Revenue in Q1'22 was $173.0 million and Adjusted EBITDA was $15.8 million

Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) reported results for its first quarter of 2022. 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.1

“We delivered strong sequential and year-over-year growth in the First Quarter,” said Phil Brace, President and CEO of Sierra Wireless. "We continue to work closely with our suppliers to secure components to meet the strong demand from our customers."

First Quarter 2022 Compared to First Quarter 2021

  • Revenue was $173.0 million, an increase of 60.1%. The improved performance was primarily due to strong demand and the realization of investments in inventory. In addition, the first quarter of 2021 was negatively impacted by the ransomware incident.
  • Gross margin was 31.8% as compared to 34.9% in the first quarter of 2021. In the first quarter of 2022, gross margin was impacted by product mix, obsolete inventory from our home security business, and one time expedited shipping costs.
  • Operating expenses were $64.6 million compared to $60.8 million in the first quarter of 2021. First quarter expenses included a $10.3 million impairment charge primarily related to the intangible assets of our home security business.
  • Net loss from continuing operations was $13.9 million, compared to $28.5 million in the first quarter of 2021.
  • Adjusted earnings from continuing operations* was $8.6 million, or earnings of $0.23 per share, as compared to a loss of $9.6 million, or loss of $0.26 per share in the first quarter of 2021.
  • Adjusted EBITDA* was $15.8 million compared to a loss of $4.4 million in the first quarter of 2021.
  • Connectivity, software, and services revenue was $34.9 million, an increase of 3.7%. This increase included growth in our core connectivity area including smart connectivity which was partially offset by decreases in our legacy 2G/3G European business and our home security business. Monthly recurring revenue ("MRR")2 was $11.4 million in March 2022 compared to $11.5 million in March 2021.

Segmented Information

IoT Solutions

Revenue from IoT Solutions increased 79.3% to $133.7 million as compared to $74.6 million in the first quarter of 2021. The increase was primarily due to increased demand for connected devices globally. IoT Solutions gross margin was 30.3%, compared to 29.6% in the first quarter of 2021.

Enterprise Solutions

Revenue from Enterprise Solutions increased 17.2% to $39.2 million as compared to $33.5 million in the first quarter of 2021. The increase was primarily due to strong demand for routers in our key industrial and public safety verticals. Enterprise Solutions gross margin was 37.0% as compared to 46.7% in the first quarter of 2021. Enterprise Solution gross margin was negatively impacted by obsolete inventory from our home security business and one-time expedited shipping costs caused by 2021 COVID-19 related shutdowns. These one-time factors had a negative 9.0% impact on gross margin.

Liquidity and Capital Resources

Cash and cash equivalents and restricted cash, including amounts held for sale, at the end of the first quarter of 2022 were $97.4 million, an increase of $20.6 million from the fourth quarter of 2021. In January 2022, we received net proceeds of $45.8 million from the full drawdown of our CAD$60 million debt facility with the Canadian Imperial Bank of Commerce and the Business Development Bank of Canada. The debt facility has a term of four years and a first-year interest rate of 5%. In addition, we continued to make investments in inventory in the supply constrained environment.

Disposition of Offender Monitoring Business Line

On April 15, 2022, we signed a definitive agreement and closed the sale of our Omnilink offender monitoring business to Sentinel Advantage LLC for $37.6 million in cash, subject to customary working capital adjustments. Sentinel continues to be an important customer, and we are providing them with connectivity services and embedded modules for their offender monitoring products. The divestiture allows the Company to focus on its core businesses and strengthen its balance sheet.

Financial Guidance

The impact of the COVID-19 pandemic on our global business continues to remain uncertain. While we continue to evaluate the effects of COVID-19 on our business, the overall severity and duration of adverse impacts related to COVID-19 on our business, financial condition, cash flows and operating results for the second quarter 2022 and beyond cannot be reasonably estimated at this time. Due to continued strong demand and the investment in inventory to combat the industry-wide tightness in supply, we expect our revenue in the second quarter 2022 to be in the range of $160 million to $175 million, with a midpoint of $167.5 million.

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.

______________________________________________

1 Non-GAAP financial measures referred to in this news release are labeled as "non-GAAP measure" or designated as such with an asterisk (*). Please see "Non-GAAP Financial Measures" for explanations of why the Company uses these non-GAAP measures and "Reconciliation of GAAP and Non-GAAP Results by Quarter" for reconciliation to the most comparable GAAP financial measures.

