Sierra Wireless reports third quarter 2012 results

  Sierra Wireless reports third quarter 2012 results

  *Revenue in the third quarter 2012 of $162.6 million, 10.8 percent
    year-over-year growth
  *Non-GAAP earnings from operations of $8.3 million, up from $4.0 million in
    the third quarter of 2011
  *Non-GAAP net earnings of $8.8 million, or $0.28 per diluted share, up from
    net earnings of $4.6 million, or $0.15 per diluted share in the third
    quarter of 2011

Business Wire

VANCOUVER, British Columbia -- November 01, 2012

Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) today reported third quarter
2012 results. All results are reported in U.S. dollars and are prepared in
accordance with United States generally accepted accounting principles (GAAP),
except as otherwise indicated below.

Revenue for the third quarter of 2012 was $162.6 million, compared to $146.8
million in the third quarter of 2011, and $167.4 million in the second quarter
of 2012. The year-over-year revenue increase of 10.8 percent was driven by
exceptional growth in Machine-to-Machine (“M2M”) sales, including a $4.6
million contribution from the recently acquired Sagemcom M2M business, and
solid growth in Mobile Computing, driven by higher sales to PC OEMs. M2M
revenue was $86.1 million, an increase of 14.3 percent compared to $75.3
million in the third quarter of 2011. Mobile Computing revenue was $76.5
million, an increase of 7.0 percent compared to $71.5 million in the third
quarter of 2011.

“Our Machine-to-Machine business had an exceptional quarter, with revenue up
14 percent year-over-year driven by strong organic growth and contribution
from the recently acquired Sagemcom M2M business,” said Jason Cohenour,
President and Chief Executive Officer. “Our success in M2M, combined with
solid year-over-year revenue growth in Mobile Computing and tight cost
control, resulted in profitability that exceeded our expectations.”

On a GAAP basis, gross margin was $47.9 million, or 29.4 percent of revenue,
in the third quarter of 2012, compared to $43.3 million, or 29.5 percent of
revenue, in the third quarter of 2011. Operating expenses were $46.8 million
and earnings from operations were $1.1 million in the third quarter of 2012,
compared to operating expenses of $45.1 million and a loss from operations of
$1.8 million in the third quarter of 2011. Net earnings were $3.7 million, or
$0.12 per diluted share, in the third quarter of 2012, compared to a net loss
of $1.0 million, or $0.03 per diluted share, in the third quarter of 2011. A
favorable income tax recovery contributed to the stronger than expected net
earnings. The third quarter results also included $2.7 million in acquisition
and restructuring costs, compared to $1.0 million in restructuring and
integration costs in the third quarter of 2011.

On a non-GAAP basis, gross margin was 29.5 percent of revenue in the third
quarter of 2012, compared to 29.6 percent of revenue in the third quarter of
2011. Operating expenses were $39.6 million and earnings from operations were
$8.3 million in the third quarter of 2012, compared to operating expenses of
$39.4 million and earnings from operations of $4.0 million in the third
quarter of 2011. Net earnings were $8.8 million, or $0.28 per diluted share,
in the third quarter of 2012 compared to net earnings of $4.6 million, or
$0.15 per diluted share, in the third quarter of 2011.

During the third quarter of 2012, we successfully completed the acquisition of
the M2M business of Sagemcom. The purchase price of €44.9 million (US$55.2
million) and the related transaction expenses were funded by cash on hand. The
cash, cash equivalents, and short term investments balance at the end of the
third quarter of 2012 was $59.5 million, down from $125.3 million at the end
of the second quarter of 2012.

Subsequent to the completion of the quarter, we entered into a new $50 million
revolving line of credit. This facility replaces our existing $10 million line
of credit and is designed to augment our working capital capacity. There are
currently no borrowings under the facility.

