[August 04, 2016] |
|
Sierra Wireless Reports Second Quarter 2016 Results
Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) today reported results
for its second quarter ending June 30, 2016. 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.
Revenue for the second quarter of 2016 was $156.2 million, a decrease of
1.1% compared to $158.0 million in the second quarter of 2015. Revenue
from OEM Solutions was $132.6 million in the second quarter of 2016,
down 4.0% compared to $138.2 million in the second quarter of 2015.
Revenue from Enterprise Solutions was $16.6 million in the second
quarter of 2016, up 10.0% compared to $15.0 million in the second
quarter of 2015. Revenue from Cloud and Connectivity Services was $7.0
million in the second quarter of 2016, up 46.8% compared to $4.8 million
in the second quarter of 2015.
Our gross margin in the second quarter of 2016 was 33.8%, compared to
32.3% in the same period of 2015. During the quarter, we received
reimbursement of certain legal costs pursuant to a favorable arbitration
decision on a contract dispute with an intellectual property licensor.
The reimbursement resulted in a favorable impact of $1.9 million in cost
of goods sold.
"Revenue and non-GAAP earnings improved sequentially in the second
quarter, driven by stronger OEM and Enterprise sales," said Jason
Cohenour, President and CEO. "We also strengthened our strategic
position in the important Fleet Management and Asset Tracking segments
with the acquisition of GenX Mobile."
GAAP RESULTS
-
Gross margin was $52.7 million, or 33.8% of revenue, in the second
quarter of 2016, compared to $50.9 million, or 32.3% of revenue, in
the second quarter of 2015.
-
Operating expenses were $49.3 million and earnings from operations
were $3.4 million in the second quarter of 2016, compared to operating
expenses of $46.8 million and earnings from operations of $4.1 million
in the second quarter of 2015.
-
Net earnings were $0.7 million, or $0.02 per diluted share, in the
second quarter of 2016, compared to net earnings of $4.1 million, or
$0.12 per diluted share, in the second quarter of 2015.
NON-GAAP RESULTS
-
Gross margin was 33.8% in the second quarter of 2016, compared to
32.4% in the second quarter of 2015.
-
Operating expenses were $44.4 million and earnings from operations
were $8.4 million in the second quarter of 2016, compared to operating
expenses of $40.4 million and earnings from operations of $10.7
million in the second quarter of 2015.
-
Net earnings were $6.4 million, or $0.20 per diluted share, in the
second quarter of 2016, compared to net earnings of $8.6 million, or
$0.26 per diluted share, in the second quarter of 2015. The non-GAAP
tax rate in the second quarter of 2016 was 24.7%.
-
Adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA") were $12.1 million in the second
quarter of 2016, compared to $13.1 million in the second quarter of
2015.
-
Excluding the previously mentioned recovery of $1.9 million in the
quarter, gross margin was 32.6%; adjusted EBITDA was $10.2 million;
earnings from operations were $6.5 million; and EPS was $0.14 per
share.
Cash and cash equivalents at the end of the second quarter of 2016 were
$98.4 million, representing an increase of $12.3 million compared to the
end of the first quarter of 2016. Cash generated from operations during
the second quarter was $16.5 million.
Acquisition of GenX Mobile
On August 3, 2016, we completed the acquisition of all of the
outstanding shares of GenX Mobile Incorporated ("GenX") for total cash
consideration of $7.8 million ($6.0 million, net of cash acquired),
subject to working capital adjustments. GenX is a provider of in-vehicle
cellular devices for the fleet management, asset tracking and
transportation markets. The company's products are complementary to our
existing Enterprise Solutions portfolio of mobile and industrial
gateways. GenX is based in San Jose, California and has 22 employees. We
believe that the acquisition of GenX expands our strategic position in
key market segments and bolsters our telematics and location
capabilities. The GenX business and team will be integrated with our
Enterprise Solutions business unit. In the first half of 2016, GenX
recorded revenue of approximately $6.7 million and non-GAAP earnings
from operations were approximately breakeven.
