UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 6-K
Report of Foreign issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
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For the Month of April 2004
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(Commission File. No 0-30718).
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SIERRA WIRELESS, INC., A CANADA CORPORATION
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(Translation of registrant's name in English)
13811 Wireless Way
Richmond, British Columbia, Canada V6V 3A4
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(Address of principal executive offices and zip code)
Registrant's Telephone Number, including area code: 604-231-1100
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Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F: Form 20-F 40-F X
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes: No: X
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NEWS RELEASE TRANSMITTED BY CCN DISCLOSURE
FOR: Sierra Wireless, Inc.
TSX: SW
Nasdaq: SWIR
April 19, 2004
Sierra Wireless Reports First Quarter 2004 Results
VANCOUVER, BRITISH COLUMBIA - Sierra Wireless, Inc. (NASDAQ: SWIR, TSX: SW) is
reporting better than expected first quarter results, including revenue of $41.6
million, a profit of $4.6 million and positive cash flow from operations. These
results are being released earlier than the previous schedule of April 22, 2004.
Our results are reported in US dollars and are prepared in accordance with
United States generally accepted accounting principles.
"Once again, our revenues were up significantly, reflecting growing demand for
our AirCard, Embedded Module and Mobile product lines, with notable strength in
North American markets", said David Sutcliffe, Chairman and Chief Executive
Officer. "Investment continues in market development and new products including
the Voq Professional Phone and the AirCard 775 for EDGE networks. We continue to
focus on profitable growth."
Results for the first quarter of 2004, relative to company guidance provided on
January 28, 2004 and, for certain measures, updated on April 1, 2004:
First quarter revenue for 2004 of $41.6 million was consistent with our
guidance of revenues greater than $40.0 million. Gross margin was 40.3%,
better than our guidance range of 39.0% to 40.0%. Our net earnings of $4.6
million, or diluted earnings per share of $0.18, exceeded our guidance of
net earnings greater than $3.0 million, or diluted earnings per share of
greater than $0.12. Our cash flow from operations was positive $5.3
million, consistent with our guidance of significantly positive cash flow.
Results for the first quarter of 2004, compared to the first quarter of 2003:
Revenue for the first quarter of 2004 increased by 107% to $41.6 million,
from $20.1 million for the same period in 2003. Gross margin improved to
40.3% from 39.4%. Operating expenses were $11.6 million in the first
quarter of 2004, compared to $7.6 million for the same period in 2003. Net
earnings for the first quarter of 2004 were $4.6 million, or diluted
earnings per share of $0.18, compared to net earnings of $0.4 million, or
diluted earnings per share of $0.02, in the first quarter of 2003.
During the first quarter of 2004, we signed a second agreement with the
Government of Canada's Technology Partnerships Canada ("TPC") under which
we are eligible to receive conditionally repayable research and development
funding up to Cdn. $9.5 million. The agreement is effective for development
work, relating to third generation wireless technologies, commencing April
2003. Funding of $1.4 million was recognized as a reduction of research and
development expense in the first quarter of 2004, of which $1.1 million
relates to the period from April 1, 2003 to December 31, 2003.
Operating expenses for the first quarter of 2004 were $12.9 million,
excluding TPC funding related to 2003 of $1.1 million and an additional
Metricom recovery of $0.2 million. Net earnings for the first quarter of
2004, excluding these amounts, were $3.3 million, or diluted
earnings per share of $0.13. Our results for the first quarter of 2004 also
included a foreign exchange loss of approximately $0.3 million.
Our revenue increased in the first quarter of 2004, compared to the first
quarter of 2003 due primarily to an increase in sales of embedded module
and AirCard products. Our margin improved in the first quarter of 2004
primarily due to increased volume and product mix. Our operating expenses
increased in the first quarter of 2004, compared to the first quarter of
2003 due primarily to the acquisition of AirPrime, Inc., which was
completed in August 2003, and costs related to the development of new
products, including EDGE and the Voq professional phone.
