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Sierra Wireless Reports Second Quarter 2012 Results

Sierra Wireless Reports Second Quarter 2012 Results

Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) today reported second quarter 2012 results: revenue in the second quarter 2012 of $167.4 million, 19.7 percent year-over-year growth.


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 second quarter of 2012 was $167.4 million, compared to $139.9 million in the second quarter of 2011, and $150.3 million in the first quarter of 2012. The year-over-year revenue increase of 19.7 percent was driven by strong sales in our 4G Mobile Computing products and steady growth in our Machine-to-Machine (“M2M”) business.
Mobile Computing revenue was $89.9 million, compared to $66.0 million in the second quarter of 2011.
M2M revenue was $77.5 million, compared to $73.9 million in the second quarter of 2011.

Jason Cohenour, President and Chief Executive Officer said:

“Exceptionally strong sales of our 4G Mobile Computing products, combined with steady growth in our Machine-to-Machine business, led to higher than expected revenue and profitability in the second quarter of 2012”

In addition, our successful acquisition of Sagemcom’s M2M business expands our leading market share position and further accelerates our growth in the exciting Machine-to-Machine market.

On a GAAP basis, gross margin was $51.3 million, or 30.7 percent of revenue, in the second quarter of 2012, compared to $39.1 million, or 28.0 percent of revenue, in the second quarter of 2011.
Operating expenses were $45.1 million and earnings from operations were $6.2 million in the second quarter of 2012, compared to operating expenses of $45.4 million and a loss from operations of $6.3 million in the second quarter of 2011.
Net earnings were $3.6 million, or $0.11 per diluted share, in the second quarter of 2012, compared to a net loss of $6.8 million, or $0.22 per diluted share, in the second quarter of 2011.
The second quarter of 2012 results included $2.1 million in acquisition and restructuring costs, compared to $0.4 million in restructuring and integration costs in the second quarter of 2011.

On a non-GAAP basis, gross margin was 30.7 percent of revenue in the second quarter of 2012, compared to 28.0 percent of revenue in the second quarter of 2011.
Operating expenses were $38.8 million and earnings from operations were $12.7 million in the second quarter of 2012, compared to operating expenses of $40.0 million and a loss from operations of $0.8 million in the second quarter of 2011.
Net earnings were $9.3 million, or $0.30 per diluted share, in the second quarter of 2012 compared to a net loss of $1.0 million, or $0.03 per diluted share, in the second quarter of 2011.

The cash, cash equivalents and short-term investments balance at the end of the second quarter of 2012 was $125.3 million, up $18.5 million from the end of the first quarter of 2012. During the second quarter of 2012, we purchased and cancelled 400,000 common shares in the open market for $3.3 million in connection with our normal course issuer bid.

Non-GAAP results exclude the impact of stock-based compensation expense, acquisition costs, restructuring costs, integration costs, acquisition amortization, foreign exchange gains or losses on foreign currency contracts as well as 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
Financial guidance for the third quarter of 2012 excludes any impact from the acquisition of the Sagemcom M2M business. In the third quarter of 2012, we expect revenue and gross margin to decrease on a sequential basis driven primarily by normalizing sales patterns in our Mobile Computing business, following an exceptional Q2.

Q3 2012 Guidance Consolidated Non-GAAP
Revenue $157.0 to $162.0 million
Earnings from operations $6.0 to $8.0 million
Net earnings $4.3 to $5.7 million
Earnings per share $0.14 to $0.19 per share

This Non-GAAP guidance for the third quarter of 2012 reflects current business indicators and expectations. 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.

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 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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