Filed by Sierra Wireless, Inc. Pursuant to Rule 425 under the Securities Act of 1933, as amended Subject
Company: Numerex Corp. Commission File No.:
000-22920
Commission File No. for Registration Statement on Form
F-4
filed by Sierra Wireless, Inc.:
333-220512
Sierra Wireless Investor Relations November 2017
Cautionary Note Regarding Forward-Looking Statements C i di f i i hi i b d hi i lf d i f dl ki i hi h bj t t
Certain statements and information in this presentation are not based on historical facts and constitute forward-looking statements within the b t ti l k d k t i l i k d t i ti M f t ld meaning of applicable securities laws (forward-looking
statements) including statements and information relating to our Q417 business outlook and beyond. Forward-looking statements are provided to help you understand our views of our short and longer term plans, expectations, and prospects.
We caution you that forward-looking statements may not be appropriate for other purposes. We do not intend to update or revise our forward-looking statements unless we are required to do so by securities laws. Forward-looking statements:
typically include words and phrases about the future, such as: outlook, will, may, estimates, intends believes plans anticipates and expects;
are subject to substantial known and unknown material risks and uncertainties. Many factors could cause our actual results, achievements and developments in our business to differ significantly from those expressed or implied by our
forward-looking statements, including, without limitation, the following factors, which are discussed in greater detail. These risk factors and others are discussed in our Annual Information Form and Managements 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: intends , believes , plans , anticipates expects ; are not promises or guarantees of future performance. They represent our current views and may change significantly; are based on a number of material
assumptions, including those listed below, which could prove to be significantly incorrect: o our ability to develop, manufacture and sell new products and services that meet the needs of our customers and gain commercial acceptance; o our ability
to continue to sell our products and services in the expected quantities at the expected prices and expected o risks related to the proposed acquisition of Numerex; o competition from new or established cloud and connectivity service providers or
from those with greater resources; o disruption of, and demands on, our ongoing business and diversion of managements time and attention in connection with acquisitions or divestitures; o the loss of any of our significant customers; o
cyber-attacks or other breaches of our information technology security; o difficult or uncertain global economic conditions; times; fi i l lt b i bj t t fl t ti o expected cost of goods sold; o expected component supply constraints; o our ability to
win new business; o our ability to complete the proposed acquisition of Numerex Corp. (Numerex) in December 2017, to integrate Numerexs business, operations and workforce with ours and return the Numerex business to profitable
growth and realize the expected benefits of the acquisition; o our ability to integrate other acquired businesses and realize expected benefits; o expected deployment of next generation networks by wireless network operators; o our financial results
being subject to fluctuation; o our ability to attract or retain key personnel; o risks related to infringement on intellectual property rights of others; o our ability to obtain necessary rights to use software or components supplied by third
parties; o our ability to enforce our intellectual property rights; o our ability to respond to changing technology, industry standards and customer requirements; o our reliance on single source suppliers for certain components used in our products;
o failures of our products or services due to design flaws and errors, component quality issues, manufacturing quality o our operations not be adversely disrupted by component shortages or other development, operating or regulatory risks; and o
expected tax rates and foreign exchange rates. defects or other issues; o our dependence on a limited number of third party manufacturers; o unanticipated costs associated with litigation or settlements; o our dependence on wireless network carriers
to offer and promote acceptable wireless service programs; o risks related to contractual disputes with counterparties; o risks related to governmental regulation; o risks related to the transmission, use and disclosure of user data and personal
information; and o risks inherent in foreign jurisdictions. 2 Investors are cautioned not to place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future results. USE OF
NON-GAAP
FINANCIAL MEASURES this presentation contains references to certain
non-GAAP
financial measures and should be viewed in conjunction with our press release,
which contains further information regarding our use of
non-GAAP
financial measures, including a reconciliation of such information to our GAAP results
Sierra Wireless IoT Leader Internet of Things Pure Play #1 in
device-to-cloud
solutions $652m in cellular modules and LTM revenue gateways* Innovator 130+ essential IP in Cat M1 edge intelligence open systems customers in countries founded in devices shipped 1993 130m p
y 3 * Source: ABI Research June 2016, IHS Research July 2016
Growth opportunity $30B for IoT device-tocloud solutions Sierra Wireless Cloud + connectivity Addressable
Market ($USD) $3B Short range (BL WiFi ZgB) Gateways + Routers Cellular modules + GNSS BL, WiFi, 4 2015 2021
Leader in
device-to-cloud
solutions for the IoT Intelligent edge devices Cloud platform services Managed Connectivity services Embedded solutions Smart SIM Networking solutions Connectivity Device Application Fully integrated solution for IoT applications y management pp
management enablement Connected devices and machines Big data and enterprise integration 5
Well positioned in key IoT market segments Automotive, Fleet, Transit, User-based Insurance, Home Security,
