Sierra Wireless Reports First Quarter 2001Results
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VANCOUVER, B.C.--(BUSINESS WIRE)--April 18, 2001--(NASDAQ:SWIR -
news; TSE:SW. - news)
We are reporting record revenue of $22.4 million and our third consecutive profitable quarter.
Our revenue for the three months ended March 31, 2001 amounted to a record $22.4 million compared to $6.9 million in
the first quarter of 2000, an increase of 225%. These revenues included significant growth in our AirCard products.
Our gross margins amounted to $9.2 million for the first quarter of 2001 compared to $3.4 million for the same period in
2000. Our gross margin percentage decreased to 41.1% from 50.0% due to changes in product mix, new product costs
and volume pricing arrangements.
Our total operating expenses for the first quarter of 2001 amounted to $8.9 million compared to $5.2 million in the
comparable quarter of 2000. Our expenses reflected gross research and development investments of $4.4 million
compared to $2.2 million in the first quarter of 2000.
Our net earnings were $0.7 million for the first quarter of 2001 compared to a net loss of $1.3 million in 2000. This is our
third consecutive profitable quarter.
Our basic and diluted earnings per share were $0.05 and $0.04, respectively, for the first quarter of 2001 compared to a
basic and diluted loss per share of $0.09 in the first quarter of 2000.
As we have previously reported, overall demand for the quarter was in line with our expectations, while revenue and
earnings were slightly lower than expected as a result of our tight credit risk management and our decision to delay,
into the second quarter, the commercial introduction of our new AirBoard 300 for the Handspring Visor.
First Quarter Highlights Included:
- We announced the addition of Toshiba and Microsoft as members of
the WirelessReady(TM) Alliance.
- We teamed with GoAmerica to deliver our AirBoard(TM) for CLIE, a
wireless adapter designed for use with the Sony CLIE handheld.
Commercial delivery of the AirBoard and accompanying AirCards are
expected to commence in the second quarter of 2001.
- We signed a distribution and supply agreement with Wireless
WebConnect! to offer the AirCard 400 for the Ricochet 128 kbps
network.
- We commenced commercial shipments of the Sierra Wireless
AirCard 400 for Ricochet, the first true type II PCMCIA wireless PC
card for the Ricochet 128 kbps network.
- We signed a supply agreement and commenced AirCard 510
deliveries to Bell Mobility, marking the deployment of the first
wireless CDMA PC Card technology in Canada.
- We announced an amendment to an existing agreement with AT&T
Wireless to include supplying the carrier with GPRS wireless modems.
These products are currently in development.
- QUALCOMM expanded our licenses to include the development,
manufacture and sale of subscriber equipment for all proposed
third-generation (3G) CDMA (i.e., cdma2000, cdma2000 1xEV, TD-SCDMA,
WCDMA) products.
- We appointed Mark McMillan as our Vice President, Marketing. Mr.
McMillan, who has over 15 years experience in the data communications
field, will be responsible for leading the Company's global product
management, marketing and customer support initiatives.
- We received a 'Wireless Wonder' award for the Sierra Wireless
AirCard 510 at the eighth annual Wireless Symposium held in San
Jose, CA. We were honored with a Mobility award for the Sierra
Wireless AirCard 510 at the seventh Annual Mobile Insights
Conference held in Phoenix, Arizona. The AirCard 510 is the third
modem of our AirCard family to receive a Mobility award.
- We announced the Sierra Wireless AirCard 700 series, the
first Wireless PC Cards capable of tri-band operation in GPRS packet
mode or for GSM dial-up access. The AirCard 700 series will provide
"World Wide Wireless(TM) for the World Wide Web", compatible with
networks in Europe, North America and Asia. Initial shipments of the
AirCard 700 series are expected to commence later this year.
- We announced our new channel partner program, "Channel
Connections." Channel Connections is designed to provide channel
partners who are looking to grow their sales in wireless data products
and services with superior tools, training, support and expertise,
facilitating their ability to develop innovative and leading-edge
wireless data products and solutions.
- We announced an agreement with TELUS Mobility for the
development of a next-generation CDMA Type II PC card for use in
laptops and handheld devices such as personal digital assistants.
- We announced two early access Software Development Kits for CDMA
and Ricochet products, in addition to the general availability of the
enhanced Sierra Wireless Software Development Kit for CDPD.
- We, with Lucent Technologies, conducted prototype demonstrations
at the CTIA Wireless 2001 trade show of our cdma2000 1xRTT AirCard ,
operating at speeds up to 144 kbps. Our 1xRTT AirCard is expected to
be commercially available later this year.
Financial Guidance
We are reiterating our guidance of April 4, 2001 for the second quarter of 2001.
