Sierra Wireless Reports First Quarter 2009 Results



    
    TSX: SW
    NASDAQ:   SWIR
    

    VANCOUVER, April 30 /CNW/ - Sierra Wireless, Inc. (NASDAQ:   SWIR, TSX: SW)
is reporting first 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 first quarter of 2009, we posted better than expected financial
results, introduced and launched several market leading products and completed
our acquisition of Wavecom," said Jason Cohenour, President and Chief
Executive Officer. "Our first quarter revenue, non-GAAP earnings and cash flow
from operations were all better than expected. We launched the world's first
HSPA+ products with Telstra in Australia and CSL in Hong Kong, while also
introducing new embedded module solutions and launching important high volume
successor products with key customers.
    While executing on our business, we were also able to complete our
acquisition of Wavecom and acquire the voting rights required to implement the
squeeze out of the remaining shareholders. We built strong momentum with our
integration activities and demonstrated the power of our combination at the
CTIA conference in April and with key customers. We firmly believe that this
combination will establish Sierra Wireless as a uniquely positioned global
leader in wireless for mobile computing and M2M.
    As we look forward, we are focused on continued strong business execution
in a challenging environment and a successful integration with Wavecom. We
remain confident that when the business cycle 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 and an excellent team."

    Q1 2009 Financial Results - GAAP

    Our revenue for the first quarter of 2009 amounted to $111.4 million,
gross margin was $30.7 million, or 27.6% of revenue, operating expenses were
$41.0 million, loss from operations was $10.3 million and our net loss was
$23.7 million, or loss per share of $0.76.

    Q1 2009 Financial Results - Non-GAAP

    Our non-GAAP results exclude the results of Wavecom from the date of
acquisition until March 31, 2009, transaction costs related to Wavecom,
restructuring costs, integration costs, stock based compensation expense,
acquisition related amortization, and foreign exchange gains and losses and
interest expense related to the Wavecom acquisition. Adjusting for these
amounts, our non-GAAP results for Q1 2009 are as follows:

    
    (in millions of U.S. dollars)                            Q1 09     Q1 08
                                                             -----     -----

    Revenue - GAAP......................................  $  111.4  $  141.9
      Wavecom revenue from March 1, 2009 to
       March 31, 2009...................................     (11.0)        -
                                                          --------- ---------
    Revenue - Non-GAAP..................................  $  100.4  $  141.9
                                                          --------- ---------

    Gross margin - GAAP                                   $   30.7  $   39.3
      Wavecom gross margin from March 1, 2009 to
       March 31, 2009...................................      (3.5)        -
      Stock-based compensation..........................       0.1       0.1
                                                          --------- ---------
    Gross margin - Non-GAAP.............................  $   27.3  $   39.4
                                                          --------- ---------

    Earnings (loss) from operations - GAAP..............  $  (10.3) $   11.4
      Wavecom loss from operations from March 1, 2009 to
       March 31, 2009...................................       3.0         -
      Transaction costs.................................       6.5         -
      Restructuring costs...............................       1.1         -
      Integration costs.................................       0.3         -
      Stock-based compensation..........................       2.0       1.6
      Acquisition related amortization..................       2.2       1.0
                                                          --------- ---------
    Earnings from operations - Non-GAAP.................  $    4.8  $   14.0
                                                          --------- ---------

    Net earnings (loss) - GAAP..........................  $  (23.7) $    9.7
      Wavecom net loss from March 1, 2009 to
       March 31, 2009...................................       3.0         -
      Transaction, restructuring, integration, stock-based
       compensation and acquisition amortization costs, net
       of tax...........................................      11.9       1.8
      Unrealized foreign exchange loss..................       9.1         -
      Interest expense..................................       4.3         -
      Non-controlling interest..........................      (0.3)        -
                                                          --------- ---------
    Net earnings - Non-GAAP.............................  $    4.3  $   11.5
                                                          --------- ---------

    Diluted earnings (loss) per share - GAAP............  $  (0.76) $   0.31
    Diluted earnings per share - Non-GAAP...............      0.14      0.37

    On a non-GAAP basis, results for the first quarter of 2009, relative to
guidance provided on February 10, 2009 are as follows:

    First quarter revenue for 2009 of $100.4 million was better than our
    guidance of $93.0 million. Our earnings from operations were
    $4.8 million, better than our guidance of a loss from operations of
    $0.5 million. Our net earnings of $4.3 million, or diluted earnings per
    share of $0.14, were better than our guidance of net earnings and diluted
    earnings per share of nil.

