Sierra Wireless Report First-Quarter 2021 Results
Tuesday, May 18, 2021 | Comments

Sierra Wireless reported results for its first quarter of 2021.

“Total revenue in the first quarter was $108.1 million, up 4.9% year over year and our connectivity, software and services revenue was $33.7 million, up 26% year over year,” said Sierra Wireless President and CEO Kent Thexton. “We have done well managing costs despite a tight supply chain environment and we lowered our operating expenses sequentially in the first quarter. Demand for our internet of things (IoT) products and gateways remains strong with first quarter orders up over 30% year over year, and we are working closely with all our supply chain partners to build and ship our products to our customers. The requirement for real-time monitoring of assets and advanced edge processing is growing in importance as more industrial and enterprise companies are digitizing their assets. With our IoT devices, connectivity service and edge-to-cloud tools, Sierra Wireless is the trusted supplier for IoT solutions.”

Revenue increased by 4.9% to $108.1 million in the first quarter of 2021, compared to $103 million in the first quarter of 2020. Revenue from IoT solutions increased by 9.1% to $74.6 million as compared to $68.4 million in the first quarter of 2020. The increase was primarily due to growth in IoT connectivity, partially offset by the impact of a ransomware incident and industrywide supply constraints. Revenue from enterprise solutions decreased by 3.3% to $33.5 million, compared to $34.6 million in the first quarter of 2020. The decrease was primarily due to the impact of the ransomware incident and industrywide supply constraints.

Product revenue was $74.4 million in the first quarter of 2021, representing 68.8% of consolidated revenue, and connectivity, software and services revenue was $33.7 million, representing 31.2% of consolidated revenue. During the quarter, orders for products were strong; however, they were impacted by both a ransomware incident and industrywide supply constraints. On a year-over-year basis, connectivity, software and services revenue increased 26.1%.

Gross margin was 34.9% in the first quarter of 2021, compared to 33.9% in the first quarter of 2020. The increase was driven by changes in product and customer mix in the company’s new IoT and enterprise solutions segments.

Gross margin for IoT solutions was 29.6% in the first quarter of 2021, compared to 26.6% in the first quarter of 2020, primarily due to increased higher margin IoT connectivity revenue. Enterprise solutions gross margin was 46.7% in the first quarter of 2021, compared to 48.3% in the first quarter of 2020 primarily due to increased material costs as a result of industrywide supply constraints.

Operating expenses were $60.8 million in the first quarter of 2021, compared to $62.7 million in the first quarter of 2020. Net loss from continuing operations was $28.5 million in the first quarter of 2021, compared to $27.2 million in the first quarter of 2020 due to the absence of a one-time income tax recovery and higher foreign exchange losses, partially offset by higher revenue and gross margin and lower operating expenses.

Adjusted net loss from continuing operations was $9.6 million, or loss of $0.26 per share, in the first quarter of 2021, compared to $19.2 million, or a loss of $0.53 per share, in the first quarter of 2020.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was a loss of $4.4 million in the first quarter of 2021, compared to a loss of $16.2 million in the first quarter of 2020.

On March 20, Sierra Wireless was the subject of a ransomware incident that affected the company’s internal IT systems and corporate website. As a result of the incident, the company temporarily halted production at its manufacturing sites. Sierra also immediately engaged a leading team of external legal counsel and forensic investigators to support its investigation, and help identify, isolate and address the incident.

The company has since enhanced its security and monitoring tools with an added layer of protection that is intended to detect and identify malicious activity and assist us in cleaning any potentially compromised systems. While initially suspended, factory production resumed less than a week after the incident was discovered. Internal teams continue to work with external advisors to review and evaluate additional security measures that could be implemented to further protect the company’s systems.

Cash and cash equivalents and restricted cash at the end of the first quarter of 2021 were $112.2 million, compared to $171.4 million at the end of the fourth quarter of 2020. The decrease in cash was due to higher working capital requirements given the current global shortage in components; restructuring to improve operating efficiency; direct costs and the indirect impact of the ransomware incident, including the unwinding of the accounts receivable factoring program; and capital expenditures. The largest impact to the company’s cash was related to a $41 million change in working capital driven by the temporary unwinding of the company’s accounts receivable factoring program and increased investment to combat the industrywide supply constraints.

Due to continued strong demand and the investment in working capital to combat the industrywide tightness in supply, the company expects its revenue for the second quarter of 2021 to be in the range of $118 million to $122 million. Demand remains strong in the second quarter of 2021, and the company has secured hardware orders and recurring revenue that is approximately 20% above the mid-point of its second-quarter 2021 revenue guidance. However, the company continues to face a tight global supply chain environment that is constraining its ability to source all the necessary components and fully deliver to this level of demand, Sierra said.

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
September 2021

27 - 30
International Wireless Communications Expo (IWCE) 2021
Las Vegas
https://www.iwceexpo.com/

October 2021

18 - 20
Colorado NENA/APCO 2021 Conference
Denver
https://www.conenaapco.org

November 2021

2 - 3
Wireless Leadership Summit (WLS)
Austin, Texas
https://www.enterprisewireless.org/wls2021

3 - 5
Critical Communications World 2021
Madrid, Spain
https://www.critical-communications-world.com

More Events >

Site Navigation

Close