We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sierra Wireless Inc | NASDAQ:SWIR | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 30.99 | 30.98 | 31.00 | 0 | 01:00:00 |
|
Form 20-F
|
o
|
40-F
|
ý
|
|
Yes:
|
o
|
No:
|
ý
|
|
Yes:
|
o
|
No:
|
ý
|
|
Sierra Wireless, Inc.
|
|
|
|
|
|
By:
|
/s/ Samuel Cochrane
|
|
|
|
|
|
Samuel Cochrane, Chief Financial Officer
|
|
|
|
Date: August 10, 2020
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
|
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
|
OVERVIEW
|
|
Business Overview
|
|
Second Quarter Overview
|
|
Outlook
|
|
CONSOLIDATED RESULTS OF OPERATIONS
|
|
SEGMENTED INFORMATION
|
|
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS
|
|
LIQUIDITY AND CAPITAL RESOURCES
|
|
NON-GAAP FINANCIAL MEASURES
|
|
OFF-BALANCE SHEET ARRANGEMENTS
|
|
TRANSACTIONS BETWEEN RELATED PARTIES
|
|
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
|
|
OUTSTANDING SHARE DATA
|
|
IMPACT OF ACCOUNTING PRONOUNCEMENTS AFFECTING CURRENT PERIOD
|
|
INTERNAL CONTROL OVER FINANCIAL REPORTING
|
|
LEGAL PROCEEDINGS
|
|
FINANCIAL RISK MANAGEMENT
|
|
RISKS AND UNCERTAINTIES
|
|
|
|
CONSOLIDATED FINANCIAL STATEMENTS
|
•
|
the scope and duration of the COVID-19 pandemic and its impact on our business;
|
•
|
our ability to return to normal operations after the COVID-19 pandemic has subsided;
|
•
|
expected component supply constraints and manufacturing capacity;
|
•
|
customer demand and our ability to continue to sell our products and services in the expected quantities at the expected prices and expected times;
|
•
|
our ability to realize the anticipated benefits of the Sale Transaction;
|
•
|
our ability to effect and to realize the anticipated benefits of our business transformation initiatives, and the timing thereof;
|
•
|
our ability to develop, manufacture and sell new products and services that meet the needs of our customers and gain commercial acceptance;
|
•
|
expected macro-economic business conditions;
|
•
|
expected cost of sales;
|
•
|
our ability to win new business;
|
•
|
our ability to integrate acquired businesses and realize expected benefits;
|
•
|
our ability to renew or obtain credit facilities when required;
|
•
|
expected deployment of next generation networks by wireless network operators;
|
•
|
our operations not being adversely disrupted by other developments, operating, cyber security, litigation, or regulatory risks; and
|
•
|
expected tax and foreign exchange rates.
|
•
|
prolonged negative impact from COVID-19;
|
•
|
our access to capital, if required;
|
•
|
competition from new or established competitors or from those with greater resources;
|
•
|
natural catastrophes or public health epidemics that could impact customer demand, result in production disruption and impact our ability to meet customer demand or capacity to continue critical operations;
|
•
|
risks that the Sale Transaction may not be completed in a timely manner or at all, which may adversely affect our business and the price of our common shares;
|
•
|
failure to satisfy the conditions to the consummation of the Sale Transaction and the receipt of certain governmental and regulatory approvals;
|
•
|
risks that the Sale Transaction may fail to realize the expected benefits;
|
•
|
the loss of, or significant demand fluctuations from, any of our significant customers;
|
•
|
our financial results being subject to fluctuation;
|
•
|
our business transformation initiatives may result in disruptions to our business and may not achieve the anticipated benefits;
|
•
|
our ability to respond to changing technology, industry standards and customer requirements;
|
•
|
failures of our products or services due to design flaws and errors, component quality issues, manufacturing defects, network service interruptions, cyber-security vulnerabilities or other quality issues;
|
•
|
deterioration in macro-economic conditions could adversely affect our operating results and financial conditions;
|
•
|
our ability to attract or retain key personnel and the impact of organizational changes on our business;
|
•
|
cyber-attacks or other breaches of our information technology security;
|
•
|
risks related to the transmission, use and disclosure of user data and personal information;
|
•
|
disruption of, and demands on, our ongoing business and diversion of management's time and attention in connection with acquisitions or divestitures;
|
•
|
risks that the acquisition of the M2M Group or our investments and partnerships may fail to realize the expected benefits;
|
•
|
risks related to infringement on intellectual property rights of others;
|
•
|
our ability to obtain necessary rights to use software or components supplied by third parties;
|
•
|
our ability to enforce our intellectual property rights;
|
•
|
our reliance on single source suppliers for certain components used in our products;
|
•
|
our dependence on a limited number of third party manufacturers;
|
•
|
unanticipated costs associated with litigation or settlements;
|
•
|
our dependence on mobile network operators to promote and offer acceptable wireless data services;
|
•
|
risks related to contractual disputes with counterparties;
|
•
|
risks related to governmental regulation;
|
•
|
risks inherent in foreign jurisdictions; and
|
•
|
risks related to tariffs or other trade restrictions.
|
•
|
Revenue was $144.1 million compared to $191.4 million in the second quarter of 2019.
|
•
|
Gross margin was 31.8% compared to 30.8% in the second quarter of 2019.
|
•
|
Loss from operations was $17.8 million compared to loss from operations of $23.3 million in the second quarter of 2019.
|
•
|
Net loss was $15.6 million, or loss of $0.43 per diluted share, compared to net loss of $28.2 million, or loss of $0.78 per diluted share, in the second quarter of 2019.
|
•
|
Short-term borrowings were $15.0 million as at June 30, 2020 compared to $25.0 million as at March 31, 2020.
|
•
|
Gross margin was 31.8% compared to 30.8% in the second quarter of 2019.
|
•
|
Loss from operations was $10.0 million compared to earnings from operations of $3.4 million in the second quarter of 2019.
|
•
|
Adjusted EBITDA was a loss of $5.3 million compared to Adjusted EBITDA of $7.9 million in the second quarter of 2019.
|
•
|
Net loss was $11.1 million, or loss of $0.30 per diluted share, compared to net earnings of $2.5 million, or $0.07 per diluted share, in the second quarter of 2019.
|
(in thousands of U.S. dollars, except where otherwise stated)
|
2020
|
|
|
2019
|
|||||||||||||||||||
Q2
|
Q1
|
|
|
Total
|
Q4
|
Q3
|
Q2
|
Q1
|
|||||||||||||||
Statement of Operations data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Revenue
|
$
|
144,062
|
|
$
|
157,576
|
|
|
|
$
|
713,513
|
|
$
|
174,301
|
|
$
|
174,025
|
|
$
|
191,374
|
|
$
|
173,813
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross Margin
|
|
|
|
|
|
|
|
|
|
||||||||||||||
- GAAP
|
$
|
45,870
|
|
$
|
43,587
|
|
|
|
$
|
219,990
|
|
$
|
51,368
|
|
$
|
55,043
|
|
$
|
58,949
|
|
$
|
54,630
|
|
- Non-GAAP (1)
|
45,861
|
|
43,635
|
|
|
|
220,153
|
|
51,389
|
|
55,087
|
|
58,991
|
|
54,686
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross Margin %
|
|
|
|
|
|
|
|
|
|
||||||||||||||
- GAAP
|
31.8
|
%
|
27.7
|
%
|
|
|
30.8
|
%
|
29.5
|
%
|
31.6
|
%
|
30.8
|
%
|
31.4
|
%
|
|||||||
- Non-GAAP (1)
|
31.8
|
%
|
27.7
|
%
|
|
|
30.9
|
%
|
29.5
|
%
|
31.7
|
%
|
30.8
|
%
|
31.5
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Earnings (loss) from operations
|
|
|
|
|
|
|
|
|
|
||||||||||||||
- GAAP
|
$
|
(17,830
|
)
|
$
|
(21,481
|
)
|
|
|
$
|
(58,021
|
)
|
$
|
(12,385
|
)
|
$
|
(12,559
|
)
|
$
|
(23,271
|
)
|
$
|
(9,806
|
)
|
- Non-GAAP (1)
|
(9,962
|
)
|
(13,764
|
)
|
|
|
2,414
|
|
(2,654
|
)
|
1,795
|
|
3,428
|
|
(155
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Adjusted EBITDA(1)
|
$
|
(5,310
|
)
|
$
|
(9,168
|
)
|
|
|
$
|
21,077
|
|
$
|
2,326
|
|
$
|
6,300
|
|
$
|
7,922
|
|
$
|
4,529
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net earnings (loss)
|
|
|
|
|
|
|
|
|
|
||||||||||||||
- GAAP
|
$
|
(15,607
|
)
|
$
|
(22,663
|
)
|
|
|
$
|
(70,538
|
)
|
$
|
(10,918
|
)
|
$
|
(20,221
|
)
|
$
|
(28,176
|
)
|
$
|
(11,223
|
)
|
- Non-GAAP (1)
|
(11,080
|
)
|
(14,694
|
)
|
|
|
(305
|
)
|
(2,939
|
)
|
1,021
|
|
2,467
|
|
(854
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Revenue by Segment:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
IoT Solutions
|
$
|
81,836
|
|
$
|
78,790
|
|
|
|
$
|
377,808
|
|
$
|
90,937
|
|
$
|
93,439
|
|
$
|
99,145
|
|
$
|
94,287
|
|
Embedded Broadband
|
62,226
|
|
78,786
|
|
|
|
335,705
|
|
83,364
|
|
80,586
|
|
92,229
|
|
79,526
|
|
|||||||
Revenue by Type:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Product
|
$
|
115,975
|
|
$
|
130,743
|
|
|
|
$
|
614,384
|
|
$
|
147,760
|
|
$
|
149,396
|
|
$
|
166,348
|
|
$
|
150,880
|
|
Recurring and other services
|
28,087
|
|
26,833
|
|
|
|
99,129
|
|
26,541
|
|
24,629
|
|
25,026
|
|
22,933
|
|
|||||||
Share and per share data:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Basic net earnings (loss) per share (in dollars)
|
|
|
|
|
|
|
|
|
|
||||||||||||||
- GAAP
|
$
|
(0.43
|
)
|
$
|
(0.62
|
)
|
|
|
$
|
(1.95
|
)
|
$
|
(0.30
|
)
|
$
|
(0.56
|
)
|
$
|
(0.78
|
)
|
$
|
(0.31
|
)
|
- Non-GAAP (1)
|
$
|
(0.30
|
)
|
$
|
(0.41
|
)
|
|
|
$
|
(0.01
|
)
|
$
|
(0.08
|
)
|
$
|
0.03
|
|
$
|
0.07
|
|
$
|
(0.02
|
)
|
Diluted net earnings (loss) per share (in dollars)
|
|
|
|
|
|
|
|
|
|
||||||||||||||
- GAAP
|
$
|
(0.43
|
)
|
$
|
(0.62
|
)
|
|
|
$
|
(1.95
|
)
|
$
|
(0.30
|
)
|
$
|
(0.56
|
)
|
$
|
(0.78
|
)
|
$
|
(0.31
|
)
|
- Non-GAAP (1)
|
$
|
(0.30
|
)
|
$
|
(0.41
|
)
|
|
|
$
|
(0.01
|
)
|
$
|
(0.08
|
)
|
$
|
0.03
|
|
$
|
0.07
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Common shares (in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||||||
At period-end
|
36,346
|
|
36,336
|
|
|
|
36,233
|
|
36,233
|
|
36,197
|
|
36,165
|
|
36,150
|
|
|||||||
Weighted average - basic
|
36,341
|
|
36,277
|
|
|
|
36,166
|
|
36,222
|
|
36,179
|
|
36,156
|
|
36,106
|
|
|||||||
Weighted average - diluted
|
36,341
|
|
36,277
|
|
|
|
36,166
|
|
36,222
|
|
36,179
|
|
36,156
|
|
36,106
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
•
|
Samuel Cochrane joined as Chief Financial Officer on May 6, 2020. Mr. Cochrane is an experienced financial executive, most recently serving as a Vice President of Motorola Solutions Inc. (“Motorola”) and before that as the CFO of Avigilon, which was acquired by Motorola in 2018. Mr. Cochrane took over the CFO role from David McLennan, whose planned retirement was announced in December 2019.