    On a non-GAAP basis, results for the first quarter of 2009, compared to
the first quarter of 2008 are as follows:

    First quarter revenue decreased by 29% to $100.4 million in 2009,
    compared to $141.9 million for the same period in 2008. Gross margin for
    the first quarter of 2009 was 27.2% of revenue, compared to 27.8% for the
    same period in 2008. Operating expenses were $22.4 million and earnings
    from operations were $4.8 million in the first quarter of 2009, compared
    to $25.5 million and $14.0 million, respectively, in the same period of
    2008. Net earnings for the first quarter of 2009 were $4.3 million, or
    diluted earnings per share of $0.14, compared to net earnings of
    $11.5 million, or diluted earnings per share of $0.37, in the same period
    of 2008. Our weighted average shares outstanding used in calculating
    earnings per share decreased to 31.0 million in the first quarter of 2009
    from 31.4 million in the prior year because our options outstanding did
    not have any dilutive impact and we had repurchased shares under our
    normal course issuer bid.

    On a non-GAAP basis, results for the first quarter of 2009, compared to
the fourth quarter of 2008 are as follows:

    Revenue for the first quarter of 2009 decreased by 24% to $100.4 million,
    compared to $132.9 million in the fourth quarter of 2008. Gross margin
    was 27.2% of revenue in the first quarter of 2009, compared to 27.5% in
    the fourth quarter of 2008. Operating expenses were $22.4 million and
    earnings from operations were $4.8 million in the first quarter of 2009,
    compared to $25.5 million and $11.1 million, respectively, in the fourth
    quarter of 2008. Net earnings for the first quarter of 2009 were
    $4.3 million, or diluted earnings per share of $0.14, compared to net
    earnings of $11.2 million, or diluted earnings per share of $0.36, in the
    fourth quarter of 2008.
    

    Our balance sheet remains strong, with $145.1 million of cash, cash
equivalents and short-term investments at March 31, 2009. Of the $145.1
million, $29.5 million is restricted cash that provides security for the
letter of credit issued in connection with the acquisition of Wavecom. In the
first quarter of 2009, we generated $10.5 million of cash from operations on a
GAAP basis. On a non-GAAP basis, we generated approximately $4.5 million of
cash from operations.

    
    First Quarter and Recent Highlights Included:

    -  We launched our USB 598 modem for EV-DO Rev A networks with Sprint for
       use on the Sprint Mobile Broadband Network.

    -  We announced that our USB 598 is available for use on the Verizon
       Wireless network, following successful completion of testing under the
       operator's Open Development Initiative.

    -  We introduced our USB 306 and USB 307, the world's first mobile
       broadband USB modems for HSPA+ networks. The new modems nearly triple
       the speed of other mobile broadband devices, with peak download speeds
       of 21 megabits per second (Mbps), making them the fastest mobile
       broadband devices available.

    -  Our new USB modem for HSPA+ networks became commercially available in
       Telstra's retail stores. The Next G Turbo 21 modem, also known as the
       Sierra Wireless USB 306, is the world's first commercially available
       HSPA+ mobile broadband modem.

    -  CSL Limited, a mobile network operator in Hong Kong, selected two
       Sierra Wireless USB modems to provide high-speed wireless connectivity
       for notebook computer users on the CSL network. The 1010 Next G
       Express 7, an HSPA USB modem also known as the Compass 889, is
       currently available and the 1010 Next G Express 21, an HSPA+ USB modem
       also known as the USB 306, is expected to be available in April
       through CSL's retail brands and enterprise channels.

    -  In February, we collaborated with Telefónica to demonstrate HSPA+
       mobile broadband technology at Mobile World Congress in Barcelona,
       using the new Sierra Wireless USB 306.

    -  We introduced 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, ensuring compatibility for future notebook upgrades. Our
       AirCard 402 commenced commercial shipments in Q1 and was launched by
       Sprint early in Q2.

    -  We introduced our new embedded module for HSPA+ networks, the MC8700,
       that allows OEMs to take advantage of the fastest mobile broadband
       speed available worldwide. Our MC8700 offers downlink speeds of up to
       21 Mbps and uplink speeds of up to 5.76 Mbps.

    -  Magneti Marelli, a broad range automotive supplier, selected our
       mobile broadband embedded modules with EMConnect(TM) firmware features
       for integration into its telematics products for safety, entertainment
       and satellite navigation applications.

