Sierra Wireless Reports Second Quarter 2008 Results
Our results are reported in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles.
"In the second quarter of 2008, we experienced strong momentum in our business and achieved record quarterly revenue and operating earnings" said Jason Cohenour, President and Chief Executive Officer. "Our revenue grew by 45% and earnings from operations were up 77% compared to the second quarter of 2007. Our strong year over year improvement was driven by continued momentum in sales of our PC Adapter products, growth in our embedded modules business, the addition of AirLink and disciplined cost management.
Looking ahead, our short term view is cautious given the expected erosion in sales of our embedded modules to PC OEMs combined with macro economic uncertainty in our key markets. Longer term, we continue to be encouraged by the growth opportunities in our market segments. Mobile broadband services continue to expand and improve around the world, customer awareness of these compelling services is growing, market segments and applications are expanding and overall market penetration is still very low. Based on this outlook and our confidence in our ability to execute, we are continuing to invest in further strengthening and broadening our market position."
Q2 2008 Financial Results
Our revenue for the second quarter of 2008 amounted to a record $155.7 million, gross margin was $43.2 million, or 27.8% of revenue, operating expenses were $28.8 million and net earnings were $11.0 million, or diluted earnings per share of $0.35. Our results for Q2 2008 include $0.7 million of pre-tax transaction costs related to the termination of the CradlePoint acquisition. Excluding these transaction costs, earnings per share would have been $0.36. We generated $14.6 million of cash from operations during the second quarter and our balance sheet remains strong, with $217.0 million of cash, short and long-term investments.
Results for the second quarter of 2008, relative to guidance provided on April 29, 2008 are as follows:
Second quarter revenue for 2008 of $155.7 million was better than our guidance of $154.0 million. Our earnings from operations were $14.4 million, better than our guidance of $13.9 million. Our net earnings of $11.0 million, or diluted earnings per share of $0.35, were in line with our guidance of net earnings of $11.0 million, or diluted earnings per share of $0.35. Results for the second quarter of 2008, compared to the second quarter of 2007 are as follows:
Second quarter revenue increased by 45% to $155.7 million in 2008 from $107.4 million for the same period in 2007. Gross margin for the second quarter of 2008 was 27.8% of revenue, compared to 27.0% for the same period in 2007. Operating expenses were $28.8 million and earnings from operations were $14.4 million in the second quarter of 2008, compared to $20.9 million and $8.1 million, respectively, in the same period of 2007.
Net earnings for the second quarter of 2008 were $11.0 million, or diluted earnings per share of $0.35, compared to net earnings of $6.7 million, or diluted earnings per share of $0.25, in the same period of 2007.
Sierra Wireless Inc.
Sierra Wireless (NASDAQ: SWIR - TSX: SW) modems and software connect people and systems to mobile broadband networks around the world. The Company offers a diverse product portfolio addressing enterprise, consumer, original equipment manufacturer, specialized vertical industry, and machine-to-machine markets, and provides professional services to customers requiring expertise in wireless design, integration, and carrier certification. For more information about Sierra Wireless, visit www.sierrawireless.com.
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