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Sierra Wireless Third Quarter 2010 Earnings 

Sierra Wireless Third Quarter 2010 Earnings

 

 
 
Tags:  aircard  quarterly earnings  q3 2010  airlink  sierra wireless  airvantage 
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Published:  October 31, 2011
 
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Slide 1: Third Quarter 2010 Results Webcast November 3, 2010 Sierra Wireless Proprietary and Confidential Page 1
Slide 2: Safe Harbor Statement Certain statements in this presentation that are not based on historical facts constitute forward-looking statements or forwardlooking information within the meaning of applicable securities laws (“forward-looking statements”). These forward-looking statements are not promises or guarantees of future performance but are only predictions that relate to future events, conditions or circumstances or our future results, performance, achievements or developments and are subject to substantial known and unknown risks, assumptions, uncertainties and other factors that could cause our actual results, performance, achievements or developments in our business or in our industry to differ materially from those expressed, anticipated or implied by such forwardlooking statements. Forward-looking statements include all financial guidance for the fourth quarter of 2010, disclosure regarding possible events, conditions, circumstances or results of operations that are based on assumptions about future economic conditions, courses of action and other future events. We caution you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. These forward-looking statements appear in a number of different places in this presentation and can be identified by words such as “may”, “estimates”, “projects”, “expects”, “intends”, “believes”, “plans”, “anticipates”, “continue”, “growing”, “expanding” or their negatives or other comparable words. Forward-looking statements include statements regarding the outlook for our future operations, plans and timing for the introduction or enhancement of our services and products, statements concerning strategies or developments, statements about future market conditions, supply conditions, end customer demand conditions, channel inventory and sell through, revenue, gross margin, operating expenses, profits, forecasts of future costs and expenditures, the outcome of legal proceedings, and other expectations, intentions and plans that are not historical fact. The risk factors and uncertainties that may affect our actual results, performance, achievements or developments are many and include, amongst others, our ability to develop, manufacture, supply and market new products that we do not produce today that meet the needs of customers and gain commercial acceptance, our reliance on the deployment of next generation networks by major wireless operators, the continuous commitment of our customers, and increased competition. These risk factors and others are discussed in our Annual Information Form which may be found on SEDAR at www.sedar.com and in our other regulatory filings with the Securities and Exchange Commission in the United States and the Provincial Securities Commissions in Canada. Many of these factors and uncertainties are beyond the control of the Company. Consequently, all forward-looking statements in this presentation are qualified by this cautionary statement and there can be no assurance that actual results, performance, achievements or developments anticipated by the Company will be realized. Forward-looking statements are based on management’s current plans, estimates, projections, beliefs and opinions and the Company does not undertake any obligation to update forward-looking statements should the assumptions related to these plans, estimates, projections, beliefs and opinions change, except as required by law. © Sierra Wireless 2010 Page 2
Slide 3: Q3 Highlights This presentation should be viewed in conjunction with our press release and supplementary information on our website (www.sierrawireless.com), which present a complete reconciliation of GAAP and Non-GAAP results. Record revenue of $172.7 million – up 27% compared Q3 2009 Continued focus on cost -- Non-GAAP operating expenses of $41.3 million Exceeded profitability guidance with Non-GAAP EPS of $0.21 Investments in M2M paying off – new products, new design wins, expanding leadership across value chain Well positioned in Mobile Computing to capture 4G growth – strong channel positions, new design wins, robust product pipeline, first LTE devices New organization structure to sharpen focus on customers and further accelerate profitable growth © Sierra Wireless 2010 Page 3