    -  We introduced our new AirLink Helix line of integrated 3G wireless
       routers that provide critical business continuity and remote site
       connectivity with onboard intelligence, extensive routing features and
       comprehensive remote management capabilities.

    -  We announced that our AirLink line of intelligent Mobile and M2M
       (machine-to-machine) gateways, initially the PinPoint X and the Raven
       X, are expected to be available in Australia in the second quarter of
       2009.

    -  Wavecom and Telenor Connexion signed an agreement that allows them to
       offer a solution that provides easy accessibility to Telenor's network
       with Wavecom Wireless CPU devices by embedding the Telenor Connexion
       SIM component into the Wavecom devices. This solution targets high-
       volume applications such as telematics systems for automotive, on-
       board equipment for intelligent transport systems and smart meters for
       utility companies.

    -  We announced our first technology collaboration with Wavecom with our
       EVDO Fastrack Extreme, a wireless CPU that is equipped with our MC5727
       EV-DO Rev A embedded module.

    -  Our test laboratories in Richmond, BC, Canada and Carlsbad, CA, USA
       were granted CTIA Authorized Test Lab status which allows our OEM
       customers to undergo Over The Air (OTA) performance testing in our
       facilities, rather than having to send their solutions to an outside
       lab, thereby streamlining the development and launch process.

    -  We announced the expansion of our patent-pending TRU-Flow(TM)
       technology to include interoperability with Sierra Wireless EV-DO
       products. First launched in the company's HSPA product line in 2007 to
       address the issue of reduced data transfer speed during simultaneous
       upload and download, TRU-Flow is the only technology in the world to
       improve web page load times during uplink congestion, even with a
       virtual private network connection enabled.
    

    Acquisition of Wavecom S.A.

    On December 2, 2008, we announced an all-cash offer to purchase the
ordinary shares and OCEANE convertible bonds ("OCEANEs") of Wavecom S.A.
("Wavecom"), a global leader in wireless M2M solutions. The total value of the
transaction was approximately EUR 218 million, representing an enterprise
value of approximately EUR 85.5 million. We made a cash offer of EUR 8.50 per
ordinary share of Wavecom, and EUR 31.93 per OCEANE. The transaction was
implemented by way of concurrent but separate public tender offers in both
France and the United States for all Wavecom shares, all American Depository
Shares ("ADSs") representing Wavecom's ordinary shares and all OCEANEs issued
by Wavecom. On February 27, 2009, we completed our acquisition of 90.57% of
the voting rights of Wavecom and on March 11, 2009, we announced the
re-opening of the tender offer for a subsequent offering period which expired
on March 31, 2009.
    In total, the first offer and subsequent offer resulted in 14,401,859
ordinary shares (including ordinary shares represented by ADSs) and 2,571,037
OCEANEs being tendered. In addition, we also purchased 160,643 Wavecom
ordinary shares on the market during the subsequent offering period. Taking
into account the treasury shares and the shares held by officers and employees
that are subject to put/call arrangements, as of the close of the subsequent
offering period, we had acquired 95.4% of the voting rights of Wavecom.
    In accordance with applicable laws and regulations, we intend to
implement a squeeze-out of the Wavecom shares and OCEANEs that have not been
tendered to the offer and to request the delisting of Wavecom shares and
OCEANEs from Euronext and ADSs from Nasdaq. We expect the squeeze-out and
delisting to be completed during the second quarter of 2009.
    We expect the combination to establish Sierra Wireless as a uniquely
positioned global leader in wireless for mobile computing and M2M. We expect
the acquisition to significantly expand our position in the global M2M market
and increase our scale and capabilities in Europe and Asia.

    Expense Reduction Program

    On January 29, 2009, we implemented an expense reduction program that is
expected to reduce labor costs by approximately $5.5 million on an annualized
basis. This program, which was completed during the first quarter of 2009,
included the elimination of approximately 56 positions, representing 10% of
our workforce. In the first quarter of 2009, we incurred a pre-tax charge of
approximately $1.6 million, which includes $0.5 million of stock-based
compensation expense. The organizational changes included the resignation of
Mr. Trent Punnett, Senior Vice-President, Marketing and Corporate Development.

