[November 02, 2017] |
|
Sierra Wireless Reports Third Quarter 2017 Results
Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) today reported results
for its third quarter ending September 30, 2017. 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.
"In the third quarter of 2017, we delivered strong revenue and
profitability growth on a year-over-year basis, driven by performance
improvements in each of our three business segments," said Jason
Cohenour, President and CEO. "We continue to strengthen our leadership
position in the Internet of Things with technology innovations, new
product launches, new customer wins and strategic acquisitions."
Revenue for the third quarter of 2017 was $173.2 million, an increase of
12.8% compared to $153.6 million in the third quarter of 2016. Revenue
from OEM Solutions was $138.5 million in the third quarter of 2017, up
8.4% compared to $127.8 million in the third quarter of 2016. Revenue
from Enterprise Solutions was $26.3 million in the third quarter of
2017, up 38.8% compared to $18.9 million in the third quarter of 2016.
Revenue from Cloud and Connectivity Services was $8.4 million in the
third quarter of 2017, up 23.0% compared to $6.9 million in the third
quarter of 2016.
GAAP RESULTS
-
Gross margin was $57.8 million, or 33.3% of revenue, in the third
quarter of 2017, compared to $49.4 million, or 32.1% of revenue, in
the third quarter of 2016.
-
Operating expenses were $57.5 million and earnings from operations
were $0.2 million in the third quarter of 2017, compared to operating
expenses of $49.4 million and a loss from operations of $0.1 million
in the third quarter of 2016.
-
Net earnings were $1.2 million, or $0.04 per diluted share, in the
third quarter of 2017, compared to a net loss of $1.8 million, or
$0.06 diluted per share, in the third quarter of 2016.
NON-GAAP RESULTS
-
Gross margin was 33.4% in the third quarter of 2017, compared to 32.2%
in the third quarter of 2016.
-
Operating expenses were $48.6 million and earnings from operations
were $9.3 million in the third quarter of 2017, compared to operating
expenses of $43.2 million and earnings from operations of $6.3 million
in the third quarter of 2016.
-
Net earnings were $7.6 million, or $0.23 per diluted share, in the
third quarter of 2017, compared to net earnings of $4.1 million, or
$0.13 per diluted share, in the third quarter of 2016.
-
Adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA") were $13.1 million in the third
quarter of 2017, compared to $9.7 million in the third quarter of 2016.
Cash and cash equivalents at the end of the third quarter of 2017 were
$74.2 million, representing a decrease of $14.8 million compared to the
end of the second quarter of 2017. The decrease in cash was primarily
due to high working capital requirements.
Acquisition
On August 2, 2017, we entered into a definitive merger agreement (the
"Merger Agreement") to acquire Numerex Corp. ("Numerex") in a
stock-for-stock merger transaction (the "Transaction"). Under the terms
of the Merger Agreement, Numerex stockholders will receive a fixed
exchange ratio of 0.18 common shares of Sierra Wireless for each share
of Numerex common stock. Concurrent with closing, Numerex's debt of
approximately $20 million and other obligations of approximately $4
million will be repaid with cash. We expect the acquisition to expand
our position as a leading global IoT pure-play and significantly
increase our subscription-based recurring services revenue. On October
23, 2017, the Transaction was granted early termination of the waiting
period pursuant to the U.S. Hart-Scott-Rodino Antitrust Improvements Act
of 1976. On October 30, 2017, the U.S. Securities and Exchange
Commission declared our Registration Statement on Form F-4 (containing
the proxy statement/prospectus relating to the Transaction) effective
under the U.S. Securities Act of 1933 and the proxy statement/prospectus
was mailed to Numerex's stockholders shortly thereafter. The special
meeting of Numerex stockholders to consider and vote on the approval of
the Transaction has been scheduled for December 6, 2017. The Transaction
is expected to close in December 2017, subject to the receipt of Numerex
stockholder approval, certain regulatory approvals, and satisfaction of
other customary closing conditions.
Financial Guidance
For the fourth quarter of 2017, we expect revenue to be in the range of
$172 million to $180 million and non-GAAP earnings per share to be in
the range of $0.21 to $0.29.
