Washington, D.C. 20549

FORM 6-K

Report of Foreign issuer

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

For the Month of November 2004

(Commission File.  No 0-30718).

SIERRA WIRELESS, INC., A CANADA CORPORATION

(Translation of registrant’s name in English)

13811 Wireless Way

Richmond, British Columbia, Canada V6V 3A4

(Address of principal executive offices and zip code)

Registrant’s Telephone Number, including area code: 604-231-1100

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:

Form 20-F  o  40-F   ý

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes:  o  No:  ý

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 10, 2004

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SIERRA WIRELESS, INC.

THIRD QUARTER REPORT

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004

US GAAP

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SIERRA WIRELESS, INC.

CHAIRMAN’S MESSAGE

TO OUR SHAREHOLDERS

We continued to set new records in the third quarter of 2004, generating revenue of $59.1 million, net earnings of $7.1 million and positive cash flow from operations. These results exceeded our expectations, and represent our ninth consecutive quarter of profitable growth and positive cash flow.

Results for Q3 2004 Compared to Q3 2003

For the three months ended September 30, 2004, our revenue climbed 125% to $59.1 million, from $26.3 million in the third quarter of 2003.  The revenue increase reflects strong sales of our PC cards and embedded modules, particularly in North American markets.

Gross margin percentage decreased slightly to 39.0% of revenue, from 40.7% of revenue in the comparable quarter as a result of changes in product mix and new product introduction costs.  Third quarter operating expenses were $15.4 million, compared to $11.5 million for the same period in 2003.  The increase in operating expenses reflects additional costs to generate increased revenues, product and market development costs, including costs for the AirCard 775® for EDGE networks and the Voq Professional Phone^TM, and an additional facilities charge which was comprised mainly of a foreign exchange adjustment.

Net earnings for the third quarter of 2004 increased to $7.1 million, or diluted earnings per share of $0.27, from a net loss of $0.9 million, or loss per share of $0.05, in the third quarter of 2003.  Excluding the restructuring and integration costs and Metricom recovery, net earnings for the third quarter of 2003 were $1.1 million, or diluted earnings per share of $0.06.

Q3 2004 Results Compared to Guidance

Third quarter revenue of $59.1 million exceeded our guidance of approximately $57.0 million.  Gross margin of 39% was within our guidance range of 39% to 40%. Operating expenses were $15.4 million, or 26% of revenue, higher than our guidance of approximately $14.8 million, or 26% of revenue. Net earnings of $7.1 million, or diluted earnings per share of $0.27, exceeded our guidance of net earnings of approximately $6.4 million, or diluted earnings per share of $0.24, while our cash flow from operations was $8.0 million, consistent with our guidance of positive cash flow.

Business Developments

The third quarter included a number of business and corporate developments:

Progress on Products for CDMA 2000 Networks and Channels:

•        We announced a distribution agreement with Premier Wireless Solutions for our embedded CDMA modules.  Under the agreement, Premier Wireless, a distributor of wireless machine-to-machine fixed and mobile communications services and products, will distribute and offer integration support for the Sierra Wireless EM3420 embedded module.

•        We announced an agreement with Tirumala Seven Hills Pvt Ltd. (“TSH”), a telecommunications company in India, to distribute the award winning AirCard 555 wide area wireless network card to the India marketplace.  We expect to commence commercial shipments of the AirCard 555 to TSH in the fourth quarter of 2004.

•        We announced that we are supplying Sierra Wireless EM3420 embedded modules to Symbol Technologies, Inc. for its MC9000 family of industrial mobile computing devices. Symbol’s rugged handheld computers scan, send, and retrieve data wirelessly, moving information from the factory, to the warehouse, to the sales floor, and to the point of business activity, in industries ranging from manufacturing and retail, to logistics and transportation.

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•        The Treo™ 600 Smartphone by palmOne, featuring an integrated Sierra Wireless EM3420 embedded module, was certified by and became available from Verizon Wireless.

Progress on Products for GSM/GPRS/EDGE Networks and Channels:

•       We signed an agreement with Onda Communication Spa to distribute our first EDGE product, the ONDA EDGE/GPRS N775 PC Card, for use on the Telecom Italia Mobile GSM, GPRS and EDGE Network. The commercial launch marks the worldwide premiere of Sierra Wireless’ EDGE product line.

•       We announced an agreement with Intel to deliver integrated wireless connectivity solutions to mobile professionals worldwide beginning in early 2005. The solution combines the new Intel® Centrino™ mobile technology-based notebook WLAN and a Sierra Wireless AirCard 775 EDGE PC Card for WWAN, together with wireless data services from a local carrier. Customers purchasing the solution will be able to use their notebook computers to access and manage wireless connections through a single software interface and a single account for billing.

•       Subsequent to the end of the third quarter, we announced that the AirCard 775 wireless wide area network card for EDGE networks is now available on the AT&T Wireless EDGE network for $299.99.   Customers who sign up for unlimited data rate plans are eligible for a $150 rebate.  The AirCard 775 provides mobile users with data rates up to three times faster than on GPRS networks, delivering fast, wireless connectivity to the Internet, e-mail, and corporate applications.

Progress on the Voq Professional Phone:

•        Together with KPN, we announced a global first with the commercial availability of our Voq Professional Phone throughout the Netherlands.  The Voq Professional Phone is a Microsoft Windows Mobile-based Smartphone.  KPN is distributing the Voq via its distribution channels at a retail price of €99 in combination with a two-year Business Select subscription and a 5Mb GPRS data package.

•        We extended commercial availability of the Voq Professional Phone across Europe with a number of key distribution partners. The Voq is now available for purchase from A & C Systems in Belgium, Luxemburg, and The Netherlands; from BagLAN in Turkey; from Cedros in Austria, Germany, and Switzerland; from Daimler in the Nordics; from Dangaard Telecom in Western Europe; from Hugh Symons Mobile Computing and Yes Telecom in the United Kingdom; from Speeka in Italy; and from Xacom Comunicaciones in France and Spain.