    Financial Guidance

    The following guidance for the second quarter of 2009 reflects our
current business indicators and expectations. This guidance is presented on a
non-GAAP basis, which excludes Wavecom transaction and integration costs,
restructuring costs, stock-based compensation expense, acquisition
amortization and foreign exchange on amounts related to the Wavecom
acquisition.
    Our guidance for the second quarter of 2009 reflects the uncertain macro
economic environment. Our guidance also includes some revenue contribution
from expected new product launches and the uncertainties associated with these
launches could affect our ability to achieve guidance.
    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.

    
                                  Sierra         Wavecom       Consolidated
                                  ------         -------       ------------
    Q2 2009 Guidance             Non-GAAP        Non-GAAP        Non-GAAP
    ----------------             --------        --------        --------

    Revenue                   $108.0 million  $31.0 million   $139.0 million
    Earnings (loss) from
     operations               $7.5 million    $(9.5) million  $(2.0) million
    Net loss                                                  $(2.0) million
    Loss per share                                            $(0.06) /share

    Conference Call, Webcast and Instant Replay

    We will host a conference call to review our results on Thursday, April
30, 2009 at 2:30 pm PDT, 5:30 pm EDT. You can participate in the conference
call either via telephone or webcast. To participate in this conference call,
please connect approximately ten minutes prior to the commencement of the
call.

    Telephone participation:

          Please dial the following number:

          1-800-732-6179   Passcode:  Not required
          or
          1-416-644-3416   Passcode:  Not required

    Webcast (to listen):

          The Company will also broadcast its conference call over the
          Internet. To access the web broadcast, click on this URL or enter:
          www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2561240

          This webcast event will be optimized for Microsoft Windows Media
          Player version 9. To download go to:

          http://www.microsoft.com/windows/windowsmedia/download.

    Should you be unable to participate, Instant Replay (audio) will be
available following the conference call for 7 business days.

          Audio only dial: 1-877-289-8525 or 1-416-640-1917
          Passcode: 21299390 followed by the number sign.
    

    The webcast will be available at the above link for 90 days following the
call.
    We look forward to having you participate in our call.

    Cautionary Note Regarding Forward-Looking Statements

    Certain statements in this press release that are not based on historical
facts constitute forward-looking statements or forward-looking information
within the meaning of the U.S. Private Securities Litigation Reform Act of
1995 and applicable Canadian securities laws ("forward-looking statements").
These forward-looking statements are not promises or guarantees of future
performance but are only predictions that relate to future events, conditions
or circumstances or our future results, performance, achievements or
developments and are subject to substantial known and unknown risks,
assumptions, uncertainties and other factors that could cause our actual
results, performance, achievements or developments in our business or in our
industry to differ materially from those expressed, anticipated or implied by
such forward-looking statements. Forward-looking statements in this press
release include all financial guidance for the second quarter of 2009, and all
other disclosure regarding possible events, conditions, circumstances or
results of operations that are based on assumptions about future economic
conditions, courses of action and other future events. We caution you not to
place undue reliance upon any such forward-looking statements, which speak
only as of the date they are made. These forward-looking statements appear in
a number of different places in this press release and can be identified by
words such as "may", "estimates", "projects", "expects", "intends",
"believes", "plans", "anticipates", "continue", "growing", "expanding", or
their negatives or other comparable words. Forward-looking statements include
statements regarding the outlook for our future operations, plans and timing
for the introduction or enhancement of our services and products, statements
concerning strategies or developments, statements about future market
conditions, supply conditions, end customer demand conditions, channel
inventory and sell through, revenue, gross margin, operating expenses,
profits, forecasts of future costs and expenditures, the outcome of legal
proceedings, and other expectations, intentions and plans that are not
historical fact. The risk factors and uncertainties that may affect our actual
results, performance, achievements or developments are many and include,
amongst others, our ability to develop, manufacture, supply and market new
products that we do not produce today that meet the needs of customers and
gain commercial acceptance, our reliance on the deployment of next generation
networks by major wireless operators, the continuous commitment of our
customers, and increased competition. 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. Many of these
factors and uncertainties are beyond our control. Consequently, all
forward-looking statements in this press release are qualified by this
cautionary statement and we cannot assure you that actual results,
performance, achievements or developments that we anticipate will be realized.
Forward-looking statements are based on management's current plans, estimates,
projections, beliefs and opinions and we do not undertake any obligation to
update forward-looking statements should the assumptions related to these
plans, estimates, projections, beliefs and opinions change, except as required
by law.

    About Sierra Wireless

    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.
    "AirCard" is a registered trademark of Sierra Wireless. Other product or
service names mentioned herein may be the trademarks of their respective
owners.

