4G chipmaker Sequans Communications S.A. (NYSE:SQNS) today
announced financial results for the fourth quarter and full year
ended December 31, 2015.
Fourth Quarter 2015 Highlights:
Revenue: Revenue of $11.0 million increased 18% compared
to the third quarter of 2015, with lower product sales offset by
higher other revenue, including both license and service revenues.
Revenue increased 68% compared to the fourth quarter of 2014 due to
higher sales of products for the LTE markets, as well as higher
other revenue.
Gross margin: Gross margin was 43.4% (51.8% on a non-IFRS
basis) compared to gross margin of 40.8% in the third quarter of
2015, and compared to 6.1% (34.7% on a non-IFRS basis) in the
fourth quarter of 2014, due to a more favorable revenue mix.
Non-IFRS gross margin excludes a provision for writing down the
remaining WiMAX inventory.
Operating loss: Operating loss was $5.1 million compared
to an operating loss of $4.2 million in the third quarter of 2015
and an operating loss of $9.2 million in the fourth quarter of
2014, reflecting higher revenues and higher gross profit offset by
higher operating expenses.
Net loss: Net loss was $9.7 million, or ($0.16) per
diluted share/ADS, compared to a net loss of $2.4 million, or
($0.04) per diluted share/ADS in the third quarter of 2015 and a
net loss of $9.0 million, or ($0.15) per diluted share/ADS in the
fourth quarter of 2014.
Non-IFRS Net loss: Excluding the non-cash items of
stock-based compensation, the provision for WiMAX inventory, the
fair-value and effective interest adjustments related to the
convertible debt and its embedded derivative, and the impact of
revaluation of an interest-free government loan, non-IFRS net loss
was $4.2 million, or ($0.07) per diluted share/ADS, compared to a
non-IFRS net loss of $4.6 million, or ($0.08) per diluted share/ADS
in the third quarter of 2015, and a non-IFRS net loss of $7.0
million, or ($0.12) per diluted share/ADS, in the fourth quarter of
2014.
Cash and cash equivalents: Cash position of $8.7 million
reflects the partial impact from strategic cooperation transactions
finalized during the fourth quarter. At least $7 million in cash is
expected to be received during the first quarter, of which over $5
million was received in January 2016.
In millions of US$ except percentages, shares and per
share amounts
Key Metrics
Q4 2015 %* Q3 2015
%* Q4 2014 %*
Full year 2015 %*
Full year 2014 %* Revenue
$11.0 $9.4 $6.6
$32.7 $22.6 Gross profit
4.8 43.4% 3.8 40.8%
0.4 6.1%
13.3 40.5% 6.8 30.2% Operating loss
(5.1) (46.6%) (4.2) (45.3%) (9.2) (139.2%)
(23.6)
-72.2% (34.1) (150.7%) Net loss
(9.7) (87.6%) (2.4)
(26.0%) (9.0) (137.6%)
(23.6) -72.2% (34.1) (150.7%)
Diluted EPS
($0.16) ($0.04) ($0.15)
($0.46) ($0.58)
Weighted average number of diluted shares/ADS
59,145,393
59,144,741 59,144,741
59,144,905 59,141,716 Cash flow used
in operations
(2.2) (2.4) (5.7)
(16.4) (24.4) Cash,
cash equivalents and short-term deposit at quarter-end
8.7
11.6 12.5
8.7 12.5 Additional information on non-cash
items: - WiMAX inventory provision
0.8
-
1.9
0.8 1.9 - Stock-based compensation included in operating
result
0.2 0.2 0.2
0.9 1.3 - Change in the fair value
of convertible debt embedded derivative
4.2 (2.5)
-
2.0 - - Interest on convertible debt
0.3 0.3 -
0.7 - - Impact of revaluation of interest-free government
loan - (0.1) -
(0.1) - Non-IFRS diluted EPS (excludes
stock-based compensation, inventory provision, fair value and
effective interest adjustments related to the convertible debt and
its embedded derivative, and the impact of revaluation of
interest-free government loan)
($0.07) ($0.08)
($0.12)
($0.39) ($0.52)
*
Percentage of revenue
“We are pleased to report revenue growth of 45% in 2015,
primarily from the home and mobile router business,” said Georges
Karam, Sequans CEO. “In addition to continued growth from this
traditional market, we expect revenue from the M2M/IoT business to
begin ramping in 2016 thanks to our LTE CAT1 leadership and secured
design wins.
