Sierra Wireless Inc. (NASDAQ:SWIR) Q3 2019 Earnings Conference Call Transcript

Nov 05, 2019 • 05:30 pm ET

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Sierra Wireless Inc. (NASDAQ:SWIR) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen and thank you for standing by and welcome to the Sierra Wireless Incorporated Third Quarter Earnings Conference Call. [Operator Instructions] After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, David Climie, Vice President of Investor Relations. Thank you. Please go ahead.

Executive
David Climie

Thanks and good afternoon everybody. Thank you for joining today's conference call and webcast. On the call today is Kent Thexton, President and CEO; and Dave McLennan, our Chief Financial Officer. As a reminder, today's presentation is being webcast and will be available on our website following the call.Today's agenda will be as follows; Dave will provide a detailed overview of our third quarter 2019 results; Kent will then provide his corporate update; and then Dave will provide comments on a full year guidance along with an update on our cost-reduction program followed by Q&A.Before we get started, I will reference the company's cautionary note regarding forward-looking statements. A summary of our cautionary note can be found on Page 2 of the webcast and is now being displayed. Today's presentation contains certain statements and information that are not based on historical facts and constitute forward-looking statements within the meaning of applicable securities laws.

These statements include our financial guidance, statements about our strategy, goals, objectives, and expectations, and commentary regarding the outlook for our business. Our forward-looking statements are based on a number of material assumptions including those listed on Page 2 of the webcast presentation which could prove to be significantly incorrect.Additionally, forward-looking statements are based on our management's current expectations and we caution investors that forward-looking statements, particularly those that relate to longer periods of time are subject to substantial known and unknown material risks and uncertainties that could cause actual events or results to differ significantly from those expressed or implied by our forward-looking statements.I draw your attention to a longer discussion of our risk factors in our AIF and management discussion and analysis which can be found on SEDAR and EDGAR as well as other regulatory filings. This presentation should also be viewed in conjunction with our quarterly earnings release.

With that, I will now turn the call over to Dave McLennan for his review of the third quarter results.

Executive
David McLennan

Thank you David. Note that we report our financial results in U.S. dollars and on a U.S. GAAP basis. We also present non-GAAP results to provide a better understanding of our operating performance. A full reconciliation between our GAAP and non-GAAP results is available on our website.Total revenue in the third quarter was $174 million, down 14.5% compared to Q3 2018. This level of quarterly revenue is below our expectations due to lower demand for certain hardware products, which I will review in more detail shortly.Non-GAAP gross margin in the third quarter was 31.7%, up from 30.8% in the prior quarter. Our non-GAAP operating expense in Q3 was $53.3 million, down $3.2 million year-over-year from Q3 2018.