|
•
|
We entered into an agreement with Lion Point Capital, LP ("Lion Point"), an investment firm which controls approximately 8.8% of the Company's total shares outstanding, regarding the membership and composition of the Sierra Wireless Board of Directors (the “Board”) and its committees, as well as certain customary standstill restrictions. Under the terms of the agreement with Lion Point, (i) Mr. Paul C. Cataford and Ms. Joy Chik, stepped down from the Board and two new independent directors, Mr. Jim Anderson and Ms. Karima Bawa, were appointed to the Board on April 16, 2020 and (ii) we agreed to propose and recommend for approval at our annual and special meeting of shareholders (the “Meeting”) a special resolution providing for an increase in the maximum size of the Board from nine (9) to twelve (12) directors (the “Board Expansion Resolution”). Following the approval of the Board Expansion Resolution at the Meeting, the Board of Directors appointed Thomas K. Linton, Martin Mc Court and Mark Twaalhoven as independent directors of the Company.
|
•
|
We announced a new collaboration with New Boundary Technologies, a leading provider of innovative Internet of Things (IoT) and Machine-to-Machine applications to simplify the development and deployment of IoT applications for industrial OEMs, distributors and IoT solution providers. New Boundary Technologies' RemoteAwareTM IoT Application Service now integrates with OctaveTM, Sierra's all-in-one edge-to-cloud solution for connecting industrial assets to the cloud.
|
•
|
On July 23, 2020, we entered into a definitive agreement to divest our Shenzhen, China-based automotive embedded module product line to Rolling Wireless for $165 million. The Sale Transaction is expected to close in the fourth quarter of 2020 and remains subject to customary closing conditions, including approval from China’s Ministry of Commerce.
|
•
|
prolonged negative impact from COVID-19;
|
•
|
our access to capital, if required;
|
•
|
closing of the Sale Transaction;
|
•
|
general economic conditions in the markets we serve;
|
•
|
our ability to manage component supply issues when they arise;
|
•
|
manufacturing capacity at our various manufacturing sites;
|
•
|
our ability to achieve the anticipated benefits of our business transformation initiatives;
|
•
|
the strength of our competitive position in the market;
|
•
|
the timely ramp-up of sales of our new products recently launched or currently under development;
|
•
|
contributions to our operating results from our acquisitions;
|
•
|
the level of success our customers achieve with sales of connected solutions;
|
•
|
fluctuations in customer demand and inventory levels, particularly large customers;
|
•
|
our ability to realize the anticipated benefits of the M2M Group acquisition;
|
•
|
our ability to attract and retain effective channel partners;
|
•
|
the timely launch and ramp-up of new customer programs;
|
•
|
our ability to secure future design wins with both existing and new customers;
|
•
|
the end-of-life of existing customer programs;
|
•
|
our ability to manage component and product quality compliance;
|
•
|
fluctuations in foreign exchange rates;
|
•
|
tariffs and other trade restrictions; and
|
•
|
seasonality in demand.
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||||||||||
(in thousands of U.S. dollars, except where otherwise stated)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||||||
|
$
|
% of
Revenue
|
|
$
|
% of
Revenue
|
|
$
|
% of
Revenue
|
|
$
|
% of
Revenue
|
||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
IoT Solutions
|
81,836
|
|
56.8
|
%
|
|
99,145
|
|
51.8
|
%
|
|
160,626
|
|
53.3
|
%
|
|
193,432
|
|
53.0
|
%
|
||||
Embedded Broadband
|
62,226
|
|
43.2
|
%
|
|
92,229
|
|
48.2
|
%
|
|
141,012
|
|
46.7
|
%
|
|
171,755
|
|
47.0
|
%
|
||||
|
144,062
|
|
100.0
|
%
|
|
191,374
|
|
100.0
|
%
|
|
301,638
|
|
100.0
|
%
|
|
365,187
|
|
100.0
|
%
|
||||
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
IoT Solutions
|
51,298
|
|
35.6
|
%
|
|
62,334
|
|
32.6
|
%
|
|
102,077
|
|
33.8
|
%
|
|
122,142
|
|
33.4
|
%
|
||||
Embedded Broadband
|
46,894
|
|
32.6
|
%
|
|
70,091
|
|
36.6
|
%
|
|
110,104
|
|
36.5
|
%
|
|
129,466
|
|
35.5
|
%
|
||||
|
98,192
|
|
68.2
|
%
|
|
132,425
|
|
69.2
|
%
|
|
212,181
|
|
70.3
|
%
|
|
251,608
|
|
68.9
|
%
|
||||
Gross margin
|
45,870
|
|
31.8
|
%
|
|
58,949
|
|
30.8
|
%
|
|
89,457
|
|
29.7
|
%
|
|
113,579
|
|
31.1
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales and marketing
|
22,283
|
|
15.5
|
%
|
|
23,755
|
|
12.4
|
%
|
|
47,053
|
|
15.6
|
%
|
|
46,261
|
|
12.7
|
%
|
||||
Research and development
|
22,680
|
|
15.7
|
%
|
|
22,111
|
|
11.6
|
%
|
|
44,829
|
|
14.9
|
%
|
|
44,908
|
|
12.3
|
%
|
||||
Administration
|
12,977
|
|
9.0
|
%
|
|
12,893
|
|
6.7
|
%
|
|
25,112
|
|
8.3
|
%
|
|
25,290
|
|
6.9
|
%
|
||||
Restructuring
|
245
|
|
0.2
|
%
|
|
18,180
|
|
9.5
|
%
|
|
860
|
|
0.3
|
%
|
|
19,577
|
|
5.4
|
%
|
||||
Acquisition-related and integration
|
185
|
|
0.1
|
%
|
|
314
|
|
0.2
|
%
|
|
185
|
|
0.1
|
%
|
|
409
|
|
0.1
|
%
|
||||
Amortization
|
5,330
|
|
3.7
|
%
|
|
4,967
|
|
2.6
|
%
|
|
10,729
|
|
3.6
|
%
|
|
10,211
|
|
2.8
|
%
|
||||
|
63,700
|
|
44.2
|
%
|
|
82,220
|
|
43.0
|
%
|
|
128,768
|
|
42.7
|
%
|
|
146,656
|
|
40.2
|
%
|
||||
Loss from operations
|
(17,830
|
)
|
(12.4
|
)%
|
|
(23,271
|
)
|
(12.2
|
)%
|
|
(39,311
|
)
|
(13.0
|
)%
|
|
(33,077
|
)
|
(9.1
|
)%
|
||||
Foreign exchange gain
|
3,534
|
|
|
|
854
|
|
|
|
565
|
|
|
|
2
|
|
|
||||||||
Other expense
|
(280
|
)
|
|
|
(102
|
)
|
|
|
(471
|
)
|
|
|
(71
|
)
|
|
||||||||
Loss before income taxes
|
(14,576
|
)
|
|
|
(22,519
|
)
|
|
|
(39,217
|
)
|
|
|
(33,146
|
)
|
|
||||||||
Income tax expense (recovery)
|
1,031
|
|
|
|
5,657
|
|
|
|
(947
|
)
|
|
|
6,253
|
|
|
||||||||
Net loss
|
(15,607
|
)
|
|
|
(28,176
|
)
|
|
|
(38,270
|
)
|
|
|
(39,399
|
)
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss per share (in dollars) - basic and diluted
|
$
|
(0.43
|
)
|
|
|
$
|
(0.78
|
)
|
|
|
$
|
(1.05
|
)
|
|
|
$
|
(1.09
|
)
|
|
||||
Weighted average number of shares (in thousands) - basic and diluted
|
36,341
|
|
|
|
36,156
|
|
|
|
36,309
|
|
|
|
36,131
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of U.S. dollars, except where otherwise stated)
|
|
|
|
|
|
% change
|
|||||||||||
|
Q2, 2020
|
|
|
Q2, 2019
|
|
|
Q2 YTD,
2020 |
|
|
Q2 YTD,
2019 |
|
|
Q2, 2020 vs Q2, 2019
|
|
Q2 YTD, 2020 vs Q2 YTD, 2019
|
|
|
Revenue