This Non-GAAP guidance 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 and certain other nonrecurring costs or
recoveries.
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 integration expense,
restructuring expense, impairment and certain other nonrecurring costs
or recoveries.
In addition to the above, Non-GAAP net earnings (loss) and non-GAAP
earnings (loss) per share exclude the impact of foreign exchange gains
or losses on translation of certain balance sheet accounts, unrealized
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 expense, restructuring expense, impairment, certain other
nonrecurring costs or recoveries, amortization, foreign exchange gains
or losses on translation of certain balance sheet accounts, unrealized
foreign exchange gains or losses on forward contracts, interest and
income tax expense. Adjusted EBITDA is a metric used by investors and
analysts for valuation purposes and we believe that it 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 capital expenditures.
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, November 2, 2017, at 6:00
PM Eastern Time (3:00 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: 75777631
To access the webcast, please follow the link below:
Sierra
Wireless Q3 2017 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=1494794&s=1&k=14795ECFA155598D365EF53424FC9A09
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 fourth quarter of 2017 and
our fiscal year 2017, 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, but not
limited to, 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 complete the proposed acquisition of Numerex Corp.
("Numerex"), in December 2017, to integrate Numerex's business,
operations and workforce with ours and to return the Numerex
business to profitable growth and realize the expected benefits of
the acquisition;
-
our ability to integrate other 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:
-
risks related to the proposed acquisition of Numerex;
-
competition from new or established cloud and connectivity 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 other
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;
-
our ability 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 offer and promote
acceptable wireless service programs;
-
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.
Customers start with Sierra because 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 1,100 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 September 30,
|
|
|
Nine months ended September 30,
|
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
Revenue
|
|
$
|
173,241
|
|
$
|
153,560
|
|
|
$
|
508,544
|
|
$
|
452,586
|
|
Cost of goods sold
|
|
115,466
|
|
104,192
|
|
|
335,411
|
|
303,639
|
|
Gross margin
|
|
57,775
|
|
49,368
|
|
|
173,133
|
|
148,947
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
18,127
|
|
15,519
|
|
|
55,138
|
|
47,194
|
|
Research and development
|
|
21,525
|
|
18,015
|
|
|
61,533
|
|
55,030
|
|
Administration
|
|
10,560
|
|
11,435
|
|
|
31,525
|
|
31,248
|
|
Restructuring
