||||
Diluted |
36,179 |
|
|
36,085 |
|
|
36,147 |
|
|
36,007 |
|
SIERRA WIRELESS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except where otherwise stated)
(unaudited)
|
September 30, 2019 |
December 31, 2018 |
||||||
Assets |
|
|
|
|||||
Current assets |
|
|
|
|||||
Cash and cash equivalents |
$ |
86,900 |
|
|
$ |
89,076 |
|
|
Restricted cash |
221 |
|
|
221 |
|
|||
Accounts receivable, net of allowance for doubtful accounts of $3,561 |
130,349 |
|
|
171,725 |
|
|||
Inventories |
60,230 |
|
|
50,779 |
|
|||
Prepaids and other |
18,160 |
|
|
11,703 |
|
|||
|
295,860 |
|
|
323,504 |
|
|||
Property and equipment, net |
38,887 |
|
|
39,842 |
|
|||
Operating lease right-of-use assets |
24,091 |
|
|
— |
|
|||
Intangible assets, net |
72,493 |
|
|
84,890 |
|
|||
Goodwill |
203,806 |
|
|
211,074 |
|
|||
Deferred income taxes |
2,901 |
|
|
11,751 |
|
|||
Other assets |
13,536 |
|
|
12,855 |
|
|||
|
$ |
651,574 |
|
|
$ |
683,916 |
|
|
|
|
|
|
|||||
Liabilities |
|
|
|
|||||
Current liabilities |
|
|
|
|||||
Accounts payable and accrued liabilities |
$ |
186,020 |
|
|
$ |
184,220 |
|
|
Deferred revenue |
9,433 |
|
|
6,213 |
|
|||
|
195,453 |
|
|
190,433 |
|
|||
Long-term obligations |
42,587 |
|
|
43,250 |
|
|||
Operating lease liabilities |
20,444 |
|
|
— |
|
|||
Deferred income taxes |
5,552 |
|
|
6,103 |
|
|||
|
264,036 |
|
|
239,786 |
|
|||
Equity |
|
|
|
|||||
Shareholders' equity |
|
|
|
|||||
Common stock: no par value; unlimited shares authorized; issued and outstanding: 36,197,137 shares (December 31, 2018 - 36,067,415 shares) |
434,925 |
|
|
432,552 |
|
|||
Preferred stock: no par value; unlimited shares authorized; issued and outstanding: nil shares |
— |
|
|
— |
|
|||
Treasury stock: at cost; 9,612 shares (December 31, 2018 - 119,584 shares) |
(114 |
) |
|
(1,965 |
) |
|||
Additional paid-in capital |
37,035 |
|
|
30,984 |
|
|||
Retained deficit |
(67,915 |
) |
|
(8,295 |
) |
|||
Accumulated other comprehensive loss |
(16,393 |
) |
|
(9,146 |
) |
|||
|
387,538 |
|
|
444,130 |
|
|||
|
$ |
651,574 |
|
|
$ |
683,916 |
|
SIERRA WIRELESS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
|
Three months ended |
|
Nine months ended |
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Cash flows provided by (used in): |
|
|
|
|
|
|
|
||||||||
Operating activities |
|
|
|
|
|
|
|
||||||||
Net loss |
$ |
(20,221 |
) |
|
$ |
(1,037 |
) |
|
$ |
(59,620 |
) |
|
$ |
(20,784 |
) |
Items not requiring (providing) cash |
|
|
|
|
|
|
|
||||||||
Amortization |
8,115 |
|
|
9,483 |
|
|
24,604 |
|
|
29,842 |
|
||||
Stock-based compensation |