Financial Guidance
As a global leader in intelligent wireless solutions for the Internet of
Things, we believe that we are well positioned to drive strong long term
growth. However, our short term outlook is more cautious. While we
expect to see continued solid revenue contributions from new OEM
programs, we are seeing signs of softer short term demand and tighter
inventory management with some established OEM customers and programs.
For the third quarter of 2016, we expect revenue to be in the range of
$145 million to $155 million and non-GAAP earnings per share to be in
the range of $0.06 to $0.13. In the fourth quarter of 2016, we expect to
see sequential and year-over-year growth, although not to the levels
previously anticipated. Given this softer short term outlook, we now
expect full year 2016 revenue and non-GAAP EPS to be below the low end
of our previously stated annual guidance range of $630 million to $670
million in revenue and non-GAAP EPS of $0.60 to $0.90.
This guidance excludes any contribution from the recently acquired GenX
and reflects current business indicators and expectations. Inherent in
this guidance are risk factors that are described in greater detail in
our regulatory filings. Our actual results could differ materially from
those presented above. All figures are approximations based on
management's current beliefs and assumptions.
Non-GAAP Financial Measures
We disclose non-GAAP financial measures as we believe they provide
useful information on actual operating performance and 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.
Non-GAAP earnings (loss) from operations excludes the impact of
stock-based compensation expense and related social taxes, amortization
related to acquisitions, acquisition-related and disposition costs,
restructuring costs, integration costs and impairment.
Non-GAAP net earnings (loss) and non-GAAP diluted earnings (loss) per
share exclude the impact of stock-based compensation expense and related
social taxes, amortization related to acquisitions, acquisition-related
and disposition costs, restructuring costs, integration costs,
impairment, foreign exchange gains or losses on translation of certain
balance sheet accounts 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 earnings (loss) from operations plus
stock-based compensation expense and related social taxes,
acquisition-related and integration costs, restructuring costs,
impairment and amortization. Adjusted EBITDA can also be calculated as
non-GAAP earnings (loss) from operations plus amortization excluding
acquisition related amortization. We believe that Adjusted EBITDA 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. Adjusted
EBITDA is also used by investors and analysts for valuation purposes.
Conference call and webcast details
Sierra Wireless President and CEO, Jason Cohenour, and CFO, David
McLennan, will host a conference call and webcast with analysts and
investors to review the results on Thursday, August 4, 2016, at 5:30 PM
Eastern Time (2:30 PM PT). 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: 32898601
To access the webcast, please follow the link below:
Sierra
Wireless Q2 2016 Conference Call and Webcast
If the above link does not work, please copy and paste the following URL
into your browser:
http://event.on24.com/r.htm?e=1210427&s=1&k=A4B4540BFF24C511667C7B65E817E267
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") including statements and information
relating to our financial guidance for the third quarter of 2016 and our
fiscal year 2016, our business outlook for the short and longer term,
statements regarding our strategy, plans and future operating
performance. 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:
-
Typically include words and phrases about the future such as
"outlook", "will", "may", "estimates", "intends", "believes", "plans",
"anticipates" and "expects".
-
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 those listed
below, which could prove to be significantly incorrect:
-
our ability to develop, manufacture and sell new products and
services that meet the needs of our customers and gain commercial
acceptance;
-
our ability to continue to sell our products and services in the
expected quantities at the expected prices and expected times;
-
expected cost of goods sold;
-
expected component supply constraints;
-
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 component
shortages or other development, operating or regulatory risks; and
-
expected tax rates and foreign exchange rates.