|
|
199
|
|
-
|
|
|
831
|
|
-
|
|
Acquisition-related and integration
|
|
2,077
|
|
34
|
|
|
3,403
|
|
467
|
|
Impairment
|
|
-
|
|
-
|
|
|
3,668
|
|
-
|
|
Amortization
|
|
5,049
|
|
4,418
|
|
|
14,435
|
|
12,905
|
|
|
|
57,537
|
|
49,421
|
|
|
170,533
|
|
146,844
|
|
Earnings (loss) from operations
|
|
238
|
|
(53
|
)
|
|
2,600
|
|
2,103
|
|
Foreign exchange gain
|
|
1,667
|
|
590
|
|
|
6,283
|
|
1,811
|
|
Other income
|
|
32
|
|
23
|
|
|
29
|
|
81
|
|
Earnings before income taxes
|
|
1,937
|
|
560
|
|
|
8,912
|
|
3,995
|
|
Income tax expense
|
|
710
|
|
2,329
|
|
|
1,247
|
|
4,328
|
|
Net earnings (loss)
|
|
$
|
1,227
|
|
$
|
(1,769
|
)
|
|
$
|
7,665
|
|
$
|
(333
|
)
|
Other comprehensive earnings (loss):
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments, net of taxes of $nil
|
|
3,822
|
|
(973
|
)
|
|
11,862
|
|
(92
|
)
|
Comprehensive earnings (loss)
|
|
$
|
5,049
|
|
$
|
(2,742
|
)
|
|
$
|
19,527
|
|
$
|
(425
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share (in dollars)
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.04
|
|
$
|
(0.06
|
)
|
|
$
|
0.24
|
|
$
|
(0.01
|
)
|
Diluted
|
|
0.04
|
|
(0.06
|
)
|
|
0.23
|
|
(0.01
|
)
|
Weighted average number of shares outstanding (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
32,200
|
|
32,043
|
|
|
32,093
|
|
32,055
|
|
Diluted
|
|
32,735
|
|
32,043
|
|
|
32,665
|
|
32,055
|
|
SIERRA WIRELESS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except where otherwise stated)
(unaudited)
|
|
September 30, 2017
|
|
|
December 31, 2016
|
Assets
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
74,206
|
|
|
$
|
102,772
|
|
Accounts receivable, net of allowance for doubtful accounts of
$1,883 (December 31, 2016 - $2,486)
|
|
148,134
|
|
|
143,798
|
|
Inventories
|
|
56,987
|
|
|
40,913
|
|
Prepaids and other
|
|
6,463
|
|
|
6,530
|
|
|
|
285,790
|
|
|
294,013
|
|
Property and equipment
|
|
36,566
|
|
|
34,180
|
|
Intangible assets
|
|
67,298
|
|
|
74,863
|
|
Goodwill
|
|
167,062
|
|
|
154,114
|
|
Deferred income taxes
|
|
16,954
|
|
|
16,039
|
|
Other assets
|
|
10,419
|
|
|
5,250
|
|
|
|
$
|
584,089
|
|
|
$
|
578,459
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
144,902
|
|
|
$
|
167,500
|
|
Deferred revenue and credits
|
|
3,666
|
|
|
5,263
|
|
|
|
148,568
|
|
|
172,763
|
|
Long-term obligations
|
|
34,035
|
|
|
32,654
|
|
Deferred income taxes
|
|
11,493
|
|
|
11,458
|
|
|
|
194,096
|
|
|
216,875
|
|
Equity
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
Common stock: no par value; unlimited shares authorized; issued and
outstanding: 32,219,652 shares (December 31, 2016 - 31,859,960
shares)
|
|
349,598
|
|
|
342,450
|
|
Preferred stock: no par value; unlimited shares authorized;
issued and outstanding: nil shares
|
|
-
|
|
|
-
|
|
Treasury stock: at cost: 225,440 shares (December 31, 2016 -
355,471 shares)
|
|
(3,256
|
)
|
|
(5,134
|
)
|
Additional paid-in capital
|
|
25,786
|
|
|
24,976
|
|
Retained earnings
|
|
20,429
|
|
|
13,718
|
|
Accumulated other comprehensive loss
|
|
(2,564
|
)
|
|
(14,426
|
)
|
|
|
389,993
|
|
|
361,584
