Sierra Wireless (SWIR) Tops Q2 EPS by 5c, Revenues Beat

Sierra Wireless (NASDAQ: SWIR) reported Q2 EPS of ($0.30), $0.05 better than the analyst estimate of ($0.35). Revenue for the quarter came in at $144.06 million versus the consensus estimate of $143.27 million.

NON-GAAP RESULTS(1)

• Gross margin was 31.8% in the second quarter of 2020 compared to 30.8% in the second quarter of 2019.
• Loss from operations was $10.0 million in the second quarter of 2020 compared to earnings from operations of $3.4 million in the second quarter of 2019.
• Net loss was $11.1 million, or loss of $0.30 per diluted share, in the second quarter of 2020 compared to net earnings of $2.5 million, or earnings of $0.07 per diluted share, in the second quarter of 2019.
• Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") loss were $5.3 million in the second quarter of 2020 compared to Adjusted EBITDA earnings of $7.9 million in the second quarter of 2019.

“We continue to improve the Company’s operating efficiency and drive focus towards being the global leader in fully integrated IoT solutions, showcased by our recently announced divestiture in the embedded automobile business,” said Kent Thexton, President and CEO of Sierra Wireless. “Despite a challenging environment given the COVID-19 pandemic, our Second Quarter results met our expectations and we are cautiously optimistic about the second half of the year as we are seeing some business improvements as we prepare for an upcoming launch of our new 5G embedded modules and routers.”

Financial Guidance

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

Given these conditions, we continue not to provide guidance although we are seeing some business improvements. In conjunction with the recently announced divestiture of the embedded automotive business, we have begun to initiate actions to reduce operating expenses by approximately $20 million which serves to rightsize the remaining business and improve ongoing earnings and cashflows.

We will continue to monitor the effects of COVID-19 on our business.

This non-GAAP guidance constitutes "forward-looking statements" within the meaning of applicable securities laws and reflects current business indicators and expectations. These statements are based on management's current beliefs and assumptions, which could prove to be significantly incorrect. Forward-looking statements, particularly those that relate to longer periods of time, are subject to substantial known and unknown risks and uncertainties that could cause actual events or results to differ significantly from those expressed or implied by our forward-looking statements, including those described in our regulatory filings. See "Cautionary Note Regarding Forward-Looking Statements" below.

For earnings history and earnings-related data on Sierra Wireless (SWIR) click here.

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