|
|
81,836
|
|
|
99,145
|
|
|
160,626
|
|
|
193,432
|
|
|
(17.5
|
)%
|
(17.0
|
)%
|
Cost of sales
|
|
51,298
|
|
|
62,334
|
|
|
102,077
|
|
|
122,142
|
|
|
(17.7
|
)%
|
(16.4
|
)%
|
Gross margin
|
|
30,538
|
|
|
36,811
|
|
|
58,549
|
|
|
71,290
|
|
|
(17.0
|
)%
|
(17.9
|
)%
|
Gross margin %
|
|
37.3
|
%
|
|
37.1
|
%
|
|
36.5
|
%
|
|
36.9
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of U.S. dollars, except where otherwise stated)
|
|
|
|
|
|
% change
|
|||||||||||
|
Q2, 2020
|
|
|
Q2, 2019
|
|
|
Q2 YTD,
2020 |
|
|
Q2 YTD,
2019 |
|
|
Q2, 2020 vs Q2, 2019
|
|
Q2 YTD, 2020 vs Q2 YTD, 2019
|
|
|
Revenue
|
|
62,226
|
|
|
92,229
|
|
|
141,012
|
|
|
171,755
|
|
|
(32.5
|
)%
|
(17.9
|
)%
|
Cost of sales
|
|
46,894
|
|
|
70,091
|
|
|
110,104
|
|
|
129,466
|
|
|
(33.1
|
)%
|
(15.0
|
)%
|
Gross margin
|
|
15,332
|
|
|
22,138
|
|
|
30,908
|
|
|
42,289
|
|
|
(30.7
|
)%
|
(26.9
|
)%
|
Gross margin %
|
|
24.6
|
%
|
|
24.0
|
%
|
|
21.9
|
%
|
|
24.6
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of U.S. dollars, except where otherwise stated)
|
2020
|
|
2019
|
2018
|
|
||||||||||||||||||||
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
|
|||||||||||||||||
Revenue
|
$
|
144,062
|
|
$
|
157,576
|
|
$
|
174,301
|
|
174,025
|
|
$
|
191,374
|
|
173,813
|
|
$
|
201,395
|
|
$
|
203,426
|
|
|
||
Cost of sales
|
98,192
|
|
113,989
|
|
122,933
|
|
118,982
|
|
132,425
|
|
119,183
|
|
135,500
|
|
136,159
|
|
|
||||||||
Gross margin
|
45,870
|
|
43,587
|
|
51,368
|
|
55,043
|
|
58,949
|
|
54,630
|
|
65,895
|
|
67,267
|
|
|
||||||||
Gross margin %
|
31.8
|
%
|
27.7
|
%
|
29.5
|
%
|
31.6
|
%
|
30.8
|
%
|
31.4
|
%
|
32.7
|
%
|
33.1
|
%
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Sales and marketing
|
22,283
|
|
24,770
|
|
22,309
|
|
23,523
|
|
23,755
|
|
22,506
|
|
22,353
|
|
21,743
|
|
|
||||||||
Research and development
|
22,680
|
|
22,149
|
|
21,015
|
|
20,550
|
|
22,111
|
|
22,797
|
|
22,230
|
|
22,621
|
|
|
||||||||
Administration
|
12,977
|
|
12,135
|
|
11,600
|
|
11,937
|
|
12,893
|
|
12,397
|
|
14,516
|
|
14,998
|
|
|
||||||||
Restructuring
|
245
|
|
615
|
|
2,309
|
|
6,274
|
|
18,180
|
|
1,397
|
|
2,345
|
|
227
|
|
|
||||||||
Acquisition-related and integration
|
185
|
|
—
|
|
274
|
|
291
|
|
314
|
|
95
|
|
613
|
|
570
|
|
|
||||||||
Impairment
|
—
|
|
—
|
|
877
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
||||||||
Loss on disposal of iTank business
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,064
|
|
—
|
|
|
||||||||
Amortization
|
5,330
|
|
5,399
|
|
5,369
|
|
5,027
|
|
4,967
|
|
5,244
|
|
5,971
|
|
6,255
|
|
|
||||||||
|
63,700
|
|
65,068
|
|
63,753
|
|
67,602
|
|
82,220
|
|
64,436
|
|
70,092
|
|
66,414
|
|
|
||||||||
Earnings (loss) from operations
|
(17,830
|
)
|
(21,481
|
)
|
(12,385
|
)
|
(12,559
|
)
|
(23,271
|
)
|
(9,806
|
)
|
(4,197
|
)
|
853
|
|
|
||||||||
Foreign exchange gain (loss)
|
3,534
|
|
(2,969
|
)
|
1,666
|
|
(2,964
|
)
|
854
|
|
(852
|
)
|
(2,378
|
)
|
(159
|
)
|
|
||||||||
Other income (expense)
|
(280
|
)
|
(191
|
)
|
(109
|
)
|
(121
|
)
|
(102
|
)
|
31
|
|
(19
|
)
|
7
|
|
|
||||||||
Earnings (loss) before income tax
|
(14,576
|
)
|
(24,641
|
)
|
(10,828
|
)
|
(15,644
|
)
|
(22,519
|
)
|
(10,627
|
)
|
(6,594
|
)
|
701
|
|
|
||||||||
Income tax expense (recovery)
|
1,031
|
|
(1,978
|
)
|
90
|
|
4,577
|
|
5,657
|
|
596
|
|
(2,768
|
)
|
1,738
|
|
|
||||||||
Net earnings (loss)
|
$
|
(15,607
|
)
|
$
|
(22,663
|
)
|
$
|
(10,918
|
)
|
$
|
(20,221
|
)
|
$
|
(28,176
|
)
|
$
|
(11,223
|
)
|
$
|
(3,826
|
)
|
$
|
(1,037
|
)
|
|
Earnings (loss) per share - in dollars
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
(0.43
|
)
|
$
|
(0.62
|
)
|
$
|
(0.30
|
)
|
$
|
(0.56
|
)
|
$
|
(0.78
|
)
|
$
|
(0.31
|
)
|
$
|
(0.11
|
)
|
$
|
(0.03
|
)
|
|
Diluted
|
$
|
(0.43
|
)
|
$
|
(0.62
|
)
|
$
|
(0.30
|
)
|
$
|
(0.56
|
)
|
$
|
(0.78
|
)
|
$
|
(0.31
|
)
|
$
|
(0.11
|
)
|
$
|
(0.03
|
)
|
|
Weighted average number of shares (in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
36,341
|
|
36,277
|
|
36,222
|
|
36,179
|
|
36,156
|
|
36,106
|
|
36,057
|
|
36,085
|
|
|
||||||||
Diluted
|
36,341
|
|
36,277
|
|
36,222
|
|
36,179
|
|
36,156
|
|
36,106
|
|
36,057
|
|
36,085
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
(in thousands of U.S. dollars)
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||||||||
|
2020
|
|
2019
|
|
Change
|
|
|
2020
|
|
2019
|
|
Change
|
|
|||||||
Cash flows provided (used) before changes in non-cash working capital:
|
|
$
|
(8,640
|
)
|
$
|
(12,747
|
)
|
$
|
4,107
|
|
|
$
|
(14,644
|
)
|
$
|
(12,002
|
)
|
$
|
(2,642
|
)
|
Changes in non-cash working capital
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts receivable
|
|
18,730
|
|
1,184
|
|
17,546
|
|
|
26,288
|
|
17,998
|
|
8,290
|
|
||||||
Inventories
|
|
(2,881
|
)
|
1,116
|
|
(3,997
|
)
|
|
(11,555
|
)
|
(5,619
|
)
|
(5,936
|
)
|
||||||
Prepaid expense and other
|
|
(4,858
|
)
|
2,129
|
|
(6,987
|
)
|
|
(5,659
|
)
|
(5,518
|
)
|
(141
|
)
|
||||||
Accounts payable and accrued liabilities
|
|
3,256
|
|
22,765
|
|
(19,509
|
)
|
|
6,033
|
|
7,599
|
|
(1,566
|
)
|
||||||
Deferred revenue
|
|
82
|
|
1,347
|
|
(1,265
|
)
|
|
(1,216
|
)
|
2,718
|
|
(3,934
|
)
|
||||||
|
|
14,329
|
|
28,541
|
|
(14,212
|
)
|
|
13,891
|
|
17,178
|
|
(3,287
|
)
|
||||||
Cash flows provided by (used in):
|
|
|
|
|
|
|
|
|
||||||||||||
Operating activities
|
|
5,689
|
|
15,794
|
|
(10,105
|
)
|
|
(753
|
)
|
5,176
|
|
(5,929
|
)
|
||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Investing activities
|
|
(6,439
|
)
|
(5,151
|
)
|
(1,288
|
)
|
|
(29,365
|
)
|
(8,940
|
)
|
(20,425
|
)
|
||||||
Acquisition of M2M Group, net of cash acquired
|
|
(172
|
)
|
—
|
|
(172
|
)
|
|
(18,391
|
)
|
—
|
|
(18,391
|
)
|
||||||
Proceeds from sale of iTank business
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
500
|
|
(500
|
)
|
||||||
Capital expenditures and increase in intangible assets
|
|
(6,471
|
)
|
(5,178
|
)
|
(1,293
|
)
|
|
(11,198
|
)
|
(9,524
|
)
|
(1,674
|
)
|
||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Financing activities
|
|
(10,327
|
)
|
(342
|
)
|
(9,985
|
)
|
|
13,967
|
|
(1,059
|
)
|
15,026
|
|
||||||
Proceeds from (repayment of) credit facility
|
|
(10,000
|
)
|
—
|
|
(10,000
|
)
|
|
15,000
|
|
—
|
|
15,000
|
|
||||||
Issue of common shares
|
|
—
|
|
73
|
|
(73
|
)
|
|
—
|
|
167
|
|
(167
|
)
|
||||||
Purchase of treasury shares for RSU distribution
|
|
(194
|
)
|
(267
|
)
|
73
|
|
|
(220
|
)
|
(267
|
)
|
47
|
