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SWIR Sierra Wireless

Filed: 9 Nov 21, 4:44pm
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
  
For the Month of November 2021
 
(Commission File.  No. 000-30718).
 
SIERRA WIRELESS, INC.
(Translation of registrant’s name in English)
 
13811 Wireless Way
Richmond, British Columbia, Canada V6V 3A4
(Address of principal executive offices and zip code)
 
Registrant’s Telephone Number, including area code: 604-231-1100
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:
 
 
 
Form 20-F
40-F
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
 
 
 
Yes:
No:

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
 
 
 
Yes:
No:

Sierra Wireless Reports Third Quarter 2021 Results

VANCOUVER, British Columbia--(BUSINESS WIRE)--November 9, 2021--Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) (the "Company", "Sierra Wireless", "we", "us", or "our") reported results for its third quarter of 2021. 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.

Revenue in the third quarter of 2021 was $82.5 million compared to $113.4 million in the third quarter of 2020. The decrease in revenue was due to the reduction in hardware sales due to manufacturing capacity constraints in Vietnam as a result of COVID-19 related restrictions.

Quarterly revenue for our two business segments was as follows:

 

(i)

Revenue from IoT Solutions was $53.7 million compared to $79.3 million in the third quarter of 2020. The decrease in revenue was due to the previously discussed manufacturing capacity constraints.



 
 

(ii)

Revenue from Enterprise Solutions was $28.8 million compared to $34.0 million in the third quarter of 2020. The decrease was due to the reduction in hardware sales of Enterprise gateways due to the previously discussed manufacturing capacity constraints.

“We continue to experience very strong customer demand, and we had record backlog at the end of the Third Quarter,” said Phil Brace, President and CEO of Sierra Wireless. "The manufacturing capacity constraints we experienced in Q3 are improving in the current quarter but we are still facing the industry-wide tight supply for parts and components. I would like to thank our customers, suppliers and employees as we collectively work through the current environment."

Product revenue decreased 43.5% year-over-year to $47.2 million, representing 57.3% of consolidated revenue in the quarter. Connectivity, software, and services revenue increased 18.2% year-over-year to $35.2 million, representing 42.7% of consolidated revenue. Monthly recurring revenue ("MRR"1) was $11.5 million in September, a year-over-year increase of 21.1%.

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, 2021 and 2020.

Non-U.S. GAAP financial measures referred to in this news release are labeled as a "non-GAAP measure" or are 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 U.S. GAAP financial measures.

__________________

1 MRR is defined as the monthly subscription revenue including usage fees from current subscribers. MRR is a key performance metric to measure our performance and growth in our recurring revenue, both to help investors better understand and assess the performance of our business and also because our mix of revenue generated from recurring sources has increased in recent years. 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.


Third Quarter 2021 Financial Highlights

  • Gross margin was 29.3% in the third quarter of 2021 compared to 34.8% in the third quarter of 2020. The decrease was primarily impacted by fixed costs spread over lower production volumes due to previously discussed manufacturing capacity constraints, increased component costs, and certain non-recurring COVID-19 costs in Vietnam.
  • IoT Solutions gross margin was 19.9% in the third quarter of 2021 compared to 28.5% in the third quarter of 2020, and Enterprise Solutions gross margin was 46.8% in the third quarter of 2021 compared to 49.6% in the third quarter of 2020.
  • Operating expenses were $61.4 million in the third quarter of 2021 compared to $57.2 million in the third quarter of 2020. The increase was primarily due to an $11.5 million impairment charge related to the intangible assets of Maingate that was acquired in 2015 in Sweden. Excluding this impairment, our operating expenses in the third quarter of 2021 decreased compared to the third quarter of 2020.
  • Net loss from continuing operations was $38.4 million in the third quarter of 2021 compared to $14.5 million in the third quarter of 2020 due to lower revenue, lower gross margin, and impairment expense.
  • Adjusted net loss from continuing operations* was $20.7 million, or loss of $0.56 per share, in the third quarter of 2021 compared to $11.7 million, or loss of $0.32 per share, in the third quarter of 2020.
  • Adjusted EBITDA* loss was $15.0 million in the third quarter of 2021 compared to a loss of $7.1 million in the third quarter of 2020.
  • Long-term debt was $9.9 million as at September 30, 2021 compared to nil as at June 30, 2021.

