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)
- Revenue: $713.5 million, lower by 10.1% year-over-year;
recurring and other services revenue was 13.9% of annual revenue
compared to 11.9% in 2018
- Loss per share: GAAP loss: $1.95; Non-GAAP loss: $0.01
- Adjusted EBITDA: $21.1 million
Q4 2019 results:(1)
- Revenue: $174.3 million, lower by 13.5% year-over-year;
recurring and other services revenue was 15.2% of quarterly revenue
compared to 11.6% in 2018
- Loss per share: GAAP loss: $0.30; Non-GAAP loss: $0.08
- Adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA"): $2.3 million
(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
- Gross margin was $51.4 million, or 29.5% of revenue, in the
fourth quarter of 2019 compared to $65.9 million, or 32.7% of
revenue, in the fourth quarter of 2018.
- Restructuring expense of $2.3 million in the fourth quarter of
2019 was comparable to the same period in 2018.
- Operating expenses were $63.8 million and loss from operations
was $12.4 million in the fourth quarter of 2019 compared to
operating expenses of $70.1 million and loss from operations of
$4.2 million in the fourth quarter of 2018.
- Net loss was $10.9 million, or $0.30 per diluted share, in the
fourth quarter of 2019 compared $3.8 million, or $0.11 per diluted
share, in the fourth quarter of 2018.
NON-GAAP RESULTS(1)
- Gross margin was 29.5% in the fourth quarter of 2019 compared
to 32.7% in the fourth quarter of 2018.
- Operating expenses were $54.0 million and loss from operations
was $2.7 million in the fourth quarter of 2019 compared to
operating expenses of $55.7 million and earnings from operations of
$10.2 million in the fourth quarter of 2018.
- Net loss was $2.9 million, or $0.08 per diluted share, in the
fourth quarter of 2019 compared to net earnings of $9.0 million, or
$0.25 per diluted share, in the fourth quarter of 2018.
- Adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA") were $2.3 million in the fourth
quarter of 2019 compared to $15.3 million in the fourth quarter of
2018.
(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
- Gross margin was $220.0 million, or 30.8% of revenue, in 2019
compared to $264.6 million, or 33.3% of revenue in 2018.
- Restructuring expenses were $28.2 million in 2019 compared to
$7.1 million in 2018.
- Operating expenses were $278.0 million and loss from operations
was $58.0 million in 2019 compared to operating expenses of $282.8
million and loss from operations of $18.3 million in 2018.
- Net loss was $70.5 million, or $1.95 per diluted share, in 2019
compared to net loss of $24.6 million, or $0.68 per diluted share,
in 2018.
NON-GAAP RESULTS(1)
- Gross margin was 30.9% in 2019 compared to 33.4% in 2018.
- Operating expenses were $217.7 million and earning from
operations were $2.4 million in 2019 compared to operating expenses
of $229.7 million and earnings from operations of $35.3 million in
2018.
- Net loss was $0.3 million, or $0.01 per diluted share, in 2019
compared to net earnings of $32.4 million, or $0.90 per diluted
share, in 2018.
- Adjusted EBITDA was $21.1 million in 2018 compared to $55.9
million in 2018.
(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.
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.
Conference call and webcast details
Sierra Wireless President and CEO, Kent Thexton, and CFO, David
McLennan, will host a conference call and webcast with analysts and
investors to review the results on Thursday February 13, 2020, at
5:30 PM Eastern time (2:30 PM Pacific time). A live slide
presentation will be available for viewing during the call from the
link provided below.
To participate in this conference call, please dial the
following number approximately ten minutes prior to the start of
the call:
- Toll-free (Canada and US): 1-877-201-0168
- Alternate number: 1-647-788-4901
- Conference ID: 9576269
To access the webcast, please follow the link below:
Sierra Wireless Q4 2019 Conference Call and Webcast
If the above link does not work, please copy and paste the
following URL into your browser:
https://onlinexperiences.com/Launch/QReg/ShowUUID=6A859656-86AC-4DE6-B78C-EDF604BF628D
The webcast will remain available at the above link for one year
following the call.