Non-GAAP results exclude the impact of stock-based compensation expense,
acquisition costs, restructuring costs, integration costs, acquisition
amortization, foreign exchange gains or losses on foreign currency contracts
and translation of balance sheet accounts, and certain tax adjustments. We
disclose non-GAAP amounts as we believe that these measures provide our
shareholders with useful information about actual operating results and assist
in comparisons from one period to another. The reconciliation between our GAAP
and non-GAAP results is provided in the accompanying schedules.

Financial guidance

In the fourth quarter of 2012, on a sequential basis, we expect revenue to be
flat compared to the third quarter, as a result of continued strength in our
M2M business, including a full quarter of contribution from the acquired
Sagemcom M2M business, offset by lower sales in Mobile Computing. We expect
gross margin to be slightly higher, driven largely by a favorable shift in
product mix and we expect operating expenses to be modestly higher as a result
of the timing of new product certification and launch expenses, as well as a
full quarter of Sagemcom M2M.

  Q4 2012 Guidance          Consolidated Non-GAAP
    Revenue                    $160.0 to $165.0 million
    Earnings from operations   $7.5 to $9.0 million
    Net earnings               $5.6 to $6.8 million
    Earnings per share         $0.18 to $0.22 per share

This Non-GAAP guidance for the fourth quarter of 2012 reflects current
business indicators and expectations. Inherent in this guidance are risk
factors that are described in greater detail in our regulatory filings. Our
actual results could differ materially from those presented below. All figures
are approximations based on management’s current beliefs and assumptions.

Conference call, webcast and instant replay details

Sierra Wireless President and CEO, Jason Cohenour, and CFO, David McLennan,
will host a conference call and webcast with analysts and investors to review
the results on Thursday, November 1, 2012, at 5:30 PM Eastern Time (2:30 PM
PT). A live slide presentation will be available for viewing during the call
from the link provided below.

To participate in this conference call, please dial the following number
approximately ten minutes prior to the commencement of the call:

  *Toll-free (Canada and US): 1-877-201-0168
  *Alternate number: 1-647-788-4901
  *Conference ID: 30799204

For those unable to participate in the live call, a replay will be available
until November 22, 2012. Dial 1-855-859-2056 or 1-800-585-8367 and enter the
Conference ID number above to access the replay.

To access the webcast, please follow the link below:

http://www.snwebcastcenter.com/custom_events/sierrawireless-20121101/site/

The webcast will remain available at the above link for one year following the
call.

We look forward to having you participate in our call.

Cautionary Note Regarding Forward-Looking Statements

Certain statements and information in this press release are not based on
historical facts and constitute forward-looking statements or forward-looking
information within the meaning of the U.S. Private Securities Litigation
Reform Act of 1995 and Canadian securities laws (“forward-looking statements”)
including statements and information relating to our financial guidance for
the fourth quarter of 2012 and our fiscal year 2012, our business outlook for
the short and longer term and our strategy, plans and future operating
performance. Forward-looking statements are provided to help you understand
our views of our short and longer term prospects. We caution you that
forward-looking statements may not be appropriate for other purposes. We will
not update or revise our forward-looking statements unless we are required to
do so by securities laws.

Forward-looking statements:

  *Typically include words and phrases about the future such as “outlook”,
    “may”, “estimates”, “intends”, “believes”, “plans”, “anticipates” and
    “expects”.
  *Are not promises or guarantees of future performance. They represent our
    current views and may change significantly.
  *Are based on a number of material assumptions, including those listed
    below, which could prove to be significantly incorrect:

       *Our ability to develop, manufacture and sell new products and
         services that meet the needs of our customers and gain commercial
         acceptance;
       *Our ability to continue to sell our products and services in the
         expected quantities at the expected prices and expected times;
       *Expected transition period to our 4G products;
       *Expected cost of goods sold;
       *Expected component supply constraints;
       *Our ability to “win” new business;
       *Expected deployment of next generation networks by wireless network
         operators;
       *Our operations are not adversely disrupted by component shortages or
         other development, operating or regulatory risks; and
       *Expected tax rates and foreign exchange rates.