•        In September, the Voq Professional Phone became available through members of Intel’s Product Dealer program, including TigerDirect, Tech Depot and CellStar Corporation. Intel Product Dealers are active resellers of Intel products, with access to marketing resources, enhanced technical support, and superior training options offered by Intel.

•        We extended availability of the Voq Professional Phone through Insight, MobilePlanet, and RCS Computer Experience.  The Voq is available at select reseller locations and online, for the end-user price of US $499, with activation on the AT&T Wireless network.

•        We announced distribution agreements with Brightpoint and Cellstar to distribute the Voq Professional Phone in the North American market.  In addition, we announced network approval for the Voq on the AT&T Wireless GSM/GPRS network.

Corporate Developments:

•        We announced a number of management changes, including the appointment of Jason W. Cohenour to Chief Operating Officer, Jim Kirkpatrick to Chief Technical Officer and Bill Dodson to Senior Vice-President, Operations.  We also reported the resignation of Senior Vice-President, Marketing, Andrew S. G. Harries, who has left the company to pursue a new business opportunity.

Outlook

We anticipate strong operating results in the fourth quarter of 2004, with continued growth in our revenue and earnings.  We expect to make significant CDMA module shipments to palmOne for the Treo 600 during the fourth quarter.  By year-end we expect to have completed the shipment of orders on hand and currently do not have visibility on further shipments for this product with palmOne.

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We continue to invest in new products, including products for EVDO, EDGE and UMTS networks, and to invest in expanding distribution and sell through for our products, including the Voq Professional Phone.  These investments are motivated by our goals of continued industry leadership and profitable growth.

/s/  David B. Sutcliffe

David B. Sutcliffe

Chairman and Chief Executive Officer

This report contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, plans and timing for the introduction or enhancement of our services and products, statements about future market conditions, supply and demand conditions, and other expectations, intentions and plans contained in this report that are not historical fact. Our expectations regarding future revenues and earnings depend upon our ability to develop, manufacture, supply and market products that we do not produce today and that meet defined specifications. When used in this report, the words “plan”, “expect”, “believe”, and similar expressions generally identify forward-looking statements. These statements reflect our current expectations. They are subject to a number of risks and uncertainties, including, but not limited to, changes in technology and changes in the wireless communications market. In light of the many risks and uncertainties surrounding the wireless communications market, you should understand that we cannot assure you that the forward-looking statements contained in this report will be realized.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our consolidated financial condition and results of operations, as of November 1, 2004, has been prepared in accordance with United States generally accepted accounting principles (GAAP) and, except where otherwise specifically indicated, all amounts are expressed in United States dollars.

Additional information related to Sierra Wireless, Inc., including our Annual Information Form, may be found on SEDAR at www.sedar.com.

Overview

We provide highly differentiated wireless solutions worldwide.  We develop and market a broad range of products that include wireless data modems for portable computers, embedded modules for original equipment manufacturers, or OEMs, rugged vehicle-mounted modems and mobile phones.  Our products permit users to access wireless data and voice networks using notebook computers, personal digital assistants, or PDAs, vehicle-based systems and mobile phones.

Wireless data communications is an expanding market positioned at the convergence of wireless communications, portable computing and the Internet, each of which we believe represents a growing market.  Our products are based on open standards, including the Internet protocol, and operate on the networks of major wireless communications service providers.

Our products are primarily used by businesses and government organizations to enable their employees access to a wide range of wireless data applications including Internet access, e-mail, messaging, corporate intranet access, remote database inquiry and computer aided dispatch.  We sell our products through indirect channels, including wireless operators, resellers and OEMs.

Beginning in fiscal 2001, there was a slowdown in enterprise spending and an overall economic slowdown that impacted our business.  The trend intensified during fiscal 2002 and continued into fiscal 2003.  Reasons for the market deterioration included a general economic slowdown, customer bankruptcies, network build-out delays and limited availability of capital.  During the latter part of 2003 and the first nine months of 2004, we experienced stronger than expected demand.

During the third quarter of 2004, our revenue increased 125.3% to $59.1 million, compared to $26.3 million in the third quarter of 2003, as a result of strong revenue from our PC card and OEM products, including products formerly sold by AirPrime, Inc. (“AirPrime”).  Our revenue from customers in the Americas, Europe and the Asia-Pacific region comprised 91%, 5% and 4%, respectively, of our total revenue in the third quarter of 2004 and 81%, 15% and 4%, respectively, in the same period of 2003.  Our North American business has increased significantly compared to the prior year as a result of strong sales of our PC card and OEM products to North American customers.  Our North American business continues to be dominated by near term demand from channels rather than by long-term, large volume commitments. In Europe, deployments of EDGE and UMTS networks have been gaining momentum and have negatively affected our GSM/GPRS sales in that region.  We do not currently have a UMTS product.  During the third quarter, we began commercial shipments of the AirCard® 775 for EDGE networks to customers in North America and Europe.

Operating expenses were $15.4 million in the third quarter of 2004 and increased from $11.5 million in the prior year due to additional costs incurred in generating increased revenue, the acquisition of AirPrime in August 2003, and costs related to the development and marketing of new products, including products for EDGE networks and the Voq professional phone.

Net earnings were $7.1 million, or diluted earnings per share of $0.27, in the third quarter of 2004, compared to a loss of $0.9 million, or loss per share of $0.05, in the same period of 2003.  Our improvement in net earnings was attributable to an increase in revenue, strong margins, operating cost control and a reduction in restructuring and integration costs that were related to the acquisition of AirPrime.

Our balance sheet remains strong, with $127.5 million of cash and short and long-term investments, compared to $109.7 million at December 31, 2003.  During the third quarter of 2004, we generated $8.0 million in cash from operations, compared to $4.1 million in the same period of 2003.