|
|
|
|
$
|
584,089
|
|
|
$
|
578,459
|
|
SIERRA WIRELESS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Cash flows provided by (used in):
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
$
|
1,227
|
|
|
$
|
(1,769
|
)
|
|
$
|
7,665
|
|
|
$
|
(333
|
)
|
Items not requiring (providing) cash
|
|
|
|
|
|
|
|
|
Amortization
|
|
7,548
|
|
|
6,577
|
|
|
21,739
|
|
|
18,851
|
|
Stock-based compensation
|
|
2,769
|
|
|
1,847
|
|
|
7,472
|
|
|
5,784
|
|
Deferred income taxes
|
|
(36
|
)
|
|
-
|
|
|
(1,340
|
)
|
|
-
|
|
Impairment
|
|
-
|
|
|
-
|
|
|
3,668
|
|
|
-
|
|
Unrealized foreign exchange (gain) loss
|
|
(2,202
|
)
|
|
120
|
|
|
(8,046
|
)
|
|
(1,423
|
)
|
Other
|
|
(43
|
)
|
|
(93
|
)
|
|
(225
|
)
|
|
(204
|
)
|
Changes in non-cash working capital
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(12,819
|
)
|
|
7,144
|
|
|
749
|
|
|
(4,190
|
)
|
Inventories
|
|
9,047
|
|
|
(2,213
|
)
|
|
(14,193
|
)
|
|
10,964
|
|
Prepaids and other
|
|
(215
|
)
|
|
3,514
|
|
|
(4,753
|
)
|
|
3,455
|
|
Accounts payable and accrued liabilities
|
|
(16,977
|
)
|
|
7,763
|
|
|
(25,559
|
)
|
|
13,462
|
|
Deferred revenue and credits
|
|
(343
|
)
|
|
1,705
|
|
|
(1,643
|
)
|
|
958
|
|
Cash flows provided by (used in) operating activities
|
|
(12,044
|
)
|
|
24,595
|
|
|
(14,466
|
)
|
|
47,324
|
|
Investing activities
|
|
|
|
|
|
|
|
|
Additions to property and equipment
|
|
(2,939
|
)
|
|
(4,540
|
)
|
|
(10,879
|
)
|
|
(12,810
|
)
|
Additions to intangible assets
|
|
(288
|
)
|
|
(201
|
)
|
|
(1,385
|
)
|
|
(737
|
)
|
Proceeds from sale of property and equipment
|
|
-
|
|
|
-
|
|
|
27
|
|
|
3
|
|
Acquisition of GNSS business
|
|
-
|
|
|
-
|
|
|
(3,145
|
)
|
|
-
|
|
Acquisition of GenX Mobile Incorporated, net of cash acquired
|
|
-
|
|
|
(5,900
|
)
|
|
-
|
|
|
(5,900
|
)
|
Cash flows used in investing activities
|
|
(3,227
|
)
|
|
(10,641
|
)
|
|
(15,382
|
)
|
|
(19,444
|
)
|
Financing activities
|
|
|
|
|
|
|
|
|
Issuance of common shares
|
|
363
|
|
|
98
|
|
|
5,285
|
|
|
1,569
|
|
Repurchase of common shares for cancellation
|
|
-
|
|
|
-
|
|
|
(2,779
|
)
|
|
(6,206
|
)
|
Purchase of treasury shares for RSU distribution
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(4,214
|
)
|
Taxes paid related to net settlement of equity awards
|
|
(7
|
)
|
|
(13
|
)
|
|
(1,096
|
)
|
|
(790
|
)
|
Payment for contingent consideration
|
|
(161
|
)
|
|
-
|
|
|
(1,397
|
)
|
|
(16
|
)
|
Decrease in other long-term obligations
|
|
(106
|
)
|
|
(152
|
)
|
|
(340
|
)
|
|
(290
|
)
|
Cash flows provided by (used in) financing activities
|
|
89
|
|
|
(67
|
)
|
|
(327
|
)
|
|
(9,947
|
)
|
Effect of foreign exchange rate changes on cash and cash equivalents
|
|
376
|
|
|
(266
|
)
|
|
1,609
|
|
|
185
|
|
Cash and cash equivalents, increase (decrease) in the period
|
|
(14,806
|
)
|
|
13,621
|
|
|
(28,566
|
)
|
|
18,118
|
|
Cash and cash equivalents, beginning of period
|
|
89,012
|
|
|
98,433
|
|
|
102,772
|
|
|
93,936
|
|
Cash and cash equivalents, end of period
|
|
$
|
74,206
|
|
|
$
|
112,054
|
|
|
$
|
74,206
|
|
|
$
|
112,054
|
|
SIERRA WIRELESS, INC.