|
||||||
Taxes paid related to net settlement of equity awards
|
|
(50
|
)
|
(75
|
)
|
25
|
|
|
(626
|
)
|
(745
|
)
|
119
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Free Cash Flow (1)
|
|
$
|
(782
|
)
|
$
|
10,616
|
|
$
|
(11,398
|
)
|
|
$
|
(11,951
|
)
|
$
|
(4,348
|
)
|
$
|
(7,603
|
)
|
|
|
|
|
|
|
|
|
|
Payments due by period
(in thousands of U.S. dollars)
|
Total
|
|
Remaining 2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
|||||||
Operating lease obligations
|
$
|
29,423
|
|
$
|
2,502
|
|
$
|
5,437
|
|
$
|
4,848
|
|
$
|
2,999
|
|
$
|
2,139
|
|
$
|
11,498
|
|
Finance lease obligations
|
407
|
|
197
|
|
191
|
|
8
|
|
8
|
|
3
|
|
—
|
|
|||||||
Purchase obligations - Contract Manufacturers(1)
|
112,806
|
|
112,806
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Purchase obligations - Mobile Network Operators (2)
|
9,065
|
|
6,730
|
|
1,894
|
|
441
|
|
—
|
|
—
|
|
—
|
|
|||||||
Purchase obligation - Cloud Computing Service (3)
|
2,612
|
|
683
|
|
1,363
|
|
566
|
|
—
|
|
—
|
|
—
|
|
|||||||
Other long-term liabilities
|
396
|
|
12
|
|
12
|
|
372
|
|
—
|
|
—
|
|
—
|
|
|||||||
Total
|
$
|
154,709
|
|
$
|
122,930
|
|
$
|
8,897
|
|
$
|
6,235
|
|
$
|
3,007
|
|
$
|
2,142
|
|
$
|
11,498
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
||||||||||||||||
(in thousands of U.S. dollars)
|
Jun 30
|
Mar 31
|
|
|
Dec 31
|
Sep 30
|
Jun 30
|
Mar 31
|
|
||||||||||||
Cash and cash equivalents
|
$
|
60,111
|
|
$
|
70,334
|
|
|
|
$
|
75,454
|
|
$
|
86,900
|
|
$
|
84,769
|
|
$
|
74,143
|
|
|
Unused committed revolving credit facility
|
35,000
|
|
5,000
|
|
|
|
30,000
|
|
30,000
|
|
30,000
|
|
30,000
|
|
|
||||||
Total
|
$
|
95,111
|
|
$
|
75,334
|
|
|
|
$
|
105,454
|
|
$
|
116,900
|
|
$
|
114,769
|
|
$
|
104,143
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of U.S. dollars, except where otherwise stated)
|
2020
|
|
|
2019
|
|
|||||||||||||||||||
Q2
|
Q1
|
|
|
Total
|
Q4
|
Q3
|
Q2
|
Q1
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross margin - GAAP
|
$
|
45,870
|
|
$
|
43,587
|
|
|
|
$
|
219,990
|
|
$
|
51,368
|
|
$
|
55,043
|
|
$
|
58,949
|
|
$
|
54,630
|
|
|
Stock-based compensation and related social taxes
|
65
|
|
49
|
|
|
|
167
|
|
20
|
|
44
|
|
44
|
|
59
|
|
|
|||||||
Realized losses on hedge contracts
|
(74
|
)
|
(1
|
)
|
|
|
(4
|
)
|
1
|
|
—
|
|
(2
|
)
|
(3
|
)
|
|
|||||||
Gross margin - Non-GAAP
|
$
|
45,861
|
|
$
|
43,635
|
|
|
|
$
|
220,153
|
|
$
|
51,389
|
|
$
|
55,087
|
|
$
|
58,991
|
|
$
|
54,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Earnings (loss) from operations - GAAP
|
$
|
(17,830
|
)
|
$
|
(21,481
|
)
|
|
|
$
|
(58,021
|
)
|
$
|
(12,385
|
)
|
$
|
(12,559
|
)
|
$
|
(23,271
|
)
|
$
|
(9,806
|
)
|
|
Stock-based compensation and related social taxes
|
3,276
|
|
3,224
|
|
|
|
13,194
|
|
1,802
|
|
3,876
|
|
4,102
|
|
3,414
|
|
|
|||||||
Acquisition-related and integration
|
185
|
|
—
|
|
|
|
974
|
|
274
|
|
291
|
|
314
|
|
95
|
|
|
|||||||
Restructuring
|
245
|
|
615
|
|
|
|
28,160
|
|
2,309
|
|
6,274
|
|
18,180
|
|
1,397
|
|
|
|||||||
Other nonrecurring costs
|
687
|
|
87
|
|
|
|
2,903
|
|
795
|
|
279
|
|
662
|
|
1,167
|
|
|
|||||||
Impairment
|
—
|
|
—
|
|
|
|
877
|
|
877
|
|
—
|
|
—
|
|
—
|
|
|
|||||||
Realized gains (losses) on hedge contracts
|
(411
|
)
|
(98
|
)
|
|
|
(187
|
)
|
81
|
|
24
|
|
(183
|
)
|
(109
|
)
|
|
|||||||
Acquisition-related amortization
|
3,886
|
|
3,889
|
|
|
|
14,514
|
|
3,593
|
|
3,610
|
|
3,624
|
|
3,687
|
|
|
|||||||
Earnings (loss) from operations - Non-GAAP
|
$
|
(9,962
|
)
|
$
|
(13,764
|
)
|
|
|
$
|
2,414
|
|
$
|
(2,654
|
)
|
$
|
1,795
|
|
$
|
3,428
|
|
$
|
(155
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss - GAAP
|
$
|
(15,607
|
)
|
$
|
(22,663
|
)
|
|
|
$
|
(70,538
|
)
|
$
|
(10,918
|
)
|
$
|
(20,221
|
)
|
$
|
(28,176
|
)
|
$
|
(11,223
|
)
|
|
Stock-based compensation and related social taxes, restructuring, impairment, acquisition-related, integration and other non-recurring costs (recoveries)
|
4,393
|
|
3,926
|
|
|
|
46,108
|
|
6,057
|
|
10,720
|
|
23,258
|
|
6,073
|
|
|
|||||||
Amortization
|
8,538
|
|
8,485
|
|
|
|
33,177
|
|
8,573
|
|
8,115
|
|
8,118
|
|
8,371
|
|
|
|||||||
Interest and other, net
|
280
|
|
191
|
|
|
|
301
|
|
109
|
|
121
|
|
102
|
|
(31
|
)
|
|
|||||||
Foreign exchange loss (gain)
|
(3,945
|
)
|
2,871
|
|
|
|
1,109
|
|
(1,585
|
)
|
2,988
|
|
(1,037
|
)
|
743
|
|
|
|||||||
Income tax expense (recovery)
|
1,031
|
|
(1,978
|
)
|
|
|
10,920
|
|
90
|
|
4,577
|
|
5,657
|
|
596
|
|
|
|||||||
Adjusted EBITDA
|
(5,310
|
)
|
(9,168
|
)
|
|
|
21,077
|
|
2,326
|
|
6,300
|
|
7,922
|
|
4,529
|
|
|
|||||||
Amortization (exclude acquisition-related amortization)
|
(4,652
|
)
|
(4,596
|
)
|
|
|
(18,663
|
)
|
(4,980
|
)
|
(4,505
|
)
|
(4,494
|
)
|
(4,684
|
)
|
|
|||||||
Interest and other, net
|
(280
|
)
|
(191
|
)
|
|
|
(301
|
)
|
(109
|
)
|
(121
|
)
|
(102
|
)
|
31
|
|
|
|||||||
Income tax expense - Non-GAAP
|
(838
|
)
|
(739
|
)
|
|
|
(2,418
|
)
|
(176
|
)
|
(653
|
)
|
(859
|
)
|
(730
|
)
|
|
|||||||
Net earnings (loss) - Non-GAAP
|
$
|
(11,080
|
)
|
$
|
(14,694
|
)
|
|
|
(305
|
)
|
$
|
(2,939
|
)
|
$
|
1,021
|
|
$
|
2,467
|
|
$
|
(854
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted net earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
GAAP - (in dollars per share)
|
$
|
(0.43
|
)
|
$
|
(0.62
|
)
|
|
|
$
|
(1.95
|
)
|
$
|
(0.30
|
)
|
$
|
(0.56
|
)
|
$
|
(0.78
|
)
|
$
|
(0.31
|
)
|
|
Non-GAAP - (in dollars per share)
|
$
|
(0.30
|
)
|
$
|
(0.41
|
)
|
|
|
$
|
(0.01
|
)
|
$
|
(0.08
|
)
|
$
|
0.03
|
|
$
|
0.07
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
||||||||||
(in thousands of U.S. dollars)
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
||||
Cash flows from operating activities
|
|
$
|
5,689
|
|
$
|
15,794
|
|
|
$
|
(753
|
)
|
$
|
5,176
|
|
Capital expenditures and increase in intangible assets
|
|
(6,471
|
)
|
(5,178
|
)
|
|
(11,198
|
)
|
(9,524
|
)
|
||||
Free Cash Flow
|
|
$
|
(782
|
)
|
$
|
10,616
|
|
|
$
|
(11,951
|
)
|
$
|
(4,348
|
)
|
|
|
|
|
|
|
|
•
|
disruptions relating to the manufacturing of our products, including disruptions relating to component production by our partners and suppliers;
|
•
|
challenges related to supply chain and logistics due to government-imposed restrictions that inhibit the flow of goods across state boundaries; and
|
•
|
continued global economic uncertainty that could impact buying patterns of our partners and customers and demand for our products and services.