“Another major goal for 2016 is to remain at the forefront of
LTE technology by introducing new LTE-M narrowband solutions that
will further expand our available market, enable new product
categories and help fuel revenue growth in the years to come.
During Q4 we finalized three new strategic partnerships, including
Verizon and Socle-Foxconn, with numerous benefits including the
ability to accelerate time-to-market for new products, access to
complementary technology, expanding our sales channels and global
reach, as well as providing financial advantages. We are gratified
that these successful companies have chosen to partner with
Sequans, validating our leadership in single-mode LTE technology,”
added Karam.
2016 Outlook
The following statements are based on management’s current
assumptions and expectations. These statements are forward-looking
and actual results may differ materially. Sequans undertakes no
obligation to update these statements.
Sequans expects revenue for the first quarter of 2016 to be in
the range of $9.5 to $11.5 million, primarily reflecting typical
seasonality, with non-IFRS gross margin above 40%. Based on this
revenue range and expected gross margin, non-IFRS net loss per
diluted share/ADS is expected to be between ($0.08) and ($0.10) for
the first quarter of 2016, based on approximately 59.2 million
weighted average number of diluted shares/ADSs. Non-IFRS EPS
guidance excludes the impact of stock based compensation, the
non-cash fair-value and effective interest adjustments related to
the convertible debt and its embedded derivative, the impact of
revaluation of an interest-free government loan and any other
relevant non-cash or non-recurring expenses.
Meaningful sequential revenue growth is expected beginning in
the second quarter as new devices are launched in addition to the
product already shipping. In addition, discussions with several
potential strategic partners are continuing. When finalized, these
alliances are expected to contribute to company financing and
incremental revenue.
Conference Call and Webcast
Sequans plans to conduct a teleconference and live webcast to
discuss the financial results for the fourth quarter of 2015 today,
February 4, 2016 at 8:00 a.m. EST /14:00 CET. To participate in the
live call, analysts and investors should dial 800-230-1059 (or +1
612-234-9959 if outside the U.S.). A live and archived webcast of
the call will be available from the Investors section of the
Sequans website at www.sequans.com/investors/. A replay of the
conference call will be available until March 4, 2016 by dialing
toll free 800-475-6701 in the U.S., or +1 320-365-3844 from outside
the U.S., using the following access code: 382913.
Forward-Looking Statements
This press release contains projections and other
forward-looking statements regarding future events or our future
financial performance. All statements other than present and
historical facts and conditions contained in this release,
including any statements regarding our future results of operations
and financial positions, business strategy, plans and our
objectives for future operations, are forward-looking statements
(within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended). These statements are only predictions and
reflect our current beliefs and expectations with respect to future
events and are based on assumptions and subject to risk and
uncertainties and subject to change at any time. We operate in a
very competitive and rapidly changing environment. New risks emerge
from time to time. Given these risks and uncertainties, you should
not place undue reliance on these forward-looking statements.
Actual events or results may differ materially from those contained
in the projections or forward-looking statements. Some of the
factors that could cause actual results to differ materially from
the forward-looking statements contained herein include, without
limitation: (i) the contraction or lack of growth of markets in
which we compete and in which our products are sold, including LTE
and WiMAX markets, (ii) unexpected increases in our expenses,
including manufacturing expenses, (iii) our inability to adjust
spending quickly enough to offset any unexpected revenue shortfall,
(iv) delays or cancellations in spending by our customers, (v)
unexpected average selling price reductions, (vi) the significant
fluctuation to which our quarterly revenue and operating results
are subject due to cyclicality in the wireless communications
industry and transitions to new process technologies, (vii) our
inability to anticipate the future market demands and future needs
of our customers, (viii) our inability to achieve new design wins
or for design wins to result in shipments of our products at levels
and in the timeframes we currently expect, and (ix) other factors
detailed in documents we file from time to time with the Securities
and Exchange Commission. Forward-looking statements in this release
are made pursuant to the safe harbor provisions contained in the
Private Securities Litigation Reform Act of 1995.
Use of Non-IFRS/non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements
prepared in accordance with IFRS, we disclose certain non-IFRS, or
non-GAAP, financial measures. These measures exclude non-cash
charges relating to stock-based compensation, the non-cash
financial expense related to the convertible debt and its embedded
derivative issued in April 2015 and the impact of revaluation of an
interest-free government loan. We believe that these measures can
be useful to facilitate comparisons among different companies.
