SIERRA WIRELESS, INC.

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

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

(unaudited)
    2012     2011
  YTD   Q2   Q1 YTD   Q2   Q1
 
Revenue - GAAP and Non-GAAP $ 317,707 $ 167,441 $ 150,266 $ 284,163 $ 139,888 $ 144,275
 
Gross Margin - GAAP $ 96,101 $ 51,335 $ 44,766 $ 78,564 $ 39,100 $ 39,464
Stock-based compensation   161   78   83   210   97   113
Gross Margin - Non-GAAP $ 96,262 $ 51,413 $ 44,849 $ 78,774 $ 39,197 $ 39,577
 
Earnings (loss) from operations - GAAP $ 6,563 $ 6,221 $ 342 $ (15,684) $ (6,270) $ (9,414)
Stock-based compensation 3,315 1,636 1,679 3,329 1,697 1,632
Acquisition 599 599 - - - -
Restructuring 1,711 1,531 180 (25) (350) 325
Integration - - - 1,305 765 540
Acquisition related amortization   5,646   2,665   2,981   6,600   3,312   3,288
Earnings (loss) from operations - Non-GAAP $ 17,834 $ 12,652 $ 5,182 $ (4,475) $ (846) $ (3,629)
Amortization (excluding acquisition related amortization)   8,067   4,066   4,001   10,468   5,144   5,324
EBITDA $ 25,901 $ 16,718 $ 9,183 $ 5,993 $ 4,298 $ 1,695
 
Net Earnings (loss) - GAAP $ 3,926 $ 3,581 $ 345 $ (14,555) $ (6,766) $ (7,789)
Stock-based compensation, restructuring and other,
integration, and acquisition related amortization, net of tax 10,660 5,891 4,769 11,228 5,503 5,725
Unrealized foreign exchange loss (gain) (266) (165) (101) (97) 238 (335)
Non-controlling interest   -   -   -   (32)   -   (32)
Net earnings (loss) - Non-GAAP $ 14,320 $ 9,307 $ 5,013 $ (3,456) $ (1,025) $ (2,431)
 
Diluted earnings (loss) per share - GAAP (in dollars)
GAAP $ 0.13 $ 0.11 $ 0.01 $ (0.47) $ (0.22) $ (0.25)
Non-GAAP $ 0.46 $ 0.30 $ 0.16 $ (0.11) $ (0.03) $ (0.08)

SIERRA WIRELESS, INC.

SEGMENTED RESULTS

(in thousands of U.S. dollars)

(unaudited)
(in thousands of U.S. dollars)              
  Three months ended June 30   Six months ended June 30
  2012   2011   2012   2011
M2M
Revenue $ 77,545 $ 73,908 $ 154,488 $ 146,636
Cost of goods sold   51,426   50,017   103,645   100,065
Gross margin $ 26,119   23,891 $ 50,843   46,571
Gross margin % 33.7% 32.3% 32.9% 31.8%
 
Mobile Computing
Revenue $ 89,896 $ 65,980 $ 163,219 $ 137,527
Cost of goods sold   64,680   50,771   117,961   105,534
Gross margin $ 25,216 $ 15,209 $ 45,258 $ 31,993
Gross margin % 28.1% 23.1% 27.7% 23.3%

SIERRA WIRELESS, INC.

REVENUE BY SEGMENT AND PRODUCT

(in thousands of U.S. dollars)

(unaudited)
(in thousands of U.S. dollars)                  
  Three months ended June 30   Six months ended June 30
2012   2011   2012   2011
M2M
AirPrime Embedded Wireless Modules (excludes PC OEMs) $ 63,768 $ 62,759 $ 126,712 $ 122,454
AirLink Intelligent Gateways and Routers 11,407 8,886 22,029 18,982
AirVantage M2M Cloud Platform and Other   2,370   2,263   5,747   5,200
$ 77,545 $ 73,908 $ 154,488 $ 146,636
 
Mobile Computing
AirCard Mobile Broadband Devices (1) $ 69,955 $ 53,135 $ 126,893 $ 116,989
AirPrime Embedded Wireless Modules for PC OEMs 17,828 11,857 33,101 18,604
Other   2,113   988   3,225   1,934
$ 89,896 $ 65,980 $ 163,219 $ 137,527

(1) Clearwire contributed $nil million in mobile computing revenue in the three and six months ended June 30, 2012 compared to $0.1 million and $8.3 million in the three and six months ended June 30, 2011, respectively.

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