  *Are subject to substantial known and unknown material risks and
    uncertainties. Many factors could cause our actual results, achievements
    and developments in our business to differ significantly from those
    expressed or implied by our forward-looking statements, including without
    limitation, the following factors. These risk factors and others are
    discussed in our Annual Information Form and Management’s Discussion and
    Analysis of Financial Condition and Results of Operations, which may be
    found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov and in our
    other regulatory filings with the Securities and Exchange Commission in
    the United States and the Provincial Securities Commissions in Canada.

       *Actual sales volumes or prices for our products and services may be
         lower than we expect for any reason including, without limitation,
         the continuing uncertain economic conditions, price and product
         competition, different product mix, the loss of any of our
         significant customers, competition from new or established wireless
         communication companies;
       *The cost of products sold may be higher than planned or necessary
         component supplies may not be available, are delayed or are not
         available on commercially reasonable terms;
       *We may be unable to enforce our intellectual property rights or may
         be subject to litigation that has an adverse outcome;
       *The development and timing of the introduction of our new products
         may be later than we expect or may be indefinitely delayed;
       *Transition periods associated with the migration to new technologies
         may be longer than we expect.

About Sierra Wireless

Sierra Wireless (NASDAQ: SWIR) (TSX: SW) offers industry-leading mobile
computing and machine-to-machine (M2M) communications products and solutions
that connect people, devices, and applications over cellular networks.
Wireless service providers, equipment manufacturers, enterprises and
government organizations around the world depend on us for reliable wireless
technology. We offer 2G, 3G and 4G wireless modems, routers and gateways as
well as a comprehensive suite of software, tools, and services that ensure our
customers can successfully bring wireless applications to market. For more
information about Sierra Wireless, visit www.sierrawireless.com.

“AirCard” and “AirLink” are registered trademarks of Sierra Wireless.
“AirPrime” and “AirVantage” are also trademarks of Sierra Wireless. Other
product or service names mentioned herein may be the trademarks of their
respective owners.

  SIERRA WIRELESS, INC.

  CONSOLIDATED BALANCE SHEETS
                                                                          
  (in thousands of U.S. dollars)

  (unaudited)
                                     September 30,    December 31,
                                        2012              2011
  Assets
  Current assets
  Cash and cash equivalents             $  59,528       $  101,375 
  Short-term investments                    –                 9,347
  Accounts receivable, net of
  allowance for
  doubtful accounts of $2,855               118,901           107,367
  (December 31, 2011 - $3,642)
  Inventories                               22,746            16,168
  Deferred income taxes                     10,109            6,540
  Prepaids and other                      41,216          20,674
                                            252,500           261,471
  Property and equipment                    26,657            22,087
  Intangible assets                         60,361            42,557
  Goodwill                                  121,937           89,961
  Deferred income taxes                     6,205             6,205
  Other assets                            608             606
                                       $  468,268       $  422,887
  Liabilities
  Current liabilities
  Accounts payable and accrued          $   163,788       $   123,547
  liabilities
  Deferred income taxes                     –                 336
  Deferred revenue and credits            1,576           1,721
                                            165,364           125,604
  Long-term obligations                     26,677            25,143
  Deferred income taxes                   236             236
                                         192,277         150,983
  Equity
  Shareholders’ equity
                no par value;
                unlimited shares
                authorized; issued
  Common stock:                             322,757           328,440
                and outstanding:
                30,590,440 shares
                (December 31, 2011 -
                31,306,692 shares)
                no par value;
                unlimited shares
  Preferred     authorized;
  stock:                                    –                 –
                issued and
                outstanding: nil
                shares
                at cost 717,886
  Treasury      shares (December 31,        (5,183    )       (6,141    )
  stock:        2011 – 877,559
                shares)
  Additional paid-in capital                21,444            20,087
  Deficit                                   (54,889   )       (62,482   )
  Accumulated other comprehensive         (8,138    )     (8,000    )
  loss
                                        275,991         271,904
                                      $  468,268       $  422,887

  SIERRA WIRELESS, INC.