RECONCILIATION OF GAAP AND NON-GAAP RESULTS BY QUARTER
(in thousands of U.S. dollars, except where
otherwise stated)
|
|
2017
|
|
2016
|
|
Q3
|
|
Q2
|
|
Q1
|
|
Total
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin - GAAP
|
|
$
|
57,775
|
|
|
$
|
59,697
|
|
|
$
|
55,661
|
|
|
$
|
217,743
|
|
|
$
|
68,796
|
|
|
$
|
49,368
|
|
|
$
|
52,764
|
|
|
$
|
46,815
|
|
Stock-based compensation and related social taxes
|
|
123
|
|
|
108
|
|
|
108
|
|
|
420
|
|
|
99
|
|
|
108
|
|
|
107
|
|
|
106
|
|
Realized gains (losses) on hedge contracts
|
|
12
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Other nonrecurring costs (recoveries)
|
|
$
|
-
|
|
|
-
|
|
|
-
|
|
|
(13,045
|
)
|
|
(13,045
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
Gross margin - Non-GAAP
|
|
$
|
57,910
|
|
|
$
|
59,805
|
|
|
$
|
55,769
|
|
|
$
|
205,118
|
|
|
$
|
55,850
|
|
|
$
|
49,476
|
|
|
$
|
52,871
|
|
|
$
|
46,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from operations - GAAP
|
|
$
|
238
|
|
|
$
|
3,849
|
|
|
$
|
(1,487
|
)
|
|
$
|
21,348
|
|
|
$
|
19,245
|
|
|
$
|
(53
|
)
|
|
$
|
3,411
|
|
|
$
|
(1,255
|
)
|
Stock-based compensation and related social taxes
|
|
2,780
|
|
|
2,577
|
|
|
2,148
|
|
|
7,596
|
|
|
1,845
|
|
|
1,856
|
|
|
1,902
|
|
|
1,993
|
|
Acquisition-related and integration
|
|
2,077
|
|
|
875
|
|
|
451
|
|
|
843
|
|
|
376
|
|
|
34
|
|
|
59
|
|
|
374
|
|
Restructuring
|
|
199
|
|
|
259
|
|
|
373
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Other nonrecurring costs (recoveries)
|
|
-
|
|
|
42
|
|
|
276
|
|
|
(11,762
|
)
|
|
(13,045
|
)
|
|
1,283
|
|
|
-
|
|
|
-
|
|
Realized gains (losses) on hedge contracts
|
|
210
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Impairment
|
|
-
|
|
|
-
|
|
|
3,668
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Acquisition-related amortization
|
|
3,845
|
|
|
3,694
|
|
|
3,641
|
|
|
12,102
|
|
|
3,308
|
|
|
3,206
|
|
|
3,058
|
|
|
2,530
|
|
Earnings from operations - Non- GAAP
|
|
$
|
9,349
|
|
|
$
|
11,296
|
|
|
$
|
9,070
|
|
|
$
|
30,127
|
|
|
$
|
11,729
|
|
|
$
|
6,326
|
|
|
$
|
8,430
|
|
|
$
|
3,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) - GAAP
|
|
$
|
1,227
|
|
|
$
|
6,649
|
|
|
$
|
(211
|
)
|
|
$
|
15,385
|
|
|
$
|
15,718
|
|
|
$
|
(1,769
|
)
|
|
$
|
718
|
|
|
$
|
718
|
|
Stock-based compensation and related social taxes,
restructuring, impairment, acquisition-related, integration
and other nonrecurring costs (recoveries)
|
|
5,056
|
|
|
3,753
|
|
|
6,916
|
|
|
(3,323
|
)
|
|
(10,824
|
)
|
|
3,173
|
|
|
1,961
|
|
|
2,367
|
|
Amortization
|
|
7,548
|
|
|
7,194
|
|
|
6,997
|
|
|
25,894
|
|
|
7,043
|
|
|
6,577
|
|
|
6,706
|
|
|
5,568
|
|
Interest and other, net
|
|
(32
|
)
|
|
12
|
|
|
(9
|
)
|
|
(83
|
)
|
|
(2
|
)
|
|
(23
|
)
|
|
(32
|
)
|
|
(26
|
)
|
Foreign exchange loss (gain)
|
|
(1,457
|
)
|
|