-
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 service providers or from
those with greater resources;
-
disruption of, and demands on, our ongoing business and diversion
of management's time and attention in connection with acquisitions
or divestitures;
-
the loss of any of our significant customers;
-
cyber-attacks or other breaches of our information technology
security;
-
difficult or uncertain global economic conditions;
-
our financial results being subject to fluctuation;
-
our ability to attract or retain key personnel;
-
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;
-
we may be unable to enforce our intellectual property rights;
-
our ability to respond to changing technology, industry standards
and customer requirements;
-
our reliance on single source suppliers for certain components
used in our products;
-
failures of our products or services due to design flaws and
errors, component quality issues, manufacturing defects or other
quality issues;
-
our dependence on a limited number of third party manufacturers;
-
unanticipated costs associated with litigation or settlements;
-
our dependence on wireless network carriers to promote and offer
acceptable wireless data services;
-
risks related to contractual disputes with counterparties;
-
risks related to governmental regulation;
-
risks related to the transmission, use and disclosure of user data
and personal information; and
-
risks inherent in foreign jurisdictions.
About Sierra Wireless
Sierra Wireless (NASDAQ: SWIR) (TSX: SW) is building the Internet of
Things with intelligent wireless solutions that empower organizations to
innovate in the connected world. We offer the industry's most
comprehensive portfolio of 2G, 3G and 4G embedded modules and gateways,
seamlessly integrated with our secure cloud and connectivity services.
OEMs and enterprises worldwide trust our innovative solutions to get
their connected products and services to market faster. Sierra Wireless
has more than 1,000 employees globally and operates R&D centers in North
America, Europe and Asia. For more information, visit www.sierrawireless.com.
"AirPrime," "AirLink," and "AirVantage" 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)
(unaudited)
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
2016
|
|
2015
|
|
Revenue
|
|
$
|
156,229
|
|
|
$
|
157,965
|
|
$
|
299,026
|
|
$
|
308,371
|
|
Cost of goods sold
|
|
103,465
|
|
|
107,018
|
|
199,447
|
|
208,588
|
|
Gross margin
|
|
52,764
|
|
|
50,947
|
|
99,579
|
|
99,783
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
16,046
|
|
|
12,828
|
|
31,675
|
|
25,973
|
|
Research and development
|
|
18,237
|
|
|
18,402
|
|
37,015
|
|
37,494
|
|
Administration
|
|
10,286
|
|
|
11,092
|
|
19,813
|
|
21,512
|
|
Restructuring
|
|
-
|
|
|
711
|
|
-
|
|
711
|
|
Acquisition-related and integration
|
|
59
|
|
|
1,015
|
|
433
|
|
2,118
|
|
Amortization
|
|
4,725
|
|
|
2,787
|
|
8,487
|
|
5,389
|
|
|
|
49,353
|
|
|
46,835
|
|
97,423
|
|
93,197
|
|
Earnings from operations