Cash Position

Cash and cash equivalents and restricted cash at the end of the third quarter of 2021 were $75.5 million compared to $118.5 million at the end of the second quarter of 2021, a decrease of $42.9 million. The decrease in cash was primarily driven by the impact of the previously discussed manufacturing capacity constraints and our continued investment in inventory, partially offset by new financing of $9.9 million from attractive long-term debt.

Financial Guidance

The impact of the COVID-19 pandemic on our global business continues to remain uncertain. While we continue to experience and evaluate the effects on our business, the overall severity and duration of adverse impacts related to COVID-19 on our business, financial condition, cash flows, and operating results for the fourth quarter of 2021 and beyond cannot be reasonably estimated at this time.

Demand for our products remains very strong. While our manufacturing capacity is expected to improve in the fourth quarter and we expect to build and ship more modules and gateways, the ongoing potential impact of COVID-19 and tight supply chain makes for an uncertain operating environment. Given this landscape and potential risks and uncertainties we are providing guidance range for revenue in the fourth quarter of $120 million to $135 million.

This non-GAAP guidance constitutes "forward-looking statements" within the meaning of applicable securities laws and reflects current business indicators and expectations. These statements are based on management's current beliefs and assumptions, which could prove to be significantly incorrect. Forward-looking statements, particularly those that relate to longer periods of time, are subject to substantial known and unknown risks and uncertainties that could cause actual events or results to differ significantly from those expressed or implied by our forward-looking statements, including those described in our regulatory filings. See "Cautionary Note Regarding Forward-Looking Statements" below.


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 net earnings (loss) from continuing operations*, adjusted basic and diluted net earnings (loss) per share from continuing operations*and adjusted EBITDA* (earnings before interest, taxes, depreciation, and amortization).

Adjusted net 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, acquisition-related and integration costs, government grants related to COVID-19 relief, CEO retirement/search, impairment, the ransomware incident, COVID-19 factory constraint incremental 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, foreign exchange gains or losses on forward contracts, and certain tax adjustments.

Adjusted EBITDA* from continuing operations 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, acquisition-related and integration costs, government grants related to COVID-19 relief, CEO retirement/search, impairment, the ransomware incident, COVID-19 factory constraint incremental 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, 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.

Conference call and webcast details

Sierra Wireless is hosting a conference call to discuss its financial results for the third quarter ended September 30, 2021 on Tuesday November 9, 2021, at 6:00 PM Eastern time (3:00 PM Pacific time).

To participate, dial the following number approximately ten minutes prior to the start of the call:

  • Toll-free (Canada and US): 1-877-201-0168
  • Alternate number: 1-647-788-4901
  • Conference ID: 8888166

Conference call and webcast details are available at the following link:
Sierra Wireless Q3 2021 Conference Call and Webcast

If the above link does not work, copy and paste the following URL into your browser:

https://onlinexperiences.com/Launch/QReg/ShowUUID=E03B257F-D00D-4490-A838-C224F22947FA

The webcast will remain available at the above link for one year following the call.


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 our fourth quarter fiscal 2021 guidance; 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; 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 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. We do not intend to update or revise our forward-looking statements expect as required by applicable securities laws.

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:
    • new management changes;
    • 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 component supply constraints and manufacturing capacity;
    • logistical 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 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 further ransomware or cyber security attacks;
    • 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:
    • prolonged negative impact from COVID-19;
    • our access to capital, if required;
    • competition from new or established competitors or from those with greater resources;
    • our reliance on single source 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;
    • natural catastrophes or public health epidemics that could impact customer demand, result in production disruption and impact our ability to meet customer demand or capacity to continue critical operations;
    • the loss of, or significant demand fluctuations from, any of our significant customers;
    • our financial results being subject to fluctuations;
    • our business transformation initiatives 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;
    • our ability to 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 that our investments and partnerships may fail to realize the expected benefits;
    • risks related to infringement on intellectual property rights of others;
    • our ability to obtain necessary rights to use software or components supplied by third parties;
    • our ability to enforce our intellectual property rights;
    • unanticipated costs associated with litigation or settlements;
    • 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,

 

2021

 

2020

 

2021

 

2020

Revenue

 

 

 

 

 

 

 

IoT Solutions

$

53,657

 

 

$

79,345

 

 

$

218,544

 

 

$

225,356

 

Enterprise Solutions

28,793

 

