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 2009 we experienced solid revenue, record unit volume shipments, strong cash flow, significant improvement in gross margin and we achieved positive non-GAAP earnings from operations earlier than expected" said Jason Cohenour, President and Chief Executive Officer. "Gross margin improved 720 basis points sequentially, driven by product cost reductions and early synergy returns from our acquisition of Wavecom. Our strong gross margin, combined with good cost management, drove better than expected non-GAAP earnings. Additionally, we have started to experience some of the diversification benefits expected from our acquisition of Wavecom. Customer concentration was reduced and our product line and geographical diversification improved during the quarter.

While executing on our business, we also completed our acquisition of 100% of the Wavecom shares and made good progress on our integration of the two companies. We have announced a new-look executive team, implemented organizational structure changes, took significant cost reduction steps, captured early product cost synergies and leveraged our combined resources to secure OEM design wins representing market share gains. Our integration is going well and is on track.

As we look forward, we are focused on continued strong business execution in a challenging environment and completing our successful integration with Wavecom. We remain confident that when the business environment strengthens, we will be well positioned with a broad and diversified product line, a long list of blue chip customers and partners, a strong global presence, a strong balance sheet and an excellent team."

Q2 2009 Financial Results - GAAP

Our revenue for the second quarter of 2009 was $135.3 million, gross margin was $47.1 million, or 34.8% of revenue, operating expenses were $63.3 million, loss from operations was $16.2 million and our net loss was $5.9 million, or loss per share of $0.19.

Q2 2009 Financial Results - Non-GAAP

Our non-GAAP results exclude transaction costs related to Wavecom, restructuring costs, integration costs, stock based compensation expense, acquisition related amortization, and foreign exchange gains and losses related to the Wavecom acquisition. Adjusting for these amounts, our non-GAAP results for Q2 2009 are as follows:

                                           Q2 2009                  Q2 2008                               --------------------------------     --------                                 Sierra    Wavecom Consolidated Consolidated   (in millions of               ------    ------- ------------ ------------    U.S. dollars)              Non-GAAP    Non-GAAP    Non-GAAP    Non-GAAP                               --------    --------    --------    --------    Revenue - GAAP and Non-GAAP  $ 101.9     $  33.4     $ 135.3     $ 155.7    Gross margin - GAAP          $  32.9     $  14.2     $  47.1     $  43.2     Stock-based compensation       0.1           -         0.1         0.1                               --------    --------    --------    --------   Gross margin - Non-GAAP      $  33.0     $  14.2     $  47.2     $  43.3    Earnings (loss) from    operations - GAAP           $   5.0     $ (21.2)    $ (16.2)    $  14.4     Transaction costs              0.8           -         0.8         0.7     Restructuring costs            0.6         7.9         8.5           -     Integration costs              0.7         0.2         0.9           -     Stock-based compensation       2.0         0.6         2.6         1.7     Acquisition related      amortization                  0.6         5.6         6.2         0.9                               --------    --------    --------    --------   Earnings from operations    - Non-GAAP                  $   9.7     $  (6.9)    $   2.8     $  17.7                               --------    --------    --------    --------    Net earnings (loss) - GAAP                           $  (5.9)    $  11.0     Transaction, restructuring,      integration, stock-based      compensation and      acquisition amortization      costs, net of tax                                    18.8         2.3     Unrealized foreign      exchange gain                                       (11.0)          -     Non-controlling interest                              (0.4)          -                                                       --------    --------   Net earnings - Non-GAAP                              $   1.5     $  13.3                                                       --------    --------    Diluted earnings (loss)    per share - GAAP                                    $ (0.19)    $  0.35   Diluted earnings per    share - Non-GAAP                                    $  0.05     $  0.42    On a non-GAAP basis, results for the second quarter of 2009, relative to   guidance provided on April 30, 2009 are as follows:        Second quarter revenue for 2009 of $135.3 million was lower than our       guidance of $139.0 million. Our earnings from operations were $2.8       million, better than our guidance of a loss from operations of $2.0       million. Our net earnings of $1.5 million, or diluted earnings per       share of $0.05, were better than our guidance of a net loss of $2.0       million, or loss per share of $0.06.    On a non-GAAP basis, results for the second quarter of 2009, compared to   the second quarter of 2008 are as follows:        Second quarter revenue decreased by 13% to $135.3 million in 2009,       compared to $155.7 million for the same period in 2008. Gross margin       for the second quarter of 2009 was 34.9% of revenue, compared to       27.8% for the same period in 2008. Operating expenses were $44.5       million and earnings from operations were $2.8 million in the second       quarter of 2009, compared to $25.7 million and $17.7 million,       respectively, in the same period of 2008. Net earnings for the second       quarter of 2009 were $1.5 million, or diluted earnings per share of       $0.05, compared to net earnings of $13.3 million, or diluted earnings       per share of $0.42, in the same period of 2008. Our weighted average       shares outstanding used in calculating earnings per share decreased       to 31.1 million in the second quarter of 2009 from 31.5 million in       the prior year because we repurchased shares under our normal course       issuer bid.    On a non-GAAP basis, results for the second quarter of 2009, compared to   the first quarter of 2009 are as follows:        Revenue for the second quarter of 2009 increased by 21% to $135.3       million, compared to $111.4 million in the first quarter of 2009.       Gross margin was 34.9% of revenue in the second quarter of 2009,       compared to 27.7% in the first quarter of 2009. Operating expenses       were $44.5 million and earnings from operations were $2.8 million in       the second quarter of 2009, compared to $28.6 million and $2.2       million, respectively, in the first quarter of 2009. Net earnings for       the second quarter of 2009 was $1.5 million, or diluted earnings per       share of $0.05, compared to $1.8 million, or diluted earnings per       share of $0.06 in the first quarter of 2009.   