|
|
3,411
|
|
|
4,112
|
|
2,156
|
|
6,586
|
|
Foreign exchange gain (loss)
|
|
(1,071
|
)
|
|
1,550
|
|
1,221
|
|
(10,343
|
)
|
Other income
|
|
32
|
|
|
13
|
|
58
|
|
118
|
|
Earnings (loss) before income taxes
|
|
2,372
|
|
|
5,675
|
|
3,435
|
|
(3,639
|
)
|
Income tax expense
|
|
1,654
|
|
|
1,599
|
|
1,999
|
|
1,938
|
|
Net earnings (loss)
|
|
$
|
718
|
|
|
$
|
4,076
|
|
$
|
1,436
|
|
$
|
(5,577
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments, net of
taxes of $nil
|
|
(4,251
|
)
|
|
4,568
|
|
881
|
|
1,050
|
|
Comprehensive earnings (loss)
|
|
$
|
(3,533
|
)
|
|
$
|
8,644
|
|
$
|
2,317
|
|
$
|
(4,527
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share (in dollars)
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.02
|
|
|
$
|
0.13
|
|
$
|
0.04
|
|
$
|
(0.17
|
)
|
Diluted
|
|
0.02
|
|
|
0.12
|
|
0.04
|
|
(0.17
|
)
|
Weighted average number of shares outstanding (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
31,966
|
|
|
32,166
|
|
32,061
|
|
32,075
|
|
Diluted
|
|
32,430
|
|
|
32,915
|
|
32,465
|
|
32,075
|
|
SIERRA WIRELESS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except where otherwise stated)
(unaudited)
|
June 30, 2016
|
|
|
December 31, 2015
|
|
Assets
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
98,433
|
|
|
$
|
93,936
|
|
Accounts receivable, net of allowance for doubtful accounts of
$2,339 (December 31, 2015 - $2,088)
|
128,542
|
|
|
116,246
|
|
Inventories
|
20,033
|
|
|
32,829
|
|
Prepaids and other
|
13,217
|
|
|
14,179
|
|
|
260,225
|
|
|
257,190
|
|
Property and equipment
|
32,541
|
|
|
28,947
|
|
Intangible assets
|
78,886
|
|
|
84,250
|
|
Goodwill
|
157,600
|
|
|
156,488
|
|
Deferred income taxes
|
14,916
|
|
|
14,865
|
|
Other assets
|
5,662
|
|
|
4,592
|
|
|
$
|
549,830
|
|
|
$
|
546,332
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
$
|
133,606
|
|
|
$
|
128,537
|
|
Deferred revenue and credits
|
2,863
|
|
|
3,479
|
|
|
136,469
|
|
|
132,016
|
|
Long-term obligations
|
46,703
|
|
|
44,353
|
|
Deferred income taxes
|
11,684
|
|
|
11,667
|
|
|
194,856
|
|
|
188,036
|
|
Equity
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
Common stock: no par value; unlimited shares authorized; issued and
outstanding: 32,035,149 shares (December 31, 2015 - 32,337,201
shares)
|
344,230
|
|
|
346,453
|
|
Preferred stock: no par value; unlimited shares authorized;
issued and outstanding: nil shares
|
-
|
|
|
-
|
|
Treasury stock: at cost: 355,471 shares (December 31, 2015 - 240,613
shares)
|
(5,134
|
)
|
|
(4,017
|
)
|
Additional paid-in capital
|
21,960
|
|
|
23,998
|
|
Retained earnings (deficit)
|
1,015
|
|
|
(160
|
)
|
Accumulated other comprehensive loss
|
(7,097
|
)
|
|
(7,978
|
)
|
|
354,974
|
|
|
358,296
|
|
|
$
|
549,830
|
|
|
$
|
546,332
|
|
SIERRA WIRELESS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
|
|
Three months ended
June 30,
|
|
|
Six months ended
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Cash flows provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
