-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JN5UxY3HsQFm9cbrvy6RMdRpm5xOSF5z8zhSlJNpXFbLt7XU9FUQu2oxnfZkLE9+ IRdvig1AxubFzIHad37JRA== 0001047469-03-003831.txt : 20030204 0001047469-03-003831.hdr.sgml : 20030204 20030204132705 ACCESSION NUMBER: 0001047469-03-003831 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIERRA WIRELESS INC CENTRAL INDEX KEY: 0001111863 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-30718 FILM NUMBER: 03538048 BUSINESS ADDRESS: STREET 1: 13575 COMMERCE PARKWAY STREET 2: SUITE 150 CITY: RICHMOND BC CANADA V STATE: A1 ZIP: 00000 6-K 1 a2102313z6-k.txt 6-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------ FORM 6-K Report of Foreign issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 ----------- For the Month of January 2003 ------------ (Commission File. No 0-30718). ----------- SIERRA WIRELESS, INC., A CANADA CORPORATION ----------------------------------------------------- (Translation of registrant's name in English) 13811 Wireless Way RICHMOND, BRITISH COLUMBIA, CANADA V6V 3A4 ----------------------------------------------------- (Address of principal executive offices and zip code) Registrant's Telephone Number, including area code: 604-231-1100 Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F: Form 20-F 40-F X ----- ----- Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: Yes: No: X ----- ----- NEWS RELEASE TRANSMITTED BY CCN DISCLOSURE FOR: Sierra Wireless, Inc. TSX: SW Nasdaq: SWIR January 30, 2003 Sierra Wireless Reports Fourth Quarter and Fiscal Year 2002 Results VANCOUVER, BRITISH COLUMBIA - Sierra Wireless (NASDAQ: SWIR, TSX: SW) is reporting better than expected fourth quarter results, including revenue of $22.5 million, a profit of $1.3 million and positive cash flow. "We are pleased to report further growth and continued profitability for the fourth quarter, a gratifying end to a most difficult year. Sales of our newer 2.5G products in North America, Europe, and the Asia-Pacific region were among the highlights of the quarter", said David Sutcliffe, Chairman and Chief Executive Officer. "Looking to the year ahead, we expect overall economic and industry conditions to continue to be challenging. Our business operating premise is profitable growth and our priorities remain expansion of our distribution channels, sell through to end customers and investment for future growth." Our results are reported in US dollars and are prepared in accordance with United States generally accepted accounting principles. The information provided below, where described as adjusted, excludes amounts described under the heading "Summary of Adjustments". The effect on net profit of these items is a $0.2 million positive contribution to the fourth quarter. Results for the fourth quarter of 2002, relative to company guidance provided on October 22, 2002: Fourth quarter adjusted revenue for 2002 of $22.2 million exceeded our guidance range of $20.0 to $22.0 million. Our adjusted net earnings of $1.1 million, or adjusted diluted earnings per share of $0.06, were better than our guidance of net earnings of approximately $0.5 to $1.0 million, or diluted earnings per share of $0.03 to $0.06. Results for the fourth quarter of 2002, compared to the third quarter of 2002: Our adjusted revenue for the three months ended December 31, 2002 amounted to $22.2 million, compared to $20.1 million in the third quarter, an increase of 11%. Revenue grew as a result of increasing 2.5G AirCard sales in North America, Europe, and the Asia-Pacific region. Adjusted gross margins were $8.1 million, or 36%, compared to $7.3 million in the third quarter, or 36%. Gross margins remained stable compared to the previous quarter on a percentage basis. Adjusted operating expenses were $7.0 million, compared to $6.8 million in the previous quarter. This increase reflects the variable costs related to increased sales as well as an increase in insurance premiums. Our adjusted gross research and development investments were $2.6 million, compared to $3.6 million in the third quarter. Our adjusted net earnings were $1.1 million for the three months ended December 31, 2002, compared to $0.5 million for the three months ended September 30, 2002. Our adjusted diluted earnings per share were $0.06 for the three months ended December 31, 2002, compared to $0.03 for the three months ended September 30, 2002. 2 Results for the 2002 fiscal year: Revenue for the year ended December 31, 2002 amounted to $77.1 million and gross margin was $8.0 million. Adjusted revenue for the year ended December 31, 2002 amounted to $73.4 million and adjusted gross margin, excluding restructuring and other charges of $20.8 million, was $25.1 million, or 34%. Adjusted operating expenses were $31.6 million, excluding restructuring and other charges of $12.9 million and the settlement related to Metricom of $1.8 million. Our net loss was $41.7 million and our loss per share was $2.56. Our adjusted net loss, excluding restructuring and other charges of $37.7 million and the $1.8 million Metricom settlement, was $5.8 million, or an adjusted loss per share of $0.35. Summary of Adjustments During the fourth quarter, we revised our estimates of restructuring and other costs and recorded an additional net write down of inventory of $1.9 million and a net recovery of $0.3 million related primarily to fixed assets. The additional write down of inventory reflected a more rapid than expected decline