  CONSOLIDATED STATEMENTS OF OPERATIONS

  (in thousands of U.S. dollars, except where otherwise stated)

  (unaudited)
                    Three months ended              Nine months ended
                                               
                    September 30                    September 30
                    2012       2011            2012       2011    
  Revenue           $ 162,638     $ 146,827         $ 480,345     $ 430,990
  Cost of goods      114,781     103,493         336,387     309,092 
  sold
  Gross margin       47,857      43,334          143,958     121,898 
  Expenses
  Sales and           10,476        11,158            33,527        34,752
  marketing
  Research and        22,395        21,942            64,564        67,479
  development
  Administration      8,592         8,548             25,938        26,743
  Acquisition         2,196         –                 2,795         –
  costs
  Restructuring       498           881               2,209         856
  Integration         –             121               –             1,426
  Amortization       2,649       2,447           7,311       8,089   
                    46,806      45,097          136,344     139,345 
  Earnings (loss)     1,051         (1,763  )         7,614         (17,447 )
  from operations
  Foreign
  exchange gain       1,176         (154    )         1,718         47
  (loss)
  Other income       (70     )    68              (231    )    15      
  (expense)
  Earnings (loss)
  before income       2,157         (1,849  )         9,101         (17,385 )
  taxes
  Income tax
  expense            (1,510  )    (851    )        1,508       (1,775  )
  (recovery)
  Net earnings        3,667         (998    )         7,593         (15,610 )
  (loss)
  Net loss
  attributable to    –           –               –           (57     )
  non-controlling
  interest
  Net earnings
  (loss)            $ 3,667      $ (998    )       $ 7,593      $ (15,553 )
  attributable to
  the Company
  Net earnings
  (loss) per
  share
  attributable to
  the Company’s
  common                                                                      
  shareholders
  (in dollars)
  Basic             $ 0.12        $ (0.03   )       $ 0.25        $ (0.50   )
  Diluted           $ 0.12        $ (0.03   )       $ 0.24        $ (0.50   )
  Weighted
  average number
  of shares
  outstanding
  (in thousands)
  Basic               30,573        31,297            30,854        31,267
  Diluted            30,772      31,297          31,012      31,267  

  SIERRA WIRELESS, INC.

  CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)

  (in thousands of U.S. dollars)

  (unaudited)
                           Three months ended         Nine months ended
                                                 
                           September 30               September 30
                          2012     2011            2012      2011      
  Net earnings (loss)      $ 3,667   $ (998   )       $ 7,593     $ (15,610 )
  Other comprehensive
  income (loss), net of
  taxes:
  Purchase of Wavecom
  S.A. shares, net of        –         –                –           42
  taxes of $nil
  Foreign currency
  translation               1,203    (5,920 )        (138  )    599     
  adjustments, net of
  taxes of $nil
  Total comprehensive        4,870     (6,918 )         7,455       (14,969 )
  earnings (loss)
  Comprehensive income
  (loss) attributable to
  non-controlling
  interest:
  Net earnings (loss)        –         –                –           (57     )
  Foreign currency
  translation               –        –              –         106     
  adjustments, net of
  taxes of $nil
  Comprehensive earnings
  (loss) attributable to   $ 4,870   $ (6,918 )       $ 7,455    $ (15,018 )
  the Company

  SIERRA WIRELESS, INC.