3,869 |
|
|
3,266 |
|
|
11,129 |
|
|
10,317 |
|
||||
Deferred income taxes |
3,766 |
|
|
1,378 |
|
|
8,804 |
|
|
2,460 |
|
||||
Unrealized foreign exchange loss |
4,056 |
|
|
653 |
|
|
2,080 |
|
|
4,978 |
|
||||
Other |
62 |
|
|
(348 |
) |
|
648 |
|
|
221 |
|
||||
Changes in non-cash working capital |
|
|
|
|
|
|
|
||||||||
Accounts receivable |
19,811 |
|
|
(5,070 |
) |
|
37,809 |
|
|
(6,762 |
) |
||||
Inventories |
(4,357 |
) |
|
2,114 |
|
|
(9,976 |
) |
|
1,325 |
|
||||
Prepaids and other |
(1,982 |
) |
|
1,396 |
|
|
(7,500 |
) |
|
(4,322 |
) |
||||
Accounts payable and accrued liabilities |
(7,102 |
) |
|
(9,401 |
) |
|
497 |
|
|
9,025 |
|
||||
Deferred revenue |
1,961 |
|
|
193 |
|
|
4,679 |
|
|
(1,496 |
) |
||||
Cash flows provided by operating activities |
7,978 |
|
|
2,627 |
|
|
13,154 |
|
|
24,804 |
|
||||
Investing activities |
|
|
|
|
|
|
|
||||||||
Additions to property and equipment |
(3,672 |
) |
|
(4,789 |
) |
|
(11,803 |
) |
|
(13,788 |
) |
||||
Additions to intangible assets |
(1,585 |
) |
|
(307 |
) |
|
(2,978 |
) |
|
(1,793 |
) |
||||
Proceeds from sale of property and equipment |
3 |
|
|
14 |
|
|
87 |
|
|
76 |
|
||||
Proceeds from sale of iTank business |
— |
|
|
— |
|
|
500 |
|
|
— |
|
||||
Cash flows used in investing activities |
(5,254 |
) |
|
(5,082 |
) |
|
(14,194 |
) |
|
(15,505 |
) |
||||
Financing activities |
|
|
|
|
|
|
|
||||||||
Issuance of common shares |
160 |
|
|
1,257 |
|
|
327 |
|
|
2,535 |
|
||||
Repurchase of common shares for cancellation |
— |
|
|
(3,120 |
) |
|
— |
|
|
(3,120 |
) |
||||
Purchase of treasury shares for RSU distribution |
(59 |
) |
|
(1,085 |
) |
|
(326 |
) |
|
(1,085 |
) |
||||
Taxes paid related to net settlement of equity awards |
(110 |
) |
|
(334 |
) |
|
(855 |
) |
|
(1,788 |
) |
||||
Payment for contingent consideration |
— |
|
|
— |
|
|
— |
|
|
(130 |
) |
||||
Decrease in other long-term obligations |
(191 |
) |
|
(68 |
) |
|
(405 |
) |
|
(511 |
) |
||||
Cash flows used in financing activities |
(200 |
) |
|
(3,350 |
) |
|
(1,259 |
) |
|
(4,099 |
) |
||||
Effect of foreign exchange rate changes on cash and cash equivalents |
(393 |
) |
|
(146 |
) |
|
123 |
|
|
(2,743 |
) |
||||
Cash, cash equivalents and restricted cash, increase (decrease) in the period |
2,131 |
|
|
(5,951 |
) |
|
(2,176 |
) |
|
2,457 |
|
||||
Cash, cash equivalents and restricted cash, beginning of period |
84,990 |
|
|
73,632 |
|
|
89,297 |
|
|
65,224 |
|
||||
Cash, cash equivalents and restricted cash, end of period |
$ |
87,121 |
|
|
$ |
67,681 |
|
|
$ |
87,121 |
|
|
$ |
67,681 |
|
SIERRA WIRELESS, INC.