Results for the first quarter of 2004, compared to the fourth quarter of 2003:
Revenue for the three months ended March 31, 2004 amounted to $41.6
million, compared to $34.6 million in the fourth quarter of 2003, an
increase of 20%. Gross margins were $16.8 million or 40.3% in the first
quarter of 2004, compared to $14.2 million or 41.1% in the fourth quarter
of 2003. Operating expenses were $11.6 million in 2004, compared to $13.0
million in the previous quarter. Operating expenses, excluding the TPC
funding related to 2003 and the additional Metricom recovery, were $12.9
million in the first quarter of 2004, compared to $12.1 million, excluding
integration costs, in the fourth quarter of 2003.
Net earnings were $4.6 million for the three months ended March 31, 2004,
compared to net earnings of $1.9 million for the three months ended
December 31, 2003. Excluding TPC funding related to 2003 and the Metricom
recovery, net earnings for the first quarter of 2004 were $3.3 million, or
diluted earnings per share of $0.13, compared to net earnings in Q4 2003 of
$2.8 million, excluding integration costs, or diluted earnings per share of
$0.12.
First Quarter Highlights Included:
Progress on products for CDMA 2000 networks and channels:
o We have provided next generation wireless technology to the Harris
County Sheriff's Office in Texas that is outfitting approximately 600
patrol vehicles and 300 detectives with a high-speed mobile solution
powered by the Sierra Wireless AirCard(R) 555.
o The Sierra Wireless MP 555 GPS rugged wireless modem has been certified
by Sprint for operation on the enhanced Sprint Nationwide PCS Network.
We will work with Sprint to market and sell the MP 555 GPS in-vehicle
mobile solution, primarily targeting public safety and utility
departments.
o We added the Sierra Wireless AirCard 555R to our product line for the
China market. Operating on CDMA 1X networks, the AirCard 555R will
provide mobile professionals with wireless data access and will be
distributed by Beijing Putian Taili Telecom.
o Verizon Wireless, Citrix Systems, Inc., and Zumasys, Inc., announced
that Continental Laboratory Products is the first customer to roll out
a mobile access solution combining Citrix(R) MetaFrame(R) Presentation
Server and Verizon Wireless' BroadbandAccess high-speed wireless
service. Currently available in San Diego and Washington D.C., Verizon
Wireless plans to make BroadbandAccess service available throughout
additional portions of its network beginning later this year.
Progress on products for GSM/GPRS/EDGE networks and channels:
o We announced the commercial availability of the Sierra Wireless AirCard
750 PC Card, a wireless wide area PC Card, for O2 customers in the
United Kingdom. This best in class product offers the highest GPRS
throughput on the market today and a superior network interface for
fast and reliable mobile computing.
o Together with Analog Devices, Inc. (ADI) and TTPCom, we announced that
we will bring wireless EDGE (Emerging Data rates for Global Evolution)
capabilities to laptop computers and personal digital assistants. We
have selected ADI's Blackfin SoftFone for EDGE Platform and TTPCom's
protocol stack software, to power our new Sierra Wireless AirCard 775
PC Card for the EDGE network.
o We have selected QUALCOMM's MSM6250(TM) Mobile Station Modem(TM)
(MSM(TM)) chipset and system software for our multimode
third-generation (3G) wireless products. With the MSM6250 chipset, we
will provide the WCDMA (UMTS) market with a high-quality, high-speed
wireless connectivity solution using a proven chipset technology.
o We announced the introduction of the Sierra Wireless AirCard 775 PC
Card and the Sierra Wireless MP 775 GPS modem for EDGE networks. The
AirCard 775 wireless wide area network (WWAN) card will provide mobile
users with faster data rates, reaching speeds up to three times faster
than on GPRS networks, offering an enhanced user experience and
increased productivity. The MP 775 GPS rugged vehicle-mount modem is
the next generation mobile product that provides in-vehicle data
solutions while operating over EDGE and GSM/GPRS networks. The AirCard
775 and MP 775 are expected to be commercially available in the second
half of 2004.
o We announced the availability of an upgrade program for current Sierra
Wireless MP 750 GPS rugged wireless modem customers to the next
generation Sierra Wireless MP 775 GPS modem for use on the AT&T
Wireless EDGE network. Built for demanding environments and worldwide
connectivity, the MP 775 GPS rugged wireless modem provides an
in-vehicle mobile solution with data transmission speeds averaging
between 100-130 kbps, up to three times faster than currently available
with GPRS. The product upgrade is expected to be available for $399 in
the third quarter of 2004.