 

34,026

 

 

104,753

 

 

102,754

 

 

82,450

 

 

113,371

 

 

323,297

 

 

328,110

 

Cost of sales

 

 

 

 

 

 

 

IoT Solutions

42,981

 

 

56,757

 

 

161,357

 

 

161,553

 

Enterprise Solutions

15,320

 

 

17,162

 

 

53,833

 

 

51,172

 

 

58,301

 

 

73,919

 

 

215,190

 

 

212,725

 

Gross margin

24,149

 

 

39,452

 

 

108,107

 

 

115,385

 

Expenses

 

 

 

 

 

 

 

Sales and marketing

18,574

 

 

20,072

 

 

59,818

 

 

64,818

 

Research and development

16,238

 

 

17,699

 

 

50,652

 

 

61,151

 

Administration

10,410

 

 

11,199

 

 

37,534

 

 

35,111

 

Restructuring

369

 

 

3,089

 

 

4,663

 

 

3,940

 

Acquisition-related and integration

(26)

 

 

140

 

 

255

 

 

325

 

Impairment

11,544

 

 

 

 

11,544

 

 

 

Amortization

4,294

 

 

5,040

 

 

13,307

 

 

15,755

 

 

61,403

 

 

57,239

 

 

177,773

 

 

181,100

 

Loss from operations

(37,254)

 

 

(17,787)

 

 

(69,666)

 

 

(65,715)

 

Foreign exchange (loss) gain

(2,601)

 

 

3,659

 

 

(5,717)

 

 

4,269

 

Other expense

(463)

 

 

(988)

 

 

(2,352)

 

 

(1,463)

 

Loss before income taxes

(40,318)

 

 

(15,116)

 

 

(77,735)

 

 

(62,909)

 

Income tax recovery

(1,912)

 

 

(633)

 

 

(755)

 

 

(3,925)

 

Net loss from continuing operations

$

(38,406)

 

 

$

(14,483)

 

 

$

(76,980)

 

 

$

(58,984)

 

Net earnings (loss) from discontinued

operations

459

 

 

2,456

 

 

(778)

 

 

8,687

 

Net loss

$

(37,947)

 

 

$

(12,027)

 

 

$

(77,758)

 

 

$

(50,297)

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

Foreign currency translation adjustments, net of taxes of $nil

(960)

 

 

2,670

 

 

(2,627)

 

 

2,122

 

Comprehensive loss

$

(38,907)

 

 

$

(9,357)

 

 

$

(80,385)

 

 

$

(48,175)

 

 

 

 

 

 

 

 

 

Basic and diluted net earnings (loss) per share (in dollars)

 

 

 

 

 

 

 

Continuing operations

$

(1.03)

 

 

$

(0.40)

 

 

$

(2.08)

 

 

$

(1.62)

 

Discontinued operations

0.01

 

 

0.07

 

 

(0.02)

 

 

0.24

 

 

$

(1.02)

 

 

$

(0.33)

 

 

$

(2.10)

 

 

$

(1.38)

 

Weighted average number of shares outstanding

(in thousands)

 

 

 

 

 

 

 

Basic

37,196

 

 

36,417

 

 

36,976

 

 

36,345

 

Diluted

37,196

 

 

36,417

 

 

36,976

 

 

36,345

 


SIERRA WIRELESS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except where otherwise stated)
(unaudited)




 

 

September 30, 2021

 

December 31, 2020

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

72,346

 

 

$

160,560

 

Restricted cash

3,193

 

 

10,864

 

Accounts receivable

52,457

 

 

68,575

 

Inventories

71,191

 

 

32,815

 

Prepaids and other

26,003

 

 

11,933

 

 

225,190

 

 

284,747

 

Property and equipment, net

31,945

 

 

31,412

 

Operating lease right-of-use assets

15,849

 

 

20,068

 

Intangible assets, net

57,355

 

 

78,081

 

Goodwill

169,619

 

 

175,545

 

Deferred income taxes

1,072

 

 

1,135

 

Other assets

8,103

 

 

10,383

 

 

$

509,133

 

 

$

601,371

 

Liabilities

 

 

 

Current liabilities

 

 

 

Accounts payable and accrued liabilities

137,750

 

 

162,138

 

Deferred revenue

10,671

 

 

9,862

 

Current portion of long-term debt

246

 

 

 

 