RECONCILIATION OF GAAP AND NON-GAAP RESULTS BY QUARTER
(in thousands of U.S. dollars, except |
|
2019 |
|
|
2018 |
||||||||||||||||||||||
|
Q3 |
Q2 |
Q1 |
|
|
Total |
Q4 |
Q3 |
Q2 |
Q1 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Gross margin - GAAP |
|
$ |
55,043 |
|
$ |
58,949 |
|
$ |
54,630 |
|
|
|
$ |
264,571 |
|
$ |
65,895 |
|
$ |
67,267 |
|
$ |
69,309 |
|
$ |
62,100 |
|
Stock-based compensation and related social taxes |
|
44 |
|
44 |
|
59 |
|
|
|
479 |
|
58 |
|
57 |
|
57 |
|
307 |
|
||||||||
Realized losses on hedge contracts |
|
— |
|
(2 |
) |
(3 |
) |
|
|
(30 |
) |
(13 |
) |
(11 |
) |
— |
|
(6 |
) |
||||||||
Other nonrecurring costs |
|
— |
|
— |
|
— |
|
|
|
5 |
|
5 |
|
— |
|
— |
|
— |
|
||||||||
Gross margin - Non-GAAP |
|
$ |
55,087 |
|
$ |
58,991 |
|
$ |
54,686 |
|
|
|
$ |
265,025 |
|
$ |
65,945 |
|
$ |
67,313 |
|
$ |
69,366 |
|
$ |
62,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Earnings (loss) from operations - GAAP |
|
$ |
(12,559 |
) |
$ |
(23,271 |
) |
$ |
(9,806 |
) |
|
|
$ |
(18,275 |
) |
$ |
(4,197 |
) |
$ |
853 |
|
$ |
(5,055 |
) |
$ |
(9,876 |
) |
Stock-based compensation and related social taxes |
|
3,876 |
|
4,102 |
|
3,414 |
|
|
|
13,006 |
|
2,743 |
|
3,473 |
|
3,950 |
|
2,840 |
|
||||||||
Acquisition-related and integration |
|
291 |
|
314 |
|
95 |
|
|
|
3,962 |
|
613 |
|
570 |
|
1,014 |
|
1,765 |
|
||||||||
Restructuring |
|
6,274 |
|
18,180 |
|
1,397 |
|
|
|
7,115 |
|
2,345 |
|
227 |
|
952 |
|
3,591 |
|
||||||||
Other nonrecurring costs |
|
279 |
|
662 |
|
1,167 |
|
|
|
11,485 |
|
4,761 |
|
1,583 |
|
5,141 |
|
— |
|
||||||||
Realized losses on hedge contracts |
|
24 |
|
(183 |
) |
(109 |
) |
|
|
(562 |
) |
(296 |
) |
(201 |
) |
(14 |
) |
(51 |
) |
||||||||
Acquisition-related amortization |
|
3,610 |
|
3,624 |
|
3,687 |
|
|
|
18,575 |
|
4,261 |
|
4,354 |
|
4,426 |
|
5,534 |
|
||||||||
Earnings (loss) from operations - Non-GAAP |
|
$ |
1,795 |
|
$ |
3,428 |
|
$ |
(155 |
) |
|
|
$ |
35,306 |
|
$ |
10,230 |
|
$ |
10,859 |
|
$ |
10,414 |
|
$ |
3,803 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net loss - GAAP |
|
$ |
(20,221 |
) |
$ |
(28,176 |
) |
$ |
(11,223 |
) |
|
|
$ |
(24,610 |
) |
$ |
(3,826 |
) |
$ |
(1,037 |
) |
$ |
(11,384 |
) |
$ |
(8,363 |
) |
Stock-based compensation and related social taxes, restructuring, impairment, acquisition-related, integration and other non-recurring costs (recoveries) |
|
10,720 |
|
23,258 |
|
6,073 |
|
|
|
35,568 |
|
10,462 |
|
5,853 |
|
11,057 |
|
8,196 |
|
||||||||
Amortization |
|
8,115 |
|
8,118 |
|
8,371 |
|
|
|
39,150 |
|
9,308 |
|
9,483 |
|
9,651 |
|
10,708 |