Home Automation, Payment, Mobile Computing, Networking, Retail, Smart Meters, Smart Grid, Industrial Automotive & Transport Energy & Industrial Enterprise Residential & Healthcare Public Safety Machines, Surveillance
Patient Monitoring Public Infrastructure 6
Three business segments OEM solutions Enterprise solutions Cloud & connectivity services LTM revenue:
$ 551M LTM revenue: $ 91M LTM revenue: $ 30M AirPrime® embedded modules AirLink® intelligent gateways, AirVantage® IoT Platform, Sierra provide 2G, 3G, 4G, LPWA, WiFi, Bluetooth, and GNSS connectivity routers and management services for
secure connectivity Smart SIM technology & Managed Connectivity Services 7
OEM Solutions: market and technology leader Air interface innovator, first to market track record: 4G LTE,
LPWA,
LTE-M,
NBIoT Edge intelligence leader with application frameworks and tools to maximize investment at the edge, Miniaturization & scalability advanced packaging, common form factor &
footprint (CF3) accelerating our customers TTM Open source Linux-based application framework Open hardware to enable Bluetooth and WiFi modules, proven Bluetooth protocol stacks Open Platform Leader Recent acquisitions 8 rapid
prototyping & commercialization Global Navigation Satellite System embedded modules
Q3 2017 OEM Solutions Solid demand from established and new OEM programs Solid design win
activity across several segments Q3 Revenue $138.5 million Announced worlds first global LTE Advanced Pro module Announced
Wi-Fi &
Bluetooth combo module with cloud services
compared to Q316 Q317 GAAP GM: 29.7% Q317
Non-GAAP
29 8% up 8.4% Increasing demand for mangOH IoT development kits Q3 Non GM: 29.8% 9
Volkswagen selects Sierra Wireless to connect
next-gen
vehicles
AirPrime® AR Series with Legato® delivers high-speed cellular connectivity for
Car-Net
platform:
In-vehicle
internet-based services Remote vehicle
access Roadside assistance 10 Diagnostics and maintenance
Enterprise Solutions: intelligent gateways & routers Mobile Industrial Enterprise Secure intelligent
gateways and g g y Low power, secure, intelligent Secure 4G LTE primary and routers with telematics capability for public safety, transit, fleets p , , g connectivity for fixed assets and infrastructure in energy & industrial p y failover
connectivity for distributed enterprise and retail 11
Q3 2017 Enterprise Solutions $26.3 Strong revenue from fleet telematics, public safety & energy
Solid demand for new gateway & router products Q3 Revenue million Announced release of new AirLink Connection Manager 2.0 VPN appliance for always on mission-critical vehicle connectivity compared to Q316 Q317 GAAP
GM: 48.1% Q317
Non-GAAP
48 1% up 38.8% Announced advanced telemetry & navigation for MP70 New design wins in Transit, Public Safety & Industrial markets Q3 GM: 48.1% 12
Cloud & Connectivity Services Smart SIM Managed connectivity Smart SIM connectivity Multi IoT
cloud platform Unified for Connectivity management Application enablement Device management Multi-operator connectivity for superior QoS, CoS and global coverage; change IMSI or full profile OTA First devices with
pre-integrated
global platform comprehensive operations management and application enablement 13 connectivity for
instant-on
service Partnering with leading analytics
providers such as Google Cloud IoT
Q3 2017 Cloud & Connectivity Services Solid YoY growth new subscribers + some FX benefit
Managed broadband connectivity services strength Q3 Revenue million $8.4 Wins in retail, telematics and industrial markets Announced that Nube is reinventing consumer gas delivery using Sierra Device to Cloud solution and
Microsoft Azure compared to Q316 Q317 GAAP GM: 47.2% Q317
Non-GAAP
47 3% up 23.0% Q3 GM: 47.3% g Sierra Wireless customers deploying our integrated
Device-to-Cloud
solution 14
Device-to-cloud
customers
Predictive maintenance Grid analytics Reinventing fleet IoT Vision: Offer a premium subscription water purification service predictive IoT Vision: Expand smart grid monitoring capability to deploy solutions with IoT Vision: Deploy a tailored fleet
solution that optimizes with employees mobility maintenance Solution:
Device-to-cloud
IoT solution that delivers 24/7 connected purification multiple carriers
around the globe Solution: Complete cellular IoT solution from cellular devices and IoT employees Solution: Fully integrated with Embedded solution, AirVantage Cloud platform, and Sierra 15 system connectivity to platform Wireless connectivity
services
LEGAL DISCLAIMER Additional Information about the Merger and Where to Find It The issuance of Sierra Wireless
common shares to Numerex stockholders in the merger will be submitted to stockholders of Numerex for their consideration. This presentation is not a substitute for the definitive joint proxy statement/prospectus or any other documents which Sierra
Wireless and Numerex may file with the SEC or send to Numerexs stockholders in connection with the proposed merger. SIERRA WIRELESS FILED WITH THE SEC ON OCTOBER 31, 2017 A DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS FOR THE PROPOSED
MERGER. SIERRA WIRELESS AND NUMEREX STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY CONTAIN AND WILL CONTAIN IMPORTANT INFORMATION. The definitive
joint proxy statement/prospectus is available, and other relevant documents, when filed, will be available, free of charge on Sierra Wireless website at www.sierrawireless.com or by contacting Sierra Wireless Investor Relations
Department by telephone at (604)
231-1137
or by
e-mail
to investor@sierrawireless.com. Copies of the documents filed by Numerex with the SEC are available free of charge
on Numerexs website at investor.numerex.com or by contacting Numerexs Investor Relations Department by telephone
770-615-1410
or by
e-mail
to kgayron@numerex.com. Furthermore, investors may obtain free copies of the registration statement, the proxy statement/prospectus and other relevant documents filed by Sierra Wireless and Numerex with the
SEC become 16 (when they available) through the website maintained by the SEC at www.sec.gov.
