Today's News |
Sierra Wireless Reports Fourth Quarter and Full Year 2019 Results
Tuesday, February 18, 2020Company Profile | Careers | Follow Company
Richmond, BC, February 13, 2020--(T-Net)---Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) today reported results for its fourth quarter and fiscal year ended December 31, 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 announced just over a year ago our strategy to transform from a hardware-focused IoT company to delivering full IoT solutions with recurring revenue attached to our market leading IoT devices. In 2019, we made tremendous progress and delivered on our plan with $99.1 million in recurring and other services revenue," said Kent Thexton, President and CEO.
"And more importantly, we achieved record design win success with over $90 million of future recurring revenue from hundreds of new accounts. We launched market leading IoT solutions like our Octave product, increased our IoT connections by more than 400,000 and ended 2019 with 3.6 million global connections. We are seeing strong customer demand for our bundled solutions and increasing design wins in the growing IoT market."
FY 2019 results:(1)
Q4 2019 results:(1)
(1) See "Non-GAAP Financial Measures" and "Reconciliation of GAAP and Non-GAAP Results by Quarter" below.
Fourth Quarter 2019
Revenue for the fourth quarter of 2019 was $174.3 million compared to $201.4 million in the fourth quarter of 2018. Quarterly revenue for our two business segments was as follows: (i) Revenue from IoT Solutions was $90.9 million in the fourth quarter of 2019, a decrease of 5.0%, compared to $95.7 million in the fourth quarter of 2018 due primarily to lower Integrated IoT solutions module revenue, partially offset by stronger recurring and other services revenue. Within the IoT Solutions segment, excluding iTank (which was sold at the end of 2018), recurring and other services revenue was up 16.3% in the fourth quarter of 2019 compared to the same period of 2018; and (ii) Revenue from Embedded Broadband was $83.4 million in the fourth quarter of 2019, down 21.1%, compared to $105.7 million in the fourth quarter of 2018 due to weaker sales to mobile computing and networking customers, offset by a modest increase in sales to automotive customers. Recurring and other services revenue in the fourth quarter was $26.5 million, representing 15.2% of consolidated revenue and Product revenue was $147.8 million, representing 84.8% 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 fourth quarter of 2019 were $75.5 million, representing a decrease of $11.4 million from the end of the third quarter of 2019. The decrease in cash was mainly due to working capital and capital expenditure requirements, partially offset by sale of receivables under our receivables purchase program and proceeds from sale of an investment.
Full Year 2019
Revenue for 2019 was $713.5 million compared to $793.6 million in 2018, a decrease of 10.1%. Product revenue was $614.4 million, down 12.1% year-over-year, and recurring and other services revenue was $99.1 million, up 5.0% compared to 2018. Annual revenue for the two business segments was as follows: (i) Revenue from IoT Solutions was $377.8 million in 2019, up 1.0% compared to $373.9 million in 2018 due to strong contributions from our recurring and other services revenue, as well as our Enterprise gateway products; partially offset by lower revenue from Integrated IoT solutions modules. Within the IoT Solutions segment, excluding iTank, recurring and other services revenue was up $6.8 million, or 7.4%, and (ii) Revenue from Embedded Broadband was $335.7 million in 2019, down 20.0% compared to $419.7 million in 2018 primarily due to weaker demand from mobile computing and networking customers as we complete certain programs with these customers, partially offset by slightly higher revenue from automotive customers.
GAAP RESULTS
NON-GAAP RESULTS(1)
(1) See "Non-GAAP Financial Measures" and "Reconciliation of GAAP and Non-GAAP Results by Quarter" below.
Acquisition of M2M Group
On January 7, 2020, we completed the acquisition of M2M group of companies ("M2M Group") in Australia. Total cash consideration paid to the shareholders of M2M Group was $19.6 million for 100% of the equity plus approximately $1.1 million for the retirement of certain obligations, subject to normal working capital adjustments. The M2M Group is focused on IoT connectivity services and cellular devices in Australia, and the acquisition expands the Company's IoT Solutions business in the Asia-Pacific region. We believe that the business is an excellent strategic fit with our IoT Solutions business with slightly more than half of the M2M Group's revenue comprised of subscription-based recurring revenue, and representing a segment of the business that 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. We believe the M2M Group has a solid platform for us to increase our IoT services and solutions in Australia and Southeast Asia.
