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Sierra Wireless Reports First Quarter 2001 Results
Vancouver, British Columbia - April 18, 2001 - We are reporting record revenue of $22.4 million and our third consecutive profitable quarter.
Our revenue for the three months ended March 31, 2001 amounted to a record $22.4 million compared to $6.9 million in the first quarter of 2000, an increase of 225%. These revenues included significant growth in our AirCard products.
Our gross margins amounted to $9.2 million for the first quarter of 2001 compared to $3.4 million for the same period in 2000. Our gross margin percentage decreased to 41.1% from 50.0% due to changes in product mix, new product costs and volume pricing arrangements.
Our total operating expenses for the first quarter of 2001 amounted to $8.9 million compared to $5.2 million in the comparable quarter of 2000. Our expenses reflected gross research and development investments of $4.4 million compared to $2.2 million in the first quarter of 2000.
Our net earnings were $0.7 million for the first quarter of 2001 compared to a net loss of $1.3 million in 2000. This is our third consecutive profitable quarter.
Our basic and diluted earnings per share were $0.05 and $0.04, respectively, for the first quarter of 2001 compared to a basic and diluted loss per share of $0.09 in the first quarter of 2000.
As we have previously reported, overall demand for the quarter was in line with our expectations, while revenue and earnings were slightly lower than expected as a result of our tight credit risk management and our decision to delay, into the second quarter, the commercial introduction of our new AirBoard 300 for the Handspring Visor.
First Quarter Highlights Included :
- We announced the addition of Toshiba and Microsoft as members of the WirelessReady Alliance.
- We teamed with GoAmerica to deliver our AirBoard for CLIE, a wireless adapter designed for use with the Sony CLIE handheld. Commercial delivery of the AirBoard and accompanying AirCards are expected to commence in the second quarter of 2001.
- We signed a distribution and supply agreement with Wireless WebConnect! to offer the AirCard 400 for the Ricochet 128 kbps network.
- We commenced commercial shipments of the Sierra Wireless AirCardŽ 400 for Ricochet, the first true type II PCMCIA wireless PC card for the Ricochet 128 kbps network.
- We signed a supply agreement and commenced AirCard 510 deliveries to Bell Mobility, marking the deployment of the first wireless CDMA PC Card technology in Canada.
- We announced an amendment to an existing agreement with AT&T Wireless to include supplying the carrier with GPRS wireless modems. These products are currently in development.
- QUALCOMM expanded our licenses to include the development, manufacture and sale of subscriber equipment for all proposed third-generation (3G) CDMA (i.e., cdma2000, cdma2000 1xEV, TD-SCDMA, WCDMA) products.
- We appointed Mark McMillan as our Vice President, Marketing. Mr. McMillan, who has over 15 years experience in the data communications field, will be responsible for leading the Company's global product management, marketing and customer support initiatives.
- We received a 'Wireless Wonder' award for the Sierra Wireless AirCardŽ 510 at the eighth annual Wireless Symposium held in San Jose, CA. We were honored with a Mobility award for the Sierra Wireless AirCardŽ 510 at the seventh Annual Mobile Insights Conference held in Phoenix, Arizona. The AirCard 510 is the third modem of our AirCard family to receive a Mobility award.
- We announced the Sierra Wireless AirCardŽ 700 series, the first Wireless PC Cards capable of tri-band operation in GPRS packet mode or for GSM dial-up access. The AirCard 700 series will provide "World Wide WirelessTM for the World Wide Web", compatible with networks in Europe, North America and Asia. Initial shipments of the AirCard 700 series are expected to commence later this year.
- We announced our new channel partner program, "Channel Connections". Channel Connections is designed to provide channel partners who are looking to grow their sales in wireless data products and services with superior tools, training, support and expertise, facilitating their ability to develop innovative and leading-edge wireless data products and solutions.
- We announced an agreement with TELUS Mobility for the development of a next-generation CDMA Type II PC card for use in laptops and handheld devices such as personal digital assistants.
- We announced two early access Software Development Kits for CDMA and Ricochet products, in addition to the general availability of the enhanced Sierra Wireless Software Development Kit for CDPD.
- We, with Lucent Technologies, conducted
prototype demonstrations at the CTIA Wireless 2001 trade show of
our cdma2000 1xRTT AirCardŽ, operating at speeds up to 144 kbps.
Our 1xRTT AirCard is expected to be commercially available later
this year.
Financial
Guidance
We are reiterating our guidance of April 4, 2001 for the second quarter of 2001.
Given pervasive indications of a slowing economy, on April 4, 2001 we lowered our guidance for the second quarter. We continue to expect that revenues will grow for the second quarter, both year-over-year and sequentially. We plan to provide guidance beyond the second quarter when we report our second quarter results. We expect revenues for the second quarter of $24 million, gross margins of 42%, operating expenditures of $9.5 million and diluted earnings per share of $0.03. We have significantly lowered planned growth in operating expenses including most new hiring. We are closely managing items that affect cash flows. We are monitoring risk associated with developments at Metricom. We are making significant, ongoing investments in sales, marketing and the development of emerging wireless internet technologies.
"We enter this more challenging economic period with a strong business model and a strong balance sheet; our primary objective is to continue to grow the business, profitably," said David Sutcliffe, President and Chief Executive Officer.
Click here for detailed financial statements (16k, PDF)
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, plans and timing for the introduction or enhancement of our services and products, statements about future market conditions, supply and demand conditions, and other expectations, intentions and plans contained in this press release that are not historical fact. Our expectations regarding future revenues depend upon our ability to manufacture and supply products which we do not produce today and that meet defined specifications. When used in this press release, the words "plan," "expect," "believe," and similar expressions generally identify forward-looking statements. These statements reflect our current expectations. They are subject to a number of risks and uncertainties, including, but not limited to, changes in technology and changes in the wireless data communications market. In light of the many risks and uncertainties surrounding the wireless data communications market, you should understand that we cannot assure you that the forward-looking statements contained in this press release will be realized.
About Sierra Wireless
Sierra Wireless, Inc. is a leading provider of wireless data communications products. Sierra Wireless delivers wireless PC Cards for portable computers, wireless adapters for PDA's, OEM modules for embedded applications and rugged vehicle-mounted wireless systems. Sierra Wireless is the founding member of the WirelessReadyTM Alliance, an alliance of industry-leading hardware, software and service companies committed to the delivery of complete and compelling wireless data solutions. For more information on Sierra Wireless, visit its Web site at www.sierrawireless.com.
Conference Call and Instant Replay
We will host a conference call to review our results on April 18, 2001 at 2:30 pm PDT,
5:30 pm EDT. To participate in this conference call, please dial the following toll free number approximately five minutes prior to the commencement of the call:
1-800-446-4472
Should you be unable to participate, Instant Replay will be available for 72 hours following the conference call by dialing:
1-888-509-0081
We look forward to having you participate in our call.
FOR FURTHER INFORMATION PLEASE
CONTACT :
Sierra Wireless, Inc.
Peter W. Roberts, CA, CPA
Chief Financial Officer
(604) 231-1192
Website: www.sierrawireless.com
Email: roberts@sierrawireless.com
INDUSTRY : CMT
SUBJECT : ERN
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