(3,517
|
)
|
|
(1,099
|
)
|
|
1,736
|
|
|
3,547
|
|
|
(590
|
)
|
|
1,071
|
|
|
(2,292
|
)
|
Income tax expense (recovery)
|
|
710
|
|
|
705
|
|
|
(168
|
)
|
|
4,310
|
|
|
(18
|
)
|
|
2,329
|
|
|
1,654
|
|
|
345
|
|
Adjusted EBITDA
|
|
13,052
|
|
|
14,796
|
|
|
12,426
|
|
|
43,919
|
|
|
15,464
|
|
|
9,697
|
|
|
12,078
|
|
|
6,680
|
|
Amortization (exclude acquisition- related amortization)
|
|
(3,703
|
)
|
|
(3,500
|
)
|
|
(3,356
|
)
|
|
(13,792
|
)
|
|
(3,735
|
)
|
|
(3,371
|
)
|
|
(3,648
|
)
|
|
(3,038
|
)
|
Interest and other, net
|
|
32
|
|
|
(12
|
)
|
|
9
|
|
|
83
|
|
|
2
|
|
|
23
|
|
|
32
|
|
|
26
|
|
Income tax expense - Non-GAAP
|
|
(1,791
|
)
|
|
(1,591
|
)
|
|
(1,418
|
)
|
|
(8,241
|
)
|
|
(2,900
|
)
|
|
(2,208
|
)
|
|
(2,086
|
)
|
|
(1,047
|
)
|
Net earnings - Non-GAAP
|
|
$
|
7,590
|
|
|
$
|
9,693
|
|
|
$
|
7,661
|
|
|
$
|
21,969
|
|
|
$
|
8,831
|
|
|
$
|
4,141
|
|
|
$
|
6,376
|
|
|
$
|
2,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP - (in dollars per share)
|
|
$
|
0.04
|
|
|
$
|
0.20
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.48
|
|
|
$
|
0.49
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.02
|
|
|
$
|
0.02
|
|
Non-GAAP - (in dollars per share)
|
|
$
|
0.23
|
|
|
$
|
0.30
|
|
|
$
|
0.24
|
|
|
$
|
0.68
|
|
|
$
|
0.27
|
|
|
$
|
0.13
|
|
|
$
|
0.20
|
|
|
$
|
0.08
|
|
SIERRA WIRELESS, INC.
SEGMENTED RESULTS
(In thousands of U.S. dollars, except where otherwise
stated)
|
|
2017
|
|
2016
|
|
Q3
|
|
Q2
|
|
Q1
|
|
Total
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OEM Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
138,531
|
|
|
$
|
144,561
|
|
|
$
|
133,000
|
|
|
$
|
516,517
|
|
|
$
|
135,211
|
|
|
$
|
127,765
|
|
|
$
|
132,667
|
|
|
$
|
120,874
|
|
Gross margin (2) (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
$
|
41,161
|
|
|
$
|
46,323
|
|
|
$
|
42,078
|
|
|
$
|
166,596
|
|
|
$
|
54,110
|
|
|
$
|
37,191
|
|
|
$
|
41,005
|
|
|
$
|
34,290
|
|
- Non-GAAP
|
|
$
|
41,268
|
|
|
$
|
46,413
|
|
|
$
|
42,167
|
|
|
$
|
154,988
|
|
|
$
|
42,232
|
|
|
$
|
37,280
|
|
|
$
|
41,096
|
|
|
$
|
34,380
|
|
Gross margin % (2) (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
29.7
|
%
|
|
32.0
|
%
|
|
31.6
|
%
|
|
32.3
|
%
|
|
40.0
|
%
|
|
29.1
|
%
|
|
30.9
|
%
|
|
28.4
|
%
|
- Non-GAAP
|
|
29.8
|
%
|
|
32.1
|
%
|
|
31.7
|
%
|
|
30.0
|
%
|
|
31.2
|
%
|
|
29.2
|
%
|
|
31.0
|
%
|
|
28.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
26,277
|
|
|
$
|
21,661
|
|
|
$
|
21,718
|
|
|
$
|
71,486
|
|
|
$
|
20,976
|
|
|
$
|
18,938
|
|
|
$
|
16,577
|
|
|
$
|
14,995
|
|
Gross margin (1) (2) (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
$
|
12,631
|
|
|
$
|
10,276
|
|
|
$
|
10,485
|
|
|
$
|
39,949
|
|
|
$
|
12,002
|
|
|
$
|
9,273
|
|
|
$
|
8,922
|
|
|
$
|
9,752
|
|
- Non-GAAP
|
|
$
|
12,652
|
|
|
$
|
10,289
|
|
|
$
|
10,500
|
|