|
||||||||
Interest and other, net |
|
121 |
|
102 |
|
(31 |
) |
|
|
(51 |
) |
19 |
|
(7 |
) |
(8 |
) |
(55 |
) |
||||||||
Foreign exchange loss (gain) |
|
2,988 |
|
(1,037 |
) |
743 |
|
|
|
4,908 |
|
2,082 |
|
(42 |
) |
4,034 |
|
(1,166 |
) |
||||||||
Income tax expense (recovery) |
|
4,577 |
|
5,657 |
|
596 |
|
|
|
916 |
|
(2,768 |
) |
1,738 |
|
2,289 |
|
(343 |
) |
||||||||
Adjusted EBITDA |
|
6,300 |
|
7,922 |
|
4,529 |
|
|
|
55,881 |
|
15,277 |
|
15,988 |
|
15,639 |
|
8,977 |
|
||||||||
Amortization (exclude acquisition-related amortization) |
|
(4,505 |
) |
(4,494 |
) |
(4,684 |
) |
|
|
(20,575 |
) |
(5,047 |
) |
(5,129 |
) |
(5,225 |
) |
(5,174 |
) |
||||||||
Interest and other, net |
|
(121 |
) |
(102 |
) |
31 |
|
|
|
51 |
|
(19 |
) |
7 |
|
8 |
|
55 |
|
||||||||
Income tax expense - Non-GAAP |
|
(653 |
) |
(859 |
) |
(730 |
) |
|
|
(2,930 |
) |
(1,245 |
) |
(352 |
) |
(769 |
) |
(564 |
) |
||||||||
Net earnings (loss) - Non-GAAP |
|
$ |
1,021 |
|
$ |
2,467 |
|
$ |
(854 |
) |
|
|
$ |
32,427 |
|
$ |
8,966 |
|
$ |
10,514 |
|
$ |
9,653 |
|
$ |
3,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted net earnings (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
GAAP - (in dollars per share) |
|
$ |
(0.56 |
) |
$ |
(0.78 |
) |
$ |
(0.31 |
) |
|
|
$ |
(0.68 |
) |
$ |
(0.11 |
) |
$ |
(0.03 |
) |
$ |
(0.32 |
) |
$ |
(0.23 |
) |
Non-GAAP - (in dollars per share) |
|
$ |
0.03 |
|
$ |
0.07 |
|
$ |
(0.02 |
) |
|
|
$ |
0.90 |
|
$ |
0.25 |
|
$ |
0.29 |
|
$ |
0.27 |
|
$ |
0.09 |
|
SIERRA WIRELESS, INC.
SEGMENTED RESULTS
(In thousands of U.S. dollars, except where otherwise stated) |
2019 |
|
2018 |
||||||||||||||||||||||
Q3 |
Q2 |
Q1 |
|
Total |
Q4 |
Q3 |
Q2 |
Q1 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
IoT Solutions |
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenue |
$ |
93,439 |
|
$ |
99,145 |
|
$ |
94,287 |
|
|
$ |
373,937 |
|
$ |
95,728 |
|
$ |
95,487 |
|
$ |
93,274 |
|
$ |
89,448 |
|
Gross margin |
|
|
|
|
|
|
|
|
|
||||||||||||||||
- GAAP |
$ |
35,203 |
|
$ |
36,811 |
|
$ |
34,479 |
|
|
$ |
139,602 |
|
$ |
36,651 |
|
$ |
36,059 |
|
$ |
34,282 |
|
$ |
32,610 |
|
- Non-GAAP |
$ |
35,203 |
|
$ |
36,833 |
|
$ |
34,510 |
|
|
$ |
139,818 |
|
$ |
36,675 |
|
$ |
36,081 |
|
$ |
34,308 |
|
$ |
32,754 |
|
Gross margin % |
|
|
|
|
|
|
|
|
|
||||||||||||||||
- GAAP |
37.7 |
% |
37.1 |
% |
36.6 |
% |
|
37.3 |
% |
38.3 |
% |
37.8 |
% |
36.8 |
% |
36.5 |
% |
||||||||
- Non-GAAP |
37.7 |
% |
37.2 |
% |
36.6 |
% |
|
37.4 |
% |
38.3 |
% |
37.8 |
% |
36.8 |
% |
36.6 |
% |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Embedded Broadband |