|
•
|
exposure to unknown liabilities or risks of acquired companies, including unknown litigation related to acts or omissions of an acquired company and/or its directors and officers prior to the acquisition, deficiencies in disclosure controls and procedures of the acquired company and deficiencies in internal controls over financial reporting of the acquired company;
|
•
|
higher than anticipated acquisition and integration costs and expenses;
|
•
|
the difficulty and expense of integrating the operations and personnel of the acquired companies;
|
•
|
use of cash to support the operations of an acquired business;
|
•
|
increased foreign exchange translation risk depending on the currency denomination of the revenue and expenses of the acquired business;
|
•
|
disruption of, and demands on, our ongoing business as a result of integration activities including diversion of management's time and attention from the ongoing business;
|
•
|
failure to maximize our financial and strategic position by the successful incorporation of acquired technology;
|
•
|
the inability to implement uniform standards, disclosure controls and procedures, internal controls over financial reporting and other procedures and policies in a timely manner;
|
•
|
the potential loss of key employees and customers;
|
•
|
decrease in our share price if the market perceives that an acquisition does not fit our strategy, the price paid is excessive in light of other similar transactions or that the terms of the acquisition are not favorable to our earnings growth;
|
•
|
failure to anticipate or adequately address regulatory requirements that may need to be satisfied as part of a business acquisition or disposition;
|
•
|
litigation and settlement costs if shareholders bring lawsuits triggered by acquisition or divestiture activities;
|
•
|
decrease in our share price, if, as a result of our acquisition strategy or growth, we decide to raise additional capital through an offering of securities; and
|
•
|
dilution to our shareholders if the purchase price is paid in common shares or securities convertible into common shares.
|
•
|
competition from more established and larger companies with strong brands and greater financial, technical and marketing resources or companies with different business models;
|
•
|
business combinations or strategic alliances by our competitors which could weaken our competitive position;
|
•
|
introduction of new products or services by us that put us in direct competition with major new competitors;
|
•
|
existing or future competitors who may be able to respond more quickly to technological developments and changes and introduce new products or services before we do; and
|
•
|
competitors who may independently develop and patent technologies and products that are superior to ours or achieve greater acceptance due to factors such as more favorable pricing, more desired or better-quality features or more efficient sales channels.
|
•
|
price and product competition which may result in lower selling prices for some of our products and services or lost market share;
|
•
|
price and demand pressure on our products and services from our customers as they experience pressure in their businesses;
|
•
|
demand fluctuation based on the success of our customers in selling their products and solutions which incorporate our wireless products, services and software;
|
•
|
development and timing of the introduction of our new products including the timing of sales orders, OEM and distributor customer sell through and design win cycles in our embedded wireless module business;
|
•
|
transition periods associated with the migration to new technologies;
|
•
|
potential commoditization and saturation in certain markets;
|
•
|
our ability to accurately forecast demand in order to properly align the purchase of components and the appropriate level of manufacturing capability;
|
•
|
product mix of our sales (our products have different gross margins - for example the embedded wireless module product line has lower gross margins than the higher margin rugged mobile product line);
|
•
|
possible delays or shortages in component supplies;
|
•
|
possible delays in the manufacturing or shipment of current or new products and the introduction of new services;
|
•
|
possible product or service quality or factory yield issues that may increase our cost of sales;
|
•
|
concentration in our customer base;
|
•
|
seasonality in demand;
|
•
|
amount of inventory held by our channel partners;
|
•
|
possible fluctuations in certain foreign currencies relative to the U.S. dollar that may affect foreign denominated revenue, cost of sales and operating expenses;
|
•
|
impairment of our goodwill or intangible assets which may result in a significant charge to earnings in the period in which an impairment is determined;
|
•
|
achievement of milestones related to our professional services contracts; and
|
•
|
operating expenses that are generally fixed in the short-term and therefore difficult to rapidly adjust to different levels of business.
|
•
|
our ability to design and manufacture products or implement solutions and services at an acceptable cost and quality;
|
•
|
our ability to attract and retain skilled technical employees;
|
•
|
the availability of critical components from third parties;
|
•
|
our ability to successfully complete the development of products in a timely manner; and
|
•
|
the ability of third parties to complete and deliver on outsourced product development engagements.
|
•
|
we may be found to be liable for potentially substantial damages, liabilities and litigation costs, including attorneys' fees;
|
•
|
we may be prohibited from further use of intellectual property because of an injunction and may be required to cease selling our products that are subject to the claim;
|
•
|
we may have to license third party intellectual property, incurring royalty fees that may or may not be on commercially reasonable terms; in addition, there is no assurance that we will be able to successfully negotiate and obtain such a license from the third party;
|
•
|
we may have to develop a non-infringing alternative, which could be costly and delay or result in the loss of sales; in addition, there is no assurance that we will be able to develop such a non-infringing alternative;
|
•
|
management attention and resources may be diverted;
|
•
|
our relationships with customers may be adversely affected; and
|
•
|
we may be required to indemnify our customers for certain costs and damages they incur in respect of such a claim.
|
•
|
non-recognition of the proprietary nature or inadequate protection of our methodologies in the United States, Canada, France or other foreign countries;
|
•
|
undetected misappropriation of our intellectual property;
|
•
|
the substantial legal and other costs of protecting and enforcing our rights in our intellectual property; and
|
•
|
development of similar technologies by our competitors.
|
•
|
potential business interruption due to unexpected events such as natural disasters, public health epidemic illnesses, such as coronavirus, labor unrest, cyber-attacks, technological issues or geopolitical events;
|
•
|
the absence of guaranteed or adequate manufacturing capacity;
|
•
|
potential violations of laws and regulations by our manufacturers that may subject us to additional costs for duties, monetary penalties, seizure and loss of our products or loss of our import privileges, and damage to our reputation;
|
•
|
reduced control over delivery schedules, production levels, manufacturing yields, costs and product quality;
|
•
|
the inability of our contract manufacturers to secure adequate volumes of components in a timely manner at a reasonable cost; and
|
•
|
unexpected increases in manufacturing costs.
|
•
|
compliance with the laws of the United States, Canada and other countries that apply to our international operations, including import and export legislation, lawful access and privacy laws;
|
•
|
compliance with existing and emerging anti-corruption laws, including the Foreign Corrupt Practices Act of the United States, the Corruption of Foreign Public Officials Act of Canada and the UK Bribery Act;
|
•
|
increased reliance on third parties to establish and maintain foreign operations;
