Sierra Wireless Reports First Quarter 2012 Results

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Sierra Wireless Reports First Quarter 2012 Results

Revenue in the first quarter 2012 of $150.3 million. Non-GAAP earnings from operations of $5.2 million. Non-GAAP net earnings of $5.0 million, or $0.16 per diluted share.

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.

Jason Cohenour, President and Chief Executive Officer said:
Broad based revenue growth and improved gross margin drove stronger than expected financial results in the first quarter of 2012.”

“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.

       

Q2 2012 Guidance

  Consolidated

Non-GAAP

 
Revenue $157.0 to $162.0 million
Earnings from operations $8.5 to $9.5 million
Net earnings $5.7 to $6.5 million
Earnings per share   $0.18 to $0.21 per share
About Sierra Wireless
Sierra Wireless (NASDAQ: SWIR) (TSX: SW) offers industry-leading mobile computing and machine-to-machine (M2M) communications products and solutions that connect people, devices, and applications over cellular networks. Wireless service providers, equipment manufacturers, enterprises and government organizations around the world depend on us for innovative, reliable wireless technology. We offer 2G, 3G and 4G wireless modems, routers and gateways as well as a comprehensive suite of software, tools, and services that ensure our customers can successfully bring wireless applications to market. For more information about Sierra Wireless, visit www.sierrawireless.com.
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