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Sierra Wireless Reports First Quarter 2013 Results

Sierra Wireless Reports First Quarter 2013 Results

First quarter 2013 revenue of $101.4 million, up 9.8%, year-over-year | Non-GAAP loss from operations of $1.4 million, compared to a loss of $2.8 million a year ago | Non-GAAP net loss from continuing operations of $0.7 million and loss per share of $0.02, compared to non-GAAP net loss of $2.8 million a year ago and loss per share of $0.09

Sierra Wireless, Inc. today reported first quarter 2013 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.

Jason Cohenour, President and Chief Executive Officer, said:

“We experienced solid year-over-year revenue growth in the quarter, powered by a strong contribution from the acquired Sagemcom M2M business.”

A major focus in the quarter was completing the sale of our AirCard® assets and operations to Netgear, which was accomplished in early April. We are now an M2M pure play, with leading global market share, the industry’s broadest product line, and blue-chip customers. Moreover, we now have significant financial capacity to accelerate growth and value creation through acquisitions, as we capitalize on the secular growth opportunity in M2M.

In accordance with U.S. GAAP, assets and liabilities associated with the sale of our AirCard business on April 2, 2013, have been recorded as “held for sale” in our consolidated balance sheet as at March 31, 2013, and the results of operations of the AirCard business as discontinued operations in our consolidated statements of operations for the three months ended March 31, 2013. The historical consolidated statements of operations and related selected financial information have been retrospectively adjusted to distinguish between continuing operations and discontinued operations.

Our segments and product lines have changed from those reported at December 31, 2012. Effective January 1, 2013, we have one reportable M2M segment with two product lines.
The OEM Solutions product line includes embedded wireless modules and tools for OEM customers, and the Enterprise Solutions product line includes intelligent gateways, routers and tools for enterprise customers, including a cloud offering for building, deploying, and managing M2M applications.

Revenue for the first quarter of 2013 was $101.4 million, an increase of 9.8% compared to $92.3 million in the first quarter of 2012, and a decrease of 7.3% compared to $109.4 million in the fourth quarter of 2012.
The year-over-year revenue increase was driven by contribution from the M2M business of Sagemcom which was acquired in August 2012.
Revenue from OEM solutions was $89.2 million in the first quarter of 2013, up 11.4%, compared to $80.1 million in the first quarter of 2012. Revenue from enterprise solutions was $12.2 million in the first quarter of 2013, in line with the first quarter of 2012.

On a GAAP basis, gross margin was $33.4 million, or 32.9% in the first quarter of 2013, compared to $27.9 million, or 30.2% in the first quarter of 2012.
Operating expenses were $40.3 million and loss from operations was $6.9 million in the first quarter of 2013, compared to operating expenses of $35.3 million and a loss from operations of $7.4 million in the first quarter of 2012.
Net loss from continuing operations was $7.9 million, or $0.26 per diluted share, in the first quarter of 2013, compared to net loss of $7.2 million, or $0.23 per diluted share, in the first quarter of 2012.
Net loss for continuing and discontinued operations was $6.1 million, or $0.20 per diluted share, compared to net earnings of $0.3 million, or $0.01 per diluted share, in the first quarter of 2012.

On a non-GAAP basis, gross margin was 33.0% in the first quarter of 2013, compared to 30.3% in the first quarter of 2012.
Operating expenses were $34.9 million and loss from operations was $1.4 million in the first quarter of 2013, compared to operating expenses of $30.8 million and loss from operations of $2.8 million in the first quarter of 2012.
Net loss from continuing operations was $0.7 million, or $0.02 per diluted share, in the first quarter of 2013, compared to a net loss of $2.8 million, or $0.09 per diluted share, in the first quarter of 2012.
Net earnings for continuing and discontinued operations were $2.9 million, or $0.09 per diluted share, in the first quarter of 2013 compared to net earnings of $5.0 million, or $0.16 per diluted share, in the first quarter of 2012.

Non-GAAP results exclude the impact of stock-based compensation expense, acquisition costs, restructuring costs, integration costs, disposition costs, acquisition amortization, impairment, 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.

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