    About Wavecom

    Wavecom is a leading provider of embedded wireless technology for M2M
communication. The company provides a range of GSM/GPRS, CDMA, EDGE and 3G
Wireless CPUs; programmable processors which also act as wireless modules or
wireless modems. These are backed by a C and Lua-based cellular wireless
software suite which includes a real-time operating system (RTOS), a software
development environment based on Eclipse(TM), and several Plug-Ins (GPS,
TCP/IP, security, Bluetooth(TM), Lua script and more). The company also offers
a wide range of professional and operated services. Wavecom solutions are used
for automotive telematics, smart metering, fleet management, GSM/GPS/satellite
tracking, wireless alarms, wireless POS (point of sales), WLL (fixed voice),
remote monitoring and many other M2M applications.



    
                            SIERRA WIRELESS, INC.

    Consolidated Statements of Operations and Retained Earnings (Deficit)
              (Expressed in thousands of United States dollars,
                          except per share amounts)
        (Prepared in accordance with United States generally accepted
                       accounting principles ("GAAP"))
                                 (Unaudited)

    Three months ended March 31,                          2009        2008
    ----------------------------                      ----------- -----------

    Revenue..........................................  $ 111,407   $ 141,949
    Cost of goods sold...............................     80,697     102,614
                                                      ----------- -----------
    Gross margin.....................................     30,710      39,335
                                                      ----------- -----------

    Expenses:
      Sales and marketing............................      8,974       7,835
      Research and development.......................     15,014      13,769
      Administration.................................      6,074       5,084
      Acquisition costs..............................      6,522           -
      Restructuring..................................      1,726           -
      Integration....................................        254           -
      Amortization...................................      2,420       1,281
                                                      ----------- -----------
                                                          40,984      27,969
                                                      ----------- -----------
    Earnings (loss) from operations..................    (10,274)     11,366
    Foreign exchange gain (loss).....................     (9,923)        625
    Other income (expense)...........................     (4,022)      1,834
                                                      ----------- -----------
    Earnings (loss) before income taxes..............    (24,219)     13,825
    Income tax expense (recovery)....................       (267)      4,148
                                                      ----------- -----------
    Net earnings (loss)..............................    (23,952)      9,677
    Net loss attributable to the
     non-controlling interest........................       (287)          -
                                                      ----------- -----------
    Net earnings (loss) attributable to
     Sierra Wireless, Inc............................    (23,665)      9,677
    Retained earnings (deficit), beginning
     of period.......................................     21,273     (40,602)
                                                      ----------- -----------
    Deficit, end of period...........................  $  (2,392)  $ (30,925)
                                                      ----------- -----------
                                                      ----------- -----------

    Earnings (loss) per share attributable to
     Sierra Wireless, Inc.:
      Basic..........................................  $   (0.76)  $    0.31
      Diluted........................................  $   (0.76)  $    0.31
                                                      ----------- -----------
                                                      ----------- -----------

    Weighted average number of shares (in thousands):
      Basic..........................................     31,032      31,341
      Diluted........................................     31,032      31,427
                                                      ----------- -----------
                                                      ----------- -----------



                            SIERRA WIRELESS, INC.

                         Consolidated Balance Sheets
              (Expressed in thousands of United States dollars)
               (Prepared in accordance with United States GAAP)

                                                         Mar 31      Dec 31
                                                      ----------- -----------
                                                          2009        2008
                                                      ----------- -----------
                                                      (Unaudited)

    Assets
    Current assets:
      Cash and cash equivalents......................  $  76,041   $  63,258
      Restricted cash................................     29,476     191,473
      Short-term investments.........................     39,536      18,003
      Accounts receivable............................     86,360      67,058
      Inventories....................................     39,895      33,031
      Deferred income taxes..........................      5,474       5,565
      Prepaid expenses...............................     12,152       6,233
                                                      ----------- -----------
                                                         288,934     384,621

    Fixed assets.....................................     36,334      22,935
    Intangible assets................................     76,219      15,291
    Goodwill.........................................     99,900      33,013
    Deferred income taxes............................      2,186       2,296
    Other............................................      5,457       4,230
                                                      ----------- -----------
                                                       $ 509,030   $ 462,386
                                                      ----------- -----------
                                                      ----------- -----------