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Results of Operations

The following table sets forth our operating results for the three and nine months ended September 30, 2004, expressed as a percentage of revenue:

Our revenue by product, by distribution channel and by geographical region is as follows:

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Results of Operations – Three Months Ended September 30, 2004 Compared to Three Months Ended September 30, 2003

Revenue

Revenue amounted to $59.1 million for the three months ended September 30, 2004, compared to $26.3 million in the same period of 2003, an increase of 125.3%.  The increase in revenue was due primarily to an increase in sales of our PC cards, OEM products and Voq professional phones, including sales of products formerly sold by AirPrime.  During the third quarter, we commenced commercial shipment of the AirCard 775 for EDGE networks.  In the future, as a percentage of revenue, we expect that PC card and Voq product revenue will increase and that OEM product revenue will decrease.

Our revenue from customers in the Americas, Europe and the Asia-Pacific region comprised 91%, 5% and 4%, respectively, of our total revenue in the third quarter of 2004 and 81%, 15% and 4%, respectively, in the same period of 2003.  Our North American business has increased significantly compared to the prior year as a result of strong sales of our PC card and OEM products to North American customers.  In Europe, deployments of EDGE and UMTS networks have been gaining momentum and have negatively affected our GSM/GPRS sales in that region.  We do not currently have a UMTS product.  We expect that North American sales will continue to be strong due to PC card and OEM sales and the addition of new products, such as the Voq professional phone and EDGE products.  For similar reasons, we expect European revenue to increase as well.  In the third quarter of 2004, three customers individually accounted for more than 10% of our revenue and in aggregate these three customers represented 69% of our revenue.

Gross margin

Gross margin amounted to $23.0 million in the third quarter of 2004, compared to $10.7 million in the third quarter of 2003.  Our gross margin percentage was 39.0% of revenue for the three months ended September 30, 2004, compared to 40.7% of revenue for the three months ended September 30, 2003.  Changes in product mix and new product introduction costs resulted in a modest decline in margin for the quarter.  During the third quarter of 2004, our sales of products that had a net book value after writedowns of nil were nil.

We expect our gross margin to continue to fluctuate moderately from quarter to quarter as a result of changes in product mix, changes in geographical mix and changes in product cost due to new product introductions.

Sales and marketing

Sales and marketing expenses were $5.6 million in the third quarter of 2004, compared to $2.7 million in the same period of 2003, an increase of 111.2%.  The increase is due primarily to an increase in marketing development costs and costs related to new products, such as the Voq professional phone and products for EDGE networks.  The addition of staff from the AirPrime acquisition also contributed to the increase.  Sales and marketing expenses as a percentage of revenue decreased to 9.5% in 2004, compared to 10.1% in 2003.  This decrease in percentage terms was due primarily to an increase in revenue.  We expect to continue to make significant and increased investments in sales and marketing as we introduce new products, such as the Voq professional phone and products for EDGE networks and continue to expand our distribution channels in Europe and the Asia-Pacific region.

Research and development, net

Research and development expenses, net of conditionally repayable government research and development funding, amounted to $6.6 million in the third quarter of 2004, compared to $4.7 million in the third quarter of 2003, an increase of 40.4%.

Gross research and development expenses, before government research and development funding, were $7.0 million or 11.7% of revenue in the third quarter of 2004, compared to $4.7 million, or 17.8% of revenue, in 2003.  Repayment of TPC funding of $0.5 million was included in our gross research and development expenses in the third quarter of 2004, compared to nil in the same period of 2003.  Gross research and development expenses increased due to the addition of staff and projects from the AirPrime acquisition and the development of new products, including EDGE products and the Voq professional phone.  We expect our gross research and development expenses to continue to increase as we invest in next generation technology and develop new products.

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Administration

Administration expenses amounted to $2.4 million, or 4.0% of revenue, in the third quarter of 2004, compared to $1.3 million, or 5.1% of revenue, in the same period of 2003.  The increase is due primarily to an increase in professional fees, insurance costs and the addition of staff from the AirPrime acquisition.   No Metricom recovery was recorded in the third quarter of 2004, compared to a $0.2 million recovery in the same period of 2003.  We expect administration expenses to decrease as a percentage of revenue as revenue continues to increase.

Restructuring and other charges

In the third quarter of 2004, we incurred restructuring and other charges of $0.3 million as a result of a change in estimate of the facilities restructuring charge that was originally announced in 2002.  The change in estimate reflects the impact of changes in estimated operating costs of the facilities and foreign exchange rates.

In the third quarter of 2003, we incurred restructuring and other charges of $1.2 million as a result of our acquisition of AirPrime.  The charges included writedowns of fixed and intangible assets, severance costs for workforce reductions and an additional facilities restructuring charge.

Integration costs

In the third quarter of 2004 we did not incur any integration costs.  In the third quarter of 2003, we incurred integration costs of $1.0 million as a result of our acquisition of AirPrime.  The charges include costs of existing staff and contractors retained for the transition period and costs related to integration activities.   All of these employees and contractors completed their integration activities and were terminated by December 31, 2003.

Income tax expense

Income tax expense amounted to $1.3 million for the three months ended September 30, 2004, compared to $0.1 million for the three months ended September 30, 2003.  Income tax expense has increased primarily due to expected taxes payable in the United States resulting from our increased earnings.

Net earnings (loss)

Our net earnings amounted to $7.1 million, or diluted earnings per share of $0.27, in the third quarter of 2004, compared to a net loss of $0.9 million, or loss per share of $0.05, in the same period of 2003.  Our net earnings were $7.4 million in the third quarter of 2004, excluding restructuring costs of $0.3 million, compared to net earnings of $1.1 million in the third quarter of 2003, excluding restructuring and integration costs of $2.2 million and the Metricom recovery of $0.2 million.

The weighted average diluted number of shares outstanding increased to 26.1 million in 2004, primarily due to the issuance of shares in August 2003 related to the AirPrime acquisition and to our secondary public offering in November 2003, as compared to 18.4 million in the same period of 2003.