  CONSOLIDATED STATEMENTS OF EQUITY

  (in thousands of U.S. dollars)

  (unaudited)
                Equity attributable to the Company                                                              
                 Common stock                Treasury Shares         
                                                                                              Accumulated                       
                                                                        Additional                                 Non-controlling
                # of                     # of                  paid-in                 other           interest         

                 shares           $           shares         $          capital      Deficit       comprehensive   (deficit)         Total
                                                                                                   income (loss)
  Balance as
  at December    31,222,786     $ 327,668     643,042      $ (3,908 )   $ 16,926     $ (33,167 )   $  (5,471  )    $   1,139         $ 303,187
  31, 2010
  Purchase of
  Wavecom S.A.   –                –           –              –            (796   )     –              42               (1,033   )      (1,787  )
  shares
  Stock option   83,906           772         –              –            (253   )     –              –                –               519
  exercises
  Stock-based    –                –           –              –            6,449        –              –                –               6,449
  compensation
  Purchase of
  treasury
  shares for     –                –           613,638        (4,472 )     –            –              –                –               (4,472  )
  RSU
  distribution
  Distribution
  of vested      –                –           (379,121 )     2,239        (2,239 )     –              –                –               –
  RSUs
  Net loss       –                –           –              –            –            (29,315 )      –                (57      )      (29,372 )
  Foreign
  currency
  translation    –              –          –            –          –          –            (2,571  )       (49      )     (2,620  )
  adjustments,
  net of tax
  Balance as
  at December    31,306,692    $ 328,440    877,559     $ (6,141 )   $ 20,087    $ (62,482 )   $  (8,000  )    $   –            $ 271,904 
  31, 2011
                                                                                                                                                 
  Common share   (800,000   )     (6,312  )   –              –            –            –              –                –               (6,312  )
  cancellation
  Stock option   83,068           624         –              –            (197   )     –              –                –               427
  exercises
  Stock-based    –                –           –              –            5,010        –              –                –               5,010
  compensation
  Purchase of
  treasury
  shares for     –                –           336,638        (2,489 )     –            –              –                –               (2,489  )
  RSU
  distribution
  Distribution
  of vested      680              5           (496,311 )     3,447        (3,456 )     –              –                –               (4      )
  RSUs
  Net earnings   –                –           –              –            –            7,593          –                –               7,593
  Foreign
  currency
  translation    –              –          –            –          –          –            (138    )       –             (138    )
  adjustments,
  net of tax
  Balance as
  at September   30,590,440    $ 322,757    717,886     $ (5,183 )   $ 21,444    $ (54,889 )   $  (8,138  )    $   –            $ 275,991 
  30, 2012

  SIERRA WIRELESS, INC.

  CONSOLIDATED STATEMENTS OF CASH FLOWS

  (in thousands of U.S. dollars)

  (unaudited)
                    Three months ended              Nine months ended
                                              