$
|
718
|
|
|
$
|
4,076
|
|
|
$
|
1,436
|
|
|
$
|
(5,577
|
)
|
Items not requiring (providing) cash
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
6,706
|
|
|
4,452
|
|
|
12,274
|
|
|
9,583
|
|
Stock-based compensation
|
|
1,902
|
|
|
2,437
|
|
|
3,937
|
|
|
4,734
|
|
Other
|
|
(115
|
)
|
|
61
|
|
|
(111
|
)
|
|
6,251
|
|
Changes in non-cash working capital
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(10,900
|
)
|
|
1,432
|
|
|
(11,334
|
)
|
|
(20,845
|
)
|
Inventories
|
|
6,097
|
|
|
(6,642
|
)
|
|
13,177
|
|
|
(9,236
|
)
|
Prepaids and other
|
|
(830
|
)
|
|
(8,829
|
)
|
|
(59
|
)
|
|
(7,188
|
)
|
Accounts payable and accrued liabilities
|
|
13,417
|
|
|
15,526
|
|
|
5,549
|
|
|
12,383
|
|
Deferred revenue and credits
|
|
(473
|
)
|
|
425
|
|
|
(747
|
)
|
|
883
|
|
Cash flows provided by (used in) operating activities
|
|
16,522
|
|
|
12,938
|
|
|
24,122
|
|
|
(9,012
|
)
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property and equipment
|
|
(5,427
|
)
|
|
(3,906
|
)
|
|
(8,270
|
)
|
|
(5,817
|
)
|
Proceeds from sale of property and equipment
|
|
-
|
|
|
-
|
|
|
3
|
|
|
-
|
|
Additions to intangible assets
|
|
(241
|
)
|
|
(354
|
)
|
|
(536
|
)
|
|
(587
|
)
|
Acquisition of Wireless Maingate AB, net of cash acquired
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(88,449
|
)
|
Acquisition of Accel Networks LLC
|
|
-
|
|
|
(9,250
|
)
|
|
-
|
|
|
(9,250
|
)
|
Cash flows used in investing activities
|
|
(5,668
|
)
|
|
(13,510
|
)
|
|
(8,803
|
)
|
|
(104,103
|
)
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common shares
|
|
943
|
|
|
580
|
|
|
1,471
|
|
|
2,725
|
|
Repurchase of common shares for cancellation
|
|
(62
|
)
|
|
-
|
|
|
(6,206
|
)
|
|
-
|
|
Purchase of treasury shares for RSU distribution
|
|
-
|
|
|
(1,656
|
)
|
|
(4,214
|
)
|
|
(2,453
|
)
|
Taxes paid related to net settlement of equity awards
|
|
(425
|
)
|
|
(452
|
)
|
|
(777
|
)
|
|
(2,194
|
)
|
Excess tax benefits from equity awards
|
|
150
|
|
|
510
|
|
|
150
|
|
|
2,180
|
|
Payment for contingent consideration
|
|
(16
|
)
|
|
-
|
|
|
(16
|
)
|
|
-
|
|
Decrease in other long-term obligations
|
|
(75
|
)
|
|
(70
|
)
|
|
(138
|
)
|
|
(144
|
)
|
Cash flows provided by (used in) financing activities
|
|
515
|
|
|
(1,088
|
)
|
|
(9,730
|
)
|
|
114
|
|
Effect of foreign exchange rate changes on cash and cash equivalents
|
|
944
|
|
|
(1,421
|
)
|
|
(1,092
|
)
|
|
2,413
|
|
Cash and cash equivalents, increase (decrease) in the period
|
|
12,313
|
|
|
(3,081
|
)
|
|
4,497
|
|
|
(110,588
|
)
|
Cash and cash equivalents, beginning of period
|
|
86,120
|
|
|
99,555
|
|
|
93,936
|
|
|
207,062
|
|
Cash and cash equivalents, end of period
|
|
$
|
98,433
|
|
|
$
|
96,474
|
|
|
$
|
98,433
|
|
|
$
|
96,474
|
|
SIERRA WIRELESS, INC.
RECONCILIATION OF GAAP AND NON-GAAP RESULTS BY QUARTER
(in thousands of U.S. dollars, except where otherwise stated)
|
|
2016
|
|
|
2015
|
|
Q2
|
|
|
Q1
|
|
|
Total
|
|
|
Q4
|
|
|
Q3
|
|
|
Q2
|
|
|
Q1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin - GAAP