2 MRR is defined as the monthly recurring revenue generated from connectivity, software, and services as well as usage fees from current customers. MRR is a key performance metric to measure our performance and growth in our recurring revenue, both to help investors better understand and assess the performance of our business and also because our mix of revenue generated from recurring sources has increased in recent years. MRR does not have any standardized meaning and is therefore unlikely to be comparable to similarly titled measures presented by other companies. MRR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. MRR is not a forecast.

3 In accordance with U.S. GAAP, the results of operations of the Automotive Business are reported as discontinued operations in our consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021. In accordance with U.S. GAAP, assets and liabilities associated with the Omnilink business have been recorded as held for sale in our consolidated balance sheet as at March 31, 2022.

Non-GAAP Financial Measures

Our consolidated financial statements are prepared in accordance with U.S. GAAP on a basis consistent for all periods presented. In addition to results reported in accordance with U.S. GAAP, we use non-GAAP financial measures as supplemental indicators of our operating performance. The term “non-GAAP financial measure” is used to refer to a numerical measure of a company’s historical or future financial performance, financial position or cash flows that: (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with U.S. GAAP in a company’s statement of earnings, balance sheet or statement of cash flows; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

Our non-GAAP financial measures included in this press release are adjusted net earnings (loss) from continuing operations*, adjusted basic and diluted net earnings (loss) per share from continuing operations*and adjusted EBITDA* (earnings before interest, taxes, depreciation and amortization).

Adjusted net earnings (loss) from continuing operations* excludes the impact of stock-based compensation expense and related social taxes, phantom RSU expense which represents expenses related to compensation units settled in cash based on the stock price at vesting, restructuring costs, government grants related to COVID-19 relief, CEO retirement/search, impairment, the ransomware incident, COVID-19 factory constraint incremental costs, certain other non-recurring costs or recoveries, acquisition-related amortization, 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.

Adjusted EBITDA* is defined as net earnings (loss) from continuing operations plus stock-based compensation expense and related social taxes, phantom RSU expense which represents expenses related to compensation units settled in cash based on the stock price at vesting, restructuring costs, government grants related to COVID-19 relief, CEO retirement/search, impairment, the ransomware incident, COVID-19 factory constraint incremental costs, certain other non-recurring costs or recoveries, amortization, interest and other income (expense), foreign exchange gains or losses on translation of certain balance sheet accounts, unrealized foreign exchange gains or losses on forward contracts, and income tax expense (recovery). 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.

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 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.

Conference call and webcast details

Sierra Wireless is hosting a conference call to discuss its financial results for the first quarter ended March 31, 2022 on Wednesday May 11, 2022, at 5:30 PM Eastern time (2:30 PM Pacific time).

To participate, 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: 5078273

Conference call and webcast details are available at the following link:

Sierra Wireless Q1 2022 Conference Call and Webcast

If the above link does not work, copy and paste the following URL into your browser:

https://app.webinar.net/9Q04x3Qb6zV

The webcast will remain available at the above link for one year following the call.