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenue |
$ |
80,586 |
|
$ |
92,229 |
|
$ |
79,526 |
|
|
$ |
419,665 |
|
$ |
105,667 |
|
$ |
107,939 |
|
$ |
108,629 |
|
$ |
97,430 |
|
Gross margin |
|
|
|
|
|
|
|
|
|
||||||||||||||||
- GAAP |
$ |
19,840 |
|
$ |
22,138 |
|
$ |
20,151 |
|
|
$ |
124,969 |
|
$ |
29,244 |
|
$ |
31,208 |
|
$ |
35,027 |
|
$ |
29,490 |
|
- Non-GAAP |
$ |
19,884 |
|
$ |
22,158 |
|
$ |
20,176 |
|
|
$ |
125,207 |
|
$ |
29,270 |
|
$ |
31,232 |
|
$ |
35,058 |
|
$ |
29,647 |
|
Gross margin % |
|
|
|
|
|
|
|
|
|
||||||||||||||||
- GAAP |
24.6 |
% |
24.0 |
% |
25.3 |
% |
|
29.8 |
% |
27.7 |
% |
28.9 |
% |
32.2 |
% |
30.3 |
% |
||||||||
- Non-GAAP |
24.7 |
% |
24.0 |
% |
25.4 |
% |
|
29.8 |
% |
27.7 |
% |
28.9 |
% |
32.3 |
% |
30.4 |
% |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total |
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenue |
$ |
174,025 |
|
$ |
191,374 |
|
$ |
173,813 |
|
|
$ |
793,602 |
|
$ |
201,395 |
|
$ |
203,426 |
|
$ |
201,903 |
|
$ |
186,878 |
|
Gross margin |
|
|
|
|
|
|
|
|
|
||||||||||||||||
- GAAP |
$ |
55,043 |
|
$ |
58,949 |
|
$ |
54,630 |
|
|
$ |
264,571 |
|
$ |
65,895 |
|
$ |
67,267 |
|
$ |
69,309 |
|
$ |
62,100 |
|
- Non-GAAP |
$ |
55,087 |
|
$ |
58,991 |
|
$ |
54,686 |
|
|
$ |
265,025 |
|
$ |
65,945 |
|
$ |
67,313 |
|
$ |
69,366 |
|
$ |
62,401 |
|
Gross margin % |
|
|
|
|
|
|
|
|
|
||||||||||||||||
- GAAP |
31.6 |
% |
30.8 |
% |
31.4 |
% |
|
33.3 |
% |
32.7 |
% |
33.1 |
% |
34.3 |
% |
33.2 |
% |
||||||||
- Non-GAAP |
31.7 |
% |
30.8 |
% |
31.5 |
% |
|
33.4 |
% |
32.7 |
% |
33.1 |
% |
34.4 |
% |
33.4 |
% |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenue by Type |
|
|
|
|
|
|
|
|
|
||||||||||||||||
Product |
$ |
149,396 |
|
$ |
166,348 |
|
$ |
150,880 |
|
|
$ |
699,158 |
|
$ |
178,031 |
|
$ |
179,390 |
|
$ |
178,806 |
|
$ |
162,931 |
|
Subscription, support and other services |
24,629 |
|
25,026 |
|
22,933 |
|
|
94,444 |
|
23,364 |
|
24,036 |
|
23,097 |
|
23,947 |
|
Non-GAAP Financial Measures
We disclose these non-GAAP financial measures as we believe they provide useful information to investors and analysts to assist them in their evaluation of our operating results and to assist in comparisons from one period to another. Readers are cautioned that non-GAAP financial measures do not have any standardized meaning prescribed by U.S. GAAP and therefore may not be comparable to similar measures presented by other companies.
Non-GAAP gross margin excludes the impact of stock-based compensation expense and related social taxes and certain other nonrecurring costs or recoveries.