                    September 30                    September 30
                   2012        2011             2012        2011      
  Cash flows
  provided (used)
  by:
  Operating
  activities
  Net earnings      $ 3,667       $ (998    )       $ 7,593       $ (15,610 )
  (loss)
  Items not
  requiring
  (providing)
  cash
  Amortization        7,082         7,456             20,795        24,524
  Stock-based         1,695         1,587             5,010         4,916
  compensation
  Deferred income     (2,032  )     (988    )         (3,905  )     (3,207  )
  taxes
  Loss (gain) on
  disposal of
  property,           57            (6      )         183           27
  equipment, and
  intangibles
  Taxes paid
  related to net      (4      )     –                 (4      )     –
  settlement of
  equity awards
  Changes in
  non-cash
  working capital
  Accounts            (6,970  )     (10,616 )         (11,380 )     11,051
  receivable
  Inventories         (6,044  )     (5,075  )         (5,127  )     (3,076  )
  Prepaid
  expenses and        (17,596 )     6,903             (20,557 )     9,406
  other
  Accounts
  payable and         16,065        (8,236  )         37,537        (19,252 )
  accrued
  liabilities
  Deferred
  revenue and        513         (69     )        (145    )    (161    )
  credits
  Cash flows
  provided (used)    (3,567  )    (10,042 )        30,000      8,618   
  by operating
  activities
  Investing
  activities
  Purchase of M2M
  business of         (55,218 )     –                 (55,218 )     –
  Sagemcom
  Purchase of
  Wavecom S.A.        –             (282    )         –             (1,787  )
  shares
  Additions to
  property, plant     (3,290  )     (3,357  )         (11,850 )     (11,920 )
  and equipment
  Proceeds from
  sale of             (8      )     14                56            29
  property and
  equipment
  Increase in
  intangible          (596    )     (1,265  )         (1,934  )     (3,222  )
  assets
  Net change in
  short-term         2,153       17,470          9,347       26,405  
  investments
  Cash flows
  provided (used)    (56,959 )    12,580          (59,599 )    9,505   
  by investing
  activities
  Financing
  activities
  Issuance of
  common shares,      158           15                427           480
  net of share
  issue costs
  Repurchase of       –             –                 (6,312  )     –
  common shares
  Purchase of
  treasury shares     –             (2,497  )         (2,489  )     (2,497  )
  for RSU
  distribution
  Repayment of
  long-term          (176    )    (261    )        (831    )    (888    )
  obligations
  Cash flows used
  by financing       (18     )    (2,743  )        (9,205  )    (2,905  )
  activities
  Effect of
  foreign
  exchange rate      (3,087  )    (818    )        (3,039  )    1       
  changes on cash
  and cash
  equivalents
  Cash and cash
  equivalents,
  increase            (63,631 )     (1,023  )         (41,847 )     15,219
  (decrease) in
  the period
  Cash and cash
  equivalents,       123,159     101,685         101,375     85,443  
  beginning of
  period
  Cash and cash
  equivalents,      $ 59,528     $ 100,662        $ 59,528     $ 100,662 
  end of period
  Supplemental
  disclosures:
  Net Income
  taxes paid        $ 321         $ 592             $ 1,261       $ (1,167  )
  (received)
  Net interest       4           35              (40     )    88      
  paid (received)

SIERRA WIRELESS, INC.

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(in thousands of U.S. dollars, except where otherwise stated)

(unaudited)
                 2012                                                  2011                                                
                  YTD          Q3           Q2           Q1            YTD          Q3           Q2           Q1
                                                                                                                     
Revenue - GAAP     $ 480,345    $ 162,638    $ 167,441    $ 150,266    $ 430,990    $ 146,827    $ 139,888    $ 144,275 
and Non-GAAP
                                                                                                                     
Gross Margin -     $ 143,958     $ 47,857      $ 51,335      $ 44,766      $ 121,898     $ 43,334      $ 39,100      $ 39,464
GAAP
Stock-based         243         82          78          83          299         89          97          113     
compensation
Gross Margin -     $ 144,201    $ 47,939     $ 51,413     $ 44,849     $ 122,197    $ 43,423     $ 39,197     $ 39,577  
Non-GAAP
                                                                                                                     
Earnings (loss)
from operations    $ 7,614       $ 1,051       $ 6,221       $ 342         $ (17,447 )   $ (1,763  )   $ (6,270  )   $ (9,414  )
- GAAP
Stock-based          5,010         1,695         1,636         1,679         4,916         1,587         1,697         1,632
compensation
Acquisition          2,795         2,196         599           -             -             -             -             -
Restructuring        2,209         498           1,531         180           856           881           (350    )     325
Integration          -             -             -             -             1,426         121           765           540
Acquisition
related             8,552       2,906       2,665       2,981       9,798       3,198       3,312       3,288   
amortization
Earnings (loss)
from operations    $ 26,180      $ 8,346       $ 12,652      $ 5,182       $ (451    )   $ 4,024       $ (846    )   $ (3,629  )
- Non-GAAP
Amortization
(excluding
acquisition         12,243      4,176       4,066       4,001       14,726      4,258       5,144       5,324   
related
amortization)
EBITDA             $ 38,423     $ 12,522     $ 16,718     $ 9,183      $ 14,275     $ 8,282      $ 4,298      $ 1,695   
                                                                                                                     