Cautionary Note Regarding Forward-Looking Statements

This press release contains certain statements and information that 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 (collectively, “forward-looking statements”) and may include statements and information relating to our financial guidance for our second quarter of 2022; our expectations regarding customer demand, our supply chain, manufacturing capacity (including manufacturing shutdowns or slowdowns) and the potential impact of COVID-19 in these areas; our ability to meet customer demand and our financial results; expectations regarding post-COVID-19 recovery; expectations regarding the Company's cost savings initiatives; 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; the impact of the ransomware incident on our business operations; our work to review and evaluate additional security measures and the ability that they will have to protect our IT systems; general economic conditions; estimates of our expenses, future revenues, financial results 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 and growth 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 and gateways. In particular, this press release describes our revenue targets, which are forward-looking statements and are subject to the assumptions, risks and uncertainties described below. 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", "guidance", "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:
    • the scope and duration of the COVID-19 pandemic and its impact on our business;
    • our ability to return to normal operations after the COVID-19 pandemic has subsided globally;
    • expected constraints on component supply and manufacturing capacity;
    • constraints impacting our ability to receive supply from our suppliers and deliver product to our customers;
    • customer demand and our ability to continue to sell our products and services in the expected quantities at the expected prices and expected times;
    • our operations not being adversely disrupted by further ransomware or cyber security attacks;
    • our ability to effect and to realize the anticipated benefits of our business transformation and restructuring 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;
    • our ability to renew or obtain credit facilities when required;
    • 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; and
    • expected tax and foreign exchange rates.
  • 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 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:
    • negative impact from COVID-19 could be prolonged and natural catastrophes could impact our capacity to continue critical operations;
    • our ability to comply with all terms under our credit facilities;
    • competition from new or established competitors or from those with greater resources;
    • our reliance on third party suppliers for certain components used in our products;
    • our dependence on a limited number of third party manufacturers;
    • cyber-attacks or other breaches of our and our vendors' information technology security;
    • the loss of, or significant demand fluctuations from, any of our significant customers;
    • our financial results being subject to fluctuations;
    • our business transformation initiatives, including investments and partnerships, 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 retain, hire and transition in a timely manner experienced and qualified additional executive officers and key employees as needed to achieve our business objectives;
    • 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 related to infringement on intellectual property rights of others and our ability to obtain necessary rights to use software or components supplied by third parties;
    • our ability to enforce our intellectual property rights;
    • 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 a leading IoT solutions provider that combines devices, network services, and software to unlock value in the connected economy. Companies globally are adopting 4G, 5G, and LPWA solutions to improve operational efficiency, create better customer experiences, improve their business models, and create new revenue streams. Sierra Wireless works with its customers to develop the right industry-specific solution for their IoT deployments, whether this is an integrated solution to help connect edge devices to the cloud, a software/API service to manage processes with billions of connected assets, or a platform to extract real-time data to improve business decisions. With more than 25 years of cellular IoT experience, Sierra Wireless is the global partner customers trust to deliver them their next IoT solution. For more information, visit www.sierrawireless.com.

“Sierra Wireless” is a registered trademark 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 LOSS

(In thousands of U.S. dollars, except where otherwise stated)

(unaudited)

 

Three months ended March 31,

 

 

2022

 

 

 

2021

 

Revenue

 

 

 

IoT Solutions

$

133,708

 

 

$

74,578

 

Enterprise Solutions

 

39,249

 

 

 

33,484

 

 

 

172,957

 

 

 

108,062

 

Cost of sales

 

 

 

IoT Solutions

 

93,183

 

 

 

52,492

 

Enterprise Solutions

 

24,711

 

 

 

17,843

 

 

 

117,894

 

 

 

70,335

 

Gross margin

 

55,063

 

 

 

37,727

 

Expenses

 

 

 

Sales and marketing

 

18,017

 

 

 

19,821

 

Research and development

 

18,335

 

 

 

17,484

 

Administration

 

10,116

 

 

 

16,308

 

Restructuring

 

4,004

 

 

 

2,574

 

Impairment

 

10,299

 

 

 

 

Amortization

 

3,820

 

 

 

4,624

 

 

 

64,591

 

 

 

60,811

 

Loss from operations

 

(9,528

)

 

 

(23,084

)

Foreign exchange loss

 

(2,278

)

 

 

(4,259

)

Other expense

 

(1,083

)

 

 

(643

)

Loss before income taxes

 

(12,889

)

 

 

(27,986

)

Income tax expense

 

1,021

 

 

 

552

 

Net loss from continuing operations

$

(13,910

)

 

$

(28,538

)

Net earnings (loss) from discontinued

operations

 

1,231

 

 

 

(1,322

)

Net loss

$

(12,679

)

 

$

(29,860

)

Other comprehensive loss:

 

 

 

Foreign currency translation adjustments, net of taxes of $nil

 

(426

)

 

 

(2,900

)

Comprehensive loss

$

(13,105

)

 

$

(32,760

)

 

 

 

 

Basic and diluted net earnings (loss) per share (in dollars)

 

 

 

Continuing operations

$

(0.37

)

 

$

(0.78

)

Discontinued operations

 

0.03

 

 

 

(0.04

)

 

$

(0.33

)

 

$

(0.81

)

Weighted average number of shares outstanding

(in thousands)

 

 

 

Basic

 

37,974

 

 

 

36,736

 

Diluted

 

37,974

 

 

 

36,736

 

SIERRA WIRELESS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except where otherwise stated)

(unaudited)

 

March 31, 2022

 

December 31, 2021

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

95,634

 

 

$

76,784

 

Restricted cash

 

 

 

 

100

 

Accounts receivable

 

88,057

 

 

 

85,310

 

Inventories

 

88,378

 

 

 

82,177

 