Sierra Wireless acquisition of Numerex Planned acquisition of Numerex accelerates our IoT Device to Cloud
strategy: > Scales subscription-based recurring revenue from IoT services > Significantly bolsters Sierras position in the global IoT market > Expands Sierras sales capacity with experienced team and channel > Strong fit with
Cloud & Connectivity Services and operating model goals Opportunity to drive operating synergies and preserve Sierras strong balance sheet If offer approved by NMRX shareholders Dec 6th, transaction is expected to close shortly
thereafter Expect the acquisition to be accretive to adjusted EPS ~12 months after close 17
Numerexs Business Established IoT pure play Si l id f d Services Numerex s 3 Key IoT Lines
of Business Single source provider of managed 1 solutions for the IoT Strong position in key IoT markets Network g p y $56m in annualized revenue (Q217)~90% recurring services revenue 2 Security Services
Company based in Atlanta 143 employees in the U.S. Asset Tracking / Tank Monitoring 3 18
Sierra WirelessTarget Business Model Assumptions: Organic growth combined with acquired revenue of
~$125 million $30M Target Model
(non-GAAP):
Improve EBIT p margin > 10% Improve Adjusted > 12% 19 EBITDA Private and Confidential
(1) Non-GAAP
financial measures exclude the impact of: stock-based compensation expense and related social taxes, acquisition-related expense, acquisition amortization, impairment, integration expense,
restructuring expense, certain other
non-recurring
expenses or recoveries, foreign exchange gains or losses on translation of balance sheet accounts, unrealized foreign exchange gains or losses on forward
contracts and certain tax adjustments.
Q3 2017 Earnings Results and Overview $173.2 million $13.1 million $ Quarterly Revenue Adjusted
EBITDA $
Non-GAAP
EPS 0.23 GAAP EPS 0.04 compared to $153.6m in Q316 up 12.8% compared to $9.7m in Q316 up 34.6% compared to GAAP EPS of $(0.06) and
non-
GAAP EPS of $0.13 in Q316 Technology Leadership Customers Numerex Acquisition
LTE-Advanced
Pro, LPWA, Open Source, Advanced Telemetry, Device to Cloud Proxy materials have been mailed to Numerex
stockholders, vote is scheduled for Dec. 6th Customer acquisition activity solid across business segments and regions in Q3 20 g Q
Q3 2017
Non-GAAP
operating results $26.3 Enterprise C&C
$153.6 $173.2 Quarterly Revenue (USD millions) Adjusted EBITDA(1) (USD millions) Earnings per share(2) (USD) $13 1 $8.4 $ $18.9 $6.9 $9.7 13.1 $0.23 138.5 $127.8 OEM $0.13 Q316 Q317 Q316 Q317 Q316 Q317 21 (1)
Adjusted EBITDA as defined equates to net earnings (loss) plus stock-based compensation expense and related social taxes, acquisition-related expense, restructuring expense, integration expense, impairment, certain other
non-recurring
expenses or recoveries, amortization, foreign exchange gains or losses on translation of balance sheet accounts, unrealized foreign exchange gains or losses on forward contracts, interest and income
tax.
(2) Non-GAAP
financial measures exclude the impact of: stock-based compensation expense and related social taxes, acquisition-related expense, acquisition amortization, impairment, integration
expense, restructuring expense, certain other
non-recurring
expenses or recoveries, foreign exchange gains or losses on translation of balance sheet accounts, unrealized foreign exchange gains or losses on
forward contracts and certain tax adjustments.
Solid cash position 8 Solid balance sheet and debt free Cash & cash equivalents (USD millions) Q3 2017
$74.2 $89.0 Cash flow from operations $ (12.0) Capital Expenditures $ (3.2) Free Cash Flow $ ( 15.2) Q217 Q317 ) Other $ 0.4 Decrease in Cash Balance $ 22 Q2 Q3 (14.8)
Q4 2017 guidance In the Fourth Quarter of 2017, we expect: Revenue to be in the range of
$172 million to $180 million
Non-GAAP
EPS in the range of $0.21 to $0.29 (note: Guidance provided above for the Fourth Quarter of 2017 excludes Numerex acquisition) 23
Sierra Wireless Investor Relations 13811 Wireless Way :: Richmond, British Columbia, Canada, V6V 3A4
sierrawireless.com
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