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Sequans Communications Announces Second Quarter 2012 Financial Results

Sequans Communications S.A. (NYSE: SQNS), a 4G chipmaker supplying LTE and WiMAX chips to equipment manufacturers for mobile operators worldwide, today announced financial results for the second quarter ended June 30, 2012.

Second Quarter 2012 Highlights:

Revenues, gross margin and non-IFRS earnings per share are in line with guidance.

Revenue: Revenue of $7.0 million increased 71% sequentially from the first quarter of 2012 and decreased 77% compared to the second quarter of 2011. The sequential increase reflects an increase in shipments of LTE products and a resumption of orders for WiMAX products from a historically large customer. The decrease compared to the prior year was due to lower sales to this same customer, following changes in the WiMAX market in the United States in the second half of 2011.

Gross margin: Gross margin was 54.2% compared to 57.4% in the first quarter of 2012 and 46.6% in the second quarter of 2011.

Operating income (loss): Operating loss was $8.0 million compared to an operating loss of $9.0 million in the first quarter of 2012 and an operating profit of $1.9 million in the second quarter of 2011.

Net profit (loss): Net loss was $8.3 million, or ($0.24) per diluted share/ADS, compared to a net loss of $9.0 million, or ($0.26) per diluted share/ADS in the first quarter of 2012 and a net profit of $0.1 million, or $0.00 per diluted share/ADS in the second quarter of 2011.

Non-IFRS Net profit (loss): Excluding stock-based compensation, non-IFRS net loss was $7.4 million, or ($0.21) per diluted share/ADS, compared to a non-IFRS net loss of $7.7 million, or ($0.22) per diluted share/ADS in the first quarter of 2012, and a non-IFRS net profit of $2.8 million, or $0.08 per diluted share/ADS, in the second quarter of 2011.



In millions of US$ except percentages,

Key Metrics

shares and per share amounts
  Q2 2012   %*   Q1 2012   %*   Q2 2011   %*
Revenues $7.0     $4.1     $30.6  
Gross profit 3.8 54.2% 2.4 57.4% 14.3 46.6%
Operating income (loss) (8.0) -113.1% (9.0) -219.4% 1.9 6.2%
Net profit (loss) (8.3) -118.0% (9.0) -220.2% 0.1 0.2%
Diluted EPS ($0.24) ($0.26) $0.00
Number of diluted shares/ADS 34,678,812 34,670,306 35,209,641
Cash flow from (used in) operations (6.4) (6.4) 0.3
Cash and cash equivalents at quarter-end 40.7 49.3 61.9
Additional information:
Stock-based compensation included in operating result
0.9 1.3 1.7
Non-IFRS diluted EPS (excludes stock-based compensation) ($0.21) ($0.22) $0.08
* Percentage of revenues

“We are pleased to report sequential revenue growth at the high end of our guidance,” said Georges Karam, Sequans CEO. “Our objective during this transition phase is to continue making important progress in the LTE market, while we limit our operating loss with continued stringent control of our expenses. During the second quarter we implemented some optimization of our organization, resulting in a reduction of our workforce by about 10%.

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