SIERRA WIRELESS INC - Second Quarter Results
Fri Jul 14 13:24:00 EDT 2000
Toronto, Ontario, Jul. 14, 2000 (Market News Publishing via COMTEX) -- We have
recorded strong growth in revenue and, as expected, an operating loss for the
second quarter of 2000.
Our revenue for the three months ended June 30, 2000 amounted to a record $9.4
million compared to $6.1 million in the second quarter of 1999, an increase of
52.9%. These revenues exceeded our expectations and included significant growth
in our OEM and AirCard products.
Our gross margins amounted to $4.4 million for the second quarter of 2000
compared to $2.9 million for the same period in 1999. Our gross margin
percentage decreased to 46.7% from 47.9% due to a higher mix of OEM product
sales.
Our total operating expenses for the second quarter of 2000 amounted to $7.8
million compared to $2.6 million in 1999. Our expenses reflected increased
investment in development and marketing programs associated with emerging
wireless technologies and included $1.0 million in one-time expenses related to
the acquisition of the Qualcomm data modules business.
Our net loss was $2.6 million for the second quarter of 2000 compared to net
earnings of $0.5 million in 1999. Our net loss excluding the one-time effects of
the acquisition of the Qualcomm data modules business was $1.8 million.
Our basic and diluted loss per share amounted to $0.17 for the second quarter of
2000 compared to basic and diluted earnings per share of $0.04 in the second
quarter of 1999. Our basic and diluted loss per share, excluding the one-time
effects of the acquisition of the Qualcomm data modules business, amounted to
$0.12. This loss was smaller than our expectations.
"In the second quarter, revenue growth was exceptionally strong, with the
largest contributions coming from our base business including CDPD OEM and
AirCard products. We also closed the Qualcomm CDMA data modules acquisition and
commenced customer shipments earlier than we had expected. We are continuing our
aggressive, growth-oriented investments in emerging wireless technologies
including CDMA, EDGE and Ricochet. With the completion of our follow-on
financing and the Nasdaq listing, our whole management team is focused on
strategy and execution, " said David Sutcliffe, President and Chief Executive
Officer.
Second Quarter Highlights Included: * Our AirCard 300, the industry's first
network interface card (NIC), was honoured with the Mobility Award for "Best PC
Card" during the sixth-annual Mobile Insights Conference held in Palm Desert,
California.
* We acquired the assets of Cypress Solutions and transferred in 14 additional
research and development staff required to develop our emerging wireless
technologies.
* We invested in SynchroPoint Wireless, Inc., a privately-held Bluetooth
company. Our investment provides us with a close, advisory relationship with a
team that is active in the Bluetooth arena.
* We completed a follow-on public offering of 2,221,139 common shares in the
United States and Canada, of which 1,461,106 were offered by us and 760,033 were
offered by certain shareholders. Net proceeds to us, after commissions and
estimated expenses, were $65.8 million. In addition, we completed our listing on
The Nasdaq National Market System and are listed under the trading symbol
"SWIR".
* We completed a series of agreements which included the purchase by our wholly
owned subsidiary Sierra Wireless SRL of QUALCOMM's Code Division Multiple Access
(CDMA) module business, including its module inventory, manufacturing and
customer commitments. In addition, we signed a supply agreement for CDMA modules
and have extended our existing license agreement with QUALCOMM.
* We received FCC approval for our upcoming CDMA AirCard. * We teamed with
Hewlett-Packard Company to deliver a wireless wide area network (WAN) solution
to the mobile workforce. HP will sell our AirCard 300, a wireless PC card,
direct from its Web site, and through select regional HP authorized resellers.
In addition, customers can use GoAmerica's service for unlimited nationwide
airtime, which includes software to enhance wireless web browsing and e-mail.
* A wireless Pocket PC solution was announced featuring COMPAQ's iPAQ H3600 with
a PC Card expansion pack and our AirCard 300. The complete solution provides
mobile users wireless connectivity to a host of web applications including
Internet/Intranet, emails and financial information using Microsoft's new Pocket
PC operating system for handheld devices. The wireless iPAQ solution offers a
fully integrated wireless device that enables corporations to easily and
securely extend their IT infrastructure and corporate applications to their
mobile workers.
All amounts are expressed in U.S. dollars and are in accordance with generally
accepted accounting principles in the United States.
Forward-Looking Statements This press release contains forward-looking
statements that involve risks and uncertainties. These forward-looking
statements relate to, among other things, plans and timing for the introduction
or enhancement of our services and products, statements about future market
conditions, supply and demand conditions, and other expectations, intentions and
plans
contained in this press release that are not historical fact. Our
expectations regarding future revenues depend upon our ability to manufacture
and supply products which we do not produce today and that meet defined
specifications. When used in this press release, the words "plan," "expect,"
"believe," and similar expressions generally identify forward-looking
statements. These statements reflect our current expectations. They are subject
to a number of risks and uncertainties, including, but not limited to, changes
in technology and changes in the wireless data communications market. In light
of the many risks and uncertainties surrounding the wireless data communications
market, you should understand that we cannot assure you that the forward-looking
statements contained in this press release will be realized.
About Sierra Wireless We are a leading provider of wireless data communications
hardware and software products. We deliver wireless PC Cards for portable
computers, rugged vehicle-mounted wireless modems and OEM modules for embedded
applications. We are a founding member of the WirelessReady Alliance, an
alliance of industry-leading hardware, software and service companies committed
to the delivery of complete and compelling wireless data solutions.