|
•
|
the complexities and expense of administering a business abroad;
|
•
|
complications in compliance with, and unexpected changes in, foreign regulatory requirements, including requirements relating to content filtering and requests from law enforcement authorities;
|
•
|
trading and investment policies;
|
•
|
consumer protection laws that impose additional obligations on us or restrict our ability to provide limited warranty protection;
|
•
|
instability in economic or political conditions, including inflation, recession and actual or anticipated military conflicts, social upheaval or political uncertainty;
|
•
|
foreign currency fluctuations;
|
•
|
foreign exchange controls and cash repatriation restrictions;
|
•
|
emerging protectionist trends in certain countries leading to new or higher tariffs and other trade barriers;
|
•
|
difficulties in collecting accounts receivable;
|
•
|
potential adverse tax consequences, including changes in tax policies in various jurisdictions that may render our tax planning strategy less effective than planned;
|
•
|
uncertainties of laws and enforcement relating to the protection of intellectual property or secured technology;
|
•
|
litigation in foreign court systems;
|
•
|
cultural and language differences;
|
•
|
difficulty in managing a geographically dispersed workforce in compliance with local laws and customs that vary from country to country; and
|
•
|
other factors, depending upon the country involved.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
||||
Revenue (note 5)
|
|
|
|
|
|
|
|
||||||||
IoT Solutions
|
$
|
81,836
|
|
|
$
|
99,145
|
|
|
$
|
160,626
|
|
|
$
|
193,432
|
|
Embedded Broadband
|
62,226
|
|
|
92,229
|
|
|
141,012
|
|
|
171,755
|
|
||||
|
144,062
|
|
|
191,374
|
|
|
301,638
|
|
|
365,187
|
|
||||
Cost of sales
|
|
|
|
|
|
|
|
||||||||
IoT Solutions
|
51,298
|
|
|
62,334
|
|
|
102,077
|
|
|
122,142
|
|
||||
Embedded Broadband
|
46,894
|
|
|
70,091
|
|
|
110,104
|
|
|
129,466
|
|
||||
|
98,192
|
|
|
132,425
|
|
|
212,181
|
|
|
251,608
|
|
||||
Gross margin
|
45,870
|
|
|
58,949
|
|
|
89,457
|
|
|
113,579
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
22,283
|
|
|
23,755
|
|
|
47,053
|
|
|
46,261
|
|
||||
Research and development
|
22,680
|
|
|
22,111
|
|
|
44,829
|
|
|
44,908
|
|
||||
Administration
|
12,977
|
|
|
12,893
|
|
|
25,112
|
|
|
25,290
|
|
||||
Restructuring (note 6)
|
245
|
|
|
18,180
|
|
|
860
|
|
|
19,577
|
|
||||
Acquisition-related and integration
|
185
|
|
|
314
|
|
|
185
|
|
|
409
|
|
||||
Amortization
|
5,330
|
|
|
4,967
|
|
|
10,729
|
|
|
10,211
|
|
||||
|
63,700
|
|
|
82,220
|
|
|
128,768
|
|
|
146,656
|
|
||||
Loss from operations
|
(17,830
|
)
|
|
(23,271
|
)
|
|
(39,311
|
)
|
|
(33,077
|
)
|
||||
Foreign exchange gain
|
3,534
|
|
|
854
|
|
|
565
|
|
|
2
|
|
||||
Other expense
|
(280
|
)
|
|
(102
|
)
|
|
(471
|
)
|
|
(71
|
)
|
||||
Loss before income taxes
|
(14,576
|
)
|
|
(22,519
|
)
|
|
(39,217
|
)
|
|
(33,146
|
)
|
||||
Income tax expense (recovery) (note 7)
|
1,031
|
|
|
5,657
|
|
|
(947
|
)
|
|
6,253
|
|
||||
Net loss
|
$
|
(15,607
|
)
|
|
$
|
(28,176
|
)
|
|
$
|
(38,270
|
)
|
|
$
|
(39,399
|
)
|
Other comprehensive gain (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments, net of taxes of $nil
|
4,318
|
|
|
95
|
|
|
(548
|
)
|
|
(3,520
|
)
|
||||
Comprehensive loss
|
$
|
(11,289
|
)
|
|
$
|
(28,081
|
)
|
|
$
|
(38,818
|
)
|
|
$
|
(42,919
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share (in dollars) (note 9)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.43
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(1.05
|
)
|
|
$
|
(1.09
|
)
|
Diluted
|
(0.43
|
)
|
|
(0.78
|
)
|
|
(1.05
|
)
|
|
(1.09
|
)
|
||||
Weighted average number of shares outstanding (in thousands) (note 9)
|
|
|
|
|
|
|
|
||||||||
Basic
|
36,341
|
|
|
36,156
|
|
|
36,309
|
|
|
36,131
|
|
||||
Diluted
|
36,341
|
|
|
36,156
|
|
|
36,309
|
|
|
36,131
|
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
60,111
|
|
|
$
|
75,454
|
|
Restricted cash
|
2,346
|
|
|
3,629
|
|
||
Accounts receivable, net of allowance of $3,820 (December 31, 2019 - $3,170) (note 10)
|
105,260
|
|
|
131,432
|
|
||
Inventories (note 12)
|
66,326
|
|
|
54,291
|
|
||
Prepaids and other (note 13)
|
25,427
|
|
|
19,256
|
|
||
|
259,470
|
|
|
284,062
|
|
||
Property and equipment, net
|
41,195
|
|
|
39,924
|
|
||
Operating lease right-of-use assets
|
22,433
|
|
|
25,609
|
|
||
Intangible assets, net
|
78,842
|
|
|
70,072
|
|
||
Goodwill
|
216,231
|
|
|
207,595
|
|
||
Deferred income taxes
|
2,108
|
|
|
2,096
|
|
||
Other assets
|
9,512
|
|
|
9,982
|
|
||
|
$
|
629,791
|
|
|
$
|
639,340
|
|
Liabilities
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Short-term borrowings (note 17 (b))
|
$
|
15,000
|
|
|
$
|
—
|
|
Accounts payable and accrued liabilities (note 14)
|
181,855
|
|
|
173,556
|
|
||
Deferred revenue (note 11)
|
10,310
|
|
|
10,610
|
|
||
|
207,165
|
|
|
184,166
|
|
||
Long-term obligations (note 15)
|
44,361
|
|
|
43,774
|
|
||
Operating lease liabilities
|
21,193
|
|
|
25,154
|
|
||
Deferred income taxes
|
9,731
|
|
|
4,921
|
|
||
|
282,450
|
|
|
258,015
|
|
||
Equity
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
||||
Common stock: no par value; unlimited shares authorized; issued and
outstanding: 36,345,691 shares (December 31, 2019 - 36,233,361 shares) |
437,608
|
|
|
435,532
|
|
||
Preferred stock: no par value; unlimited shares authorized;
issued and outstanding: nil shares
|
—
|
|
|
—
|
|
||
Treasury stock: at cost; 10,274 shares (December 31, 2019 – 44,487 shares)
|
(86
|
)
|
|
(370
|
)
|
||
Additional paid-in capital
|
41,465
|
|
|
38,212
|
|
||
Retained deficit
|
(117,882
|
)
|
|
(78,833
|
)
|
||
Accumulated other comprehensive loss (note 16)
|
(13,764
|
)
|
|
(13,216
|
)
|
||
|
347,341
|
|
|
381,325
|
|
||
|
$
|
629,791
|
|
|
$
|
639,340
|
|
Three and six months ended June 30, 2020
|
|||||||||||||||||||||||||||||
|
Common Stock
|
|
Treasury Stock
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
# of shares
|
|
|
$
|
|
# of shares
|
|
|
$
|
|
Additional paid-in capital
|
|
|
Retained deficit
|
|
|
Accumulated other comprehensive income/(loss)
|
|
|
Total
|
|
||||||||
Balance as at December 31, 2019 as previously reported
|
36,233,361
|
|
|
$
|
435,532
|
|
|
44,487
|
|
|
$
|
(370
|
)
|
|
$
|
38,212
|
|
|
$
|
(78,833
|
)
|
|
$
|
(13,216
|
)
|
|
$
|
381,325
|
|
Effect of adoption of ASC 326 (note 2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(779
|
)
|
|
—
|
|
|
(779
|
)
|
||||||
Balance as at January 1, 2020
|
36,233,361
|
|
|
435,532
|
|
|
44,487
|
|
|
(370
|
)
|
|
38,212
|
|
|
(79,612
|
)
|
|
(13,216
|
)
|
|
$
|
380,546
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Stock-based compensation (note 8)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,182
|
|
|
—
|
|
|
—
|
|
|
3,182
|
|
||||||
Purchase of treasury shares for RSU distribution
|
—
|
|
|
—
|
|
|
3,600
|
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
||||||
Distribution of vested RSUs
|
103,431
|
|
|
1,927
|
|
|
(42,280
|
)
|
|
348
|
|
|
(2,851
|
)
|
|
—
|
|
|
—
|
|
|
(576
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,663
|
)
|
|
—
|
|
|
(22,663
|
)
|
||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,866
|
)
|
|
(4,866
|
)
|
||||||
Balance as at March 31, 2020
|
36,336,792
|
|
|
$
|
437,459
|
|
|
5,807
|
|
|
$
|
(48
|
)
|
|
$
|
38,543
|
|
|
$
|
(102,275
|
)
|
|
$
|
(18,082
|
)
|
|
$
|
355,597
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Stock-based compensation (note 8)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,276
|
|
|
—
|
|
|
—
|
|
|
3,276
|
|
||||||
Purchase of treasury shares for RSU distribution
|
—
|
|
|
—
|
|
|
23,000
|
|
|
(194
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(194
|
)
|
||||||
Distribution of vested RSUs
|
8,899
|
|
|
149
|
|
|
(18,533
|
)
|
|
156
|
|
|
(354
|
)
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,607
|
)
|
|
—
|
|
|
(15,607
|
)
|
||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,318
|
|
|
4,318
|
|
||||||
Balance as at June 30, 2020
|
36,345,691
|
|
|
$
|
437,608
|
|
|
10,274
|
|
|
$
|
(86
|
)
|
|
$
|
41,465
|
|
|
$
|
(117,882
|
)
|
|
$
|
(13,764
|
)
|
|
$
|
347,341
|
|
Three and six months ended June 30, 2019
|
|||||||||||||||||||||||||||||
|
Common Stock
|
|
Treasury Stock