Accounting Standard Adoption
We adopted the new accounting standard for lease accounting (ASC 842) effective January 1, 2019. Our fourth quarter and full year 2019 financial results reflect the adoption of this new standard.
Financial Guidance - Full Year
In 2020, we expect annual revenue to be between $690 million to $710 million and Adjusted EBITDA to be between $10 million and $15 million. On a reporting segment basis, our expectation is that IoT Solutions revenue will grow 7% to 10% year-over-year and Embedded Broadband revenue will decline by 12% to 15% year-over-year. 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.
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.
SIERRA WIRELESS, INC. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE EARNINGS (LOSS) |
||||||||||||||||
(In thousands of U.S. dollars, except where otherwise stated) |
||||||||||||||||
|
Three months ended |
|
Twelve months ended |
|||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
Revenue |
|
|
|
|
|
|
|
|||||||||
loT Solutions |
$ |
90,937 |
|
|
$ |
95,728 |
|
|
$ |
377,808 |
|
|
$ |
373,937 |
|
|
Embedded Broadband |
83,364 |
|
|
105,667 |
|
|
335,705 |
|
|
419,665 |
|
|||||
|
174,301 |
|
|
201,395 |
|
|
713,513 |
|
|
793,602 |
|
|||||
Cost of sales |
|
|
|
|
|
|
|
|||||||||
loT Solutions |
57,272 |
|
|
59,077 |
|
|
237,650 |
|
|
234,335 |
|
|||||
Embedded Broadband |
65,661 |
|
|
76,423 |
|
|
255,873 |
|
|
294,696 |
|
|||||
|
122,933 |
|
|
135,500 |
|
|
493,523 |
|
|
529,031 |
|
|||||
Gross margin |
51,368 |
|
|
65,895 |
|
|
219,990 |
|
|
264,571 |
|
|||||
Expenses |
|
|
|
|
|
|
|
|||||||||
Sales and marketing |
22,309 |
|
|
22,353 |
|
|
92,093 |
|
|
88,587 |
|
|||||
Research and development |
21,015 |
|
|
22,230 |
|
|
86,473 |
|
|
93,707 |
|
|||||
Administration |
11,600 |
|
|
14,516 |
|
|
48,827 |
|
|
61,582 |
|
|||||
Restructuring |
2,309 |
|
|
2,345 |
|
|
28,160 |
|
|
7,115 |
|
|||||
Acquisition-related and integration |
274 |
|
|
613 |
|
|
974 |
|
|
3,962 |
|
|||||
Impairment |
877 |
|
|
— |
|
|
877 |
|
|
— |
|
|||||
Loss on disposal of iTank business |
— |
|
|
2,064 |
|
|
— |
|
|
2,064 |
|
|||||
Amortization |
5,369 |
|
|
5,971 |
|
|
20,607 |
|
|
25,829 |
|
|||||
|
63,753 |
|
|
70,092 |
|
|
278,011 |
|
|
282,846 |
|
|||||
Loss from operations |
(12,385 |
) |
|
(4,197 |
) |
|
(58,021 |
) |
|
(18,275 |
) |
|||||
Foreign exchange gain (loss) |
1,666 |
|
|
(2,378 |
) |
|
(1,296 |
) |
|
(5,470 |
) |
|||||
Other income (expense) |
(109 |
) |
|
(19 |
) |
|
(301 |
) |
|
51 |
|
|||||
Loss before income taxes |
(10,828 |
) |
|
(6,594 |
) |
|
(59,618 |
) |
|
(23,694 |
) |
|||||
Income tax expense (recovery) |
90 |
|
|
(2,768 |
) |
|
10,920 |
|
|
916 |
|
|||||
Net loss |
$ |
(10,918 |
) |
|
$ |
(3,826 |
) |
|
$ |
(70,538 |
) |
|
$ |
(24,610 |
) |
|
Other comprehensive earnings (loss): |
|
|
|
|
|
|
|
|||||||||
Foreign currency translation adjustments, net of taxes of $nil |
3,177 |
|
|
249 |
|
|
(4,070 |
) |
|
(6,670 |
) |
|||||
Comprehensive loss |
$ |
(7,741 |
) |
|
$ |
(3,577 |
) |
|
$ |
(74,608 |
) |
|
$ |