These non-GAAP measures have limitations in that the non-GAAP
measures we use may not be directly comparable to those reported by
other companies. We seek to compensate for this limitation by
providing a reconciliation of the non-GAAP financial measures to
the most directly comparable IFRS measures in the table attached to
this press release.
About Sequans Communications
Sequans Communications S.A. (NYSE:SQNS) is a 4G chipmaker and
leading provider of single-mode LTE chipset solutions to wireless
device manufacturers worldwide. Founded in 2003, Sequans has
developed and delivered six generations of 4G technology and its
chips are certified and shipping in 4G networks, both LTE and
WiMAX, around the world. Today, Sequans offers two LTE product
lines: StreamrichLTE™, optimized for feature-rich mobile computing
and home/portable router devices, and StreamliteLTE™, optimized for
M2M devices and other connected devices for the Internet of Things.
Sequans is based in Paris, France with additional offices in the
United States, United Kingdom, Israel, Hong Kong, Singapore,
Taiwan, South Korea, and China. Visit Sequans online
at www.sequans.com; www.facebook.com/sequans; www.twitter.com/sequans
Condensed financial tables follow
SEQUANS COMMUNICATIONS S.A.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
Three months ended (in thousands of US$, except
share and per share amounts) Dec 31, Sept 30,
Dec 31, 2015
2015 2014 Revenue :
Product revenue $ 6,551 $ 7,887 $ 5,759 Other revenue
4,496 1,471
813
Total revenue
11,047 9,358
6,572 Cost of revenue
Cost of product revenue 5,628 5,153 6,036 Cost of other revenue
621 391
133
Total cost of revenue
6,249 5,544
6,169 Gross profit
4,798
3,814 403
Operating expenses : Research and development 6,892 5,525
6,595 Sales and marketing 1,509 1,406 1,255 General and
administrative 1,540 1,119 1,704
Total operating expenses
9,941
8,050 9,554
Operating loss (5,143 )
(4,236 )
(9,151 ) Financial income (expense): Interest
income (expense), net (541 ) (509 ) (23 ) Other financial expense
(4 ) - - Change in the fair value of convertible debt embedded
derivative (4,249 ) 2,488 - Foreign exchange gain (loss)
234 (91 )
164
Loss before income taxes
(9,703 ) (2,348
) (9,010 ) Income tax
expense (benefit) (23 )
81 34
Loss
$ (9,680 ) $ (2,429 )
(9,044 ) Attributable to : Shareholders of the
parent (9,680 ) (2,429 ) (9,044 ) Minority interests
- -
- Basic loss per share ($0.16 )
($0.04 ) ($0.15 ) Diluted loss
per share ($0.16 ) ($0.04
) ($0.15 ) Weighted average number of shares
used for computing: — Basic 59,145,393 59,144,741 59,144,741 —
Diluted 59,145,393
59,144,741 59,144,741
SEQUANS COMMUNICATIONS S.A.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
Year ended December 31, (in thousands of US$, except
share and per share amounts) 2015
2014 Revenue : Product revenue $ 24,669
$ 19,836 Other revenue 8,040
2,766
Total revenue
32,709 22,602
Cost of revenue Cost of product revenue 17,970 15,435
Cost of other revenue 1,481
346
Total cost of revenue
19,451 15,781
Gross profit 13,258
6,821 Operating
expenses : Research and development 25,445 28,634 Sales and
marketing 5,985 5,278 General and administrative 5,428 6,969
Total operating
expenses 36,858
40,881 Operating loss
(23,600 )
(34,060 ) Financial income (expense): Interest
income (expense), net (1,516 ) (20 ) Other financial expense (145 )
- Change in the fair value of convertible debt embedded derivative
(2,036 ) - Foreign exchange gain 249
118
Loss before income taxes
(27,048 )
(33,962 ) Income tax expense (benefit) 177 162
Loss (27,225 ) (34,124 )
Attributable to : Shareholders of the parent (27,225 )
(34,124 ) Minority interests -
- Basic loss per share
($0.46 ) ($0.58 ) Diluted loss per share
($0.46 ) ($0.58 )
Weighted average number of shares used for
computing:
— Basic 59,144,905 59,141,716 — Diluted
59,144,905 59,141,716
SEQUANS COMMUNICATIONS S.A.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION At
December 31, (in thousands of US$)