|
$
|
38,913
|
|
|
$
|
10,930
|
|
|
$
|
9,286
|
|
|
$
|
8,934
|
|
|
$
|
9,763
|
|
Gross margin % (1) (2) (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
48.1
|
%
|
|
47.4
|
%
|
|
48.3
|
%
|
|
55.9
|
%
|
|
57.2
|
%
|
|
49.0
|
%
|
|
53.8
|
%
|
|
65.0
|
%
|
- Non-GAAP
|
|
48.1
|
%
|
|
47.5
|
%
|
|
48.3
|
%
|
|
54.4
|
%
|
|
52.1
|
%
|
|
49.0
|
%
|
|
53.9
|
%
|
|
65.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud and Connectivity Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
8,433
|
|
|
$
|
7,288
|
|
|
$
|
7,075
|
|
|
$
|
27,604
|
|
|
$
|
6,834
|
|
|
$
|
6,857
|
|
|
$
|
6,985
|
|
|
$
|
6,928
|
|
Gross margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
$
|
3,983
|
|
|
$
|
3,098
|
|
|
$
|
3,098
|
|
|
$
|
11,198
|
|
|
$
|
2,684
|
|
|
$
|
2,904
|
|
|
$
|
2,837
|
|
|
$
|
2,773
|
|
- Non-GAAP
|
|
$
|
3,990
|
|
|
$
|
3,103
|
|
|
$
|
3,102
|
|
|
$
|
11,217
|
|
|
$
|
2,688
|
|
|
$
|
2,910
|
|
|
$
|
2,841
|
|
|
$
|
2,778
|
|
Gross margin %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
47.2
|
%
|
|
42.5
|
%
|
|
43.8
|
%
|
|
40.6
|
%
|
|
39.3
|
%
|
|
42.4
|
%
|
|
40.6
|
%
|
|
40.0
|
%
|
- Non-GAAP
|
|
47.3
|
%
|
|
42.6
|
%
|
|
43.8
|
%
|
|
40.6
|
%
|
|
39.3
|
%
|
|
42.4
|
%
|
|
40.7
|
%
|
|
40.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
173,241
|
|
|
$
|
173,510
|
|
|
$
|
161,793
|
|
|
$
|
615,607
|
|
|
$
|
163,021
|
|
|
$
|
153,560
|
|
|
$
|
156,229
|
|
|
$
|
142,797
|
|
Gross margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
$
|
57,775
|
|
|
$
|
59,697
|
|
|
$
|
55,661
|
|
|
$
|
217,743
|
|
|
$
|
68,796
|
|
|
$
|
49,368
|
|
|
$
|
52,764
|
|
|
$
|
46,815
|
|
- Non-GAAP
|
|
$
|
57,910
|
|
|
$
|
59,805
|
|
|
$
|
55,769
|
|
|
$
|
205,118
|
|
|
$
|
55,850
|
|
|
$
|
49,476
|
|
|
$
|
52,871
|
|
|
$
|
46,921
|
|
Gross margin %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- GAAP
|
|
33.3
|
%
|
|
34.4
|
%
|
|
34.4
|
%
|
|
35.4
|
%
|
|
42.2
|
%
|
|
32.1
|
%
|
|
33.8
|
%
|
|
32.8
|
%
|
- Non-GAAP
|
|
33.4
|
%
|
|
34.5
|
%
|
|
34.5
|
%
|
|
33.3
|
%
|
|
34.3
|
%
|
|
32.2
|
%
|
|
33.8
|
%
|
|
32.9
|
%
|
(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. (3) Q4 2016 OEM Solutions
and Enterprise Solutions GAAP gross margins include a favorable impact
of $12.9 million and $1.5 million, respectively, of a change in estimate
on accrued royalty obligations. This is comprised of two components, an
amount of $11.7 million and $1.3 million, respectively, related to a
one-time reduction effective October 1, 2016 (excluded from non-GAAP
gross margin), and a $1.2 million and $0.2 million, respectively,
favorable impact related to royalties accrued on the products sold in
Q4, 2016 (included in non-GAAP gross margin).
View source version on businesswire.com: http://www.businesswire.com/news/home/20171102006782/en/
[ Back To TMCnet.com's Homepage ]
|