Prepaids and other

 

44,405

 

 

 

27,372

 

Assets held for sale

 

26,932

 

 

 

 

 

 

343,406

 

 

 

271,743

 

Property and equipment, net

 

23,222

 

 

 

31,134

 

Operating lease right-of-use assets

 

12,338

 

 

 

14,348

 

Intangible assets, net

 

37,729

 

 

 

54,708

 

Goodwill

 

154,956

 

 

 

167,379

 

Deferred income taxes

 

1,277

 

 

 

1,268

 

Other assets

 

5,922

 

 

 

6,473

 

 

$

578,850

 

 

$

547,053

 

Liabilities

 

 

 

Current liabilities

 

 

 

Accounts payable and accrued liabilities

 

179,658

 

 

 

183,529

 

Deferred revenue

 

11,697

 

 

 

11,770

 

Current portion of long-term debt

 

750

 

 

 

494

 

Liabilities held for sale

 

269

 

 

 

 

 

 

192,374

 

 

 

195,793

 

Long-term obligations

 

40,458

 

 

 

42,808

 

Operating lease liabilities

 

14,377

 

 

 

15,033

 

Long-term debt

 

56,686

 

 

 

9,394

 

Deferred income taxes

 

6,461

 

 

 

6,371

 

 

 

310,356

 

 

 

269,399

 

Equity

 

 

 

Shareholders’ equity

 

 

 

Common stock: no par value; unlimited shares authorized; issued and outstanding: 38,322,537 shares (December 31, 2021 - 37,774,800 shares)

 

467,074

 

 

 

460,331

 

Preferred stock: no par value; unlimited shares authorized;

issued and outstanding: nil shares

 

 

 

 

 

Treasury stock: at cost; 7,074 shares (December 31, 2021 – 119,761 shares)

 

(126

)

 

 

(2,128

)

Additional paid-in capital

 

44,852

 

 

 

48,747

 

Retained deficit

 

(234,148

)

 

 

(220,564

)

Accumulated other comprehensive loss

 

(9,158

)

 

 

(8,732

)

 

 

268,494

 

 

 

277,654

 

 

$

578,850

 

 

$

547,053

 

SIERRA WIRELESS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(unaudited)

 

Three months ended March 31,

 

 

2022

 

 

 

2021

 

Cash flows provided by (used in):

 

 

 

Operating activities

 

 

 

Net loss

$

(12,679

)

 

$

(29,860

)

Items not requiring (providing) cash

 

 

 

Amortization

 

6,684

 

 

 

7,308

 

Stock-based compensation

 

3,066

 

 

 

8,515

 

Capitalized interest expense

 

910

 

 

 

 

Impairment

 

10,299

 

 

 

 

Unrealized foreign exchange loss

 

1,367

 

 

 

5,028

 

Other

 

418

 

 

 

20

 

Changes in non-cash working capital

 

 

 

Accounts receivable

 

(5,726

)

 

 

(10,744

)

Inventories

 

(6,495

)

 

 

(1,532

)

Prepaids and other

 

(16,940

)

 

 

(16,234

)

Accounts payable and accrued liabilities

 

(3,013

)

 

 

(13,046

)

Deferred revenue and other

 

(1,636

)

 

 

161

 

Cash flows used in operating activities

 

(23,745

)

 

 

(50,384

)

Investing activities

 

 

 

Additions to property and equipment

 

(2,449

)

 

 

(4,709

)

Additions to intangible assets

 

(673

)

 

 

(420

)

Proceeds from sale of property and equipment

 

11

 

 

 

14

 

Cash flows used in investing activities

 

(3,111

)

 

 

(5,115

)

Financing activities

 

 

 

Issuance of common shares, net of issuance cost

 

878

 

 

 

2,802

 

Purchase of treasury shares for RSU distribution

 

 

 

 

(3,933

)

Taxes paid related to net settlement of equity awards

 

 

 

 

(946

)

Decrease in other long-term obligations

 

(5

)

 

 

(36

)

Proceeds from long-term debt, net of issuance cost

 

45,782

 

 

 

 

Cash flows provided by (used in) financing activities

 

46,655

 

 

 

(2,113

)

Effect of foreign exchange rate changes on cash and cash equivalents

 

758

 

 

 

(1,578

)

Cash, cash equivalents and restricted cash, increase (decrease) in the period

 

20,557

 

 

 

(59,190

)

Cash, cash equivalents and restricted cash, beginning of period

 

76,884

 

 

 

171,424

 

Cash, cash equivalents and restricted cash, end of period

$

97,441

 

 

$

112,234

 

Cash, cash equivalents and restricted cash are comprised of

 

 

 

Cash, cash equivalents and restricted cash

$

95,634

 

 

$

112,234

 

Cash, cash equivalents and restricted cash held for sale

$

1,807

 

 

$

 

Cash, cash equivalents and restricted cash, end of period

$

97,441

 

 

$

112,234

 

SIERRA WIRELESS, INC.