(31,280 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Net loss per share (in dollars) |
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
(0.30 |
) |
|
$ |
(0.11 |
) |
|
$ |
(1.95 |
) |
|
$ |
(0.68 |
) |
|
Diluted |
(0.30 |
) |
|
(0.11 |
) |
|
(1.95 |
) |
|
(0.68 |
) |
|||||
Weighted average number of shares outstanding (in thousands) |
|
|
|
|
|
|
|
|||||||||
Basic |
36,222 |
|
|
36,057 |
|
|
36,166 |
|
|
36,019 |
|
|||||
Diluted |
36,222 |
|
|
36,057 |
|
|
36,166 |
|
|
36,019 |
|
SIERRA WIRELESS, INC. |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands of U.S. dollars, except where otherwise stated) |
||||||||
|
December 31, 2019 |
|
December 31, 2018 |
|||||
Assets |
|
|
|
|||||
Current assets |
|
|
|
|||||
Cash and cash equivalents |
$ |
75,454 |
|
|
$ |
89,076 |
|
|
Restricted cash |
3,629 |
|
|
221 |
|
|||
Accounts receivable |
131,432 |
|
|
171,725 |
|
|||
Inventories |
54,291 |
|
|
50,779 |
|
|||
Prepaids and other |
19,256 |
|
|
11,703 |
|
|||
|
284,062 |
|
|
323,504 |
|
|||
Property and equipment, net |
39,924 |
|
|
39,842 |
|
|||
Operating lease right-of-use assets |
25,609 |
|
|
— |
|
|||
Intangible assets, net |
70,072 |
|
|
84,890 |
|
|||
Goodwill |
207,595 |
|
|
211,074 |
|
|||
Deferred income taxes |
2,096 |
|
|
11,751 |
|
|||
Other assets |
9,982 |
|
|
12,855 |
|
|||
|
$ |
639,340 |
|
|
$ |
683,916 |
|
|
Liabilities |
|
|
|
|||||
Current liabilities |
|
|
|
|||||
Accounts payable and accrued liabilities |
$ |
173,556 |
|
|
$ |
184,220 |
|
|
Deferred revenue |
10,610 |
|
|
6,213 |
|
|||
|
184,166 |
|
|
190,433 |
|
|||
Long-term obligations |
43,774 |
|
|
43,250 |
|
|||
Operating lease liabilities |
25,154 |
|
|
— |
|
|||
Deferred income taxes |
4,921 |
|
|
6,103 |
|
|||
|
258,015 |
|
|
239,786 |
|
|||
Equity |
|
|
|
|||||
Shareholders' equity |
|
|
|
|||||
Common stock: no par value; unlimited shares authorized; issued and outstanding: 336,233,361 shares (December 31, 2018 - 36,067,415 shares) |
435,532 |
|
|
432,552 |
|
|||
Preferred stock: no par value; unlimited shares authorized; issued and outstanding: nil shares |
— |
|
|
— |
|
|||
Treasury stock: at cost; 44,487 shares (December 31, 2018 - 119,584 shares) |
(370 |
) |
|
(1,965 |
) |
|||
Additional paid-in capital |
38,212 |
|
|
30,984 |
|
|||
Retained deficit |
(78,833 |
) |
|
(8,295 |
) |
|||
Accumulated other comprehensive loss |
(13,216 |
) |
|
(9,146 |
) |
|||
|
381,325 |
|
|
444,130 |
|
|||
|
$ |
639,340 |
|
|
$ |
683,916 |
|
SIERRA WIRELESS, INC. |
||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||||||||
(In thousands of U.S. dollars) |
||||||||||||||||
|
Three months ended |
|
Twelve months ended |
|||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
Cash flows provided by (used in): |
|
|
|
|
|
|
|
|||||||||
Operating activities |
|
|
|
|
|
|
|
|||||||||
Net loss |
$ |
(10,918 |
) |
|
$ |
(3,826 |
) |
|
$ |
(70,538 |
) |
|
$ |
(24,610 |
) |
|
Items not requiring (providing) cash |
|
|
|
|
|
|
|
|||||||||
Amortization |
8,573 |
|
|
9,308 |
|
|
33,177 |
|
|
39,150 |
|
|||||
Stock-based compensation |