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
# of shares
|
|
|
$
|
|
# of shares
|
|
|
$
|
|
Additional paid-in capital
|
|
|
Retained deficit
|
|
|
Accumulated other comprehensive income/(loss)
|
|
|
Total
|
|
||||||||
Balance as at December 31, 2018
|
36,067,415
|
|
|
$
|
432,552
|
|
|
119,584
|
|
|
$
|
(1,965
|
)
|
|
$
|
30,984
|
|
|
$
|
(8,295
|
)
|
|
$
|
(9,146
|
)
|
|
$
|
444,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Stock option exercises (note 8)
|
9,045
|
|
|
136
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
94
|
|
||||||
Stock-based compensation (note 8)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,158
|
|
|
—
|
|
|
—
|
|
|
3,158
|
|
||||||
Distribution of vested RSUs
|
73,839
|
|
|
1,366
|
|
|
(112,612
|
)
|
|
1,847
|
|
|
(3,883
|
)
|
|
—
|
|
|
—
|
|
|
(670
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,223
|
)
|
|
—
|
|
|
(11,223
|
)
|
||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,615
|
)
|
|
(3,615
|
)
|
||||||
Balance as at March 31, 2019
|
36,150,299
|
|
|
$
|
434,054
|
|
|
6,972
|
|
|
$
|
(118
|
)
|
|
$
|
30,217
|
|
|
$
|
(19,518
|
)
|
|
$
|
(12,761
|
)
|
|
$
|
431,874
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Stock option exercises (note 8)
|
6,971
|
|
|
102
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
73
|
|
||||||
Stock-based compensation (note 8)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,102
|
|
|
—
|
|
|
—
|
|
|
4,102
|
|
||||||
Purchase of treasury shares for RSU distribution
|
—
|
|
|
—
|
|
|
20,000
|
|
|
(267
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(267
|
)
|
||||||
Distribution of vested RSUs
|
7,826
|
|
|
160
|
|
|
(9,080
|
)
|
|
156
|
|
|
(391
|
)
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,176
|
)
|
|
—
|
|
|
(28,176
|
)
|
||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
|
95
|
|
||||||
Balance as at June 30, 2019
|
36,165,096
|
|
|
$
|
434,316
|
|
|
17,892
|
|
|
$
|
(229
|
)
|
|
$
|
33,899
|
|
|
$
|
(47,694
|
)
|
|
$
|
(12,666
|
)
|
|
$
|
407,626
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
||||
Cash flows provided by (used in):
|
|
|
|
|
|
|
|
||||||||
Operating activities
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(15,607
|
)
|
|
$
|
(28,176
|
)
|
|
$
|
(38,270
|
)
|
|
$
|
(39,399
|
)
|
Items not requiring (providing) cash
|
|
|
|
|
|
|
|
||||||||
Amortization
|
8,538
|
|
|
8,118
|
|
|
17,023
|
|
|
16,489
|
|
||||
Stock-based compensation (note 8)
|
3,276
|
|
|
4,102
|
|
|
6,458
|
|
|
7,260
|
|
||||
Deferred income taxes
|
(16
|
)
|
|
4,961
|
|
|
(9
|
)
|
|
5,038
|
|
||||
Unrealized foreign exchange (gain) loss
|
(4,772
|
)
|
|
(2,230
|
)
|
|
361
|
|
|
(1,976
|
)
|
||||
Other
|
(59
|
)
|
|
478
|
|
|
(207
|
)
|
|
586
|
|
||||
Changes in non-cash working capital
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
18,730
|
|
|
1,184
|
|
|
26,288
|
|
|
17,998
|
|
||||
Inventories
|
(2,881
|
)
|
|
1,116
|
|
|
(11,555
|
)
|
|
(5,619
|
)
|
||||
Prepaids and other
|
(4,858
|
)
|
|
2,129
|
|
|
(5,659
|
)
|
|
(5,518
|
)
|
||||
Accounts payable and accrued liabilities
|
3,256
|
|
|
22,765
|
|
|
6,033
|
|
|
7,599
|
|
||||
Deferred revenue
|
82
|
|
|
1,347
|
|
|
(1,216
|
)
|
|
2,718
|
|
||||
Cash flows provided by (used in) operating activities
|
5,689
|
|
|
15,794
|
|
|
(753
|
)
|
|
5,176
|
|
||||
Investing activities
|
|
|
|
|
|
|
|
||||||||
Additions to property and equipment
|
(5,728
|
)
|
|
(4,273
|
)
|
|
(9,727
|
)
|
|
(8,131
|
)
|
||||
Additions to intangible assets
|
(743
|
)
|
|
(905
|
)
|
|
(1,471
|
)
|
|
(1,393
|
)
|
||||
Proceeds from sale of property and equipment
|
204
|
|
|
27
|
|
|
224
|
|
|
84
|
|
||||
Proceeds from sale of iTank business
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
||||
Acquisition of M2M Group, net of cash acquired (note 4)
|
(172
|
)
|
|
—
|
|
|
(18,391
|
)
|
|
—
|
|
||||
Cash flows used in investing activities
|
(6,439
|
)
|
|
(5,151
|
)
|
|
(29,365
|
)
|
|
(8,940
|
)
|
||||
Financing activities
|
|
|
|
|
|
|
|
||||||||
Issuance of common shares
|
—
|
|
|
73
|
|
|
—
|
|
|
167
|
|
||||
Purchase of treasury shares for RSU distribution
|
(194
|
)
|
|
(267
|
)
|
|
(220
|
)
|
|
(267
|
)
|
||||
Taxes paid related to net settlement of equity awards
|
(50
|
)
|
|
(75
|
)
|
|
(626
|
)
|
|
(745
|
)
|
||||
Decrease in other long-term obligations
|
(83
|
)
|
|
(73
|
)
|
|
(187
|
)
|
|
(214
|
)
|
||||
Proceeds from (repayment of) credit facility (note 17(b))
|
(10,000
|
)
|
|
—
|
|
|
15,000
|
|
|
—
|
|
||||
Cash flows provided by (used in) financing activities
|
(10,327
|
)
|
|
(342
|
)
|
|
13,967
|
|
|
(1,059
|
)
|
||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
766
|
|
|
325
|
|
|
(475
|
)
|
|
516
|
|
||||
Cash, cash equivalents and restricted cash, increase (decrease) in the period
|
(10,311
|
)
|
|
10,626
|
|
|
(16,626
|
)
|
|
(4,307
|
)
|
||||
Cash, cash equivalents and restricted cash, beginning of period
|
72,768
|
|
|
74,364
|
|
|
79,083
|
|
|
89,297
|
|
||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
62,457
|
|
|
$
|
84,990
|
|
|
$
|
62,457
|
|
|
$
|
84,990
|
|
1.
|
BASIS OF PRESENTATION
|
2.
|
ACCOUNTING STANDARDS
|
3.
|
SIGNIFICANT ACCOUNTING POLICIES
|
4.
|
ACQUISITION OF M2M GROUP
|
|
|
Amount
|
|
Assets acquired
|
|
|
|
Cash
|
|
2,712
|
|
Net working capital
|
|
(640
|
)
|
Deferred revenue
|
|
(914
|
)
|
Identifiable intangible assets
|
|
16,064
|
|
Goodwill
|
|
8,699
|
|
Deferred income tax liability
|
|
(4,819
|
)
|
Fair value of net assets acquired
|
|
21,102
|
|
|
|
Estimated
useful life |
|
Amount
|
|
|
Customer relationships
|
|
10 years
|
|
$
|
14,646
|
|
Brand
|
|
5 years
|
|
1,418
|
|
|
|
|
|
|
$
|
16,064
|
|
5.
|
SEGMENTED INFORMATION
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
115,975
|
|
|
$
|
166,348
|
|
|
$
|
246,718
|
|
|
$
|
317,228
|
|
Recurring and other services
|
28,087
|
|
|
25,026
|
|
|
54,920
|
|
|
47,959
|
|
||||
|
$
|
144,062
|
|
|
$
|
191,374
|
|
|
$
|
301,638
|
|
|
$
|
365,187
|
|
|
IoT Solutions
|
|
|
Embedded Broadband
|
|
|
Total
|
|
|||
|
|
|
|
|
|
||||||
Three months ended June 30, 2020
|
|
|
|
|
|
||||||
Americas
|
$
|
46,253
|
|
|
$
|
11,626
|
|
|
$
|
57,879
|
|
Europe, Middle East and Africa
|
14,546
|
|
|
9,483
|
|
|
24,029
|
|
|||
Asia-Pacific
|
21,037
|
|
|
41,117
|
|
|
62,154
|
|
|||
|
$
|
81,836
|
|
|
$
|
62,226
|
|
|
$
|
144,062
|
|
|
|
|
|
|
|
||||||
Three months ended June 30, 2019
|
|
|
|
|
|
||||||
Americas
|
$
|
60,523
|
|
|
$
|
20,056
|
|
|
$
|
80,579
|
|
Europe, Middle East and Africa
|
17,218
|
|
|
16,909
|
|
|
34,127
|
|
|||
Asia-Pacific
|
21,404
|
|
|
55,264
|
|
|
76,668
|
|
|||
|
$
|
99,145
|
|
|
92,229
|
|
|
$
|
191,374
|
|
|
IoT Solutions
|
|
|
Embedded Broadband
|
|
|
Total
|
|
|||
|
|
|
|
|
|
||||||
Six months ended June 30, 2020
|
|
|
|
|
|
||||||
Americas
|
$
|
89,491
|
|
|
$
|
26,153
|
|
|
$
|
115,644
|
|
Europe, Middle East and Africa
|
31,301
|
|
|
32,851
|
|
|
64,152
|
|
|||
Asia-Pacific
|
39,834
|
|
|
82,008
|
|
|
121,842
|
|
|||
|
$
|
160,626
|
|
|
$
|
141,012
|
|
|
$
|
301,638
|
|
|
|
|
|
|
|
||||||
Six months ended June 30, 2019
|
|
|
|
|
|
||||||
Americas
|
$
|
118,239
|
|
|
$
|
34,416
|
|
|
$
|
152,655
|
|
Europe, Middle East and Africa
|
35,199
|
|
|
38,532
|
|
|
73,731
|
|
|||
Asia-Pacific
|
39,994
|
|
|
98,807
|
|
|
138,801
|
|
|||
|
$
|
193,432
|
|
|
171,755
|
|
|
$
|
365,187
|
|
6.
|
RESTRUCTURING
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
||||
Balance, beginning of period
|
$
|
4,415
|
|
|
$
|
2,580
|
|
|
$
|
8,655
|
|
|
$
|
2,486
|
|
Expensed in period
|
245
|
|
|
18,180
|
|
|
860
|
|
|
19,577
|
|
||||
Disbursements
|
(2,197
|
)
|
|
(3,405
|
)
|
|
(6,898
|
)
|
|
(4,720
|
)
|
||||
Foreign exchange
|
44
|
|
|
153
|
|
|
(110
|
)
|
|
165
|
|
||||
|
$
|
2,507
|
|
|
$
|
17,508
|
|
|
$
|
2,507
|
|
|
$
|
17,508
|
|
|
|
|
|
|
|
|
|
||||||||
Classification:
|
|
|
|
|
|
|
|
|
|||||||
Accounts payable and accrued liabilities
|
2,507
|
|
|
17,508
|
|
|
2,507
|
|
|
17,508
|
|
||||
|
$
|
2,507
|
|
|
$
|
17,508
|
|
|
$
|
2,507
|
|
|
$
|
17,508
|
|
|
|
|
|
|
|
|
|
||||||||
By restructuring initiative:
|
|
|
|
|
|
|
|
||||||||
March 2018
|
—
|
|
|
557
|
|
|
—
|
|
|
557
|
|
||||
November 2018
|
—
|
|
|
801
|
|
|
—
|
|
|
801
|
|
||||
April 2019
|
2,507
|
|
|
16,150
|
|
|
2,507
|
|
|
16,150
|
|
||||
|
$
|
2,507
|
|
|
$
|
17,508
|
|
|
$
|
2,507
|
|
|
$
|
17,508
|
|
7.
|
INCOME TAXES
|
8.
