VANCOUVER, Oct. 28 /CNW/ -- Sierra Wireless, Inc. (NASDAQ: SWIR, TSX: SW) is reporting third quarter 2009 results.

Our results are reported in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles.

"In the third quarter of 2009, solid revenue, strong gross margin and significant cost reductions drove better than expected non-GAAP earnings from operations. We also continued to deliver strong cash flow from operations and added to our cash position." said Jason Cohenour, President and Chief Executive Officer. "In addition, we continued to experience important benefits of the Wavecom acquisition, including improved diversification, lower product costs and growing momentum in our Solutions & Services business. We believe that our integration with Wavecom is going well and is on track. Our operating cost trajectory is aligned with our expectations and we have made strong progress on site rationalization, deployment of our new organizational structure and systems integration. Additionally, we continued to leverage the strength of our combined position to drive new OEM design wins representing market share gains.

As we look forward, we are focused on continued strong business execution in a challenging environment and completing our successful integration with Wavecom. We believe that our demand outlook has improved, although short term growth is likely to be tempered by constraints in the flash memory supply chain. We remain confident that as the business environment strengthens, we are 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."

Q3 2009 Financial Results - GAAP

Our revenue for the third quarter of 2009 was $135.7 million, gross margin was $47.2 million, or 34.8% of revenue, operating expenses were $57.4 million, loss from operations was $10.2 million and our net loss was $7.6 million, or loss per share of $0.25.

Q3 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 Q3 2009 are as follows:

Q3 2009                   Q3 2008
--------------------------------    ---------
(in millions of              Sierra    Wavecom Consolidated Consolidated
U.S. dollars)              Non-GAAP    Non-GAAP    Non-GAAP     Non-GAAP
--------    --------    --------     --------
Revenue - GAAP and
Non-GAAP                  $ 102.6     $  33.1     $ 135.7      $ 136.8
Gross margin - GAAP        $  33.0     $  14.2     $  47.2      $  37.8
Stock-based compensation     0.1           -         0.1          0.1
--------    --------    --------     --------
Gross margin - Non-GAAP    $  34.6     $  14.2     $  47.3      $  37.9
Earnings (loss) from
operations - GAAP         $    6.0    $ (16.2)    $ (10.2)     $   9.8
Transaction costs             0.4          -         0.4            -
Restructuring costs             -        5.3         5.3            -
Integration costs             0.8        0.5         1.3            -
Stock-based
compensation                 1.6        0.1         1.7          1.6
Acquisition related
amortization                 0.6        5.9         6.5          0.7
--------    --------    --------     --------
Earnings from operations
- Non-GAAP                $    9.5    $  (4.4)    $   5.1      $  12.1
--------    --------    --------     --------
Net earnings (loss) -
GAAP                                              $  (7.6)     $   7.3
Transaction,
restructuring,
integration, stock-
based compensation and
acquisition amortization
costs, net of tax                                  15.0          1.6
Unrealized foreign exchange gain                    (1.5)           -
Non-controlling interest                               -            -
--------     --------
Net earnings - Non-GAAP                            $   5.9      $   8.9
--------     --------
Diluted earnings (loss) per share - GAAP           $ (0.25)     $  0.23
Diluted earnings per share - Non-GAAP              $  0.19      $  0.28
On a non-GAAP basis, results for the third quarter of 2009, relative
to guidance provided on July 30, 2009 are as follows:
Third quarter revenue for 2009 of $135.7 million was consistent
with our guidance of $135.0 million. Our earnings from operations
were $5.1 million, better than our guidance of earnings from
operations of $2.0 million. Our net earnings of $5.9 million, or
diluted earnings per share of $0.19, were better than our guidance
of a net earnings of $2.0 million, or earnings per share of $0.06.
On a non-GAAP basis, results for the third quarter of 2009, compared
to the third quarter of 2008 are as follows:
Third quarter revenue decreased slightly to $135.7 million in
2009, compared to $136.8 million for the same period in 2008.
Gross margin for the third quarter of 2009 was 34.9% of revenue,
compared to 27.7% for the same period in 2008. Operating expenses
were $42.3 million and earnings from operations were $5.1 million
in the third quarter of 2009, compared to $25.7 million and
$12.2 million, respectively, in the same period of 2008. Net
earnings for the third quarter of 2009 were $5.9 million, or
diluted earnings per share of $0.19, compared to net earnings of
$8.9 million, or diluted earnings per share of $0.28, in the same
period of 2008. Our weighted average shares outstanding used in
calculating earnings per share decreased to 31.1 million in the
third quarter of 2009 from 31.3 million in the prior year because
we repurchased shares under our normal course issuer bid.
On a non-GAAP basis, results for the third quarter of 2009, compared
to the second quarter of 2009 are as follows:
Revenue for the third quarter of 2009 increased slightly to
$135.7 million, compared to $135.3 million in the second quarter
of 2009. Gross margin was 34.9% of revenue in the third quarter of
2009 as well as the second quarter of 2009. Operating expenses
were $42.3 million and earnings from operations were $5.1 million
in the third quarter of 2009, compared to $44.5 million and
$2.8 million, respectively, in the second quarter of 2009. Net
earnings for the third quarter of 2009 were $5.9 million, or
diluted earnings per share of $0.19, compared to $1.5 million, or
diluted earnings per share of $0.05 in the second quarter of 2009.

Our balance sheet remains strong, with $135.9 million of cash, cash equivalents and short-term investments at September 30, 2009. In the third quarter of 2009, we generated $15.1 million of cash from operations on a GAAP basis.

Third Quarter and Recent Highlights Included:
-   We implemented the restructuring and integration of
Anyware Technologies, the Toulouse-based company that was a
subsidiary of Wavecom, SA. As a result of the restructuring,
Anyware's open source consulting business has been spun off and is
now an independent entity, separate from Sierra Wireless. The
remaining team has been fully integrated into Sierra Wireless as the
Solutions and Services business unit. This group is now dedicated to
creating and providing end to end solutions and portal services for
the M2M market. These solutions and services are sold to Operators,
OEMs and system integrators on a software-as-a-service ("SaaS") basis
around the world. The restructuring and integration of Anyware has
enabled us to reduce our fixed cost structure, while sharpening our
focus on end to end solutions for the machine-to-machine ("M2M")
market.
-   PSA Peugeot Citroën Group, a global leader in advanced automotive
technology, executed an agreement with our Solutions and Services
business unit to use our device management services for remote device
monitoring and delivery of software upgrades for cars equipped with
Sierra Wireless embedded automotive solutions.
-   Orbcomm, a global satellite data communications company, selected our
M2M services platform to enable their customers to manage subscribers
on both celestial and terrestrial networks, as well as for
comprehensive device management. The solution is expected to improve
the control and monitoring of remote devices, help customers manage
wireless service costs and enable simplified billing across multiple
networks.
-   We launched ACEnet services, a web based device management platform
tailored for our AirLink intelligent gateway products. Using a SaaS
model, ACEnet Services offers customers a secure hosted platform for
configuring, controlling and managing their entire deployment of
AirLink intelligent gateway devices using a standard web browser. In
the coming months, ACEnet Services will be fully integrated with our
M2M Services platform.
-   NetComm further strengthened its 3G offerings under an agreement to
distribute our AirLink range of intelligent gateways in Australia and
New Zealand. This agreement expands our collaborative relationship
with NetComm, which has successfully integrated our embedded modules
into their wireless routers for enterprise, SOHO, and consumer
markets since 2007.
-   We signed a Memorandum of Understanding ("MOU") with T-Mobile that is
expected to lead to collaborative market activities and joint
solution offerings for the M2M market.