|
|
$
|
52,764
|
|
|
$
|
46,815
|
|
|
$
|
193,855
|
|
|
$
|
45,063
|
|
|
$
|
49,009
|
|
|
$
|
50,947
|
|
|
$
|
48,836
|
|
Stock-based compensation and related social taxes
|
|
107
|
|
|
106
|
|
|
647
|
|
|
106
|
|
|
146
|
|
|
147
|
|
|
248
|
|
Gross margin - Non-GAAP
|
|
$
|
52,871
|
|
|
$
|
46,921
|
|
|
$
|
194,502
|
|
|
$
|
45,169
|
|
|
$
|
49,155
|
|
|
$
|
51,094
|
|
|
$
|
49,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from operations - GAAP
|
|
$
|
3,411
|
|
|
$
|
(1,255
|
)
|
|
$
|
10,114
|
|
|
$
|
(674
|
)
|
|
$
|
4,202
|
|
|
$
|
4,112
|
|
|
$
|
2,474
|
|
Stock-based compensation and related social taxes
|
|
1,902
|
|
|
1,993
|
|
|
9,685
|
|
|
1,670
|
|
|
2,557
|
|
|
2,858
|
|
|
2,600
|
|
Acquisition-related and integration
|
|
59
|
|
|
374
|
|
|
1,945
|
|
|
(616
|
)
|
|
443
|
|
|
1,015
|
|
|
1,103
|
|
Restructuring
|
|
-
|
|
|
-
|
|
|
951
|
|
|
201
|
|
|
39
|
|
|
711
|
|
|
-
|
|
Acquisition related amortization
|
|
3,058
|
|
|
2,530
|
|
|
9,666
|
|
|
2,734
|
|
|
2,234
|
|
|
2,029
|
|
|
2,669
|
|
Earnings from operations - Non-GAAP
|
|
$
|
8,430
|
|
|
$
|
3,642
|
|
|
$
|
32,361
|
|
|
$
|
3,315
|
|
|
$
|
9,475
|
|
|
$
|
10,725
|
|
|
$
|
8,846
|
|
Amortization (excluding acquisition related amortization)
|
|
3,648
|
|
|
3,038
|
|
|
10,550
|
|
|
3,030
|
|
|
2,635
|
|
|
2,423
|
|
|
2,462
|
|
Adjusted EBITDA
|
|
$
|
12,078
|
|
|
$
|
6,680
|
|
|
$
|
42,911
|
|
|
$
|
6,345
|
|
|
$
|
12,110
|
|
|
$
|
13,148
|
|
|
$
|
11,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) - GAAP
|
|
$
|
718
|
|
|
$
|
718
|
|
|
$
|
(2,674
|
)
|
|
$
|
(383
|
)
|
|
$
|
3,286
|
|
|
$
|
4,076
|
|
|
$
|
(9,653
|
)
|
Stock-based compensation and related social taxes,
restructuring, impairment, acquisition- related, integration,
and acquisition related amortization, net of tax
|
|
5,013
|
|
|
4,893
|
|
|
22,063
|
|
|
4,016
|
|
|
5,232
|
|
|
6,443
|
|
|
6,372
|
|
Foreign exchange loss (gain)
|
|
1,097
|
|
|
(2,292
|
)
|
|
11,596
|
|
|
1,393
|
|
|
(51
|
)
|
|
(1,581
|
)
|
|
11,835
|
|
Income tax adjustments
|
|
(452
|
)
|
|
(698
|
)
|
|
(5,211
|
)
|
|
(2,490
|
)
|
|
(1,048
|
)
|
|
(301
|
)
|
|
(1,372
|
)
|
Net earnings - Non-GAAP
|
|
$
|
6,376
|
|
|
$
|
2,621
|
|
|
$
|
25,774
|
|
|
$
|
2,536
|
|
|
$
|
7,419
|
|
|
$
|
8,637
|
|
|
$
|
7,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP - (in dollars)
|
|
$
|
0.02
|
|
|
$
|
0.02
|
|
|
$
|
(0.08
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.10
|
|
|
$
|
0.12
|
|
|
$
|
(0.30
|
)
|
Non-GAAP - (in dollars)
|
|
$
|
0.20
|
|
|
$
|
0.08
|
|
|
$
|
0.80
|
|
|
$
|
0.08
|
|
|
$
|
0.23
|
|
|
$
|
0.26
|
|
|
$
|
0.22
|
|
Q2 2016 RECONCILIATION OF GAAP AND NON-GAAP RESULTS
|
|
|
|
Acquisition Related Amortization
|
|
|
Acquisition- related & Integration
|
|
Stock-based Compensation & Related Social Taxes
|
|
|
Foreign Exchange Loss
|
|
|
Tax Adjustments
|
|
|
|
|
(In thousands of U.S. dollars, except where
otherwise stated)
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
Non GAAP
|
|
Q2 2016