Given pervasive indications of a slowing economy, on April 4, 2001 we lowered our guidance for the second quarter.
We continue to expect that revenues will grow for the second quarter, both year-over-year and sequentially. We plan
to provide guidance beyond the second quarter when we report our second quarter results. We expect revenues for
the second quarter of $24 million, gross margins of 42%, operating expenditures of $9.5 million and diluted earnings per
share of $0.03. We have significantly lowered planned growth in operating expenses including most new hiring. We are
closely managing items that affect cash flows. We are monitoring risk associated with developments at Metricom. We are
making significant, ongoing investments in sales, marketing and the development of emerging wireless internet
technologies.
``We enter this more challenging economic period with a strong business model and a strong balance sheet; our
primary objective is to continue to grow the business, profitably,'' said David Sutcliffe, President and Chief Executive
Officer.
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
Sierra Wireless, Inc. is a leading provider of wireless data communications products. Sierra Wireless delivers wireless
PC Cards for portable computers, wireless adapters for PDA's, OEM modules for embedded applications and rugged
vehicle-mounted wireless systems. Sierra Wireless is the founding member of the WirelessReady(TM) Alliance, an
alliance of industry-leading hardware, software and service companies committed to the delivery of complete and
compelling wireless data solutions. For more information on Sierra Wireless, visit its Web site at
sierrawireless.com.
Conference Call and Instant Replay
We will host a conference call to review our results on April 18, 2001 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 ended March 31, 2001 2000
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Revenue $ 22,369 $ 6,882
Cost of goods sold 13,171 3,441
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Gross margin 9,198 3,441
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Expenses
Sales and marketing 3,534 1,972
Research and development, net 2,814 2,214
Administration 2,108 826
Amortization 464 211
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8,920 5,223
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Earnings (loss) from operations 278 (1,782)
Other income 1,000 482
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Earnings (loss) before income taxes 1,278 (1,300)
Income tax expense 546 19
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Net earnings (loss) 732 (1,319)
Deficit, beginning of period (7,632) (4,514)
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Deficit, end of period $ (6,900) $ (5,833)
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Earnings (loss) per share for
the period
Basic $ 0.05 $ (0.09)
Diluted $ 0.04 $ (0.09)
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Weighted average number of
shares (in thousands)
Basic 16,062 14,245
Diluted 17,025 14,245
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SIERRA WIRELESS, INC.
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States dollars)
(Unaudited)
March 31, December 31,
2001 2000
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Assets
Current assets
Cash and cash equivalents $ 12,136 $ 6,891
Short-term investments 47,574 72,144
Accounts receivable 25,433 22,588
Inventories 20,014 12,560
Deferred income taxes 569 506
Prepaid expenses 664 1,239
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106,390 115,928
Fixed assets 11,893 7,500
Deferred income taxes 3,432 3,733
Intangible assets 9,204 8,564
Other 340 340
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$ 131,259 $ 136,065
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Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 7,494 $ 12,087
Accrued liabilities 8,377 8,596
Deferred revenue - 750
Current portion of
long-term obligations 503 317
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16,374 21,750
Long term obligations 65 502
Shareholders' equity
Share capital 122,449 122,174
Deficit (6,900) (7,632)
Accumulated other comprehensive income
Cumulative translation adjustments (729) (729)
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114,820 113,813
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$ 131,259 $ 136,065
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SIERRA WIRELESS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of United States dollars)
(Unaudited)
Three months ended March 31, 2001 2000
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Cash flows from operating activities:
Net earnings (loss) for the period $ 732 $ (1,319)
Adjustments to reconcile net
earnings (loss) to net cash
provided by operating activities
Amortization 1,393 342
Deferred income taxes 238 -
Changes in operating assets
and liabilities
Accounts receivable (2,845) (1,131)
Inventories (7,454) (299)
Prepaid expenses 575 (416)
Accounts payable (4,593) 245
Accrued liabilities (219) 188
Deferred revenue (750) (1)
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Net cash used in operating activities (12,923) (2,391)
Cash flows from investing activities:
Purchase of fixed assets (5,174) (1,378)
Increase in intangible assets (1,252) -
Decrease in short-term investments 24,570 -
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Net cash provided by (used in)
investing activities 18,144 (1,378)
Cash flows from financing activities:
Issue of common shares 275 288
Repayment of long-term obligations (251) (112)
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Net cash provided by
financing activities 24 176
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Net increase (decrease) in cash and
cash equivalents 5,245 (3,593)
Cash and cash equivalents,
beginning of period 6,891 38,592
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Cash and cash equivalents,
end of period $ 12,136 $ 34,999
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Contact:
Sierra Wireless Inc.
Peter W. Roberts, 604/231-1192
roberts@sierrawireless.com
sierrawireless.com |