RECONCILIATION OF GAAP AND NON-GAAP RESULTS BY QUARTER

(in thousands of U.S. dollars, except where otherwise stated)

 

2022

 

 

2021

 

 

2020

 

Q1

 

Q4

Q3

Q2

Q1

 

Q4

Q3

Q2

 

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations - GAAP

$

(13,910

)

 

$

(11,752

)

$

(38,406

)

$

(10,036

)

$

(28,538

)

 

$

(11,167

)

$

(14,483

)

$

(17,291

)

Stock-based compensation and related social taxes

 

3,281

 

 

 

5,832

 

 

1,820

 

 

3,807

 

 

7,928

 

 

 

6,461

 

 

5,085

 

 

3,256

 

Phantom RSU (recovery) expense

 

(202

)

 

 

393

 

 

(69

)

 

569

 

 

206

 

 

 

691

 

 

261

 

 

141

 

Restructuring

 

4,004

 

 

 

7,592

 

 

369

 

 

1,720

 

 

2,574

 

 

 

4,800

 

 

3,089

 

 

245

 

COVID-19 government relief

 

(11

)

 

 

(5,557

)

 

(168

)

 

(1,016

)

 

(2,049

)

 

 

(954

)

 

(6,298

)

 

 

CEO retirement/search

 

 

 

 

44

 

 

42

 

 

400

 

 

1,655

 

 

 

 

 

 

 

 

Impairment

 

10,299

 

 

 

741

 

 

11,544

 

 

 

 

 

 

 

 

 

 

 

 

Ransomware incident

 

(59

)

 

 

(959

)

 

271

 

 

1,135

 

 

533

 

 

 

 

 

 

 

 

COVID-19 factory constraint incremental costs

 

1,096

 

 

 

22

 

 

1,135

 

 

 

 

 

 

 

 

 

 

 

 

Other non-recurring costs

 

99

 

 

 

978

 

 

323

 

 

593

 

 

508

 

 

 

445

 

 

439

 

 

337

 

Amortization

 

6,684

 

 

 

6,935

 

 

7,208

 

 

7,267

 

 

7,308

 

 

 

7,054

 

 

8,030

 

 

7,823

 

Interest and other expense, net

 

1,142

 

 

 

307

 

 

192

 

 

111

 

 

110

 

 

 

564

 

 

988

 

 

283

 

Foreign exchange loss (gain), net of realized gain/loss on hedge contracts

 

2,326

 

 

 

1,927

 

 

2,693

 

 

(821

)

 

4,816

 

 

 

(2,804

)

 

(3,572

)

 

(3,955

)

Income tax expense (recovery)

 

1,021

 

 

 

761

 

 

(1,912

)

 

605

 

 

552

 

 

 

(7,984

)

 

(633

)

 

427

 

Adjusted EBITDA*

$

15,770

 

 

$

7,264

 

$

(14,958

)

$

4,334

 

$

(4,397

)

 

$

(2,894

)

$

(7,094

)

$

(8,734

)

 

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations - GAAP

$

(13,910

)

 

$

(11,752

)

$

(38,406

)

$

(10,036

)

$

(28,538

)

 

$

(11,167

)

$

(14,483

)

$

(17,291

)

Stock-based compensation and related social taxes

 

3,281

 

 

 

5,832

 

 

1,820

 

 

3,807

 

 

7,928

 

 

 

6,461

 

 

5,085

 

 

3,256

 

Phantom RSU (recovery) expense

 

(202

)

 

 

393

 

 

(69

)

 

569

 

 

206

 

 

 

691

 

 

261

 

 

141

 

Restructuring

 

4,004

 

 

 

7,592

 

 

369

 

 

1,720

 

 

2,574

 

 

 

4,800

 

 

3,089

 

 

245

 

COVID-19 government relief

 

(11

)

 

 

(5,557

)

 

(168

)

 