Conference Call and Instant Replay We will host a conference call to review our
results on July 13, 2000 at 2:30 pm PDT, 5:30 pm EDT. To participate in this
conference call, please dial the following toll free number approximately five
minutes prior to the commencement of the call:
1-800-446-4472 Should you be unable to participate, Instant Replay will be
available for 72 hours following the conference call by dialing:
1-888-509-0081 We look forward to having you participate in our call.
SIERRA WIRELESS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(Expressed in thousands of United States
dollars except per share amounts)
(Unaudited)
Three months Six months
ended June 30 ended June 30
2000 1999 2000 1999
Revenue $ 9,373 $ 6,129 $ 16,255 $ 11,259
Cost of goods sold 4,996 3,192 8,437 5,718
Gross margin 4,377 2,937 7,818 5,541
Expenses
Sales and marketing 2,034 1,208 4,006 2,300
Research and development 3,914 880 5,997 1,627
Administration 1,187 361 2,013 715
Amortization 643 190 985 344
7,778 2,639 13,001 4,986
Earnings (loss) from operations (3,401) 298 (5,183) 555
Other income 906 269 1,388 387
Earnings (loss)
before income taxes (2,495) 567 (3,795) 942
Income tax expense 92 24 111 39
Net earnings (loss) (2,587) 543 (3,906) 903
Deficit, beginning of period (5,833) (7,366) (4,514) (7,726)
Deficit, end of period $ (8,420) $ (6,823) $ (8,420) $ (6,823)
Earnings (loss) per share for the period
Basic $ (0.17) $ 0.04 $ (0.27) $ 0.08
Diluted $ (0.17) $ 0.04 $ (0.27) $ 0.07
Weighted average number of shares (in thousands)
Basic 15,159 12,454 14,702 11,691
Diluted 15,159 13,303 14,702 12,540
SIERRA WIRELESS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in thousands of United States dollars)
(Unaudited)
Three months Six months
ended June 30 ended June 30
2000 1999 2000 1999
Net earnings (loss) $ (2,587) $ 543 $ (3,906) $ 903
Other comprehensive income
Foreign currency translation - 104 - 341
Comprehensive income (loss) $ (2,587) $ 647 $ (3,906) $ 1,244
SIERRA WIRELESS, INC.
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States dollars)
(Unaudited)
June 30, December 31,
2000 1999
Assets
Current assets
Cash and cash equivalents $ 27,626 $ 38,592
Short-term investments 63,620 -
Accounts receivable 8,393 4,942
Inventories 6,112 3,103
Deferred income taxes 1,677 781
Prepaid expenses 315 296
107,743 47,714
Fixed assets 4,294 2,370
Deferred income taxes 2,580 1,225
Intangible and other assets 7,115 1,084
$ 121,732 $ 52,393
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 7,983 $ 3,782
Deferred revenue 152 191
Current portion of
long-term obligations 923 351
9,058 4,324
Long-term obligations 306 376
Shareholders' equity
Share capital
Authorized: Unlimited number
of common and preference shares with
shares with no par value
Common shares, issued and outstanding
15,834,450 (December 31,
1999 - 14,216,395) 121,517 52,936
Deficit (8,420) (4,514)
Accumulated other comprehensive income
Cumulative translation adjustments (729) (729)
112,368 47,693
$ 121,732 $ 52,393
SIERRA WIRELESS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of United States dollars)
(Unaudited)
Three months Six months
ended June 30 ended June 30
2000 1999 2000 1999
Cash flows from
operating activities:
Net earnings (loss)
for the period $ (2,587) $ 543 $ (3,906) $ 903
Adjustments to reconcile
net earnings (loss) to net
cash provided by
operating activities
Amortization 655 190 997 344
Loss on disposal - - - 29
Deferred income taxes (2,250) - (2,250) -
Changes in operating assets
and liabilities
Accounts receivable (2,320) (532) (3,451) 13
Inventories (2,710) 327 (3,009) 1,063
Prepaid expenses 396 348 (20) (252)
Accounts payable and
accrued liabilities 3,767 206 4,200 1,282
Deferred revenue (37) 12 (38) (13)
Net cash provided by (used in)
operating activities (5,086) 1,094 (7,477) 3,369
Cash flows from
investing activities:
Business acquisitions - - - (505)
Purchase of fixed, intangible
and other assets (7,574) (1,054) (8,952) (1,250)
Decrease (increase )in
short-term investments (63,620) 101 (63,620) (1,003)
Net cash used in
investing activities (71,194) (953) (72,572) (2,758)
Cash flows from
financing activities:
Issue of common shares 71,039 29,316 71,327 29,371
Share issue costs (2,746) - (2,746) -
Increase (decrease) in
long-term obligations 614 (116) 502 (262)
Net cash provided by financing
activities 68,907 29,200 69,083 29,109
Effect of foreign currency
exchange rates on cash
and cash equivalents - (97) - (46)
Net increase (decrease) in
cash and cash equivalents (7,373) 29,244 (10,966) 29,674
Cash and cash equivalents,
beginning of period 34,999 6,345 38,592 5,915
Cash and cash equivalents,
end of period $ 27,626 $ 35,589 $ 27,626 $ 35,589 |