Progress on the Voq Professional Phone(TM):
o The new Voq Professional Phone, a pocketable Microsoft Windows
Mobile(TM) based SmartPhone developed by Sierra Wireless, is expected
to be commercially available in selected countries in the second
quarter of 2004.
o We signed an agreement with KPN to launch and sell the Voq Professional
Phone and the VoqMail Professional Edition product to customers in the
Netherlands.
o We signed an agreement with THBBury to provide industry leading car
accessories for the new Voq Professional Phone through THBBury
distribution channels in Europe and North America.
o We announced agreements with key European distributors to sell the Voq
Professional Phone and the VoqMail Professional Edition to customers in
Austria, Belgium, Germany, Holland, Italy, Luxemburg, the Nordics,
Switzerland, and Spain.
Financial Guidance
We are providing our guidance for the second quarter of 2004 that reflects our
current business indicators and expectations. Inherent in this guidance are risk
factors that are described in detail in our regulatory filings. All figures are
estimates based on management's current beliefs and assumptions and are subject
to change. Our actual results could differ materially from those presented
below.
Q2 2004 Guidance
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Revenue $48 - $50 million
Gross margin 39% - 40%
Operating expenses $14.3 - $14.8 million
Net earnings $4.0 - $4.3 million
Diluted earnings per share $0.15 - $0.16
Cash flow from operations Positive
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 conditions, channel
and end customer demand conditions, revenues, gross margins, operating expenses,
profits, and other expectations, intentions, and plans contained in this press
release that are not historical fact. Our expectations regarding future revenues
and earnings depend upon our ability to develop, manufacture, and supply
products that 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 is a leader in delivering highly differentiated wireless
solutions that enable our customers to improve their productivity and lifestyle.
Sierra Wireless develops and markets AirCard, the industry-leading wireless PC
card line for portable computers; embedded modules for OEM wireless
applications; the MP line of rugged vehicle-mounted connectivity solutions and
Voq, a line of professional phones with easy-to-use, secure software solutions
for mobile professionals. For more information on Sierra Wireless, visit our web
site at www.sierrawireless.com. For more information on Voq professional phones,
visit our web site at www.voq.com.
"AirCard" and "Voq" are trademarks of Sierra Wireless, Inc. Other product or
service names mentioned herein may be the trademarks of their respective owners.
Conference Call and Instant Replay
We will host a conference call to review our results on April 19, 2004 at 10:00
AM PDT, 1:00 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:
1-800-346-5998 Passcode: Not required
or
1-416-641-6683 Passcode: Not required
Should you be unable to participate, Instant Replay will be available for seven
business days following the conference call by dialing:
1-800-558-5253 Passcode: 21186081
or
1-416-626-4100 Passcode: 21186081
We look forward to having you participate in our call.
FOR FURTHER INFORMATION PLEASE CONTACT:
Sierra Wireless, Inc.
David G. McLennan
Chief Financial Officer
(604) 231-1185
Website: www.sierrawireless.com
Email: dmclennan@sierrawireless.com
INDUSTRY : CMT
SUBJECT : ERN
SIERRA WIRELESS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in thousands of United States dollars, except per share amounts)
(Prepared in accordance with United States generally
accepted accounting principles (GAAP))
(Unaudited)
THREE MONTHS ENDED MARCH 31, 2004 2003
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Revenue.................................................................................... $ 41,641 $ 20,150
Cost of goods sold......................................................................... 24,839 12,210
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Gross margin 16,802 7,940
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Expenses:
Sales and marketing...................................................................... 4,173 2,729
Research and development, net............................................................ 4,739 2,749
Administration........................................................................... 2,064 1,617
Amortization............................................................................. 636 553
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11,612 7,648
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Earnings from operations................................................................... 5,190 292
Other income............................................................................... 84 104
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Earnings before income taxes............................................................... 5,274 396
Income tax expense......................................................................... 704 35
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Net earnings............................................................................... 4,570 361
Deficit, beginning of period............................................................... (71,309) (73,564)
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Deficit, end of period..................................................................... $(66,739) $(73,203)
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Earnings per share:
Basic.................................................................................... $ 0.18 $ 0.02
Diluted.................................................................................. $ 0.18 $ 0.02
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Weighted average number of shares (in thousands)
Basic.................................................................................... 24,986 16,355
Diluted.................................................................................. 26,027 16,718
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SIERRA WIRELESS, INC.
