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Sierra Wireless Reports Fourth Quarter And Full Year 2012 Results

Stocks in this article: SWIR

Sierra Wireless, Inc.:

Fourth Quarter 2012

  • Total revenue, including revenue from AirCard ® related discontinued operations, of $163.8 million and non-GAAP net earnings of $10.3 million, or $0.33 per diluted share
  • Revenue from continuing operations of $109.4 million, 32.8 percent year-over-year growth, and non-GAAP operating earnings from continuing operations of $3.7 million

Full Year 2012

  • Total revenue, including revenue from AirCard related discontinued operations, of $644.2 million and non-GAAP net earnings of $33.4 million, or $1.08 per diluted share
  • Revenue from continuing operations of $397.3 million, 19.3 percent year-over-year growth, and non-GAAP operating earnings from continuing operations of $0.9 million

Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) today reported fourth quarter and full year 2012 results. 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.

On January 28, 2013, the company announced a definitive agreement for the sale of substantially all of the assets and operations related to its AirCard business to Netgear, Inc. In accordance with GAAP, assets and liabilities associated with the sale have been recorded as “held for sale” and the results of operations of the AirCard business as discontinued operations. The consolidated statements of operations and related selected financial information have been retrospectively modified to distinguish between continuing operations and discontinued operations.

“Our fourth quarter results highlight our continued solid revenue growth and improving earnings,” said Jason Cohenour, President and Chief Executive Officer. “As the global leader in M2M and connected device solutions, we believe that we are exceptionally well positioned to drive profitable growth both organically and through strategic acquisitions.”

Fourth Quarter 2012 Revenue from continuing operations in the fourth quarter of 2012 was $109.4 million, compared to $82.4 million in the fourth quarter of 2011, and $100.2 million in the third quarter of 2012. The 32.8 percent year-over-year revenue increase was driven by better than expected growth in Machine-to-Machine (“M2M”) sales, including a $15.5 million contribution from the recently acquired M2M business of Sagemcom, along with solid growth in sales to PC OEMs.

On a GAAP basis, gross margin from continuing operations was $36.2 million, or 33.1 percent of revenue, in the fourth quarter of 2012, compared to $25.2 million, or 30.6 percent of revenue, in the fourth quarter of 2011. Operating expenses from continuing operations were $37.7 million and loss from continuing operations was $1.5 million in the fourth quarter of 2012, compared to operating expenses of $45.2 million and a loss from operations of $20.0 million in the fourth quarter of 2011. Fourth quarter of 2011 operating expenses included an intangible asset impairment charge of $11.2 million, primarily related to a software development program that was acquired through the purchase of Wavecom, S.A. in 2009 and which we abandoned during the fourth quarter of 2011. Net earnings from continuing operations were $15.5 million, or $0.50 per diluted share, in the fourth quarter of 2012, compared to net loss of $20.4 million, or $0.65 per diluted share, in the fourth quarter of 2011. Net earnings from continuing operations in 2012 included an income tax recovery that was the result of the recognition of certain tax assets that will be realizable as a result of the sale of the AirCard business. Net earnings, including discontinued operations, were $19.6 million, or $0.64 per diluted share, in the fourth quarter of 2012, compared to net loss, including discontinued operations, of $13.8 million, or $0.44 per diluted share, in the fourth quarter of 2011.

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