Results of Operations – Nine Months Ended September 30, 2004 Compared to Nine Months Ended September 30, 2003

Revenue

Revenue amounted to $152.4 million for the nine months ended September 30, 2004, compared to $67.1 million in the same period of 2003, an increase of 127.0%.  The increase in revenue was due primarily to an increase in sales of our PC card, OEM and mobile products, including sales of products formerly sold by AirPrime.  During the first nine months of 2004, we also commenced commercial shipment of the AirCard 580 for CDMA 1xEV-DO networks, the AirCard 555R for CDMA networks in Asia, the MP555 for CDMA 1X, the AirCard 775 for EDGE networks and the Voq Professional Phone. In the future, as a percentage of revenue, we expect that PC card and Voq product revenue will increase and that OEM product revenue will decrease.

Our revenue from customers in the Americas, Europe and the Asia-Pacific region comprised 92%, 5% and 3%,

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respectively, of our total revenue for the nine months ended September 30, 2004 and 65%, 18% and 17%, respectively, in the same period of 2003.  Our North American business has increased significantly compared to the prior year as a result of strong sales of our PC card, OEM and mobile products to North American customers.  In Europe, deployments of EDGE and UMTS networks have been gaining momentum and have negatively affected our GSM/GPRS sales in that region.  We do not currently have a UMTS product.  We expect that North American sales will continue to be strong due to PC card and OEM sales and the addition of new products, such as the Voq professional phone and EDGE products.  For similar reasons, we expect European revenue to increase as well.  In the first nine months of 2004, two customers individually accounted for more than 10% of our revenue and in aggregate these two customers represented 51% of our revenue.

Gross margin

Gross margin amounted to $60.8 million for the nine months ended September 30, 2004, compared to $26.9 million in the same period of 2003.  Our gross margin percentage was 39.9% of revenue for the nine months ended September 30, 2004, compared to 40.1% of revenue for the nine months ended September 30, 2003.  Strong PC card and mobile product margins offset the impact of OEM products that yield lower margins, resulting in a relatively stable margin for the nine month period.  During the first nine months of 2004, we sold $0.2 million of products that had a net book value after writedowns of nil.

We expect our gross margin to fluctuate moderately from quarter to quarter as a result of changes in product mix, changes in geographical mix and changes in product cost due to new product introductions.

Sales and marketing

Sales and marketing expenses were $14.2 million for the nine months ended September 30, 2004, compared to $8.0 million in the same period of 2003, an increase of 77.7%.  The increase is due primarily to the addition of staff from the AirPrime acquisition, market development costs and marketing costs related to new products such as the Voq professional phone and products for EDGE networks.  Sales and marketing expenses as a percentage of revenue decreased to 9.3% in 2004, compared to 11.9% in 2003.  This decrease was due primarily to an increase in revenue.  We expect to continue to make significant and increased investments in sales and marketing as we introduce new products, such as the Voq professional phone and products for EDGE networks, and continue to expand our distribution channels in Europe and the Asia-Pacific region.

Research and development, net

Research and development expenses, net of conditionally repayable government research and development funding, amounted to $17.3 million for the nine months ended September 30, 2004, compared to $10.4 million in the same period of 2003, an increase of 66.7%.

Gross research and development expenses, before government research and development funding, were $19.5 million or 12.8% of revenue in the first nine months of 2004, compared to $10.9 million or 16.2% of revenue in 2003.  Repayment of TPC funding of $1.4 million was included in our gross research and development expenses in the first nine months of 2004, compared to nil in the same period of 2003.  Gross research and development expenses increased due to the addition of staff and projects from the AirPrime acquisition and the development of new products, including EDGE products and the Voq professional phone.  We expect our gross research and development expenses to continue to increase as we invest in next generation technology and develop new products.

During 2004, we signed a second agreement with the Government of Canada’s Technology Partnerships Canada (“TPC”) program under which we are eligible to receive conditionally repayable research and development funding up to Cdn. $9.5 million to support the development of a range of third generation wireless technologies.  The agreement is effective for development work commencing April 2003.  Funding of $2.2 million was recognized during the nine months ended September 30, 2004, of which $1.1 million relates to the period from April 1, 2003 to December 31, 2003.  We expect that our TPC funding will be based on research and development work completed in each quarter.

Administration

Administration expenses amounted to $6.9 million, or 4.6% of revenue, for the nine months ended September 30, 2004, compared to $4.4 million, or 6.5% of revenue, in the same period of 2003.  The increase is due primarily to an increase in legal fees, consulting fees, insurance costs and the addition of staff from the AirPrime acquisition. Included in administration expense for the nine months ended September 30, 2004 was an additional recovery from Metricom of $0.4 million, compared to $0.5 million in the same period of 2003.  We expect administration expenses to decrease as a percentage of revenue as revenue continues to increase.

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Restructuring and other charges

In the nine months ended September 30, 2004, we incurred restructuring and other charges of $0.3 million as a result of a change in estimate of the facilities restructuring charge that was originally announced in 2002.  The change in estimate reflects the impact of changes in estimated operating costs of the facilities and foreign exchange rates.

In the nine months ended September 30, 2003, we incurred restructuring and other charges of $1.2 million as a result of our acquisition of AirPrime.  The charges included writedowns of fixed and intangible assets, severance costs for workforce reductions and an additional facilities restructuring charge.

Integration costs

In the nine months ended September 30, 2004 we did not incur any integration costs.  In the nine months ended September 30, 2003, we incurred integration costs of $1.0 million as a result of our acquisition of AirPrime.  The charges include costs of existing staff and contractors retained for the transition period and costs related to integration activities.   All of these employees and contractors completed their integration activities and were terminated by December 31, 2003.

Income tax expense

Income tax expense amounted to $3.4 million for the nine months ended September 30, 2004, compared to $0.1 million for the nine months ended September 30, 2003.  Income tax expense has increased primarily due to expected taxes payable in the United States resulting from our increased earnings.