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
156,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
156,229
|
|
Cost of goods sold
|
103,465
|
|
|
|
|
|
|
|
107
|
|
|
|
|
|
|
|
|
103,358
|
|
Gross margin
|
52,764
|
|
|
-
|
|
|
-
|
|
|
(107
|
)
|
|
-
|
|
|
-
|
|
|
52,871
|
|
GM%
|
33.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
16,046
|
|
|
|
|
|
|
|
427
|
|
|
|
|
|
|
|
|
15,619
|
|
Research and development
|
18,237
|
|
|
115
|
|
|
|
|
327
|
|
|
|
|
|
|
|
|
17,795
|
|
Administration
|
10,286
|
|
|
|
|
|
|
|
1,041
|
|
|
|
|
|
|
|
|
9,245
|
|
Acquisition-related and integration
|
59
|
|
|
|
|
|
59
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Amortization
|
4,725
|
|
|
2,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,782
|
|
Total operating expenses
|
49,353
|
|
|
3,058
|
|
|
59
|
|
|
1,795
|
|
|
-
|
|
|
-
|
|
|
44,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations
|
3,411
|
|
|
(3,058
|
)
|
|
(59
|
)
|
|
(1,902
|
)
|
|
-
|
|
|
-
|
|
|
8,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss
|
(1,071
|
)
|
|
|
|
|
|
|
|
|
|
(1,071
|
)
|
|
|
|
|
-
|
|
Other income
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32
|
|
Total other income (expense)
|
(1,039
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,071
|
)
|
|
-
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
2,372
|
|
|
(3,058
|
)
|
|
(59
|
)
|
|
(1,902
|
)
|
|
(1,071
|
)
|
|
-
|
|
|
8,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
1,654
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
26
|
|
|
(452
|
)
|
|
2,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
718
|
|
|
(3,058
|
)
|
|
(53
|
)
|
|
(1,902
|
)
|
|
(1,097
|
)
|
|
452
|
|
|
6,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares
|
32,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,430
|
|
SIERRA WIRELESS, INC.
SEGMENTED RESULTS
(In thousands of U.S. dollars, except where
otherwise stated)
|
|
2016
|
|
|
2015
|
|
Q2
|
|
|
Q1
|
|
|
Total
|
|
|
Q4
|
|
|
Q3
|
|
|
Q2
|
|
|
Q1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OEM Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
132,667
|
|
|
$
|
120,874
|
|
|
$
|
523,366
|
|
|
$
|
121,540
|
|
|
$
|
130,653
|
|
|
$
|
138,133
|
|
|
$
|
133,040
|
|
Gross margin (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
$
|
41,005
|
|
|
$
|
34,290
|
|
|
$
|
151,807
|
|
|
$
|
33,416
|
|
|
$
|
37,440
|
|
|
$
|
40,990
|
|
|
$
|
39,961
|
|
- Non-GAAP
|
|
$
|
41,096
|
|
|
$
|
34,380
|
|
|
$
|
152,368
|
|
|
$
|
33,506
|
|
|
$
|
37,563
|
|
|
$
|
41,119
|
|
|
$
|
40,180
|
|
Gross margin % (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
30.9
|
%
|
|
28.4
|
%
|
|
29.0
|
%
|
|
27.5
|
%
|
|
28.7
|
%
|
|
29.7
|
%
|
|
30.0
|
%
|
- Non-GAAP
|
|
31.0
|
%
|
|
28.4
|
%
|
|
29.1
|
%
|
|
27.6
|
%
|
|
28.8
|
%
|
|
29.8
|
%
|
|
30.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
16,577
|
|
|
$
|
14,995
|
|
|
$
|
63,072
|
|
|
$
|
16,506
|
|
|
$
|
17,734
|
|
|
$
|
15,074
|
|
|
$
|
13,758
|
|
Gross margin (1) (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