in demand for CDPD products. In addition, we have settled with the reorganized debtor of Metricom and recorded a recovery of $1.8 million. The net effect of these items is a $0.2 million positive contribution to fourth quarter net profits. We have reclassified certain of the figures presented for comparison purposes to conform to the financial statements presentation that we adopted as of the fourth quarter of 2002 for certain research and development funding arrangements. We now record certain research and development funding arrangements as revenue rather than as operating expense relief and the effect in the fourth quarter of this change is to increase each of revenue, gross margin, and net research and development expense by $0.3 million and to leave net profits unchanged. Fourth Quarter Highlights Included: o Progress on products for CDMA 1xRTT networks and channels included: o Verizon Wireless' Express Network(SM) and Sierra Wireless's AirCard(R) 555 were honored with Network World's "Best of the Tests" Award in the Cool Tools Hardware category. o Together with Citrix Systems, Inc., Ingram Micro Inc., and Sprint, we announced a bundled enterprise wireless data solution, which includes the PCS Connection Card by Sierra Wireless (AirCard 550), to be sold through the PCS Business SolutionsSM Program. o Together with Sprint, we announced the availability of a high-speed wireless PC Card. The PCS Connection Card(TM) by Sierra Wireless (AirCard 550) is designed to wirelessly enable laptops and handhelds via the enhanced Sprint Nationwide PCS Network. o Global Wireless Data will distribute the Sierra Wireless AirCard 555, with service on Verizon Wireless' high-speed data network, to systems integrators, value-added resellers, agents, and dealers across the United States. o Lucent Technologies publicly demonstrated seamless handoffs of wireless data calls from a wireless local area network to a third-generation CDMA2000(TM) 1xEV/DO network. The demonstrations, utilizing a prototype Sierra Wireless AirCard, showed laptop data calls being switched between these two types of wireless access networks with no interruption in service. 3 o Progress on products for GSM/GPRS networks and channels included: o T-Mobile USA, Inc., a provider of wireless voice and data solutions for the enterprise, expanded its business product portfolio to include the global-ready Sierra Wireless AirCard 750. The announcement represents the first U.S. release of the Sierra Wireless AirCard 750. o We launched the AirCard 750 GSM/GPRS Wireless PC Card Modem with KPN Mobile who will offer the Sierra Wireless AirCard 750, with added voice functionality, to markets in the Netherlands. o Together with Check Point Software Technologies and T-Mobile USA, we will deliver secure wireless data solutions to the enterprise market. The solution combines Check Point's VPN-1(R)/ FireWall-1(R) and the Sierra Wireless AirCard 750 running on T-Mobile's GSM/GPRS network. o We signed a distribution agreement with Multicap to distribute the AirCard 750 GSM/GPRS wireless network card to the European marketplace including Belgium, the Netherlands, and Luxemburg. o Other Developments o We signed a North American distribution agreement with Tech Data to distribute Sierra Wireless AirCard products including the AirCard 500 series, operating on high-speed CDMA2000 1X networks and the AirCard 700 series, designed for use with global GSM/GPRS networks. o The WirelessReady(TM) Alliance, founded by us in 1998, held its 4th annual partner conference with leaders from the wireless industry including Citrix, Hewlett Packard, Microsoft, Qualcomm, and Toshiba. o Our Board of Directors appointed Peter Ciceri as Lead Independent Director. In this capacity, Mr. Ciceri will be providing leadership to enhance board effectiveness, managing the board and acting as liaison between the board and management. Financial Guidance For the first quarter ending March 31, 2003, we are providing the following guidance reflecting our current business indicators and expectations. Inherent in this guidance is higher than normal risk resulting from uncertainty associated with timing of volume shipments to channels and with the rate of end customer adoption of newer products. We expect revenue to be between $19.0 and $20.0 million, reflecting expected seasonal demand and lower sales of CDPD products. We expect gross margin on a percentage basis to improve to approximately 38%. We expect operating expenses to be approximately $7.1 million, reflecting our continued investment for future growth. We expect net earnings of between $0.1 and $0.3 million and diluted earnings per share between $0.01 and $0.02 per share. We expect cash flow to be neutral for the quarter. 