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States dollars)
(Prepared in accordance with United States GAAP)
MARCH 31, DECEMBER 31,
2004 2003
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(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents................................................................$ 62,601 $ 70,358
Short-term investments................................................................... 20,369 14,760
Accounts receivable....................................................................... 22,652 21,566
Inventories............................................................................... 2,096 1,511
Prepaid expenses.......................................................................... 1,956 2,223
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109,674 110,418
Long-term investments....................................................................... 32,331 24,639
Fixed assets................................................................................ 6,551 5,985
Intangible assets........................................................................... 15,354 14,620
Goodwill.................................................................................... 20,022 19,706
Deferred income taxes....................................................................... 500 500
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$ 184,432 $ 175,868
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable.........................................................................$ 2,634 $ 5,966
Accrued liabilities....................................................................... 26,558 22,221
Deferred revenue and credits.............................................................. 250 399
Current portion of long-term liabilities.................................................. 1,328 1,328
Current portion of obligations under capital lease........................................ 87 141
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30,857 30,055
Long-term liabilities....................................................................... 1,935 2,266
Shareholders' equity:
Share capital............................................................................. 217,241 214,047
Warrants.................................................................................. 1,538 1,538
Deficit................................................................................... (66,739) (71,309)
Accumulated other comprehensive loss...................................................... (400) (729)
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151,640 143,547
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$ 184,432 $ 175,868
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SIERRA WIRELESS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of United States dollars)
(Prepared in accordance with United States GAAP)
(Unaudited)
THREE MONTHS ENDED MARCH 31, 2004 2003
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Cash flows from operating activities:
Net earnings for the period..................................................... $ 4,570 $ 361
Adjustments to reconcile net earnings to
net cash provided by operating activities
Amortization................................................................. 1,630 1,338
Loss on disposal............................................................. (14) --
Accrued warrants............................................................. -- 168
Changes in operating assets and liabilities
Accounts receivable.......................................................... (998) 3,725
Inventories.................................................................. (585) (815)
Prepaid expenses............................................................. 267 6
Accounts payable............................................................. (3,332) 564
Accrued liabilities.......................................................... 3,922 (1,589)
Deferred revenue and credits................................................. (149) 104
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Net cash provided by operating activities......................................... 5,311 3,862
Cash flows from investing activities:
Purchase of fixed assets........................................................ (1,503) (143)
Increase in intangible assets................................................... (1,246) (602)
Purchase of long-term investments............................................... (17,011) --
Proceeds on disposal of long-term investments................................... 3,217 --
Purchase of short-term investments.............................................. (7,226) --
Proceeds on maturity of short-term investments.................................. 7,892 --
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Net cash used in investing activities............................................. (15,877) (745)
Cash flows from financing activities:
Issue of common shares.......................................................... 3,194 41
Repayment of long-term obligations.............................................. (385) (456)
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Net cash provided by (used in) financing activities............................... 2,809 (415)
Net increase (decrease) in cash and cash equivalents.............................. (7,757) 2,702
Cash and cash equivalents, beginning of period.................................... 70,358 34,841
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Cash and cash equivalents, end of period.......................................... $ 62,601 $ 37,543
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Sierra Wireless, Inc.
By: /s/ David G. McLennan
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David G. McLennan, Chief Financial Officer and Secretary
Date: April 20, 2004