1,801 |
|
|
2,743 |
|
|
12,930 |
|
|
13,060 |
|
|||||
Deferred income taxes |
(93 |
) |
|
(4,145 |
) |
|
8,711 |
|
|
(1,685 |
) |
|||||
Impairment |
877 |
|
|
— |
|
|
877 |
|
|
— |
|
|||||
Loss on disposal of iTank business |
— |
|
|
2,064 |
|
|
— |
|
|
2,064 |
|
|||||
Unrealized foreign exchange loss (gain) |
(958 |
) |
|
995 |
|
|
1,122 |
|
|
5,973 |
|
|||||
Other |
570 |
|
|
58 |
|
|
1,218 |
|
|
279 |
|
|||||
Changes in non-cash working capital |
|
|
|
|
|
|
|
|||||||||
Accounts receivable |
156 |
|
|
1,236 |
|
|
37,965 |
|
|
(5,526 |
) |
|||||
Inventories |
6,264 |
|
|
183 |
|
|
(3,712 |
) |
|
1,508 |
|
|||||
Prepaids and other |
(1,111 |
) |
|
797 |
|
|
(8,611 |
) |
|
(3,525 |
) |
|||||
Accounts payable and accrued liabilities |
(12,566 |
) |
|
12,919 |
|
|
(12,069 |
) |
|
21,944 |
|
|||||
Deferred revenue |
1,113 |
|
|
94 |
|
|
5,792 |
|
|
(1,402 |
) |
|||||
Cash flows provided by (used in) operating activities |
(6,292 |
) |
|
22,426 |
|
|
6,862 |
|
|
47,230 |
|
|||||
Investing activities |
|
|
|
|
|
|
|
|||||||||
Additions to property and equipment |
(4,691 |
) |
|
(4,378 |
) |
|
(16,494 |
) |
|
(18,166 |
) |
|||||
Additions to intangible assets |
(801 |
) |
|
(1,140 |
) |
|
(3,779 |
) |
|
(2,933 |
) |
|||||
Proceeds from sale of property and equipment |
11 |
|
|
17 |
|
|
98 |
|
|
93 |
|
|||||
Proceeds from sale of investment |
3,303 |
|
|
— |
|
|
3,303 |
|
|
— |
|
|||||
Proceeds from sale of iTank business |
— |
|
|
5,000 |
|
|
500 |
|
|
5,000 |
|
|||||
Cash flows used in investing activities |
(2,178 |
) |
|
(501 |
) |
|
(16,372 |
) |
|
(16,006 |
) |
|||||
Financing activities |
|
|
|
|
|
|
|
|||||||||
Issuance of common shares, net of issuance cost |
161 |
|
|
101 |
|
|
488 |
|
|
2,636 |
|
|||||
Repurchase of common shares for cancellation |
— |
|
|
— |
|
|
— |
|
|
(3,120 |
) |
|||||
Purchase of treasury shares for RSU distribution |
(348 |
) |
|
(1,723 |
) |
|
(674 |
) |
|
(2,808 |
) |
|||||
Taxes paid related to net settlement of equity awards |
(86 |
) |
|
(90 |
) |
|
(941 |
) |
|
(1,878 |
) |
|||||
Payment for contingent consideration |
— |
|
|
— |
|
|
— |
|
|
(130 |
) |
|||||
Decrease in other long-term obligations |
(130 |
) |
|
(116 |
) |
|
(535 |
) |
|
(627 |
) |
|||||
Cash flows used in financing activities |
(403 |
) |
|
(1,828 |
) |
|
(1,662 |
) |
|
(5,927 |
) |
|||||
Effect of foreign exchange rate changes on cash and cash equivalents |
835 |
|
|
1,519 |
|
|
958 |
|
|
(1,224 |
) |
|||||
Cash, cash equivalents and restricted cash, increase (decrease) in the period |
(8,038 |
) |
|
21,616 |
|
|
(10,214 |
) |
|
24,073 |
|
|||||
Cash, cash equivalents and restricted cash, beginning of period |
87,121 |
|
|
67,681 |
|
|
89,297 |
|
|
65,224 |
|
|||||
Cash, cash equivalents and restricted cash, end of period |
$ |
79,083 |
|
|
$ |
89,297 |
|
|
$ |
79,083 |
|
|
$ |
89,297 |
|
SIERRA WIRELESS, INC. |
|||||||||||||||||||||||||||||||||||||||||
RECONCILIATION OF GAAP AND NON-GAAP RESULTS BY QUARTER |
|||||||||||||||||||||||||||||||||||||||||
(in thousands of U.S. dollars, except where otherwise stated) |
