Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) today reported first quarter 2012 results. 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 first quarter of 2012 was $150.3 million, an increase of 4% compared to $144.3 million in the first quarter of 2011, and an increase of 2% compared to $147.2 million in the fourth quarter of 2011. The year-over-year revenue increase was driven by growth in both our M2M and Mobile Computing lines of business. M2M revenue was $77.0 million, up 6% compared to $72.7 million in the first quarter of 2011. Mobile Computing revenue was $73.3 million, up 3% compared to $71.6 million in the first quarter of 2011.
On a GAAP basis, gross margin was $44.8 million, or 29.8%, in the first quarter of 2012, compared to $39.5 million, or 27.4%, in the first quarter of 2011. Operating expenses were $44.4 million and earnings from operations were $0.3 million in the first quarter of 2012, compared to operating expenses of $48.9 million and a loss from operations of $9.4 million in the first quarter of 2011. Net earnings were $0.3 million, or $0.01 per diluted share, in the first quarter of 2012, compared to net loss of $7.8 million, or $0.25 per diluted share, in the first quarter of 2011.
On a non-GAAP basis, gross margin was 29.8% in the first quarter of 2012, compared to 27.4% in the first quarter of 2011. Operating expenses were $39.7 million and earnings from operations were $5.2 million in the first quarter of 2012, compared to operating expenses of $43.2 million and loss from operations of $3.6 million in the first quarter of 2011. Net earnings were $5.0 million, or $0.16 per diluted share, in the first quarter of 2012 compared to a net loss of $2.4 million, or $0.08 per diluted share, in the first quarter of 2011.
"Broad based revenue growth and improved gross margin drove stronger than expected financial results in the first quarter of 2012," said Jason Cohenour, President and Chief Executive Officer. "Overall I am very pleased with our Q1 results and trajectory. We have strengthened our operating model and have good visibility to growth drivers in both M2M and Mobile Computing."
Non-GAAP results exclude the impact of stock-based compensation expense, acquisition amortization, restructuring costs, integration costs, foreign exchange gains or losses on translation of balance sheet accounts, and certain tax adjustments. We disclose non-GAAP amounts as we believe that these measures provide our shareholders with better information about actual operating results and assist in comparisons from one period to another. The reconciliation between our GAAP and non-GAAP results is provided in the accompanying schedules.
Financial Guidance
The following Non-GAAP guidance for the second quarter of 2012 reflects current business indicators and expectations. In the second quarter of 2012, we expect revenue to increase on a sequential basis, driven primarily by growth in revenue from our 4G AirCard products. We expect gross margin to improve slightly and for operating expenses to increase slightly, compared to first quarter of 2012.
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 below. All figures are approximations based on management's current beliefs and assumptions.
Conference Call, Webcast and Instant Replay 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, May 3, 2012, at 5:30 PM Eastern Standard Time (2:30 PM PST). 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 commencement of the call:
- Toll-free (Canada and US): 1-877-201-0168
- Alternate number: 1-647-788-4901
- Conference ID: 53772714 For those unable to participate in the live call, a replay will be available until May 11, 2012. Dial 1-855-859-2056 or 1-800-585-8367 and enter the Conference ID number above to access the replay.
To access the webcast, please follow the link below:
http://www.snwebcastcenter.com/...
The webcast will remain available at the above link for one year following the call.
We look forward to having you participate in our 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 second quarter of 2012 and our fiscal year 2012, our business outlook for the short and longer term and our strategy, plans and future operating performance. Forward-looking statements are provided to help you understand our views of our short and longer term prospects. We caution you that forward-looking statements may not be appropriate for other purposes. We will not 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", "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 transition period to our 4G products;
- Expected cost of goods sold;
- Expected component supply constraints;
- Our ability to "win" new business;
- Expected deployment of next generation networks by wireless network operators;
- Our operations are not 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.
- Actual sales volumes or prices for our products and services may be lower than we expect for any reason including, without limitation, the continuing uncertain economic conditions, price and product competition, different product mix, the loss of any of our significant customers, competition from new or established wireless communication companies;
- The cost of products sold may be higher than planned or necessary component supplies may not be available, are delayed or are not available on commercially reasonable terms;
- We may be unable to enforce our intellectual property rights or may be subject to litigation that has an adverse outcome;
- The development and timing of the introduction of our new products may be later than we expect or may be indefinitely delayed.
- Transition periods associated with the migration to new technologies may be longer than we expect.