$
|
8,922
|
|
|
$
|
9,752
|
|
|
$
|
33,127
|
|
|
$
|
8,837
|
|
|
$
|
8,911
|
|
|
$
|
7,917
|
|
|
$
|
7,462
|
|
- Non-GAAP
|
|
$
|
8,934
|
|
|
$
|
9,763
|
|
|
$
|
33,192
|
|
|
$
|
8,848
|
|
|
$
|
8,928
|
|
|
$
|
7,930
|
|
|
$
|
7,486
|
|
Gross margin % (1) (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
53.8
|
%
|
|
65.0
|
%
|
|
52.5
|
%
|
|
53.5
|
%
|
|
50.2
|
%
|
|
52.5
|
%
|
|
54.2
|
%
|
- Non-GAAP
|
|
53.9
|
%
|
|
65.1
|
%
|
|
52.6
|
%
|
|
53.6
|
%
|
|
50.3
|
%
|
|
52.6
|
%
|
|
54.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud and Connectivity Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
6,985
|
|
|
$
|
6,928
|
|
|
$
|
21,360
|
|
|
$
|
6,800
|
|
|
$
|
6,194
|
|
|
$
|
4,758
|
|
|
$
|
3,608
|
|
Gross margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
$
|
2,837
|
|
|
$
|
2,773
|
|
|
$
|
8,921
|
|
|
$
|
2,810
|
|
|
$
|
2,658
|
|
|
$
|
2,040
|
|
|
$
|
1,413
|
|
- Non-GAAP
|
|
$
|
2,841
|
|
|
$
|
2,778
|
|
|
$
|
8,942
|
|
|
$
|
2,815
|
|
|
$
|
2,664
|
|
|
$
|
2,045
|
|
|
$
|
1,418
|
|
Gross margin %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
40.6
|
%
|
|
40.0
|
%
|
|
41.8
|
%
|
|
41.3
|
%
|
|
42.9
|
%
|
|
42.9
|
%
|
|
39.2
|
%
|
- Non-GAAP
|
|
40.7
|
%
|
|
40.1
|
%
|
|
41.9
|
%
|
|
41.4
|
%
|
|
43.0
|
%
|
|
43.0
|
%
|
|
39.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
156,229
|
|
|
$
|
142,797
|
|
|
$
|
607,798
|
|
|
$
|
144,846
|
|
|
$
|
154,581
|
|
|
$
|
157,965
|
|
|
$
|
150,406
|
|
Gross margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
$
|
52,764
|
|
|
$
|
46,815
|
|
|
$
|
193,855
|
|
|
$
|
45,063
|
|
|
$
|
49,009
|
|
|
$
|
50,947
|
|
|
$
|
48,836
|
|
- Non-GAAP
|
|
$
|
52,871
|
|
|
$
|
46,921
|
|
|
$
|
194,502
|
|
|
$
|
45,169
|
|
|
$
|
49,155
|
|
|
$
|
51,094
|
|
|
$
|
49,084
|
|
Gross margin %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
33.8
|
%
|
|
32.8
|
%
|
|
31.9
|
%
|
|
31.1
|
%
|
|
31.7
|
%
|
|
32.3
|
%
|
|
32.5
|
%
|
- Non-GAAP
|
|
33.8
|
%
|
|
32.9
|
%
|
|
32.0
|
%
|
|
31.2
|
%
|
|
31.8
|
%
|
|
32.4
|
%
|
|
32.6
|
%
|
(1) Q1 2016 Enterprise Solutions results include a $1.9 million
recovery from a legal settlement with a supplier related to a quality
issue with a component used in some of our gateway products. Excluding
this recovery, GAAP and Non-GAAP gross margin percentage would have been
52.4% and 52.5%, respectively. (2) Q2 2016 OEM Solutions
results include a $1.7 million recovery from certain legal costs
pursuant to a favorable arbitration decision on a contract dispute with
an intellectual property licensor. Excluding this recovery, GAAP and
Non-GAAP gross margin percentage would have been 29.6% and 29.7%,
respectively. Q2 2016 Enterprise Solutions results also include a $0.2
million recovery from this arbitration decision. Excluding this
recovery, GAAP and Non-GAAP gross margin percentage would have been
52.7% and 52.8%, respectively.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160804006481/en/
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