|
STOCK-BASED PAYMENTS
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
||||
Cost of sales
|
$
|
65
|
|
|
$
|
44
|
|
|
$
|
114
|
|
|
$
|
103
|
|
Sales and marketing
|
959
|
|
|
1,250
|
|
|
1,983
|
|
|
2,156
|
|
||||
Research and development
|
654
|
|
|
936
|
|
|
1,396
|
|
|
1,645
|
|
||||
Administration
|
1,598
|
|
|
1,872
|
|
|
2,965
|
|
|
3,356
|
|
||||
|
$
|
3,276
|
|
|
$
|
4,102
|
|
|
$
|
6,458
|
|
|
$
|
7,260
|
|
|
|
|
|
|
|
|
|
||||||||
Stock option plan
|
$
|
536
|
|
|
$
|
740
|
|
|
$
|
1,129
|
|
|
$
|
1,457
|
|
Restricted stock plan
|
2,740
|
|
|
3,362
|
|
|
5,329
|
|
|
5,803
|
|
||||
|
$
|
3,276
|
|
|
$
|
4,102
|
|
|
$
|
6,458
|
|
|
$
|
7,260
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||
Number of Options
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Outstanding, beginning of period
|
1,444,493
|
|
|
1,671,963
|
|
|
1,588,143
|
|
|
1,378,348
|
|
Granted
|
—
|
|
|
25,209
|
|
|
8,865
|
|
|
401,365
|
|
Exercised
|
—
|
|
|
(6,971
|
)
|
|
—
|
|
|
(16,016
|
)
|
Forfeited / expired
|
(79,815
|
)
|
|
(31,511
|
)
|
|
(232,330
|
)
|
|
(105,007
|
)
|
Outstanding, end of period
|
1,364,678
|
|
|
1,658,690
|
|
|
1,364,678
|
|
|
1,658,690
|
|
Exercisable, beginning of period
|
873,801
|
|
|
697,167
|
|
|
824,073
|
|
|
612,133
|
|
Exercisable, end of period
|
889,567
|
|
|
759,053
|
|
|
889,567
|
|
|
759,053
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Risk-free interest rate
|
N/A
|
|
1.95%
|
|
1.38%
|
|
2.10%
|
Annual dividends per share
|
N/A
|
|
Nil
|
|
Nil
|
|
Nil
|
Expected stock price volatility
|
N/A
|
|
54%
|
|
49%
|
|
54%
|
Expected option life (in years)
|
N/A
|
|
4.0
|
|
4.0
|
|
4.0
|
Average fair value of options granted (in dollars)
|
N/A
|
|
$5.85
|
|
$3.45
|
|
$5.54
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||
Number of RSUs
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Outstanding, beginning of period
|
2,475,247
|
|
|
1,837,634
|
|
|
1,815,759
|
|
|
1,046,275
|
|
Granted
|
—
|
|
|
88,022
|
|
|
928,390
|
|
|
1,119,721
|
|
Vested / settled
|
(33,465
|
)
|
|
(22,659
|
)
|
|
(243,174
|
)
|
|
(256,338
|
)
|
Forfeited
|
(24,210
|
)
|
|
(5,010
|
)
|
|
(83,403
|
)
|
|
(11,671
|
)
|
Outstanding, end of period
|
2,417,572
|
|
|
1,897,987
|
|
|
2,417,572
|
|
|
1,897,987
|
|
|
|
|
|
|
|
|
|
||||
Outstanding – vested and not settled
|
241,756
|
|
|
159,063
|
|
|
241,756
|
|
|
159,063
|
|
Outstanding – unvested
|
2,175,816
|
|
|
1,738,924
|
|
|
2,175,816
|
|
|
1,738,924
|
|
Outstanding, end of period
|
2,417,572
|
|
|
1,897,987
|
|
|
2,417,572
|
|
|
1,897,987
|
|
9.
|
LOSS PER SHARE
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
||||
Net loss
|
$
|
(15,607
|
)
|
|
$
|
(28,176
|
)
|
|
$
|
(38,270
|
)
|
|
$
|
(39,399
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares used in computation of:
|
|
|
|
|
|
|
|
||||||||
Basic
|
36,341
|
|
|
36,156
|
|
|
36,309
|
|
|
36,131
|
|
||||
Diluted
|
36,341
|
|
|
36,156
|
|
|
36,309
|
|
|
36,131
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss per share (in dollars):
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.43
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(1.05
|
)
|
|
$
|
(1.09
|
)
|
Diluted
|
(0.43
|
)
|
|
(0.78
|
)
|
|
(1.05
|
)
|
|
(1.09
|
)
|
10.
|
ACCOUNT RECEIVABLES
|
|
Six months ended
June 30, 2020 |
|
|
Balance, end of period, as previously reported
|
3,170
|
|
|
Effect of adoption of ASC 326 (note 2)
|
779
|
|
|
Balance, beginning of period, as adjusted
|
3,949
|
|
|
Current-period provision for expected credit losses
|
356
|
|
|
Write-offs charged against allowance for credit losses
|
(474
|
)
|
|
Recoveries of amounts previously written off
|
—
|
|
|
Foreign exchange
|
(11
|
)
|
|
Balance, end of period
|
$
|
3,820
|
|
11.
|
CONTRACT BALANCES
|
|
June 30, 2020
|
|
December 31, 2019
|
|
Change
|
|
|||
|
|
|
|
||||||
Contract assets
|
$
|
1,672
|
|
$
|
1,688
|
|
$
|
(16
|
)
|
Deferred revenue - current
|
10,310
|
|
10,610
|
|
(300
|
)
|
|||
Deferred revenue - noncurrent
|
7,854
|
|
8,078
|
|
(224
|
)
|
|||
|
|
|
|
12.
|
INVENTORIES
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
||
Electronic components
|
$
|
34,865
|
|
|
$
|
30,149
|
|
Finished goods
|
31,461
|
|
|
24,142
|
|
||
|
$
|
66,326
|
|
|
$
|
54,291
|
|
13.
|
PREPAIDS AND OTHER
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
||
Inventory advances
|
$
|
14,330
|
|
|
$
|
10,418
|
|
Insurance and licenses
|
956
|
|
|
309
|
|
||
Deposits
|
2,349
|
|
|
2,231
|
|
||
Contract acquisition and fulfillment costs
|
1,394
|
|
|
1,529
|
|
||
Other
|
6,398
|
|
|
4,769
|
|
||
|
$
|
25,427
|
|
|
$
|
19,256
|
|
14.
|
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
||
Trade payables and accruals
|
$
|
98,985
|
|
|
$
|
75,057
|
|
Inventory commitment reserve
|
1,283
|
|
|
1,430
|
|
||
Accrued royalties
|
10,568
|
|
|
11,870
|
|
||
Accrued payroll and related liabilities
|
17,390
|
|
|
15,093
|
|
||
Professional services
|
4,184
|
|
|
4,481
|
|
||
Taxes payable (including sales taxes)
|
4,609
|
|
|
4,904
|
|
||
Product warranties (note 18 (a)(iii))
|
7,006
|
|
|
8,927
|
|
||
Sales credits
|
7,474
|
|
|
8,814
|
|
||
Restructuring liability (note 6)
|
2,507
|
|
|
8,655
|
|
||
Operating lease liabilities
|
5,344
|
|
|
5,933
|
|
||
Finance lease liabilities
|
360
|
|
|
379
|
|
||
Other
|
22,145
|
|
|
28,013
|
|
||
|
$
|
181,855
|
|
|
$
|
173,556
|
|
15.
|
LONG-TERM OBLIGATIONS
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
||
Accrued royalties
|
$
|
31,748
|
|
|
$
|
30,988
|
|
Deferred revenue
|
7,854
|
|
|
8,078
|
|
||
Finance lease liabilities
|
38
|
|
|
208
|
|
||
Other
|
4,721
|
|
|
4,500
|
|
||
|
$
|
44,361
|
|
|
$
|
43,774
|
|
16.
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
||||
Balance, beginning of period
|
$
|
(18,082
|
)
|
$
|
(12,761
|
)
|
|
$
|
(13,216
|
)
|
$
|
(9,146
|
)
|
Foreign currency translation adjustments
|
2,987
|
|
(558
|
)
|
|
(368
|
)
|
(3,205
|
)
|
||||
Gain (loss) on long term intercompany balances
|
1,331
|
|
653
|
|
|
(180
|
)
|
(315
|
)
|
||||
Balance, end of period
|
$
|
(13,764
|
)
|
$
|
(12,666
|
)
|
|
$
|
(13,764
|
)
|
$
|
(12,666
|
)
|
17.
|
FINANCIAL INSTRUMENTS
|
Level 1 -
|
Quoted prices in active markets for identical assets or liabilities.
|
Level 2 -
|
Observable inputs other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for identical or similar assets or liabilities in markets that
|
Level 3 -
|
Inputs that are generally unobservable and are supported by little or no market activity and that are significant to the fair value determination of the assets or liabilities.
|
18.
|
COMMITMENTS AND CONTINGENCIES
|
(i)
|
Under license agreements, we are committed to make royalty payments based on the sales of products using certain technologies. We recognize royalty obligations as determinable in accordance with agreement terms. Where agreements are not in place, we have recognized our current best estimate of the obligation under accrued liabilities and long-term obligations. When agreements are finalized or the obligation becomes statute barred, the estimate will be revised accordingly.
|
(ii)
|
We are a party to a variety of agreements in the ordinary course of business under which we may be obligated to indemnify a third party with respect to certain matters. Typically, these obligations arise as a result of contracts for sale of our products to customers where we provide indemnification against losses arising from matters such as potential intellectual property infringements and product liabilities. The impact on our future financial results is not subject to reasonable estimation because considerable uncertainty exists as to whether claims will be made and the final outcome of potential claims. To date, we have not incurred material costs related to these types of indemnifications.
|
|
Three months ended
June 30, 2020 |
|
|
Six months ended
June 30, 2020 |
|
||
Balance, beginning of period
|
$
|
7,741
|
|
|
$
|
8,927
|
|
Provisions
|
271
|
|
|
735
|
|
||
Expenditures
|
(1,006
|
)
|
|
(2,656
|
)
|
||
Balance, end of period
|
$
|
7,006
|
|
|
$
|
7,006
|
|
19.
|
SUBSEQUENT EVENT
|
|
|
|
|
Head Office
|
|
Sierra Wireless, Inc.
|
|
13811 Wireless Way
|
|
Richmond
|
|
British Columbia
|
|
Canada V6V 3A4
|
|
|
|
Telephone :: 604 231 1100
|
|
|
|
Facsimile :: 604 231 1109
|
|
|
|
Website :: www.sierrawireless.com
|
1 Year Sierra Wireless Chart |
1 Month Sierra Wireless Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions