Revenue in Q3'22 was $166.1 million and
Adjusted EBITDA was $15.4 million
Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) reported results
for its third quarter of 2022. All results are reported in U.S.
dollars and are prepared in accordance with U.S. generally accepted
accounting principles ("U.S. GAAP" or "GAAP"), except as otherwise
indicated below.1
Third Quarter 2022 Compared to Third Quarter 2021
- Revenue was $166.1 million, an increase of 101.4% compared to
the third quarter of 2021. The increase was primarily due to strong
demand and the realization of investments in inventory to combat
the ongoing supply chain tightness. Revenues in the comparative
period were also impacted by manufacturing capacity constraints in
Vietnam as a result of COVID-19 related restrictions.
- Gross margin was 34.1% as compared to 29.3% in the third
quarter of 2021. Gross margin increased due to price increases and
the comparative period was negatively impacted by costs resulting
from the manufacturing capacity constraints in Vietnam caused by
COVID-19.
- Operating expenses were $61.2 million compared to $61.4 million
in the third quarter of 2021. Third quarter operating expenses
included $10.1 million related to the Transaction, as discussed
below. Operating expenses in the comparative period included an
impairment charge of $11.5 million.
- Net loss from continuing operations was $10.3 million, compared
to $38.4 million in the third quarter of 2021.
- Adjusted earnings from continuing operations* was $10.0
million, or earnings of $0.25 per share, as compared to a loss of
$20.7 million, or loss of $0.56 per share in the third quarter of
2021.
- Adjusted EBITDA* was $15.4 million compared to a loss of $15.0
million in the third quarter of 2021.
- Connectivity, software, and services revenue was $29.0 million,
a decrease of 17.8% compared to the third quarter of 2021. This
decrease was due to the sale of the Omnilink offender monitoring
business in the second quarter of 2022, the impact of the shutdown
of 2G/3G networks in the United States on our home security
business, and the impact of the wind down of 2G/3G networks in
Sweden on our enhanced carrier connectivity service lines.
- On October 21, 2022, we signed a definitive agreement and
closed the sale of our legacy home security business for gross
proceeds of $7.6 million in cash.
- Monthly recurring revenue ("MRR")2, 3 was $8.7 million in
September 2022 compared to $9.3 million in September 2021. The
decrease is primarily due to the impact of the wind down of 2G/3G
networks in Sweden on our enhanced carrier connectivity service
lines.
Segmented Information
IoT Solutions
Revenue from IoT Solutions increased 124.2% to $120.3 million as
compared to $53.7 million in the third quarter of 2021. The
increase was primarily due to strong demand for connected devices
globally and the realization of investments in inventory to combat
the ongoing supply chain tightness. Increase in demand includes
acceleration in IoT modules deployment across our industrial
customers. In addition, revenues in the comparative period were
negatively impacted by manufacturing capacity constraints in
Vietnam caused by COVID-19. IoT Solutions gross margin was 29.1%,
compared to 19.9% in the third quarter of 2021. The increase in
gross margin was due to price increases and improved absorption of
fixed costs from increased volume, partially offset by product mix.
Gross margin in the comparative period was also negatively impacted
by costs resulting from the manufacturing capacity constraints in
Vietnam caused by COVID-19.
Enterprise Solutions
Revenue from Enterprise Solutions increased 59.0% to $45.8
million as compared to $28.8 million in the third quarter of 2021.
The increase was due to strong demand for routers in our key
industrial and public safety verticals, partially offset by a
decline in connectivity, software, and services revenue resulting
from the sale of the Omnilink offender monitoring business in the
second quarter of 2022 and the impact of the shutdown of 2G/3G
networks in the United States on our home security business. In
addition, revenues in the comparative period were negatively
impacted by manufacturing capacity constraints in Vietnam.
Enterprise Solutions gross margin was 47.3%, similar to gross
margin of 46.8% in the third quarter of 2021.
Liquidity and Capital Resources
Cash and cash equivalents and restricted cash at the end of the
third quarter of 2022 were $126.0 million, a decrease of $1.4
million from the second quarter of 2022.
Acquisition by Semtech Corporation
On August 2, 2022, we entered into a definitive agreement (the
"Arrangement Agreement") with Semtech Corporation and a subsidiary
of Semtech Corporation (the "Purchaser") pursuant to which the
Purchaser will acquire all of the issued and outstanding shares of
Sierra Wireless (the "Transaction"). Under the terms of the
Transaction, Sierra Wireless shareholders will receive $31 in cash
per share (in U.S. dollars).
The Transaction, which is not subject to any financing
conditions, is to be carried out by way of a court-approved plan of
arrangement under the Canada Business Corporations Act. On
September 27, 2022, at a special meeting, Sierra Wireless
securityholders approved the Transaction. On September 29, 2022,
the Supreme Court of British Columbia approved the plan of
arrangement. On October 3, 2022, the Purchaser received a no action
letter from the Canadian Competition Bureau, satisfying the
Canadian Competition Act approval condition to closing the
Transaction. The Transaction remains subject to regulatory approval
under the United States Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended. On October 18, 2022, we announced that the
Company and the Purchaser each received a request for additional
information and documentary material (commonly known as a "second
request") from the U.S. Department of Justice in connection with
the Transaction. The second requests were issued under notification
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended. The outside date for closing the Transaction
provided under the Arrangement Agreement, inclusive of extensions,
is March 3, 2023, unless extended further by mutual agreement of
the parties.
______________________________ 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. We continue to monitor MRR as
a measure of performance in our recurring revenue. 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 With the sale of our Omnilink offender
monitoring business in the second quarter of 2022 and our home
security business in October of 2022, revenues from these
businesses have been excluded from MRR for the current and prior
periods.
4 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 and nine months
ended September 30, 2022 and 2021.
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 earnings (loss) from continuing operations*, basic and
diluted adjusted earnings (loss) per share from continuing
operations* and adjusted EBITDA* (earnings before interest, taxes,
depreciation and amortization).
Adjusted 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, gain on sale of
Omnilink, the ransomware incident, COVID-19 factory constraint
incremental costs, transaction 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, recognition of cumulative translation
adjustments on dissolution of subsidiaries, 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, gain on sale of
Omnilink, the ransomware incident, COVID-19 factory constraint
incremental costs, transaction 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, recognition of cumulative
translation adjustments on dissolution of subsidiaries, 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.
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, among others, the consummation of the Transaction and the
expected timing thereof, the synergies and other benefits to be
realized if the Transaction is consummated; the termination of our
credit facilities upon the consummation of the Transaction; 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; 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. 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:
- the failure to satisfy the conditions to the closing of the
Transaction;
- the failure to obtain regulatory approvals required for the
closing of the Transaction, including the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended;
- the failure of the purchaser to obtain financing required to
close the Transaction;
- the occurrence of any event, change or other circumstances that
could give rise to the termination of the arrangement agreement,
including the payment of a termination fee;
- the risk that the Transaction will not be consummated within
the expected time period, or at all;
- the effect of the Transaction on our management, ability to
retain and hire key personnel and maintain business relationships
with customers, suppliers and others with whom they each do
business;
- the effect of the Transaction on our ability to conduct certain
activities in the ordinary course of business;
- the effect of the Transaction on our ability to pursue
alternative transactions on favourable terms;
- 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;
- unanticipated costs associated with litigation or
settlements;
- 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;
- 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 September
30,
Nine months ended September
30,
2022
2021
2022
2021
Revenue
IoT Solutions
$
120,287
$
53,657
$
393,673
$
218,544
Enterprise Solutions
45,769
28,793
133,291
104,753
166,056
82,450
526,964
323,297
Cost of sales
IoT Solutions
85,299
42,981
276,147
161,357
Enterprise Solutions
24,138
15,320
75,953
53,833
109,437
58,301
352,100
215,190
Gross margin
56,619
24,149
174,864
108,107
Expenses
Sales and marketing
19,454
18,574
55,586
59,818
Research and development
15,988
16,238
51,619
50,652
Administration
10,906
10,384
32,241
37,789
Restructuring
2,140
369
9,859
4,663
Impairment
—
11,544
10,299
11,544
Gain on sale of Omnilink
—
—
(9,179
)
—
Transaction costs
10,070
—
10,584
—
Amortization
2,632
4,294
9,352
13,307
61,190
61,403
170,361
177,773
Earnings (loss) from operations
(4,571
)
(37,254
)
4,503
(69,666
)
Foreign exchange loss
(3,065
)
(2,601
)
(10,698
)
(5,717
)
Other expense
(1,839
)
(463
)
(3,572
)
(2,352
)
Loss before income taxes
(9,475
)
(40,318
)
(9,767
)
(77,735
)
Income tax expense (recovery)
869
(1,912
)
3,581
(755
)
Net loss from continuing
operations
$
(10,344
)
$
(38,406
)
$
(13,348
)
$
(76,980
)
Net earnings (loss) from discontinued
operations
1,014
459
3,038
(778
)
Net loss
$
(9,330
)
$
(37,947
)
$
(10,310
)
$
(77,758
)
Other comprehensive income (loss):
Foreign currency translation adjustments,
net of taxes of $nil
(1,299
)
(960
)
(3,639
)
(2,627
)
Comprehensive loss
$
(10,629
)
$
(38,907
)
$
(13,949
)
$
(80,385
)
Basic and diluted net earnings (loss) per
share (in dollars)
Continuing operations
$
(0.26
)
$
(1.03
)
$
(0.35
)
$
(2.08
)
Discontinued operations
0.03
0.01
0.08
(0.02
)
$
(0.24
)
$
(1.02
)
$
(0.27
)
$
(2.10
)
Weighted average number of shares
outstanding
(in thousands)
Basic
39,196
37,196
38,679
36,976
Diluted
39,196
37,196
38,679
36,976
SIERRA WIRELESS, INC.
CONSOLIDATED BALANCE
SHEETS
(In thousands of U.S. dollars,
except where otherwise stated)
(unaudited)
September 30, 2022
December 31, 2021
Assets
Current assets
Cash and cash equivalents
$
126,042
$
76,784
Restricted cash
—
100
Accounts receivable
100,828
85,310
Inventories
107,964
82,177
Prepaids and other
53,491
27,372
Assets held for sale
2,427
—
390,752
271,743
Property and equipment, net
26,314
31,134
Operating lease right-of-use assets
13,620
14,348
Intangible assets, net
30,796
54,708
Goodwill
139,471
167,379
Deferred income taxes
1,097
1,268
Other assets
2,155
6,473
$
604,205
$
547,053
Liabilities
Current liabilities
Accounts payable and accrued
liabilities
192,017
183,529
Deferred revenue
13,756
11,770
Secured borrowing
14,556
—
Current portion of long-term debt
1,130
494
Liabilities held for sale
284
—
221,743
195,793
Long-term obligations
35,699
42,808
Operating lease liabilities
14,055
15,033
Long-term debt
52,287
9,394
Deferred income taxes
5,632
6,371
329,416
269,399
Equity
Shareholders’ equity
Common stock: no par value; unlimited
shares authorized; issued and outstanding: 39,065,069 shares
(December 31, 2021 - 37,774,800 shares)
478,280
460,331
Preferred stock: no par value; unlimited
shares authorized;
issued and outstanding: nil shares
—
—
Treasury stock: at cost; 171 shares
(December 31, 2021 – 119,761 shares)
(4
)
(2,128
)
Additional paid-in capital
41,673
48,747
Retained deficit
(232,789
)
(220,564
)
Accumulated other comprehensive loss
(12,371
)
(8,732
)
274,789
277,654
$
604,205
$
547,053
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,
2022
2021
2022
2021
Cash flows provided by (used
in):
Operating activities
Net loss
$
(9,330
)
$
(37,947
)
$
(10,310
)
$
(77,758
)
Items not requiring (providing) cash
Amortization
4,432
7,208
15,857
21,783
Stock-based compensation
3,317
1,767
10,136
14,004
Capitalized interest expense
964
—
2,548
—
Deferred income tax (recovery) expense
—
(2,378
)
1
(2,381
)
Impairment
—
11,544
10,299
11,544
Gain on sale of Omnilink
—
—
(9,179
)
—
Unrealized foreign exchange loss
5,882
2,841
13,127
7,002
Recognition of cumulative translation
adjustments on dissolution of subsidiaries
754
—
1,571
—
Other
(71
)
(45
)
374
292
Changes in non-cash working capital
Accounts receivable
1,551
22,049
(22,403
)
14,853
Inventories
(15,956
)
(24,375
)
(26,808
)
(38,610
)
Prepaids and other
615
(928
)
(22,663
)
(12,012
)
Accounts payable and accrued
liabilities
(180
)
(28,532
)
10,619
(23,037
)
Deferred revenue and other
(1,454
)
348
(3,777
)
744
Cash flows used in operating
activities
(9,476
)
(48,448
)
(30,608
)
(83,576
)
Investing activities
Additions to property and equipment
(2,987
)
(3,187
)
(10,716
)
(11,868
)
Additions to intangible assets
(277
)
(1,139
)
(1,152
)
(4,061
)
Proceeds from sale of property and
equipment
55
51
78
90
Proceeds from sale of Omnilink, net of
transaction costs and cash sold
206
—
35,165
—
Acquisition of M2M New Zealand, net of
cash acquired
—
—
—
(319
)
Cash flows (used in) provided by investing
activities
(3,003
)
(4,275
)
23,375
(16,158
)
Financing activities
Issuance of common shares, net of issuance
cost
1,070
481
3,635
4,082
Purchase of treasury shares for RSU
distribution
(245
)
(111
)
(2,688
)
(7,574
)
Taxes paid related to net settlement of
equity awards
—
—
—
(1,057
)
Decrease in other long-term
obligations
(3
)
(73
)
(43
)
(175
)
Proceeds from long-term debt, net of
issuance costs
—
9,908
45,732
9,908
Proceeds from secured borrowing
14,556
—
14,556
—
Cash flows provided by financing
activities
15,378
10,205
61,192
5,184
Effect of foreign exchange rate changes on
cash and cash equivalents
(4,277
)
(429
)
(4,801
)
(1,335
)
Cash, cash equivalents and restricted
cash, (decrease) increase in the period
(1,378
)
(42,947
)
49,158
(95,885
)
Cash, cash equivalents and restricted
cash, beginning of period
127,420
118,486
76,884
171,424
Cash, cash equivalents and restricted
cash, end of period
$
126,042
$
75,539
$
126,042
$
75,539
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
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Net earnings (loss) from continuing
operations - GAAP
$
(10,344
)
$
10,906
$
(13,910
)
$
(11,752
)
$
(38,406
)
$
(10,036
)
$
(28,538
)
$
(11,167
)
Stock-based compensation and related
social taxes
3,415
3,758
3,281
5,832
1,820
3,807
7,928
6,461
Phantom RSU expense (recovery)
258
157
(202
)
393
(69
)
569
206
691
Restructuring
2,140
3,715
4,004
7,592
369
1,720
2,574
4,800
COVID-19 government relief
(33
)
(22
)
(11
)
(5,557
)
(168
)
(1,016
)
(2,049
)
(954
)
CEO retirement/search
—
—
—
44
42
400
1,655
—
Impairment
—
—
10,299
741
11,544
—
—
—
Gain on sale of Omnilink
—
(9,179
)
—
—
—
—
—
—
Ransomware incident
2
(1,089
)
(59
)
(959
)
271
1,135
533
—
COVID-19 factory constraint incremental
costs
—
—
1,096
22
1,135
—
—
—
Transaction costs
10,070
514
—
—
—
—
—
—
Other non-recurring costs
76
168
99
978
323
593
508
445
Amortization
4,432
4,741
6,684
6,935
7,208
7,267
7,308
7,054
Interest and other expense, net
1,083
922
1,142
307
192
111
110
564
Foreign exchange loss (gain), net of
realized gain/loss on hedge contracts
2,708
5,317
2,326
1,927
2,693
(821
)
4,816
(2,804
)
Recognition of cumulative translation
adjustments on dissolution of subsidiaries
754
817
—
—
—
—
—
—
Income tax expense (recovery)
869
1,691
1,021
761
(1,912
)
605
552
(7,984
)
Adjusted EBITDA*
$
15,430
$
22,416
$
15,770
$
7,264
$
(14,958
)
$
4,334
$
(4,397
)
$
(2,894
)
Net earnings (loss) from continuing
operations - GAAP
$
(10,344
)
$
10,906
$
(13,910
)
$
(11,752
)
$
(38,406
)
$
(10,036
)
$
(28,538
)
$
(11,167
)
Stock-based compensation and related
social taxes
3,415
3,758
3,281
5,832
1,820
3,807
7,928
6,461
Phantom RSU expense (recovery)
258
157
(202
)
393
(69
)
569
206
691
Restructuring
2,140
3,715
4,004
7,592
369
1,720
2,574
4,800
COVID-19 government relief
(33
)
(22
)
(11
)
(5,557
)
(168
)
(1,016
)
(2,049
)
(954
)
CEO retirement/search
—
—
—
44
42
400
1,655
—
Impairment
—
—
10,299
741
11,544
—
—
—
Gain on sale of Omnilink
—
(9,179
)
—
—
—
—
—
—
Ransomware incident
2
(1,089
)
(59
)
(959
)
271
1,135
533
—
COVID-19 factory constraint incremental
costs
—
—
1,096
22
1,135
—
—
—
Transaction costs
10,070
514
—
—
—
—
—
—
Other non-recurring costs
76
168
99
978
323
593
508
445
Acquisition-related amortization
1,517
1,558
2,152
2,254
2,776
2,890
3,135
3,306
Foreign exchange loss (gain), net of
realized gain/loss on hedge contracts
2,708
5,317
2,326
1,927
2,693
(821
)
4,816
(2,804
)
Recognition of cumulative translation
adjustments on dissolution of subsidiaries
754
817
—
—
—
—
—
—
Income tax expense (recovery)
adjustment
(585
)
126
(500
)
(441
)
(3,008
)
(357
)
(393
)
(7,784
)
Adjusted earnings (loss) from
continuing operations*
$
9,978
$
16,746
$
8,575
$
1,074
$
(20,678
)
$
(1,116
)
$
(9,625
)
$
(7,006
)
Weighted average number of shares
outstanding (in thousands)
Basic
39,196
38,770
37,974
37,541
37,196
36,992
36,736
36,534
Diluted
39,196
39,079
37,974
37,541
37,196
36,992
36,736
36,534
Basic and diluted adjusted earnings
(loss) per share from continuing operations (in dollars)*
$
0.25
$
0.43
$
0.23
$
0.03
$
(0.56
)
$
(0.03
)
$
(0.26
)
$
(0.19
)
SIERRA WIRELESS, INC.
SEGMENTED RESULTS
(In thousands of U.S. dollars, except
where otherwise indicated)
2022
2021
Q3
Q2
Q1
Total
Q4
Q3
Q2
Q1
IoT Solutions
Revenue
$
120,287
$
139,678
$
133,708
$
323,075
$
104,531
$
53,657
$
90,309
$
74,578
Gross margin
$
34,988
$
42,013
$
40,525
$
83,765
$
26,578
$
10,676
$
24,425
$
22,086
Gross margin %
29.1
%
30.1
%
30.3
%
25.9
%
25.4
%
19.9
%
27.0
%
29.6
%
Enterprise Solutions
Revenue
$
45,769
$
48,273
$
39,249
$
150,134
$
45,381
$
28,793
$
42,476
$
33,484
Gross margin
$
21,631
$
21,169
$
14,538
$
73,034
$
22,114
$
13,473
$
21,806
$
15,641
Gross margin %
47.3
%
43.9
%
37.0
%
48.6
%
48.7
%
46.8
%
51.3
%
46.7
%
Total
Revenue
$
166,056
$
187,951
$
172,957
$
473,209
$
149,912
$
82,450
$
132,785
$
108,062
Gross margin
$
56,619
$
63,182
$
55,063
$
156,799
$
48,692
$
24,149
$
46,231
$
37,727
Gross margin %
34.1
%
33.6
%
31.8
%
33.1
%
32.5
%
29.3
%
34.8
%
34.9
%
Revenue by Type:
Product
$
137,099
$
156,538
$
138,052
$
332,810
$
113,619
$
47,207
$
97,595
$
74,389
Connectivity, software, and services
$
28,957
$
31,413
$
34,905
$
140,399
$
36,293
$
35,243
$
35,190
$
33,673
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221109005989/en/
Media Contact: Louise Matich pr@sierrawireless.com
Investor Contact: Sean Fallis
investor@sierrawireless.com
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