Revenue for the first quarter of 2012 was $150.3 million, an increase of 4% compared to $144.3 million in the first quarter of 2011, and an increase of 2% compared to $147.2 million in the fourth quarter of 2011. The year-over-year revenue increase was driven by growth in both our M2M and Mobile Computing lines of business. M2M revenue was $77.0 million, up 6% compared to $72.7 million in the first quarter of 2011. Mobile Computing revenue was $73.3 million, up 3% compared to $71.6 million in the first quarter of 2011.
On a GAAP basis, gross margin was $44.8 million, or 29.8%, in the first quarter of 2012, compared to $39.5 million, or 27.4%, in the first quarter of 2011. Operating expenses were $44.4 million and earnings from operations were $0.3 million in the first quarter of 2012, compared to operating expenses of $48.9 million and a loss from operations of $9.4 million in the first quarter of 2011. Net earnings were $0.3 million, or $0.01 per diluted share, in the first quarter of 2012, compared to net loss of $7.8 million, or $0.25 per diluted share, in the first quarter of 2011.
On a non-GAAP basis, gross margin was 29.8% in the first quarter of 2012, compared to 27.4% in the first quarter of 2011. Operating expenses were $39.7 million and earnings from operations were $5.2 million in the first quarter of 2012, compared to operating expenses of $43.2 million and loss from operations of $3.6 million in the first quarter of 2011. Net earnings were $5.0 million, or $0.16 per diluted share, in the first quarter of 2012 compared to a net loss of $2.4 million, or $0.08 per diluted share, in the first quarter of 2011.
"Broad based revenue growth and improved gross margin drove stronger than expected financial results in the first quarter of 2012," said Jason Cohenour, President and Chief Executive Officer. "Overall I am very pleased with our Q1 results and trajectory. We have strengthened our operating model and have good visibility to growth drivers in both M2M and Mobile Computing."
Non-GAAP results exclude the impact of stock-based compensation expense, acquisition amortization, restructuring costs, integration costs, foreign exchange gains or losses on translation of balance sheet accounts, and certain tax adjustments. We disclose non-GAAP amounts as we believe that these measures provide our shareholders with better information about actual operating results and assist in comparisons from one period to another. The reconciliation between our GAAP and non-GAAP results is provided in the accompanying schedules.
Financial Guidance
The following Non-GAAP guidance for the second quarter of 2012 reflects current business indicators and expectations. In the second quarter of 2012, we expect revenue to increase on a sequential basis, driven primarily by growth in revenue from our 4G AirCard products. We expect gross margin to improve slightly and for operating expenses to increase slightly, compared to first quarter of 2012.
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 below. All figures are approximations based on management's current beliefs and assumptions.
Conference Call, Webcast and Instant Replay 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, May 3, 2012, at 5:30 PM Eastern Standard Time (2:30 PM PST). 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 commencement of the call:
- Toll-free (Canada and US): 1-877-201-0168
- Alternate number: 1-647-788-4901
- Conference ID: 53772714 For those unable to participate in the live call, a replay will be available until May 11, 2012. Dial 1-855-859-2056 or 1-800-585-8367 and enter the Conference ID number above to access the replay.
To access the webcast, please follow the link below:
http://www.snwebcastcenter.com/...
The webcast will remain available at the above link for one year following the call.
We look forward to having you participate in our 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 second quarter of 2012 and our fiscal year 2012, our business outlook for the short and longer term and our strategy, plans and future operating performance. Forward-looking statements are provided to help you understand our views of our short and longer term prospects. We caution you that forward-looking statements may not be appropriate for other purposes. We will not 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", "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 transition period to our 4G products;
- Expected cost of goods sold;
- Expected component supply constraints;
- Our ability to "win" new business;
- Expected deployment of next generation networks by wireless network operators;
- Our operations are not 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.
- Actual sales volumes or prices for our products and services may be lower than we expect for any reason including, without limitation, the continuing uncertain economic conditions, price and product competition, different product mix, the loss of any of our significant customers, competition from new or established wireless communication companies;
- The cost of products sold may be higher than planned or necessary component supplies may not be available, are delayed or are not available on commercially reasonable terms;
- We may be unable to enforce our intellectual property rights or may be subject to litigation that has an adverse outcome;
- The development and timing of the introduction of our new products may be later than we expect or may be indefinitely delayed.
- Transition periods associated with the migration to new technologies may be longer than we expect.