Net earnings

Our net earnings amounted to $17.7 million, or diluted earnings per share of $0.68, for the nine months ended September 30, 2004, compared to net earnings of $0.3 million, or diluted earnings per share of $0.02, for the same period of 2003.  Excluding the TPC funding of $1.1 million related to the 2003 period, the Metricom recoveries of $0.4 million and the restructuring of $0.3 million, our net earnings for the first nine months of 2004 were $16.5 million, or diluted earnings per share of $0.63.  Excluding restructuring and integration costs of $2.2 million and the Metricom recovery of $0.5 million, our net earnings for the first nine months of 2003 were $2.1 million, or diluted earnings per share of $0.12.

The weighted average diluted number of shares outstanding increased to 26.1 million in 2004 due to the issuance of shares in August 2003 related to the AirPrime acquisition and to our secondary public offering in November 2003, as compared to 17.6 million in 2003.

Contingent Liabilities

On September 23, 2004, Sierra Wireless America, Inc., as successor to AirPrime, Inc., along with other defendants, was served with the first amended complaint of Joshua Cohen and David Beardsley on behalf of themselves and others similarly situated, which was filed in the U.S. District Court for the Central District of California for violations of federal and state securities laws allegedly occurring prior to the time AirPrime, Inc. was acquired by the Company.   We have not yet been required to file our response to the first amended complaint and have given notice to our liability insurance carriers.  Although there can be no assurance that an unfavourable outcome of the dispute would not have a material adverse effect on our operating results, liquidity or financial position, we are assessing the first amended complaint and believe the claims are without merit and will vigorously defend them.

During 2002, we executed a settlement agreement with Metricom, one of our U.S. customers, in a Chapter 11 reorganization under U.S. bankruptcy laws, under which all claims and counterclaims were settled.  We received the amount of $1.8 million that has been included in our net loss for 2002.  We also received additional recoveries of $0.3 million and $0.2 million that have been included in our second and third quarter net earnings for 2003, respectively, and $0.2 million and $0.2 million that have been included in our first and second quarter net earnings for 2004, respectively.

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Under license agreements, we are committed to 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 finalized, we have recognized our current best estimate of the obligation.  When the agreements are finalized, the estimate will be revised accordingly.

We are engaged in other legal actions and believe that the ultimate outcome of these actions will not have a material adverse effect on our operating results, liquidity or financial position.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States, and we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent liabilities. On an on-going basis, we evaluate our estimates and judgments, including those related to revenue recognition, adequacy of allowance for doubtful accounts, adequacy of inventory reserve, income taxes and adequacy of warranty reserve.  We base our estimates on historical experience and anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty.  Actual results may differ from our estimates.  Senior management has discussed with our audit committee the development, selection, and disclosure of accounting estimates used in the preparation of our consolidated financial statements.

During the quarter ended September 30, 2004, we did not adopt any new accounting policies that have a material impact on our consolidated financial statements or make changes to existing accounting policies.

The following critical accounting policies affect our more significant estimates and assumptions used in preparing our consolidated financial statements:

•                    We recognize revenue from sales of products and services upon the later of transfer of title or upon shipment of the product to the customer or rendering of the service, so long as collectibility is reasonably assured. Customers include resellers, original equipment manufacturers, wireless service providers and end-users. We record deferred revenue when we receive cash in advance of the revenue recognition criteria being met.

A significant portion of our revenue is generated from sales to resellers.  We recognize revenue on the portion of sales to certain resellers that are subject to provisions allowing various rights of return and stock rotation when the rights have expired or the products have been reported as sold by the resellers.

Funding from research and development agreements, other than government research and development arrangements, is recognized as revenue when certain criteria stipulated under the terms of those funding agreements have been met, and when there is reasonable assurance the funding will be received. Certain research and development funding will be repayable only on the occurrence of specified future events.  If such events do not occur, no repayment would be required.  We will recognize the liability to repay research and development funding in the period in which conditions arise that would cause research and development funding to be repayable.

•                    We maintain an allowance for doubtful accounts for estimated losses that may arise if any of our customers are unable to make required payments.  We consider the following factors when determining if collection is reasonably assured:  customer credit-worthiness, past transaction history with the customer, current economic industry trends and changes in customer payment terms.  If we have no previous experience with the customer, we typically obtain reports from credit organizations to ensure that the customer has a history of paying its creditors.  We may also request financial information, including financial statements, to ensure that the customer has the means of making payment.  If these factors indicate collection is not reasonably assured, revenue is deferred until collection becomes reasonably assured, which is generally upon receipt of cash.  If the financial condition of any of our customers deteriorates, we may increase our allowance.

•                    We value our inventory at the lower of cost, determined on a first-in-first-out basis, and estimated net realizable value. We assess the need for an inventory writedown based on our assessment of estimated market value using assumptions about future demand and market conditions. Our reserve requirements generally increase as our projected demand requirements decrease, due to market conditions, technological and product life cycle changes and longer than previously expected usage periods.  If market conditions are worse than our projections, we may further writedown the value of our inventory.

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•                    We currently have intangible assets of $14.5 million and goodwill of $20.0 million generated from our acquisition of AirPrime in August 2003.  Goodwill is tested for impairment annually, or more often, if an event or circumstance indicates that an impairment loss has been incurred.

The initial goodwill impairment test was completed during the fourth quarter of 2003, which resulted in no impairment loss.  We assessed the realizability of goodwill related to our reporting unit during the fourth quarter and determined that its fair value did not have to be re-computed because the components of the reporting unit had not changed since the fair value computation completed at August 12, 2003, the date of acquisition, the previous fair value amount exceeded the carrying amount of the reporting unit by a substantial margin, and no evidence exists to indicate that the current fair value of the reporting unit would be less than its current carrying amount.