    Liabilities and Shareholders' Equity
    Current liabilities:
      Accounts payable...............................  $  62,066   $  38,631
      Accrued liabilities............................     53,996      47,568
      Deferred revenue and credits...................      1,873         683
      Current portion of long-term obligations.......        493         193
      Current portion of obligations under
       capital leases................................        344           -
                                                      ----------- -----------
                                                         118,772      87,075

    Long-term obligations............................      1,258         316
    Obligations under capital leases.................        307           -
    Other long-term liabilities......................     34,495      14,789
    Deferred income taxes............................      2,556       2,758

    Shareholders' equity:
      Share capital..................................    325,893     325,893
      Treasury shares, at cost.......................     (3,005)     (1,487)
      Additional paid-in capital.....................     13,621      12,518
      Retained earnings (deficit)....................     (2,392)     21,273
      Accumulated other comprehensive income
       (loss)........................................        188        (749)
                                                      ----------- -----------
                                                         334,305     357,448
    Non-controlling interest in Wavecom S.A..........     17,337           -
                                                      ----------- -----------
    Total shareholders' equity.......................    351,642     357,448
                                                      ----------- -----------
                                                       $ 509,030   $ 462,386
                                                      ----------- -----------
                                                      ----------- -----------



                            SIERRA WIRELESS, INC.

                    Consolidated Statements of Cash Flows
              (Expressed in thousands of United States dollars)
               (Prepared in accordance with United States GAAP)
                                 (Unaudited)

    Three months ended March 31,                          2009        2008
    ----------------------------                      ----------- -----------
    Cash flows from operating activities:
      Net earnings (loss)............................  $ (23,665)  $   9,677
      Adjustments to reconcile net earnings (loss) to
       net cash provided by operating activities
        Amortization.................................      6,746       3,771
        Stock-based compensation.....................      2,103       1,638
        Deferred income tax..........................         (5)       (116)
        Loss on disposal.............................          1          75
        Unrealized foreign exchange loss on
         restricted cash.............................     15,719           -
        Unrealized foreign exchange loss
         on term loan................................      1,215           -
        Non-controlling interest.....................       (287)          -
      Changes in operating assets and liabilities
        Accounts receivable..........................     18,858     (18,745)
        Inventories..................................        517      (5,139)
        Prepaid expenses and other assets............      6,276       1,381
        Accounts payable.............................     (9,080)     17,402
        Accrued liabilities..........................     (8,239)      7,230
        Deferred revenue and credits.................        295        (156)
                                                      ----------- -----------
    Net cash provided by operating activities........     10,454      17,018

    Cash flows from investing activities:
      Business acquisition, net of cash
       acquired of $139,785..........................     (6,918)          -
    Acquisition of OCEANE convertible bonds..........   (104,767)          -
      Decrease in restricted cash....................    146,277           -
      Deferred acquisition costs.....................          -        (529)
      Purchase of fixed assets.......................     (2,476)     (4,909)
      Increase in intangible assets..................     (1,027)       (289)
      Purchase of short-term investments.............    (21,950)    (37,572)
      Proceeds on maturity of short-term
       investments...................................        469      46,197
                                                      ----------- -----------
    Net cash provided by investing activities........      9,608       2,898

    Cash flows from financing activities:
      Proceeds on issuance of term loan..............    102,716           -
      Repayment of term loan.........................   (103,931)          -
      Financing costs................................     (3,921)          -
      Issuance of common shares, net of share
       issue costs...................................          -          77
      Purchase of treasury shares for RSU
       distribution..................................     (2,518)          -
      Proceeds on exercise of Wavecom options........      4,148           -
      Principal payment on obligations under
       capital leases................................        (31)          -
      Repayment of long-term liabilities.............       (501)        (93)
                                                      ----------- -----------
    Net cash used in financing activities............     (4,038)        (16)
                                                      ----------- -----------

    Effect of foreign exchange changes on cash
     and cash equivalents............................     (3,241)          -
                                                      ----------- -----------

      Net increase in cash and cash equivalents......     12,783      19,900
    Cash and cash equivalents, beginning of period...     63,258      83,624
                                                      ----------- -----------
    Cash and cash equivalents, end of period.........  $  76,041   $ 103,524
                                                      ----------- -----------
                                                      ----------- -----------
    

    %SEDAR: 00011917E




For further information:

For further information: Sierra Wireless, Inc., David G. McLennan, Chief
Financial Officer, (604) 231-1181, Website: www.sierrawireless.com, Email:
investor@sierrawireless.com

Organization Profile

SIERRA WIRELESS, INC.

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