Sierra Wireless Announces Third-Quarter Financial Results
Friday, November 13, 2020 | Comments

Sierra Wireless report results for its third quarter ended September 30.

“We are on-track to complete the sale of our automotive product line and expect the deal to close in the coming weeks,” said Kent Thexton, president and CEO. “Our continuing operations in the third quarter, excluding the automotive product line being divested, improved sequentially with recurring and other Services revenue up 11% sequentially and 22% year-over-year.”

Revenue, including the automotive business, for the third quarter of 2020 was $180.3 million compared to $174.0 million in the third quarter of 2019, an increase of 3.6% in a challenging environment. Revenue, excluding the automotive business, for the third quarter of 2020 was $113.4 million compared to $136.7 million in the third quarter of 2019, a decrease of 17.1%. Revenue, excluding automotive was up 1.5% sequentially from the second quarter of 2020.

The company said its transformation to an internet of things (IoT) solutions company is progressing well with record recurring revenue design wins year to date and increasing device design wins. Additionally, the company said its enterprise networking segment is seeing strong growth in its opportunities pipeline.

Revenue from IoT solutions was $79.1 million in the third quarter of 2020, a decrease of 15.4% compared to $93.4 million in the third quarter of 2019 due to lower hardware sales in Enterprise gateway products and IoT solutions modules driven by the impact of COVID-19; the economic impact on energy, sales & payment and public safety; competitive pressure in hardware-only segments; and a transition to lower device ASPs with the increasing sales of low-power wide-area (LPWA) technologies. Within this segment the company had solid year-over-year recurring and other service revenue growth of 21.6% driven by growth in connected devices.

Revenue from embedded broadband, excluding the automotive business, was $34.3 million in the third quarter of 2020, a decrease of 20.8% compared to $43.3 million in the third quarter of 2019, reflecting lower mobile computing and networking sales due to previously communicated design losses of two higher-margin computing customers.

Recurring and other services revenue in the third quarter of 2020 was $29.8 million, representing 26.3% of consolidated revenue and product revenue was $83.6 million, representing 73.7% of consolidated revenue.

Gross margin, excluding the automotive business, was $39.5 million, or 34.8% of revenue, in the third quarter of 2020 compared to $49.6 million, or 36.3% of revenue, in the third quarter of 2019.

Operating expenses, excluding the automotive business, were $57.2 million in the third quarter of 2020 compared to $62.5 million in the third quarter of 2019. In the third quarter of 2020, Sierra recorded government grants under the Canada Emergency Wage Subsidy (CEWS) of $5.6 million and other COVID-19 related subsidies of $700,000, totaling $6.3 million.

Loss from operations, again excluding the automotive business, was $17.8 million, compared to $12.8 million in the third quarter of 2019. Net loss from continuing operations was $14.5 million, or loss of $0.40 per diluted share, compared to net loss of $19.8 million, or loss of $0.55 per diluted share, in the third quarter of 2019.

Net loss, which includes the automotive business, was $12 million, or a loss of $0.33 per diluted share, compared to $20.2 million, or loss of $0.56 per diluted share in the third quarter of 2019. Short-term borrowings and long-term debt were $34.4 million as at September 30, compared to $15 million on June 30, 2020.

The impact of the COVID-19 pandemic on the company’s global business continues to remain uncertain. The company continues to evaluate the effects of COVID-19 on its business, the overall severity and duration of adverse impacts related to COVID-19 on its business, financial condition, cash flows and/or results of operations for the fourth quarter 2020 and beyond cannot be reasonably estimated at this time. The ultimate size of the impact of the COVID-19 pandemic on the business will depend on future developments that cannot be currently predicted.

Given these conditions, the company said it was continuing not to provide guidance although it is seeing continued business improvements. In conjunction with the recently announced divestiture of the embedded automotive business, the company has also begun to initiate actions to reduce operating expenses by approximately $25 to $30 million on an annualized basis to rightsize the remaining business and improve ongoing earnings and cash flows.

Would you like to comment on this story? Find our comments system below.



 
 
Post a comment
Name: *
Email: *
Title: *
Comment: *
 

Comments

No Comments Submitted Yet

Be the first by using the form above to submit a comment!


Education







Events
May 2021

18 - 19
Nexus: The NG 9-1-1 Experience Reimagined
Washington, D.C.
https://www.apconexus.org/

More Events >

Site Navigation

Close