148,667

 

 

172,000

 

Long-term obligations

42,534

 

 

45,646

 

Operating lease liabilities

15,457

 

 

17,054

 

Long-term debt

9,662

 

 

 

Deferred income taxes

7,340

 

 

10,258

 

 

223,660

 

 

244,958

 

Equity

 

 

 

Shareholders’ equity

 

 

 

Common stock: no par value; unlimited shares authorized;
issued and outstanding: 37,238,177 shares (December 31, 2020 - 36,619,439 shares)

452,350

 

 

441,999

 

Preferred stock: no par value; unlimited shares authorized;

issued and outstanding: nil shares

 

 

 

Treasury stock: at cost; 8,542 shares (December 31, 2020 – 46,505 shares)

(136)

 

 

(542)

 

Additional paid-in capital

50,557

 

 

49,489

 

Retained deficit

(209,091)

 

 

(128,953)

 

Accumulated other comprehensive loss

(8,207)

 

 

(5,580)

 

 

285,473

 

 

356,413

 

 

$

509,133

 

 

$

601,371

 


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,

 

2021

 

2020

 

2021

 

2020

Cash flows provided by (used in):

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

 

 

Net loss

$

(37,947)

 

 

$

(12,027)

 

 

$

(77,758)

 

 

$

(50,297)

 

Items not requiring (providing) cash

 

 

 

 

 

 

 

Amortization

7,208

 

 

8,269

 

 

21,783

 

 

25,292

 

Stock-based compensation

1,767

 

 

5,667

 

 

14,004

 

 

12,125

 

Deferred income tax (recovery) expense

(2,378)

 

 

153

 

 

(2,381)

 

 

144

 

Impairment

11,544

 

 

 

 

11,544

 

 

 

Unrealized foreign exchange loss (gain)

2,841

 

 

(4,278)

 

 

7,002

 

 

(3,917)

 

Other

(45)

 

 

54

 

 

292

 

 

(153)

 

Changes in non-cash working capital

 

 

 

 

 

 

 

Accounts receivable

22,049

 

 

(27,524)

 

 

14,853

 

 

(1,236)

 

Inventories

(24,375)

 

 

9,330

 

 

(38,610)

 

 

(2,225)

 

Prepaids and other

(928)

 

 

8,273

 

 

(12,012)

 

 

2,614

 

Accounts payable and accrued liabilities

(28,532)

 

 

4,589

 

 

(23,037)

 

 

10,622

 

Deferred revenue

348

 

 

(188)

 

 

744

 

 

(1,404)

 

Cash flows used in operating activities

(48,448)

 

 

(7,682)

 

 

(83,576)

 

 

(8,435)

 

Investing activities

 

 

 

 

 

 

 

Additions to property and equipment

(3,187)

 

 

(2,416)

 

 

(11,868)

 

 

(12,143)

 

Additions to intangible assets

(1,139)

 

 

(503)

 

 

(4,061)

 

 

(1,974)

 

Proceeds from sale of property and equipment

51

 

 

28

 

 

90

 

 

252

 

Acquisition of M2M Group, net of cash acquired

 

 

 

 

 

 

(18,391)

 

Acquisition of M2M New Zealand, net of cash acquired

 

 

 

 

(319)

 

 

 

Cash flows used in investing activities

(4,275)

 

 

(2,891)

 

 

(16,158)

 

 

(32,256)

 

Financing activities

 

 

 

 

 

 

 

Issuance of common shares, net of issuance cost

481

 

 

883

 

 

4,082

 

 

883

 

Purchase of treasury shares for RSU distribution

(111)

 

 

(544)

 

 

(7,574)

 

 

(764)

 

Taxes paid related to net settlement of equity awards

 

 

(565)

 

 

(1,057)

 

 

(1,191)

 

Decrease in other long-term obligations

(73)

 

 

(47)

 

 

(175)

 

 

(234)

 

Proceeds from short-term borrowings

 

 

10,000

 

 

 

 

25,000

 

Proceeds from long-term debt

9,908

 

 

9,383

 

 

9,908

 

 

9,383

 

Cash flows provided by financing activities

10,205

 

 

19,110

 

 

5,184

 

 

33,077

 

Effect of foreign exchange rate changes on cash and cash equivalents

(429)

 

 

978

 

 

(1,335)

 

 

503

 