•                    We evaluate our deferred income tax assets to assess whether their realization is more likely than not. If their realization is not considered more likely than not, we provide for a valuation allowance. The ultimate realization of our deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. We consider projected future taxable income and tax planning strategies in making our assessment. If we determine that we would not be able to realize our deferred tax assets, we may make an adjustment to our deferred tax assets that would be charged to income.

•                    We accrue product warranty costs in accrued liabilities to provide for the repair or replacement of defective products.  Our accrual is based on an assessment of historical experience and management’s estimates.  If we suffer a decrease in the quality of our products, we may increase our accrual.

•                    Under license agreements, we are committed to 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 finalized, we have recognized our current best estimate of the obligation in accrued liabilities.  When the agreements are finalized, the estimate will be revised accordingly.

•                    We recorded a lease provision during 2002 as a result of our restructuring program by estimating the net present value of the future cash outflows over the remaining lease period.  The estimate was based on various assumptions including the obtainable sublease rates and the time it will take to find a suitable tenant.  These assumptions are influenced by market conditions and the availability of similar space nearby.  If market conditions change, we will adjust our provision.

•                    We are engaged in certain legal actions and believe that the ultimate outcome of these actions will not have a material adverse effect on our operating results, liquidity or financial position.  We estimate the range of liability related to pending litigation where the amount and range of loss can be reasonably estimated.  We record our best estimate of a loss when the loss is considered probable.  As additional information becomes available, we assess the potential liability relating to our pending litigation and revise our estimates.

Liquidity and Capital Resources

Operating Activities

Cash provided by operating activities amounted to $21.5 million for the first nine months of 2004, compared to cash provided by operating activities of $10.9 million in the same period of 2003, an improvement of $10.6 million.  The source of cash in 2004 primarily resulted from earnings from operations of $22.8 million adjusted for non-cash items, inventory levels and changes in other operating assets and liabilities of $1.3 million.  Our working capital has increased significantly from December 31, 2003 as a result of strong revenue and operating expense control.  Generally, our working capital requirements will increase or decrease with quarterly revenue levels.

Investing Activities

Cash provided by investing activities was $31.0 million for the nine months ended September 30, 2004, compared to cash used by investing activities of $13.8 million during the same period in 2003.  The source of cash during the first nine months of 2004 was due primarily to the disposal of long-term investments that were re-invested in investments with maturities less than 90 days.  Expenditures on intangible assets were $1.7 million in 2004, compared to $3.9 million in 2003, and were primarily for license fees and patents.  Capital expenditures were $5.5 million in 2004, compared to $1.0 million in 2003, and were primarily for tooling, research and development equipment, computer equipment and software.

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We do not have any trading activities that involve any type of commodity contracts that are accounted for at fair value but for which a lack of market price quotations necessitate the use of fair value estimation techniques.

Financing Activities

Cash provided by financing activities was $3.1 million in the first nine months of 2004, compared to a use of cash of $1.3 million during the same period in 2003, an increase of $4.4 million.  The source of cash in 2004 was primarily from the issuance of common shares upon the exercise of stock options, offset slightly by repayments of our long-term obligations.

As of September 30, 2004, we did not have any off-balance sheet finance or special purpose entities.

Cash Requirements

We expect our operations will generate positive net cash during fiscal 2004.

Our near-term cash requirements are primarily related to funding our operations, capital expenditures and other obligations discussed below.  We believe our cash and cash equivalents of $125.9 million, short-term investments of $1.6 million as of September 30, 2004 and cash generated from operations will be sufficient to fund our expected working and other capital requirements for the next twelve months based on current business plans.  Our capital expenditures during 2004 are expected to be primarily for research and development equipment, tooling, licenses and patents.  However, we cannot provide assurance that our actual cash requirements will not be greater than we currently expect.

The following table quantifies our future contractual obligations as of September 30, 2004:

We have entered into purchase commitments totaling $26.7 million with certain contract manufacturers under which we commit to buy a minimum amount of designated products.  In certain of these agreements, we may be required to acquire and pay for such products up to the prescribed minimum or forecasted purchases.   The terms of the commitment require us to purchase $26.7 million of product from certain contract manufacturers between October 2004 and December 2004.

Sources and Uses of Cash

In November 2003, we completed a new issue and secondary public offering in the United States and Canada.  Our net proceeds after selling commissions and expenses of the offering amounted to approximately $67.4 million.  The net proceeds from the offering are to be used for product development, working capital and general corporate purposes, including acquisitions.

One of our significant sources of funds is expected to be our future operating cash flow. In the past, our revenue was dependent on us fulfilling our commitments in accordance with agreements with major customers. We have completed volume shipments on those contracts.  We are now relying on purchase orders with these customers and these customers, like our other customers, will be under no contractual obligation to purchase our products.  If they do not make such purchases, our future operating cash flow will be negatively impacted.  We have a risk of impairment to our liquidity should there be any interruption to our business operations.

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The source of funds for our future capital expenditures and commitments is cash, short-term investments, accounts receivable, research and development funding, borrowings and cash from operations, as follows:

•                    Net cash and short-term investments amounted to $127.5 million at September 30, 2004, compared to $85.1 million at December 31, 2003.

•                    Long-term investments amounted to nil at September 30, 2004, compared to $24.6 million at December 31, 2003.

•                    Accounts receivable amounted to $29.7 million at September 30, 2004, compared to $21.6 million at December 31, 2003.

•                    We have a $10.0 million operating line of credit with a Canadian chartered bank. The credit facility bears interest at prime plus 1.25% and is secured by a general security agreement providing a first charge against all assets.  At September 30, 2004, there were no borrowings under this line of credit.

Market Risk Disclosure

During the third quarter ended September 30, 2004, 89% of our revenue was earned from United States-based customers. Our risk from currency fluctuations between the Canadian and U.S. dollar is reduced by purchasing inventory, other costs of sales and many of our services in U.S. dollars.  We are exposed to foreign currency fluctuations because the majority of our research and development, sales and marketing, and administration costs are incurred in Canada. We monitor our exposure to fluctuations between the Canadian and U.S. dollars. For the three and nine months ended September 30, 2004, we have recorded a foreign exchange gain of approximately $0.3 million and loss of $0.3 million, respectively.  As we have available funds and very little debt, we have not been adversely affected by significant interest rate fluctuations.

With our international expansion into Europe and the Asia-Pacific region, we are transacting business in additional foreign currencies and the potential for currency fluctuations is increasing.  The risk associated with currency fluctuations between the U.S. dollar and foreign currencies in Europe and the Asia-Pacific region has been minimal as such transactions have not been material to date.  As our business expands in Europe, we expect that we will also continue to be exposed to Euro transactions. To date we have not entered into any futures contracts. To manage our foreign currency risks, we may enter into such contracts should we consider it to be advisable to reduce our exposure to future foreign exchange fluctuations.

Currently, we do not have any hedging activities or derivative instruments, therefore the impact of FAS No. 133 is not material to our financial results.

Related Party Transactions

During the three and nine months ended September 30, 2004, there were no material related party transactions.

Quarterly Results of Operations

The following tables set forth certain unaudited consolidated statements of operations data for each of the eleven most recent quarters that, in management’s opinion, have been prepared on a basis consistent with the audited consolidated financial statements contained in our fiscal 2003 Annual Report.  The unaudited consolidated statements of operations data presented below reflects all adjustments, consisting primarily of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of results for the interim periods.  These operating results are not necessarily indicative of results for any future period.  You should not rely on them to predict our future performance.

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Selected Annual Information

Forward-looking Statements

This report contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, plans and timing for the introduction or enhancement of our services and products, statements about future market conditions, supply and demand conditions, channel inventory and sell through, revenue, gross margin, operating expenses, profits, and other expectations, intentions and plans contained in this report that are not historical fact. Our expectations regarding future revenues and earnings depend in part upon our ability to develop, manufacture, supply and market products that we do not produce today and that meet defined specifications.   When used in this report, the words “plan”, “expect”, “believe”, and similar expressions generally identify forward-looking statements. These statements reflect our current expectations. They are subject to a number of risks and uncertainties, including but not limited to, changes in technology and changes in the wireless communications market. In light of the many risks and uncertainties surrounding the wireless communications market, you should understand that we cannot assure you that the forward-looking statements contained in this report will be realized.

Risk Factors

Our business is subject to significant risks and past performance is no guarantee of future performance.  Some of the risks we face are:

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We have incurred net losses in the past and may not sustain profitability.

While we had earnings from operations for the year ended December 31, 2003, we have incurred a loss from operations in each of the previous three fiscal years.  As of September 30, 2004 our accumulated deficit was $53.7 million. While we had net earnings of $17.7 million for the nine months ended September 30, 2004, our ability to achieve and maintain profitability will depend on, among other things, the continued sales of our products and the successful development and commercialization of new products.  We cannot predict if the current profitability will be sustainable on a quarterly or an annual basis.  As a result, our share price may decline.

If the current profitability does not continue, we may need to raise additional capital in the future. Additional financing may not be available, and even if available, may not be on acceptable terms. We may seek to raise additional capital though an offering of common shares, preference shares or debt, which may result in dilution, and/or the issuance of securities with rights senior to the rights, of the holders of common shares.

If demand for our current products declines and we are unable to launch successful new products, our revenues will decrease.

If the markets in which we compete fail to grow, or grow more slowly than we currently anticipate, or if we are unable to establish markets for our new products, it would significantly harm our business, results of operations and financial condition.  In addition, demand for one or all of our current products could decline as a result of competition, technological change or other factors.

If we are unable to design and develop new products that gain sufficient commercial acceptance, we may be unable to maintain our market share or to recover our research and development expenses and our revenues could decline.

We depend on designing, developing and marketing new products to achieve much of our future growth. Our ability to design, develop and market new products depends on a number of factors, including, but not limited to the following:

•    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

•    Our ability to manufacture products at an acceptable price and quality.

A failure by us, or our suppliers, in any of these areas, or a failure of new products, such as the Voq professional phone, to obtain commercial acceptance, could mean we receive less revenue than we anticipate and we are unable to recover our research and development expenses, and could result in a decrease in the market price for our shares.

The loss of any of our material customers could adversely affect our revenue and profitability, and therefore shareholder value.

We depend on a small number of customers for a significant portion of our revenues.  In the last two fiscal years, there have been two different customers that individually accounted for more than 10% of our revenues.  In the nine months ended September 30, 2004, two customers individually accounted for more than 10% of our revenue and in aggregate these two customers represented 51% of our revenue.  If any of these customers reduce their business with us or suffer from business failure, our revenues and profitability could decline, perhaps materially.

We may not be able to continue to design products that meet our customer needs and, as a result, our revenue and profitability may decrease.

We develop products to meet our customers’ requirements but, particularly with original equipment manufacturers, current design wins do not guarantee future design wins.  If we are unable or choose not to meet our customers’ future needs, we may not win their future business and our revenue and profitability may decrease.

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We depend on a few third parties to manufacture our products and supply key components. If they do not manufacture our products properly or cannot meet our needs in a timely manner, we may be unable to fulfill our product delivery obligations and our costs may increase, and our revenue and margins could decrease.

We outsource a substantial part of the manufacture of our products to third parties and depend heavily on the ability of these manufacturers to meet our needs in a timely and satisfactory manner. Some components used by us may only be available from a small number of suppliers, in some cases from only one supplier.  We currently rely on three manufacturers, any of which may terminate the manufacturing contract with us at the end of any contract year. Our reliance on third party manufacturers and suppliers subjects us to a number of risks, including the following:

•    The absence of guaranteed manufacturing capacity;

•    Reduced control over delivery schedules, production yields and costs; and

•    Inability to control the amount of time and resources devoted to the manufacture of our products.

