Wed. Dec 11th, 2019

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News recap: Sierra Wireless, Inc. (NASDAQ: SWIR)

3 min read

Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) recently declared results for its 3rd-quarter finished September 30, 2k19.

Revenue for the 3rd-quarter of 2k19 was $174.00M contrast to $203.40M in the 3rd-quarter of 2k18. Quarterly revenue for our two business segments was as follows: (i) Revenue from IoT Solutions was $93.40M in the 3rd-quarter of 2k19, a decline of 2.10 percent contrast to $95.50M in the 3rd-quarter of 2k18 because of lower Integrated IoT solutions module revenue, partially offset by stronger subscription, support and other services revenue and stronger sales of Enterprise gateway products. Within the IoT Solutions segment, recurring subscription revenue was up 6.70 percent; and (ii) Revenue from Embedded Broadband was $80.60M in the 3rd-quarter of 2k19, down 25.30 percent contrast to $107.90M in the 3rd-quarter of 2k18 mainly because of weaker demand from mobile computing, networking and automotive customers. Subscription, support and other services revenue in the 3rd-quarter was $24.60M, representing 14.00 percent of merged revenue and Product revenue was $149.40M, representing 86.00 percent of merged revenue.

GAAP RESULTS

  • Gross margin was $55.00M, or 31.60 percent of revenue, in the 3rd-quarter of 2k19 contrast to $67.30M, or 33.10 percent of revenue, in the 3rd-quarter of 2k18.
  • Restructuring cost was $6.30M contrast to $0.20M in the 3rd-quarter of 2k18.
  • Operating costs were $67.60M and loss from operations was $12.60M in the 3rd-quarter of 2k19 contrast to operating costs of $66.40M and earnings from operations of $0.90M in the 3rd-quarter of 2k18.
  • Net loss was $20.20M, or $0.560 for each diluted share, in the 3rd-quarter of 2k19 contrast $1.00M, or $0.030 for each diluted share, in the 3rd-quarter of 2k18.

NON-GAAP RESULTS(1)

  • Gross margin was 31.70 percent in the 3rd-quarter of 2k19 contrast to 33.10 percent in the 3rd-quarter of 2k18.
  • Operating costs were $53.30M and earnings from operations were $1.80M in the 3rd-quarter of 2k19 contrast to operating costs of $56.50M and earnings from operations of $10.90M in the 3rd-quarter of 2k18.
  • Net earnings were $1.00M, or $0.030 for each diluted share, in the 3rd-quarter of 2k19 contrast to net earnings of $10.50M, or $0.290 for each diluted share, in the 3rd-quarter of 2k18.
  • Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) were $6.30M in the 3rd-quarter of 2k19 contrast to $16.00M in the 3rd-quarter of 2k18.

Cash and cash equivalents at the end of the 3rd-quarter of 2k19 were $86.90M, representing a boost of $2.10M from the end of the 2nd-quarter of 2k19. The incline in cash was mainly because of cash flow from operating activities, partially offset by capital expenditures.

In Q3 2k19, we recorded $2.70M in severance and $3.60M in transitional costs related to the consolidation of engineering and product administration resources in addition to the outsourcing programs we formerly declared.

Acquisition of M2M Group

On November 5, 2k19, we signed a contract to purchase the M2M group of companies (“M2M Group”) in Australia to expand our IoT Solutions business in the Asia-Pacific region. The M2M Group is focused on connectivity services and IoT cellular devices with a strong history of IoT leadership and solid carrier relations in the region. The purchase price of $19.80M is based on cash consideration of $18.80M for 100.00 percent of the equity plus about $1.00M for the retirement of certain obligations, subject to normal working capital adjustments.

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