Vancouver, Canada. August 4, 2011 – Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) has reported its second quarter 2011 results. Revenue for the second quarter of 2011 was $139.9 million, a decrease of 12% compared to $159.1 million in the second quarter of 2010, and a decrease of 3% compared to $144.3 million in the first quarter of 2011.
The year-on-year revenue decrease was principally driven by the loss of revenue from Barnes & Noble and Clearwire, which together accounted for nearly $25 million in revenue in the second quarter of 2010. Mobile Computing revenue was $66.0 million, down 13% compared to $75.5 million in the second quarter of 2010. Machine-to-machine (M2M) revenue was $73.9 million, down 12% compared to $83.6 million in the second quarter of 2010. However, when you exclude sales to Barnes & Noble, the company’s core M2M business increased 14% in the second quarter of 2011 on a year-on-year basis.
“Notwithstanding a slower than expected start to 2011, Sierra Wireless remains well positioned in our two target markets. In Mobile Computing, we are launching several new 4G LTE products with key operators and PC OEMs (original equipment manufacturers). In M2M, we continue to build on our global leadership position and successfully drive value chain expansion,” said Jason Cohenour, President and Chief Executive Officer. “Our growth drivers remain intact and, despite some product launch delays, we expect significant sequential revenue and earnings growth in the second half of 2011.”
On a GAAP (generally accepted accounting principles) basis, gross margin was $39.1 million, or 28.0% of revenue, in the second quarter of 2011 compared to $46.2 million, or 29.0% of revenue, in the second quarter of 2010. Operating expenses were $45.4 million and loss from operations was $6.3 million in the second quarter of 2011, compared to operating expenses of $49.7 million and a loss from operations of $3.5 million in the second quarter of 2010. Net loss was $6.8 million, or $0.22 per diluted share, in the second quarter of 2011, compared to a net loss of $8.6 million, or $0.28 per diluted share, in the second quarter of 2010.
On a non-GAAP basis, gross margin was 28.0% in the second quarter of 2011, compared to 29.1% in the second quarter of 2010. Operating expenses were $40.0 million and loss from operations was $0.8 million in the second quarter of 2011, compared to operating expenses of $41.7 million and earnings from operations of $4.7 million in the second quarter of 2010. Net loss was $1.0 million, or $0.03 per diluted share, in the second quarter of 2011 compared to net earnings of $4.4 million, or $0.14 per diluted share, in the second quarter of 2010.
Non-GAAP results exclude the impact of stock-based compensation expense, acquisition amortisation, integration costs, restructuring costs, foreign exchange gains or losses on translation of balance sheet accounts, and certain tax adjustments. Non-GAAP amounts are disclosed as Sierra Wireless believes that these measures provide its shareholders with better information on actual operating results and assist in comparisons from one period to another. The reconciliation between its GAAP and non-GAAP operational results is provided in the schedules.
All results are reported in US dollars and are prepared in accordance with United States GAAP, except as otherwise indicated.