Slide 4: Machine-to-Machine Q3 revenue of $76.1 million, up 42% year-over-year Building on #1 global market share position in M2M Strong design win activity in automotive, payment, networking, consumer and energy Launched AR series – creating a new standard for automotive grade embedded modules Another record quarter for AirLink™ intelligent gateways & routers, including growing sales in EMEA TELUS selected AirVantage™ Services Platform to manage and deploy M2M solutions AirLink™ Raven XE Intelligent Gateway AirPrime™ AR series © Sierra Wireless 2010 Page 4
Slide 5: Mobile Computing Q3 revenue of $96.6 million, up 18% year-over-year Well positioned to capture mobile broadband growth AT&T Shockwave New launch with AT&T: Shockwave 21 Mbps HSPA+ Strong sales of dual-mode EVDO/WiMAX AirCard products to Sprint & Clear Commenced volume shipments of 42 Mbps, dual-carrier HSPA+ AirCard 312U to Telstra Announced first LTE products Awarded new channel slots for 4G devices, including AirCards and AirPrime modules with PC OEMs AirPrime™ LTE modules Sprint AirCard 250U Telstra AirCard 312U © Sierra Wireless 2010 Page 5
Slide 6: Revenue Growth & Diversification Quarterly Revenue by Business (USD millions) Quarterly Revenue by Customer (USD millions) $172.7 $135.7 $96.6 56% $172.7 $135.7 $58.2 43% Mobile Computing $52.8 31% Top 2 Customers $81.9 60% $119.9 $76.1 $53.8 40% 44% M2M $77.5 Q3 '09 Q3 '10 Q3 '09 Q3 '10 © Sierra Wireless 2010 Page 6
Slide 7: Improving Operating Performance Q3 Non-GAAP Results Operating Expenses (USD millions) Earnings from Operations (USD millions) Diluted EPS (USD per share) $43.6 $0.21 $41.3 $7.8 $0.18 $5.1 Q3 '09 Q3 '10 Q3 '09 Q3 '10 Q3 '09 Q3 '10 © Sierra Wireless 2010 Page 7
Slide 8: Solid Cash Position and Debt Free Cash Balance (USD millions) Third Quarter 2010 Cash Metrics $134.4 $115.4 $105.0 Cash used in operating activities: $10.7 million • Working capital • Inventory • Restructuring / integration Capital expenditures: $2.8 million Cash balance per share: $3.38 Q4 '09 Q2 '10 Q3 '10 © Sierra Wireless 2010 Page 8
Slide 9: Summary of Key Financial Metrics Q3 2010 Financial Metrics ($USD millions, except EPS and GM%) GAAP Actual $172.7 28.3% $51.2 ($2.2) (1.3%) $0.7 $0.02 Non-GAAP* Actual $172.7 28.4% $41.3 $7.8 4.5% $6.5 $0.21 Non-GAAP* Guidance $168 - 173 Revenue Gross Margin (%) Operating Expenses Earnings (Loss) from Operations Operating Margin (%) Net Earnings Earnings Per Share $5.4 – 6.4 $4.5 – 5.4 $0.15 - 0.17 * Non-GAAP results exclude stock-based compensation expense, acquisition amortization, Wavecom integration costs, restructuring costs, foreign exchange gains or losses, tax adjustments and non-controlling interest related to non-GAAP adjustments © Sierra Wireless 2010 Page 9
Slide 10: Q4 2010 Financial Guidance Guidance for Q4 2010 is based on the following expectations relative to Q3 2010: • Growth in M2M revenue on broad-based demand • Decline in Mobile Computing revenue on lower AirCard sales • Modest increase in gross margin percentage • Slightly higher operating expenses driven by new product certification and launch costs Consolidated Non-GAAP* Revenue $170 - $175 million Earnings from Operations Net Earnings $8.0 - $9.0 million $6.8 - $7.6 million Earnings per Share $0.22 - $0.24/share Guidance for the fourth quarter also reflects the uncertain macro economic environment and is based on current beliefs and assumptions, which are subject to change. Actual results could differ materially from guidance. Risk factors are described in our regulatory filings. * Non-GAAP results exclude stock-based compensation expense, acquisition amortization, Wavecom integration costs, restructuring costs, foreign exchange gains or losses, tax adjustments and non-controlling interest related to non-GAAP adjustments © Sierra Wireless 2010 Page 10
Slide 11: Summary Strong operating performance in Q3 – record revenue, better than expected earnings Strong channel positions and product portfolio in Mobile Computing – well positioned to capture 4G mobile broadband growth Global leader in M2M with a fundamentally differentiated position – solutions across the value chain, design win momentum Sharpened organizational focus on customers and profitable growth Building a business platform to drive revenue and earnings growth in 2011 and beyond © Sierra Wireless 2010 Page 11
Slide 12: Thank You Q&A Session © Sierra Wireless 2010 Page 12

   
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