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:
- Typically include words and phrases about the future such as
"outlook", "will", "may", “expects”, “is expected”, “anticipates”,
“believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”,
“strategy”, “goals”, “objectives”, “potential”, “possible”, or
variations thereof.
- Are not promises or guarantees of future performance. They
represent our current views and may change significantly.
- Are based on a number of material assumptions, including, but
not limited to, those listed below, which could prove to be
significantly incorrect:
- expected component supply constraints and manufacturing
capacity;
- our ability to continue to sell our products and services in
the expected quantities at the expected prices and expected
times;
- our ability to effect and to realize the anticipated benefits
of our business transformation initiatives, and the timing
thereof;
- our ability to develop, manufacture and sell new products and
services that meet the needs of our customers and gain commercial
acceptance;
- expected macro-economic business conditions;
- expected cost of sales;
- our ability to win new business;
- our ability to integrate acquired businesses and realize
expected benefits;
- expected deployment of next generation networks by wireless
network operators;
- our operations not being adversely disrupted by other
developments, operating, cyber security, litigation, or regulatory
risks;
- expected tax and foreign exchange rates; and
- our ability to recruit a new Chief Financial Officer.
- Are based on our management's current expectations and we
caution investors that forward-looking statements, particularly
those that relate to longer periods of time, are subject to
substantial known and unknown material risks and uncertainties.
Many factors could cause our actual results, achievements and
developments in our business to differ significantly from those
expressed or implied by our forward-looking statements, including
without limitation, the following factors. These risk factors and
others are discussed in our Annual Information Form and
Management's Discussion and Analysis of Financial Condition and
Results of Operations, which may be found on SEDAR at www.sedar.com
and on EDGAR at www.sec.gov and in our other regulatory filings
with the Securities and Exchange Commission in the United States
and the provincial securities commissions in Canada:
- competition from new or established competitors or from those
with greater resources;
- natural catastrophes or public health epidemics could impact
customer demand, result in production disruption and impact our
ability to meet customer demand or capacity to continue critical
operations;
- the loss of, or significant demand fluctuations from, any of
our significant customers;
- our financial results being subject to fluctuation;
- our business transformation initiatives may result in
disruptions to our business and may not achieve the anticipated
benefits;
- our ability to respond to changing technology, industry
standards and customer requirements;
- failures of our products or services due to design flaws and
errors, component quality issues, manufacturing defects, network
service interruptions, cyber-security vulnerabilities or other
quality issues;
- deterioration in macro-economic conditions could adversely
affect our operating results and financial conditions;
- our ability to attract or retain key personnel and the impact
of organizational change on our business;
- cyber-attacks or other breaches of our information technology
security;
- risks related to the transmission, use and disclosure of user
data and personal information;
- disruption of, and demands on, our ongoing business and
diversion of management's time and attention in connection with
acquisitions or divestitures;
- risks that the acquisition of M2M Group may fail to realize the
expected benefits.
- risks related to infringement on intellectual property rights
of others;
- our ability to obtain necessary rights to use software or
components supplied by third parties;
- our ability to enforce our intellectual property rights;
- our reliance on single source suppliers for certain components
used in our products;
- our dependence on a limited number of third party
manufacturers;
- unanticipated costs associated with litigation or
settlements;
- our dependence on mobile network operators to promote and offer
acceptable wireless data services;
- risks related to contractual disputes with counterparties;
- risks related to governmental regulation;
- risks inherent in foreign jurisdictions; and
- risks related to tariffs or other trade restrictions.
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 December
31,
Twelve months ended December
31,
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 December
31,
Twelve months ended December
31,
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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200213005923/en/
Investor and Media Contact: David Climie Vice President,
Investor Relations +1 (604) 231-1137 dclimie@sierrawireless.com
Investor Contact: David G. McLennan Chief Financial
Officer +1 (604) 231-1181 investor@sierrawireless.com
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