4 Forward-Looking Statements This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, plans and timing for the introduction or enhancement of our services and products, statements about future market conditions, supply conditions, channel and end customer demand conditions, revenues, gross margins, operating expenses, profits, and other expectations, intentions, and plans contained in this press release that are not historical fact. Our expectations regarding future revenues depend upon our ability to develop, manufacture, and supply products that we do not produce today and that meet defined specifications. When used in this press release, the words "plan", "expect", "believe", and similar expressions generally identify forward-looking statements. These statements reflect our current expectations. They are subject to a number of risks and uncertainties, including, but not limited to, changes in technology and changes in the wireless data communications market. In light of the many risks and uncertainties surrounding the wireless data communications market, you should understand that we cannot assure you that the forward-looking statements contained in this press release will be realized. About Sierra Wireless Sierra Wireless, Inc. is a leading provider of wireless data communications products. Sierra Wireless develops and markets wireless PC Cards for portable computers, OEM modules for embedded applications, and rugged vehicle-mounted wireless systems. Sierra Wireless is the founding member of the WirelessReady(TM) Alliance, an alliance of industry-leading hardware, software, and service companies committed to the delivery of complete and compelling wireless data solutions. For more information on Sierra Wireless, visit its web site at www.sierrawireless.com. "AirCard" is a registered trademark of Sierra Wireless, Inc. All other trademarks or service marks in this news release are the trademarks or service marks of their respective owners. Conference Call and Instant Replay We will host a conference call to review our results on January 30, 2003 at 2:30 PM PST, 5:30 PM EST. To participate in this conference call, please dial the following toll free number approximately five minutes prior to the commencement of the call: 1-800-446-4472 Should you be unable to participate, Instant Replay will be available for 72 hours following the conference call by dialing: 1-888-509-0081 We look forward to having you participate in our call. FOR FURTHER INFORMATION PLEASE CONTACT: Sierra Wireless, Inc. Peter W. Roberts, CA, CPA Chief Financial Officer (604) 231-1192 Website: www.sierrawireless.com Email: roberts@sierrawireless.com INDUSTRY: CMT SUBJECT: ERN 5 SIERRA WIRELESS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT (Expressed in thousands of United States dollars, except per share amounts) (Prepared in accordance with United States generally accepted accounting principles (GAAP))
THREE MONTHS ENDED YEARS ENDED DECEMBER 31, DECEMBER 31, ---------------------- ----------------------- 2002 2001 2002 2001 ---------- --------- ---------- ---------- (UNAUDITED) (AUDITED) Revenue............................................................... $ 22,507 $ 8,773 $ 77,130 $ 62,348 Cost of goods sold.................................................... 15,947 5,254 69,132 47,035 --------- --------- --------- --------- Gross margin.......................................................... 6,560 3,519 7,998 15,313 --------- --------- --------- --------- Expenses: Sales and marketing................................................. 3,133 2,702 11,564 12,726 Research and development, net ...................................... 2,263 4,658 14,896 16,902 Administration...................................................... (444) 1,900 4,708 10,460 Restructuring and other charges .................................... (224) -- 12,869 -- Amortization........................................................ 555 492 2,331 2,084 --------- --------- --------- --------- 5,283 9,752 46,368 42,172 --------- --------- --------- --------- Earnings (loss) from operations....................................... 1,277 (6,233) (38,370) (26,859) Other income.......................................................... 61 273 170 2,317 --------- --------- --------- --------- Earnings (loss) before income taxes................................... 1,338 (5,960) (38,200) (24,542) Income tax expense (recovery)......................................... 30 (798) 3,463 (273) --------- --------- --------- --------- Net earnings (loss)................................................... 1,308 (5,162) (41,663) (24,269) Deficit, beginning of period.......................................... (74,872) (26,739) (31,901) (7,632) --------- --------- --------- --------- Deficit, end of period................................................ $ (73,564) $ (31,901) $ (73,564) $ (31,901) ========= ========= ========= ========= Earnings (loss) per share for the period: Basic............................................................... $ 0.08 $ (0.32) $ (2.56) $ (1.50) Diluted............................................................. $ 0.08 $ (0.32) $ (2.56) $ (1.50) ========= ========= ========= ========= Weighted average number of shares (in thousands) Basic............................................................... 16,334 16,173 16,304 16,129 Diluted............................................................. 16,733 16,173 16,304 16,129 ========= ========= ========= =========
6 SIERRA WIRELESS, INC. CONSOLIDATED BALANCE SHEETS (Expressed in thousands of United States dollars) (Prepared in accordance with United States GAAP) (Audited)