(1,016

)

 

(2,049

)

 

 

(954

)

 

(6,298

)

 

 

CEO retirement/search

 

 

 

 

44

 

 

42

 

 

400

 

 

1,655

 

 

 

 

 

 

 

 

Impairment

 

10,299

 

 

 

741

 

 

11,544

 

 

 

 

 

 

 

 

 

 

 

 

Ransomware incident

 

(59

)

 

 

(959

)

 

271

 

 

1,135

 

 

533

 

 

 

 

 

 

 

 

COVID-19 factory constraint incremental costs

 

1,096

 

 

 

22

 

 

1,135

 

 

 

 

 

 

 

 

 

 

 

 

Other non-recurring costs

 

99

 

 

 

978

 

 

323

 

 

593

 

 

508

 

 

 

445

 

 

439

 

 

337

 

Acquisition-related amortization

 

2,152

 

 

 

2,254

 

 

2,776

 

 

2,890

 

 

3,135

 

 

 

3,306

 

 

3,555

 

 

3,886

 

Foreign exchange loss (gain), net of realized gain/loss on hedge contracts

 

2,326

 

 

 

1,927

 

 

2,693

 

 

(821

)

 

4,816

 

 

 

(2,804

)

 

(3,572

)

 

(3,955

)

Income tax expense (recovery) adjustment

 

(500

)

 

 

(441

)

 

(3,008

)

 

(357

)

 

(393

)

 

 

(7,784

)

 

200

 

 

358

 

Adjusted earnings (loss) from continuing operations*

$

8,575

 

 

$

1,074

 

$

(20,678

)

$

(1,116

)

$

(9,625

)

 

$

(7,006

)

$

(11,724

)

$

(13,023

)

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of share (in thousands) - basic and diluted

 

37,974

 

 

 

37,541

 

 

37,196

 

 

36,992

 

 

36,736

 

 

 

36,534

 

 

36,417

 

 

36,341

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted adjusted earnings (loss) per share from continuing operations (in dollars)*

$

0.23

 

 

$

0.03

 

$

(0.56

)

$

(0.03

)

$

(0.26

)

 

$

(0.19

)

$

(0.32

)

$

(0.36

)

SIERRA WIRELESS, INC.

SEGMENTED RESULTS

(In thousands of U.S. dollars, except where otherwise indicated)

 

2022

 

 

2021

 

Q1

 

Total

Q4

Q3

Q2

Q1

 

 

 

 

 

 

 

 

IoT Solutions

 

 

 

 

 

 

 

Revenue

$

133,708

 

 

$

323,075

 

$

104,531

 

$

53,657

 

$

90,309

 

$

74,578

 

Gross margin

$

40,525

 

 

$

83,765

 

$

26,578

 

$

10,676

 

$

24,425

 

$

22,086

 

Gross margin %

 

30.3

%

 

 

25.9

%

 

25.4

%

 

19.9

%

 

27.0

%

 

29.6

%

Enterprise Solutions

 

 

 

 

 

 

 

Revenue

$

39,249

 

 

$

150,134

 

$

45,381

 

$

28,793

 

$

42,476

 

$

33,484

 

Gross margin

$

14,538

 

 

$

73,034

 

$

22,114

 

$

13,473

 

$

21,806

 

$

15,641

 

Gross margin %

 

37.0

%

 

 

48.6

%

 

48.7

%

 

46.8

%

 

51.3

%

 

46.7

%

Total

 

 

 

 

 

 

 

Revenue

$

172,957

 

 

$

473,209

 

$

149,912

 

$

82,450

 

$

132,785

 

$

108,062

 

Gross margin

$

55,063

 

 

$

156,799

 

$

48,692

 

$

24,149

 

$

46,231

 

$

37,727

 

Gross margin %

 

31.8

%

 

 

33.1

%

 

32.5

%

 

29.3

%

 

34.8

%

 

34.9

%

Revenue by Type:

 

 

 

 

 

 

 

Product

$

138,052

 

 

$

332,810

 

$

113,619

 

$

47,207

 

$

97,595

 

$

74,389

 

Connectivity, software, and services

$

34,905

 

 

$

140,399

 

$

36,293

 

$

35,243

 

$

35,190

 

$

33,673

 

 

Investor and Media Contact: David Climie, Investor Relations dclimie@sierrawireless.com

Investor Contact: Samuel Cochrane, Chief Financial Officer investor@sierrawireless.com

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