|
2019 |
|
2018 |
|||||||||||||||||||||||||||||||||||||
|
Total |
Q4 |
Q3 |
Q2 |
Q1 |
|
Total |
Q4 |
Q3 |
Q2 |
Q1 |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Gross margin - GAAP |
|
$ |
219,990 |
|
$ |
51,368 |
|
$ |
55,043 |
|
$ |
58,949 |
|
$ |
54,630 |
|
|
$ |
264,571 |
|
$ |
65,895 |
|
$ |
67,267 |
|
$ |
69,309 |
|
$ |
62,100 |
|
|||||||||
Stock-based compensation and related social taxes |
|
167 |
|
20 |
|
44 |
|
44 |
|
59 |
|
|
479 |
|
58 |
|
57 |
|
57 |
|
307 |
|
|||||||||||||||||||
Realized gains (losses) on hedge contracts |
|
(4 |
) |
1 |
|
— |
|
(2 |
) |
(3 |
) |
|
(30 |
) |
(13 |
) |
(11 |
) |
— |
|
(6 |
) |
|||||||||||||||||||
Other nonrecurring costs |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
5 |
|
5 |
|
— |
|
— |
|
— |
|
|||||||||||||||||||
Gross margin - Non-GAAP |
|
$ |
220,153 |
|
$ |
51,389 |
|
$ |
55,087 |
|
$ |
58,991 |
|
$ |
54,686 |
|
|
$ |
265,025 |
|
$ |
65,945 |
|
$ |
67,313 |
|
$ |
69,366 |
|
$ |
62,401 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Earnings (loss) from operations - GAAP |
|
$ |
(58,021 |
) |
$ |
(12,385 |
) |
$ |
(12,559 |
) |
$ |
(23,271 |
) |
$ |
(9,806 |
) |
|
$ |
(18,275 |
) |
$ |
(4,197 |
) |
$ |
853 |
|
$ |
(5,055 |
) |
$ |
(9,876 |
) |
|||||||||
Stock-based compensation and related social taxes |
|
13,194 |
|
1,802 |
|
3,876 |
|
4,102 |
|
3,414 |
|
|
13,006 |
|
2,743 |
|
3,473 |
|
3,950 |
|
2,840 |
|
|||||||||||||||||||
Acquisition-related and integration |
|
974 |
|
274 |
|
291 |
|
314 |
|
95 |
|
|
3,962 |
|
613 |
|
570 |
|
1,014 |
|
1,765 |
|
|||||||||||||||||||
Restructuring |
|
28,160 |
|
2,309 |
|
6,274 |
|
18,180 |
|
1,397 |
|
|
7,115 |
|
2,345 |
|
227 |
|
952 |
|
3,591 |
|
|||||||||||||||||||
Impairment |
|
877 |
|
877 |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|||||||||||||||||||
Realized gains (losses) on hedge contracts |
|
(187 |
) |
81 |
|
24 |
|
(183 |
) |
(109 |
) |
|
(562 |
) |
(296 |
) |
(201 |
) |
(14 |
) |
(51 |
) |
|||||||||||||||||||
Other nonrecurring costs |
|
2,903 |
|
795 |
|
279 |
|
662 |
|
1,167 |
|
|
11,485 |
|
4,761 |
|
1,583 |
|
5,141 |
|
— |
|
|||||||||||||||||||
Acquisition-related amortization |
|
14,514 |
|
3,593 |
|
3,610 |
|
3,624 |
|
3,687 |
|
|
18,575 |
|
4,261 |
|
4,354 |
|
4,426 |
|
5,534 |
|
|||||||||||||||||||
Earnings (loss) from operations - Non-GAAP |
|
$ |
2,414 |
|
$ |
(2,654 |
) |
$ |
1,795 |
|
$ |
3,428 |
|
$ |
(155 |
) |
|
$ |
35,306 |
|
$ |
10,230 |
|
$ |
10,859 |
|
$ |
10,414 |
|
$ |
3,803 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Net loss - GAAP |
|
$ |
(70,538 |
) |
$ |
(10,918 |
) |
$ |
(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 nonrecurring costs (recoveries) |
|
46,108 |
|
6,057 |
|
10,720 |
|
23,258 |
|
6,073 |
|
|
35,568 |
|
10,462 |
|
5,853 |
|
11,057 |
|
8,196 |
|
|||||||||||||||||||
Amortization |
|
33,177 |
|
8,573 |
|
8,115 |
|
8,118 |
|
8,371 |
|
|
39,150 |
|
9,308 |
|
9,483 |
|
9,651 |
|
10,708 |
|
|||||||||||||||||||
Interest and other, net |
|
301 |
|
109 |
|
121 |
|
102 |
|
(31 |
) |
|
(51 |
) |
19 |
|
(7 |
) |
(8 |
) |
(55 |
) |
|||||||||||||||||||
Foreign exchange losses (gains) |
|
1,109 |
|
(1,585 |
) |
2,988 |
|
(1,037 |
) |
743 |
|
|
4,908 |
|
2,082 |
|
(42 |
) |
4,034 |
|
(1,166 |
) |
|||||||||||||||||||
Income tax expense (recovery) |
|
10,920 |
|
90 |
|
4,577 |
|
5,657 |
|
596 |
|
|
916 |
|
(2,768 |
) |
1,738 |
|
2,289 |
|
(343 |
) |
|||||||||||||||||||
Adjusted EBITDA |
|
21,077 |
|
2,326 |
|
6,300 |
|
7,922 |
|
4,529 |
|
|
55,881 |
|
15,277 |
|
15,988 |
|
15,639 |
|
8,977 |
|
|||||||||||||||||||
Amortization (exclude acquisition-related amortization) |
|
(18,663 |
) |
(4,980 |
) |
(4,505 |
) |
(4,494 |
) |
(4,684 |
) |
|
(20,575 |
) |
(5,047 |
) |
(5,129 |
) |
(5,225 |
) |
(5,174 |
) |
|||||||||||||||||||
Interest and other, net |
|
(301 |
) |
(109 |
) |
(121 |
) |
(102 |
) |
31 |
|
|
51 |
|
(19 |
) |
7 |
|
8 |
|
55 |
|
|||||||||||||||||||
Income tax expense - Non-GAAP |
|
(2,418 |
) |
(176 |
) |
(653 |
) |
(859 |
) |
(730 |
) |
|
(2,930 |
) |
(1,245 |
) |
(352 |
) |
(769 |
) |
(564 |
) |
|||||||||||||||||||
Net earnings (loss) - Non-GAAP |
|
$ |
(305 |
) |
$ |
(2,939 |
) |
$ |
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) |
|
$ |
(1.95 |
) |
$ |
(0.30 |
) |
$ |
(0.56 |
) |
$ |
(0.78 |
) |
$ |
(0.31 |
) |
|
$ |
(0.68 |
) |
$ |
(0.11 |
) |
$ |
(0.03 |
) |
$ |
(0.32 |
) |
$ |
(0.23 |
) |
|||||||||
Non-GAAP - (in dollars per share) |
|
$ |
(0.01 |
) |
$ |
(0.08 |
) |
$ |
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 |
||||||||||||||||||||||||||||||||||||||
Total |
Q4 |
Q3 |
Q2 |
Q1 |
|
Total |
Q4 |
Q3 |
Q2 |
Q1 |
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
IoT Solutions |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Revenue |
$ |
377,808 |
|
$ |
90,937 |
|
$ |
93,439 |
|
$ |
99,145 |
|
$ |
94,287 |
|
|
$ |
373,937 |
|
$ |
95,728 |
|
$ |
95,487 |
|
$ |
93,274 |
|
$ |
89,448 |
|
||||||||||
Gross margin |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
- GAAP |
$ |
140,158 |
|
$ |
33,665 |
|
$ |
35,203 |
|
$ |
36,811 |
|
$ |
34,479 |
|
|
$ |
139,602 |
|
$ |
36,651 |
|
$ |
36,059 |
|
$ |
34,282 |
|
$ |
32,610 |
|
||||||||||
- Non-GAAP |
$ |
140,222 |
|
$ |
33,676 |
|
$ |
35,203 |
|
$ |
36,833 |
|
$ |
34,510 |
|
|
$ |
139,818 |
|
$ |
36,675 |
|
$ |
36,081 |
|
$ |
34,308 |
|
$ |
32,754 |
|
||||||||||
Gross margin % |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
- GAAP |
37.1 |
% |
37.0 |
% |
37.7 |
% |
37.1 |
% |
36.6 |
% |
|
37.3 |
% |
38.3 |
% |
37.8 |
% |
36.8 |
% |
36.5 |
% |
||||||||||||||||||||
- Non-GAAP |
37.1 |
% |
37.0 |
% |
37.7 |
% |
37.2 |
% |
36.6 |
% |
|
37.4 |
% |
38.3 |
% |
37.8 |
% |
36.8 |
% |
36.6 |
% |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Embedded Broadband |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Revenue |
$ |
335,705 |
|
$ |
83,364 |
|
$ |
80,586 |
|
$ |
92,229 |
|
$ |
79,526 |
|
|
$ |
419,665 |
|
$ |
105,667 |
|
$ |
107,939 |
|
$ |
108,629 |
|
$ |
97,430 |
|
||||||||||
Gross margin |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
- GAAP |
$ |
79,832 |
|
$ |
17,703 |
|
$ |
19,840 |