2015 2014 ASSETS
Non-current assets Property, plant and equipment $ 7,116 $
8,743 Intangible assets 5,255 3,440 Deposits and other receivables
345 320 Available for sale assets 321
597
Total non-current assets
13,037 13,100
Current assets Inventories 4,065 9,199 Trade
receivables 16,674 7,749 Prepaid expenses and other receivables
3,170 2,988 Recoverable value added tax 541 447 Research tax credit
receivable 2,838 3,443 Deposit maturing in less than 90 days 393
160 Cash and cash equivalents 8,288
12,329
Total current assets
35,969 36,315
Total assets $ 49,006 $
49,415 EQUITY AND LIABILITIES Equity
Issued capital, euro 0.02 nominal value, 59,166,741 shares
authorized, issued and outstanding at December 31, 2015 (59,144,741
at December 31, 2014) $ 1,568 $ 1,568 Share premium 165,536 165,507
Other capital reserves 16,864 15,997 Accumulated deficit (184,589 )
(157,363 ) Other components of equity (450 )
(594 )
Total equity (deficit)
(1,071 ) 25,115
Non-current liabilities Government grant advances, loans and
other liabilities 8,615 4,013 Finance lease obligations - 9
Provisions 1,396 1,228 Deferred tax liabilities 10 2 Convertible
debt and accrued interest 8,984
-
Total non-current liabilities
19,005 5,252
Current liabilities Trade payables 9,498 11,231
Interest-bearing receivables financing 6,472 2,133 Convertible debt
embedded derivative 6,091 - Government grant advances 916 603
Finance lease obligations 12 202 Other current liabilities 4,604
4,017 Deferred revenue 3,162 314 Provisions
317 548
Total current
liabilities 31,072
19,048
Total equity and liabilities $
49,006 $ 49,415
SEQUANS COMMUNICATIONS S.A. UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Year
ended December 31, (in thousands of US$)
2015 2014 Operating
activities Loss before income taxes
$ (27,048
) $ (33,962 ) Non-cash adjustment to
reconcile income before tax to net cash from (used in) operating
activities Depreciation and impairment of property, plant and
equipment 3,408 3,510 Amortization and impairment of intangible
assets 1,867 1,790 Share-based payment expense 867 1,276 Increase
(decrease) in provisions 152 308 Financial expense (income) 1,516
20 Change in the fair value of convertible debt embedded derivative
2,036 - Other financial expenses 145 - Foreign exchange loss (gain)
(340 ) (15 ) Loss (Gain) on disposal of property, plant and
equipment 5 34 Working capital adjustments Decrease (Increase) in
trade receivables and other receivables (9,268 ) (1,619 ) Decrease
(Increase) in inventories 5,134 (2,617 ) Decrease (Increase) in
research tax credit receivable 605 4,563 Increase (Decrease) in
trade payables and other liabilities 2,041 3,424 Increase
(Decrease) in deferred revenue 2,848 (29 ) Increase (Decrease) in
government grant advances (197 ) (816 ) Income tax paid (172 ) (273
)
Net cash flow used in operating activities (16,401
) (24,406 ) Investing activities
Purchase of intangible assets and property, plant and equipment
(5,483 ) (6,242 ) Sale (purchase) of financial assets 345 652 Sale
of short-term investments (233 ) (160 ) Interest received 26 125
Net cash flow used in investments activities (5,345
) (5,625 ) Financing activities
Public equity offering, net of costs - (300 ) Proceeds from issue
of warrants and exercise of stock options/warrants 29 23 Proceeds
from Interest-bearing receivables financing 4,339 2,133 Proceeds
from interest-bearing research project financing - 3,648 Proceeds
from government loans, net of transaction cost 2,134 - Proceeds
from convertible debt, net of transaction cost 11,572 - Repayment
of borrowings and finance lease liabilities (183 ) (244 ) Interest
paid (181 ) (139 )
Net cash flows from financing activities
17,710 5,121 Net increase (decrease) in cash
and cash equivalents (4,036 ) (24,910 ) Net foreign exchange
difference (5 ) (5 ) Cash and cash equivalent at January 1 12,329
37,244
Cash and cash equivalents at end of the period
$ 8,288 $ 12,329
SEQUANS COMMUNICATIONS S.A.