Non-GAAP earnings (loss) from operations includes allocation of realized gains or losses on forward contracts and excludes the impact of stock-based compensation expense and related social taxes, acquisition-related amortization, acquisition-related and integration costs, restructuring costs, impairment and certain other non-recurring costs or recoveries.
Non-GAAP income tax expense includes certain tax adjustments and taxes on acquisition-related amortization, acquisition-related and integration costs, restructuring costs, other non-recurring costs and foreign exchange.
In addition to the above, non-GAAP net earnings (loss) and non-GAAP net earnings (loss) per share exclude the impact of foreign exchange gains or losses on translation of certain balance sheet accounts, foreign exchange gains or losses on forward contracts and certain tax adjustments.
We use the above-noted non-GAAP financial measures for planning purposes and to allow us to assess the performance of our business before including the impacts of the items noted above as they affect the comparability of our financial results. These non-GAAP measures are reviewed regularly by management and the Board of Directors as part of the ongoing internal assessment of our operating performance. We also use non-GAAP earnings from operations as one component in determining short-term incentive compensation for management employees.
Adjusted EBITDA is defined as net earnings (loss) plus stock-based compensation expense and related social taxes, acquisition-related and integration costs, restructuring cost, impairment, certain other nonrecurring costs or recoveries, amortization, foreign exchange gains or losses on translation of certain balance sheet accounts, unrealized foreign exchange gains or losses on forward contracts, interest and income tax expense. Adjusted EBITDA is a metric used by investors and analysts for valuation purposes and is an important indicator of our operating performance and our ability to generate liquidity through operating cash flow that will fund future working capital needs and fund future capital expenditures.
Cautionary Note Regarding Forward-Looking Statements
Certain statements and information in this press release are not based on historical facts and constitute forward-looking statements or forward-looking information within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities laws ("forward-looking statements") and may include statements and information relating to our Q3 2019 corporate update; financial guidance for our fiscal year 2019; expectations regarding the Company's cost savings initiatives; expectations regarding the acquisition of M2M Group and the timing thereof; our business outlook for the short and longer term; statements regarding our strategy, plans, goals, objectives, expectations and future operating performance; the Company's liquidity and capital resources; the Company's financial and operating objectives and strategies to achieve them; general economic conditions; estimates of our expenses, future revenues, non-GAAP earnings per share and capital requirements; our expectations regarding the legal proceedings we are involved in; statements with respect to the Company's estimated working capital; expectations with respect to the adoption of IoT solutions; expectations regarding trends in the IoT market and wireless module market; expectations regarding product and price competition from other wireless device manufacturers and solution providers; our ability to implement effective control procedures; and expectations regarding the launch of fifth generation cellular embedded modules. Forward-looking statements are provided to help you understand our views of our short and long term plans, expectations and prospects. We caution you that forward-looking statements may not be appropriate for other purposes. We do not intend to update or revise our forward-looking statements unless we are required to do so by securities laws.
Forward-looking statements
About Sierra Wireless
Sierra Wireless (NASDAQ: SWIR) (TSX: SW) is is the leading IoT solutions provider that combines devices, network and software to unlock value in the connected economy. Companies globally are adopting IoT to improve operational efficiency, create better customer experiences, improve their business models and create new revenue streams. Whether it is a solution to help a business securely connect edge devices to the cloud, or a software/API solution to help manage processes associated with billions of connected assets, or a platform to extract real-time data to make the best business decisions, Sierra Wireless will work with you to create the right industry-specific solution for your next IoT endeavor. Sierra Wireless has more than 1,300 employees globally and operates R&D centers in North America, Europe and Asia. For more information, visit www.sierrawireless.com.
AirPrime, AirLink, AirVantage, mangOH and Legato are trademarks of Sierra Wireless. Other product or service names mentioned herein may be the trademarks of their respective owners.
Company Snapshot |
||
Sierra Wireless (a Semtech Company)
Richmond, BC (Wireless)
|
Other Recent Company News |
|||||||||||||||||||
|