Cash, cash equivalents and restricted cash, (decrease) increase in the period

(42,947)

 

 

9,515

 

 

(95,885)

 

 

(7,111)

 

Cash, cash equivalents and restricted cash, beginning of period

118,486

 

 

62,457

 

 

171,424

 

 

79,083

 

Cash, cash equivalents and restricted cash, end of period

$

75,539

 

 

$

71,972

 

 

$

75,539

 

 

$

71,972

 


SIERRA WIRELESS, INC.
RECONCILIATION OF GAAP AND NON-GAAP RESULTS BY QUARTER






 

(in thousands of U.S. dollars, except where otherwise stated)

2021

 

2020

 

2019

Q3

Q2

Q1

 

Q4

Q3

Q2

Q1

 

Q4

 

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations - GAAP

$

(38,406)

 

$

(10,036)

 

$

(28,538)

 

 

$

(11,167)

 

$

(14,483)

 

$

(17,291)

 

$

(27,210)

 

 

$

(15,316)

 

Stock-based compensation and related social taxes

1,820

 

3,807

 

7,928

 

 

6,461

 

5,085

 

3,256

 

3,200

 

 

1,773

 

Phantom RSU (recovery) expense

(69)

 

569

 

206

 

 

691

 

261

 

141

 

74

 

 

35

 

Restructuring

369

 

1,720

 

2,574

 

 

4,800

 

3,089

 

245

 

606

 

 

2,251

 

Acquisition-related and integration

(26)

 

72

 

209

 

 

115

 

140

 

185

 

 

 

274

 

COVID-19 government relief

(168)

 

(1,016)

 

(2,049)

 

 

(954)

 

(6,298)

 

 

 

 

 

CEO retirement/search

42

 

400

 

1,655

 

 

 

 

 

 

 

 

Impairment

11,544

 

 

 

 

 

 

 

 

 

877

 

Ransomware incident

271

 

1,135

 

533

 

 

 

 

 

 

 

 

COVID-19 factory constraint incremental costs

1,135

 

 

 

 

 

 

 

 

 

 

Other non-recurring costs

349

 

521

 

299

 

 

330

 

299

 

152

 

87

 

 

795

 

Amortization

7,208

 

7,267

 

7,308

 

 

7,054

 

8,030

 

7,823

 

7,726

 

 

7,849

 

Interest and other expense, net

192

 

111

 

110

 

 

564

 

988

 

283

 

192

 

 

111

 

Foreign exchange loss (gain), net of realized gain/loss on hedge contracts

2,693

 

(821)

 

4,816

 

 

(2,804)

 

(3,572)

 

(3,955)

 

2,836

 

 

(1,580)

 

Income tax (recovery) expense

(1,912)

 

605

 

552

 

 

(7,984)

 

(633)

 

427

 

(3,719)

 

 

(262)

 

Adjusted EBITDA*

$

(14,958)

 

$

4,334

 

$

(4,397)

 

 

$

(2,894)

 

$

(7,094)

 

$

(8,734)

 

$

(16,208)

 

 

$

(3,193)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations - GAAP

$

(38,406)

 

$

(10,036)

 

$

(28,538)

 

 

$

(11,167)

 

$

(14,483)

 

$

(17,291)

 

$

(27,210)

 

 

$

(15,316)

 

Stock-based compensation and related social taxes

1,820

 

3,807

 

7,928

 

 

6,461

 

5,085

 

3,256

 

3,200

 

 

1,773

 

Phantom RSU (recovery) expense

(69)

 

569

 

206

 

 

691

 

261

 

141

 

74

 

 

35

 

Restructuring

369

 

1,720

 

2,574

 

 

4,800

 

3,089

 

245

 

606

 

 

2,251

 

Acquisition-related and integration

(26)

 

72

 

209

 

 

115

 

140

 

185

 

 

 

274

 

COVID-19 government relief

(168)

 

(1,016)

 

(2,049)

 

 

(954)

 

(6,298)

 

 

 

 

 

CEO retirement/search

42

 

400

 

1,655

 

 

 

 

 

 

 

 

Impairment

11,544

 

 

 

 

 

 

 

 

 

877

 

Ransomware incident

271

 

1,135

 

533

 

 

 

 

 

 

 

 

COVID-19 factory constraint incremental costs

1,135

 

 

 

 

 

 

 

 

 

 