UNAUDITED RECONCILIATION OF NON-IFRS FINANCIAL
RESULTS
Three months ended (in thousands of US$,
except share and per share amounts) Dec 31, Sept
30, Dec 31, 2015
2015 2014 Net IFRS loss as
reported $ (9,680 ) $ (2,429
) $ (9,044 ) Add back WiMAX
inventory provision (1) 760 - 1,875 Stock-based compensation
expense according to IFRS 2 (2) 246 186
217
Change in the fair value of convertible debt embedded derivative
4,249 (2,488 ) - Interest on Convertible debt and loans 267 254 -
Impact of revaluation of interest-free government loan - (121 ) -
Non-IFRS loss adjusted $ (4,158
) $ (4,598 )
$ (6,952 ) IFRS basic loss per
share as reported ($0.16 ) ($0.04 ) ($0.15 ) Add back WiMAX
inventory provision $ 0.01 - $ 0.03 Stock-based compensation
expense according to IFRS 2 $ 0.00 $ 0.00 $ 0.00 Change in the fair
value of convertible debt embedded derivative $ 0.07 ($0.04 ) -
Interest on Convertible debt and loans $ 0.01 $ 0.00 - Impact of
revaluation of interest-free government loan -
($0.00 ) -
Non-IFRS basic loss per share ($0.07 )
($0.08 ) ($0.12 ) IFRS diluted
loss per share ($0.16 ) ($0.04 ) ($0.15 ) Add back WiMAX inventory
provision $ 0.01 - $ 0.03 Stock-based compensation expense
according to IFRS 2 $ 0.00 $ 0.00 $ 0.00 Change in the fair value
of convertible debt embedded derivative $ 0.07 ($0.04 ) - Interest
on Convertible debt and loans $ 0.01 $ 0.00 - Impact of revaluation
of interest-free government loan -
($0.00 ) -
Non-IFRS diluted loss per share ($0.07 )
($0.08 ) ($0.12 )
(1) All included in cost of goods sold in the IFRS loss (2)
Included in the IFRS loss as follows: Cost of product revenue $ 3 $
3 $ 9 Research and development 107 81 110 Sales and marketing 29 29
(18 ) General and administrative 107 73 116
SEQUANS COMMUNICATIONS S.A.
UNAUDITED RECONCILIATION OF NON-IFRS FINANCIAL RESULTS
Year ended
December 31, (in thousands of US$, except share and per
share amounts) 2015 2014 Net IFRS loss as
reported (27,225 ) (34,124 ) Add
back WiMAX inventory provision (1) 760 1,875 Stock-based
compensation expense according to IFRS 2 (2) 867 1,277 Change in
the fair value of convertible debt embedded derivative 2,036 -
Interest on Convertible debt and loans 737 - Impact of revaluation
of interest-free government loan (121 ) -
Non-IFRS loss
adjusted (22,946 )
(30,972 ) IFRS basic loss per
share as reported ($0.46 ) ($0.58 ) Add back WiMAX inventory
provision $ 0.02 $ 0.03 Stock-based compensation expense according
to IFRS 2 $ 0.01 $ 0.03 Change in the fair value of convertible
debt embedded derivative $ 0.03 - Interest on Convertible debt and
loans $ 0.01 - Impact of revaluation of interest-free government
loan ($0.00 ) -
Non-IFRS basic loss per share ($0.39 )
($0.52 ) IFRS diluted loss per share ($0.46 ) ($0.58
) Add back WiMAX inventory provision $ 0.02 $ 0.03 Stock-based
compensation expense according to IFRS 2 $ 0.01 $ 0.03 Change in
the fair value of convertible debt embedded derivative $ 0.03 -
Interest on Convertible debt and loans $ 0.01 - Impact of
revaluation of interest-free government loan
($0.00 ) - Non-IFRS diluted loss per
share ($0.39 ) ($0.52 )
(1) All included in cost of goods sold in the IFRS loss (2)
Included in the IFRS loss as follows: Cost of product revenue
$
17
$
47 Research and development 372 559 Sales and marketing 132 166
General and administrative 346 505
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160204005573/en/
Sequans Communications S.A.Media Relations:Kimberly Tassin,
+1-425-736-0569Kimberly@sequans.comorInvestor Relations:Claudia
Gatlin, +1-212-830-9080Claudia@sequans.com
Sequans Communications (NYSE:SQNS)
Historical Stock Chart
From Aug 2024 to Sep 2024
Sequans Communications (NYSE:SQNS)
Historical Stock Chart
From Sep 2023 to Sep 2024