|
$ |
22,138 |
|
$ |
20,151 |
|
|
$ |
124,969 |
|
$ |
29,244 |
|
$ |
31,208 |
|
$ |
35,027 |
|
$ |
29,490 |
|
||||||||||
- Non-GAAP |
$ |
79,931 |
|
$ |
17,713 |
|
$ |
19,884 |
|
$ |
22,158 |
|
$ |
20,176 |
|
|
$ |
125,207 |
|
$ |
29,270 |
|
$ |
31,232 |
|
$ |
35,058 |
|
$ |
29,647 |
|
||||||||||
Gross margin % |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
- GAAP |
23.8 |
% |
21.2 |
% |
24.6 |
% |
24.0 |
% |
25.3 |
% |
|
29.8 |
% |
27.7 |
% |
28.9 |
% |
32.2 |
% |
30.3 |
% |
||||||||||||||||||||
- Non-GAAP |
23.8 |
% |
21.2 |
% |
24.7 |
% |
24.0 |
% |
25.4 |
% |
|
29.8 |
% |
27.7 |
% |
28.9 |
% |
32.3 |
% |
30.4 |
% |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Revenue |
$ |
713,513 |
|
$ |
174,301 |
|
$ |
174,025 |
|
$ |
191,374 |
|
$ |
173,813 |
|
|
$ |
793,602 |
|
$ |
201,395 |
|
$ |
203,426 |
|
$ |
201,903 |
|
$ |
186,878 |
|
||||||||||
Gross margin |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
- GAAP |
$ |
219,990 |
|
$ |
51,368 |
|
$ |
55,043 |
|
$ |
58,949 |
|
$ |
54,630 |
|
|
$ |
264,571 |
|
$ |
65,895 |
|
$ |
67,267 |
|
$ |
69,309 |
|
$ |
62,100 |
|
||||||||||
- Non-GAAP |
$ |
220,153 |
|
$ |
51,389 |
|
$ |
55,087 |
|
$ |
58,991 |
|
$ |
54,686 |
|
|
$ |
265,025 |
|
$ |
65,945 |
|
$ |
67,313 |
|
$ |
69,366 |
|
$ |
62,401 |
|
||||||||||
Gross margin % |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
- GAAP |
30.8 |
% |
29.5 |
% |
31.6 |
% |
30.8 |
% |
31.4 |
% |
|
33.3 |
% |
32.7 |
% |
33.1 |
% |
34.3 |
% |
33.2 |
% |
||||||||||||||||||||
- Non-GAAP |
30.9 |
% |
29.5 |
% |
31.7 |
% |
30.8 |
% |
31.5 |
% |
|
33.4 |
% |
32.7 |
% |
33.1 |
% |
34.4 |
% |
33.4 |
% |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Revenue by Type |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Product |
$ |
614,384 |
|
$ |
147,760 |
|
$ |
149,396 |
|
$ |
166,348 |
|
$ |
150,880 |
|
|
$ |
699,158 |
|
$ |
178,031 |
|
$ |
179,390 |
|
$ |
178,806 |
|
$ |
162,931 |
|
||||||||||
Recurring and other services |
$ |
99,129 |
|
$ |
26,541 |
|
$ |
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.
Our non-GAAP financial measures include non-GAAP gross margin, non-GAAP earnings (loss) from operations, non-GAAP net earnings (loss), non-GAAP basic and diluted net earnings (loss) per share, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), and free cash flow.
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 nonrecurring 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 non-recurring 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 Q4 2019 corporate update; financial guidance for our fiscal year 2020; expectations regarding the expected earnings of the M2M Group and ability to expand our market presence in Australia and Southeast Asia; our business outlook for the short and long 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 Internet of Things ("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.
Forward-looking statements
Company Snapshot |
||
Sierra Wireless (a Semtech Company)
Richmond, BC (Wireless)
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