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Sierra Wireless Reports Fourth Quarter and Full Year 2014 Results

Sierra Wireless Reports Fourth Quarter and Full Year 2014 Results

Q4 2014 record revenue of $149.0 million; 25.7% year-over-year growth.

Sierra Wireless, Inc. today reported results for its fourth quarter and full year, ending December 31, 2014.

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.

Fourth Quarter 2014 highlights

  • Record revenue of $149.0 million, an increase of 25.7% compared to Q4 2013
  • Non-GAAP earnings from operations of $10.0 million compared to $2.6 million in Q4 2013
  • Adjusted EBITDA of $12.7 million compared to $6.2 million in Q4 2013
  • Non-GAAP EPS of $0.29 compared to $0.10 in Q4 2013

Full Year 2014 highlights

  • Record revenue of $548.5 million, an increase of 24.1% compared to 2013
  • Non-GAAP earnings from operations of $22.8 million compared to $5.0 million in 2013
  • Adjusted EBITDA of $35.4 million compared to $18.7 million in 2013
  • Non-GAAP EPS of $0.63 compared to $0.23 in 2013

Jason Cohenour, President and Chief Executive Officer, said:

“In the fourth quarter of 2014, we delivered record revenue and a strong year-over-year improvement in our key profitability metrics. Going forward, we will continue to focus on delivering profitable organic growth, while bolstering our leadership position in the Internet of Things with strategic acquisitions that expand our position in the value chain and enhance our business model.”

Q4 2014

Revenue for the fourth quarter of 2014 was $149.0 million, an increase of 25.7% compared to $118.6 million in the fourth quarter of 2013.
Revenue from OEM Solutions was $129.5 million in the fourth quarter of 2014, up 27.2% compared to $101.8 million in the fourth quarter of 2013.
Revenue from Enterprise Solutions was $19.5 million in the fourth quarter of 2014, up 16.4% compared to $16.8 million in the fourth quarter of 2013.
On a consolidated basis, organic revenue growth, which excludes contribution from the acquired In Motion Technology and AnyData businesses, was 20.7% compared to the fourth quarter of 2013.

GAAP RESULTS

Gross margin was $50.0 million, or 33.5% of revenue, in the fourth quarter of 2014, compared to $38.4 million, or 32.4% of revenue, in the fourth quarter of 2013.
Operating expenses were $46.6 million and earnings from operations were $3.4 million in the fourth quarter of 2014, compared to operating expenses of $42.0 million and a loss from operations of $3.5 million in the fourth quarter of 2013.
Net loss from continuing operations was $1.7 million, or $0.05 per diluted share, in the fourth quarter of 2014, compared to a net loss from continuing operations of $1.9 million, or $0.06 per diluted share, in the fourth quarter of 2013. The fourth quarter of 2014 included a $3.8 million foreign exchange loss associated with the translation of certain foreign denominated balances, compared to a $1.9 million gain in the fourth quarter of 2013.

NON-GAAP RESULTS

Gross margin was 33.6% in the fourth quarter of 2014, compared to 32.5% in the fourth quarter of 2013.
Operating expenses were $40.1 million and earnings from operations were $10.0 million in the fourth quarter of 2014, compared to operating expenses of $36.0 million and earnings from operations of $2.6 million in the fourth quarter of 2013.
Net earnings from continuing operations were $9.1 million, or $0.29 per diluted share, in the fourth quarter of 2014, compared to net earnings from continuing operations of $3.1 million, or $0.10 per diluted share, in the fourth quarter of 2013. The non-GAAP tax rate in the fourth quarter of 2014 was 11.5%.
Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) were $12.7 million in the fourth quarter of 2014, compared to $6.2 million in the fourth quarter of 2013.
Cash and cash equivalents at the end of 2014 were $207.1 million, representing an increase of $11.0 million compared to the end of the third quarter of 2014. Cash generated from operations during the fourth quarter was $11.3 million.

Full Year 2014

Revenue for 2014 was $548.5 million, an increase of 24.1% compared to $441.9 million in 2013.
Revenue from OEM Solutions was $476.6 million in 2014, up 24.8% compared to $382.0 million in 2013.
Revenue from Enterprise Solutions was $71.9 million in 2014, up 20.1% compared to $59.9 million in 2013.
On a consolidated basis, organic revenue growth, which excludes contribution from the acquired In Motion Technology and AnyData businesses, was 18.3% compared to 2013.

GAAP RESULTS

Gross margin was $179.0 million, or 32.6% of revenue, in 2014, compared to $145.6 million, or 33.0% of revenue, in 2013.
Operating expenses were $185.6 million and loss from operations was $6.6 million in 2014, compared to operating expenses of $163.3 million and a loss from operations of $17.7 million in 2013.
Net loss from continuing operations was $16.9 million, or $0.53 per diluted share, in 2014, compared to a net loss from continuing operations of $15.6 million, or $0.50 per diluted share, in 2013. 2014 included a $12.4 million foreign exchange loss associated with the translation of certain foreign denominated balances, compared to a $3.8 million gain in 2013.

NON-GAAP RESULTS

Gross margin was 32.7% in 2014, compared to 33.1% in 2013.
Operating expenses were $156.7 million and earnings from operations were $22.8 million in 2014, compared to operating expenses of $141.0 million and earnings from operations of $5.0 million in 2013.
Net earnings from continuing operations were $19.8 million, or $0.63 per diluted share, in 2014, compared to net earnings from continuing operations of $6.9 million, or $0.23 per diluted share, in 2013.
Adjusted EBITDA was $35.4 million in 2014, compared to $18.7 million in 2013.
Cash and cash equivalents increased $27.2 million during 2014, reflecting $48.7 million of cash generated by operations and receipt of $13.8 million previously held in escrow from the sale of the AirCard business in 2013, partially offset by $23.9 million net cash used to acquire In Motion and $10.8 million used for capital expenditures.

Subsequent to year-end, we acquired substantially all of the outstanding shares of Wireless Maingate AB (“Maingate”) for $91.6 million, including working capital, subject to certain post-closing adjustments.

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