Net Earnings       $ 7,593       $ 3,667       $ 3,581       $ 345         $ (15,553 )   $ (998    )   $ (6,766  )   $ (7,789  )
(loss) - GAAP
Stock-based
compensation,
restructuring
and other,
integration, and
acquisition
related              17,778        7,118         5,891         4,769         16,798        5,570         5,503         5,725
amortization,
net of tax
Unrealized
foreign              (1,484  )     (1,218  )     (165    )     (101    )     (63     )     34            238           (335    )
exchange loss
(gain)
Income tax           (804    )     (804    )     -             -             -             -             -             -
adjustments
Non-controlling     -           -           -           -           (32     )    -           -           (32     )
interest
Net earnings
(loss) -           $ 23,083     $ 8,763      $ 9,307      $ 5,013      $ 1,150      $ 4,606      $ (1,025  )   $ (2,431  )
Non-GAAP
                                                                                                                     
Diluted
earnings (loss)
per share -
GAAP (in
dollars)
GAAP               $ 0.24        $ 0.12        $ 0.11        $ 0.01        $ (0.50   )   $ (0.03   )   $ (0.22   )   $ (0.25   )
Non-GAAP           $ 0.74        $ 0.28        $ 0.30        $ 0.16        $ 0.04        $ 0.15        $ (0.03   )   $ (0.08   )

SIERRA WIRELESS, INC.

SEGMENTED RESULTS

(in thousands of U.S. dollars)

(unaudited)
                                                         
                Three months ended September   Nine months ended September
                  30                               30
                 2012            2011          2012           2011
M2M
Revenue           $   86,155       $   75,315      $   240,643     $  221,951
Cost of goods        58,143          49,667         161,788       149,732
sold
Gross margin      $   28,012       $   25,648      $   78,855      $  72,219
Gross margin %        32.5%            34.1%           32.8%          32.5%
                                                                      
Mobile
Computing
Revenue           $   76,483       $   71,512      $   239,702     $  209,039
Cost of goods        56,638          53,826         174,599       159,360
sold
Gross margin      $   19,845       $   17,686      $   65,103      $  49,679
Gross margin %        25.9%            24.7%           27.2%          23.8%

  SIERRA WIRELESS, INC.

  REVENUE BY SEGMENT AND PRODUCT

  (in thousands of U.S. dollars)

  (unaudited)
                                                         
                     Three months ended         Nine months ended
                       September 30                 September 30
                      2012         2011         2012          2011
  M2M
  AirPrime Embedded
  Wireless Modules     $  73,249     $  63,635      $  199,961     $  186,089
  (excludes PC OEMs)
  (1)
  AirLink
  Intelligent             11,262        9,928          33,291         28,910
  Gateways and
  Routers
  AirVantage M2M
  Cloud Platform and     1,644        1,752         7,391         6,952
  Other
                       $  86,155     $  75,315      $  240,643     $  221,951
                                                                      
  Mobile Computing
  AirCard Mobile
  Broadband Devices    $  61,066     $  60,453      $  187,959     $  177,442
  (2)
  AirPrime Embedded
  Wireless Modules        14,018        9,771          47,119         28,375
  for PC OEMs
  Other                  1,399        1,288         4,624         3,222
                       $  76,483     $  71,512      $  239,702     $  209,039

(1) AirPrime Embedded Wireless Modules includes revenue generated from the
acqusition of the M2M business of Sagemcom from the date of acquisition on
August 1, 2012 to September 30, 2012 of $4,630.

(2) Clearwire contributed $nil in mobile computing revenue in the three and
nine months ended September 30, 2012 compared to $nil and $8,366 in the three
and nine months ended September 30, 2011, respectively.

Contact:

Sierra Wireless, Inc.
Media Contact:
Sharlene Myers
Manager, Global Public Relations
+1 (604) 232-1445
smyers@sierrawireless.com
or
Investor Contact:
David G. McLennan
Chief Financial Officer
+1 (604) 231-1181
investor@sierrawireless.com
 
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