DECEMBER 31, ---------------------- 2002 2001 --------- ---------- ASSETS Current assets: Cash and cash equivalents................................................................. $ 34,841 $ 12,085 Short-term investments.................................................................... -- 31,879 Accounts receivable....................................................................... 13,865 10,504 Inventories .............................................................................. 6,673 25,591 Deferred income taxes..................................................................... -- 224 Prepaid expenses.......................................................................... 864 1,180 --------- ---------- 56,243 81,463 Fixed assets................................................................................ 7,198 14,694 Deferred income taxes....................................................................... 500 4,030 Intangible assets........................................................................... 6,907 10,054 Other....................................................................................... 241 483 --------- ---------- $ 71,089 $ 110,724 ========= ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable.......................................................................... $ 3,017 $ 4,356 Accrued liabilities....................................................................... 12,431 12,555 Deferred revenue and credits.............................................................. 297 1,050 Current portion of long-term liabilities.................................................. 2,803 341 Current portion of obligations under capital lease........................................ 831 947 --------- ---------- 19,379 19,249 Long-term liabilities....................................................................... 2,896 671 Obligations under capital lease............................................................. 60 761 Shareholders' equity: Share capital............................................................................. 123,047 122,673 Deficit................................................................................... (73,564) (31,901) Accumulated other comprehensive income Cumulative translation adjustments..................................................... (729) (729) ---------- ---------- 48,754 90,043 --------- ---------- $ 71,089 $ 110,724 ========= ==========
7 SIERRA WIRELESS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in thousands of United States dollars) (Prepared in accordance with United States GAAP)
THREE MONTHS ENDED YEARS ENDED DECEMBER 31, DECEMBER 31, ----------------------- ---------------------- 2002 2001 2002 2001 --------- --------- --------- --------- (UNAUDITED) (AUDITED) Cash flows from operating activities: Net earnings (loss) for the period................................. $ 1,308 $ (5,162) $ (41,663) $ (24,269) Adjustments to reconcile net earnings (loss) to net cash provided by operating activities Amortization.................................................... 1,358 1,808 6,788 6,661 Non-cash restructuring and other charges........................ 2,688 -- 28,593 -- Loss on disposal................................................ 475 -- 597 -- Deferred income taxes........................................... -- (151) 3,754 (15) Accrued warrants................................................ 97 101 481 671 Changes in operating assets and liabilities Accounts receivable............................................. (502) 6,034 (3,361) 12,084 Inventories..................................................... (740) (5,696) 2,517 (13,031) Prepaid expenses................................................ (467) (302) 159 59 Accounts payable................................................ (1,038) (515) (1,339) (6,945) Accrued liabilities............................................. (570) 5,026 (463) 3,420 Deferred revenue................................................ (21) 450 (753) 300 --------- --------- --------- --------- Net cash provided by (used in) operating activities................ 2,588 1,593 (4,690) (21,065) Cash flows from investing activities: Proceeds on disposal............................................ 307 -- 338 -- Purchase of fixed assets........................................ (235) (597) (2,219) (10,523) Increase in intangible assets................................... (428) (1,194) (1,431) (3,328) Increase in other assets........................................ -- -- -- (143) Purchase of short-term investments.............................. -- (14,965) (14,662) (69,411) Proceeds on maturity of short-term investments.................. 6,008 19,966 46,541 109,676 --------- --------- --------- --------- Net cash provided by investing activities.......................... 5,652 3,210 28,567 26,271 Cash flows from financing activities: Issue of common shares.......................................... 28 110 374 499 Increase in long-term liabilities............................... -- -- -- 255 Repayment of long-term liabilities.............................. (285) (135) (1,495) (766) --------- --------- --------- --------- Net cash used in financing activities.............................. (257) (25) (1,121) (12) --------- --------- --------- --------- Net increase in cash and cash equivalents............................ 7,983 4,778 22,756 5,194 Cash and cash equivalents, beginning of period....................... 26,858 7,307 12,085 6,891 --------- --------- --------- --------- Cash and cash equivalents, end of period..............................$ 34,841 $ 12,085 $ 34,841 $ 12,085 ========= ========= ========= =========
8 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Sierra Wireless, Inc. By: /s/ PETER W. ROBERTS ----------------------------------- Peter W. Roberts, Chief Financial Officer Date: February 4, 2003 9 -----END PRIVACY-ENHANCED MESSAGE-----