Other non-recurring costs

349

 

521

 

299

 

 

330

 

299

 

152

 

87

 

 

795

 

Acquisition-related amortization

2,776

 

2,890

 

3,135

 

 

3,306

 

3,555

 

3,886

 

3,889

 

 

3,593

 

Foreign exchange loss (gain), net of realized gain/loss on hedge contracts

2,693

 

(821)

 

4,816

 

 

(2,804)

 

(3,572)

 

(3,955)

 

2,836

 

 

(1,580)

 

Income tax (recovery) expense adjustment

(3,008)

 

(357)

 

(393)

 

 

(7,784)

 

200

 

358

 

(2,696)

 

 

415

 

Adjusted loss from continuing operations*

$

(20,678)

 

$

(1,116)

 

$

(9,625)

 

 

$

(7,006)

 

$

(11,724)

 

$

(13,023)

 

$

(19,214)

 

 

$

(6,883)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares (in thousands) - basic and diluted

37,196

 

36,992

 

36,736

 

 

36,534

 

36,417

 

36,341

 

36,277

 

 

36,222

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted adjusted net loss per share from continuing operations (in dollars)*

$

(0.56)

 

$

(0.03)

 

$

(0.26)

 

 

$

(0.19)

 

$

(0.32)

 

$

(0.36)

 

$

(0.53)

 

 

$

(0.19)

 

 

 

 

 

 

 

 

 

 

 

 


SIERRA WIRELESS, INC.
SEGMENTED RESULTS




 

(In thousands of U.S. dollars, except where otherwise indicated)

2021

 

2020(1)

Q3

Q2

Q1

 

Total

Q4

Q3

Q2

Q1

 

 

 

 

 

 

 

 

 

 

IoT Solutions (New)

 

 

 

 

 

 

 

 

 

Revenue

$

53,657

 

$

90,309

 

$

74,578

 

 

$

306,917

 

$

81,561

 

$

79,345

 

$

77,629

 

$

68,382

 

Gross margin

$

10,676

 

$

24,425

 

$

22,086

 

 

$

87,146

 

$

23,343

 

$

22,588

 

$

23,030

 

$

18,185

 

Gross margin %

19.9

%

27.0

%

29.6

%

 

28.4

%

28.6

%

28.5

%

29.7

%

26.6

%

Enterprise Solutions

 

 

 

 

 

 

 

 

 

Revenue

$

28,793

 

$

42,476

 

$

33,484

 

 

$

141,671

 

$

38,917

 

$

34,026

 

$

34,089

 

$

34,639

 

Gross margin

$

13,473

 

$

21,806

 

$

15,641

 

 

$

71,605

 

$

20,023

 

$

16,864

 

$

17,978

 

$

16,740

 

Gross margin %

46.8

%

51.3

%

46.7

%

 

50.5

%

51.5

%

49.6

%

52.7

%

48.3

%

Total

 

 

 

 

 

 

 

 

 

Revenue

$

82,450

 

$

132,785

 

$

108,062

 

 

$

448,588

 

$

120,478

 

$

113,371

 

$

111,718

 

$

103,021

 

Gross margin

$

24,149

 

$

46,231

 

$

37,727

 

 

$

158,751

 

$

43,366

 

$

39,452

 

$

41,008

 

$

34,925

 

Gross margin %

29.3

%

34.8

%

34.9

%

 

35.4

%

36.0

%

34.8

%

36.7

%

33.9

%

Revenue by Type:

 

 

 

 

 

 

 

 

 

Product

$

47,207

 

$

97,595

 

$

74,389

 

 

$

332,544

 

$

87,856

 

$

83,560

 

$

84,820

 

$

76,308

 

Connectivity, software, and services(1)

$

35,243

 

$

35,190

 

$

33,673

 

 

$

116,044

 

$

32,622

 

$

29,811

 

$

26,898

 

$

26,713

 

 


























 

(1) Previously called 'Recurring and other services'

 

Contacts

Investor and Media Contact:
David Climie, Investor Relations
dclimie@sierrawireless.com

Investor Contact:
Samuel Cochrane, Chief Financial Officer
investor@sierrawireless.com


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
Sierra Wireless, Inc.
 
 
 
By:
/s/ Samuel Cochrane
 
 
 
 
 
Samuel Cochrane, Chief Financial Officer

Date: November 9, 2021