Our balance sheet remains strong, with $131.5 million of cash, cash equivalents and short-term investments at June 30, 2009. In the second quarter of 2009, we generated $18.5 million of cash from operations on a GAAP basis.

Acquisition Synergies and Cost Reduction Plans

We are implementing an action plan that we expect will capture significant product and operating cost savings independent of the acquisition of Wavecom, as well as revenue, product cost and operating expense synergies resulting from the acquisition of Wavecom.

With respect to operating expenses, we have already implemented several cost reduction activities which have been previously disclosed. We believe that our expense reduction plan will enable us to achieve quarterly non-GAAP operating expenses of approximately $40.0 million in Q1 2010. This cost structure target represents a quarterly reduction of $8.9 million from the pre-acquisition combined Q4 2008 non-GAAP operating expenses of Wavecom and Sierra Wireless of $48.9 million. The estimated $36.0 million annualized non-GAAP cost savings is driven by a combination of cost synergies resulting from the acquisition of Wavecom, as well as cost reduction activities that are independent of the combination.

With respect to product cost, we have already implemented synergy actions that have resulted in product cost savings. Such actions include staff rationalization and common component supplier price negotiations. We believe that additional product cost savings will be achieved over time through a combination of phased actions including manufacturing facility rationalization, consolidation of logistics activities, and product platform harmonization which increases component commonality. We believe that these synergy actions will result in a per unit product cost reduction of approximately 3% - 4% by the end of 2010.

With respect to revenue, we believe that the improved market position of the combined company will result in incremental revenue gains over time. As a combined company, we believe we have the broadest product portfolio and global technical support capability in our industry, as well as scale and product cost advantages relative to our peers. We believe that these enhanced market position advantages have already resulted in OEM design wins that represent market share gains.

In the second quarter of 2009, we incurred a pre-tax charge of approximately $8.9 million related to the cost reduction initiatives already implemented.

   Second Quarter and Recent Highlights Included:    -   Our Sierra Wireless USB 598 modem for EV-DO Rev A networks was       launched with Telus, which is the first CDMA operator using our TRU-       Update feature, a managed service providing automatic firmware,       driver and application updates.    -   Our AirCard 402 for EV-DO Rev A networks, a 2-in-1 mobile broadband       card designed to fit both PC card and ExpressCard slots, commenced       commercial shipments and was launched by Sprint.    -   Our new Q26 Elite Wireless CPU(R) for CDMA 1X passed all regulatory       and interoperability testing and was approved for use on the Verizon       Wireless, Sprint and Aeris networks. The Q26 Elite is ruggedized for       extreme environmental conditions and supports GPS which makes it       suitable for fleet management and tracking applications.