If we are unable to successfully manage any of these risks or to locate alternative or additional manufacturers or suppliers in a timely and cost-effective manner, we may not be able to deliver products in a timely manner. In addition, our results of operations could be harmed by increased costs, reduced revenues and reduced margins.

We do not have fixed-term employment agreements with our key personnel and the loss of any key personnel may harm our ability to compete effectively.

None of our officers or other key employees has entered into a fixed-term employment agreement.  Our success depends in large part on the abilities and experience of our executive officers and other key employees.  Competition for highly skilled management, technical, research and development and other key employees is intense in the wireless communications industry.  We may not be able to retain our current key employees or attract and retain additional key employees as needed.  The loss of key employees could disrupt our operations and impair our ability to compete effectively.

We may have difficulty responding to changing technology, industry standards and customer preferences, which could cause us to be unable to recover our research and development expenses and lose revenues.

The wireless industry is characterized by rapid technological change.  Our success will depend in part on our ability to develop products that keep pace with the continuing changes in technology, evolving industry standards and changing customer and end-user preferences and requirements. Our products embody complex technology that may not meet those standards, changes and preferences. In addition, wireless communications service providers require that wireless data systems deployed on their networks comply with their own standards, which may differ from the standards of other providers. We may be unable to successfully address these developments in a timely basis or at all. Our failure to respond quickly and cost-effectively to new developments through the development of new products or enhancements to existing products could cause us to be unable to recover significant research and development expenses and reduce our revenues.

Competition from new or established wireless communication companies or from those with greater resources may prevent us from increasing or maintaining our market share and could result in price reductions and reduced revenues.

The wireless industry is intensely competitive and subject to rapid technological change. We expect competition to intensify. More established and larger companies with greater financial, technical and marketing resources sell products that compete with ours.  We also may introduce new products that will put us in direct competition with major new competitors.  Existing or future competitors may be able to respond more quickly to technological developments and changes or 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 or more efficient sales channels. If we are unable to compete effectively with our competitors’ pricing strategies, technological advances and other initiatives, our market share and revenues may be reduced.

We depend on third parties to offer wireless data and voice communications services for our products to operate.

Our products can only be used over wireless data and voice networks operated by third parties.  In addition, our future growth depends, in part, on the successful deployment of next generation wireless data and voice networks by third parties for which we are developing products.  If these network operators cease to offer effective and reliable service, or fail to market their services effectively, sales of our products will decline and our revenues will decrease.

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Acquisitions of companies or technologies may result in disruptions to our business or may not achieve the anticipated benefits.

As part of our business strategy, we may acquire additional assets and businesses principally relating to or complementary to our current operations.  Any acquisitions and/or mergers by us will be accompanied by the risks commonly encountered in acquisitions of companies.  These risks include, among other things:

•            Exposure to unknown liabilities of acquired companies, including unknown litigation related to acts or omissions of our acquired company and/or its directors and officers prior to the acquisition;

•            Higher than anticipated acquisition costs and expenses;

•            Effects of costs and expenses of acquiring and integrating new businesses on our operating results and financial condition;

•            The difficulty and expense of integrating the operations and personnel of the companies;

•            Disruption of our ongoing business;

•            Diversion of management’s time and attention away from our remaining business during the integration process;

•            Failure to maximize our financial and strategic position by the successful incorporation of acquired technology;

•            The inability to implement uniform standards, controls, procedures and policies;

•            The loss of key employees and customers as a result of changes in management;

•            The incurrence of amortization expenses; and

•            Possible dilution to our shareholders.

In addition, geographic distances may make integration of businesses more difficult.  We may not be successful in overcoming these risks or any other problems encountered in connection with any acquisitions.  If realized, these risks could reduce shareholder value.

Others could claim that we infringe on their intellectual property rights, which may result in substantial costs, diversion of resources and management attention and harm to our reputation.

It is possible that other parties may claim that we have violated their intellectual property rights. Rights to intellectual property can be difficult to verify. Competitors could assert, for example, that former employees of theirs whom we have hired have misappropriated their proprietary information for our benefit. A successful infringement claim against us could damage us in the following ways:

•            We may be liable for damages and litigation costs, including attorneys’ fees;

•            We may be prohibited from further use of the intellectual property;

•            We may have to license the intellectual property, incurring licensing fees; and

•            We may have to develop a non-infringing alternative, which could be costly and delay or result in the loss of sales.

Regardless of the outcome, an infringement claim could result in substantial costs, diversion of resources and management attention and harm to our reputation.

If we are successful in the design and development of our new products, and there is commercial acceptance of our products, such as the Voq professional phone, others may claim that we infringe on their intellectual property rights, which may result in substantial costs, diversion of resources and management attention and harm our reputation.

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Misappropriation of our intellectual property could place us at a competitive disadvantage.

Our intellectual property is important to our success. We rely on a combination of patent protection, copyrights, trademarks, trade secrets, licenses, non-disclosure agreements and other contractual agreements to protect our intellectual property. Third parties may attempt to copy aspects of our products and technology or obtain information we regard as proprietary without our authorization. If we are unable to protect our intellectual property against unauthorized use by others it could have an adverse effect on our competitive position.

Our strategies to deter misappropriation could be inadequate due to the following risks:

•            Non-recognition of the proprietary nature or inadequate protection of our methodologies in the United States, Canada or 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.

In addition, we could be required to spend significant funds and our managerial resources could be diverted in order to defend our rights, which could disrupt our operations.

As our business expands internationally, we will be exposed to additional risks relating to international operations.

Our expansion into international operations exposes us to additional risks unique to such international markets, including the following:

•            Increased credit management risks and greater difficulties in collecting accounts receivable;

•            Unexpected changes in regulatory requirements, wireless communications standards, exchange rates, trading policies, tariffs and other barriers;

•            Uncertainties of laws and enforcement relating to the protection of intellectual property;

•            Language barriers; and

•            Potential adverse tax consequences.

Furthermore, if we are unable to further develop distribution channels in Europe and the Asia-Pacific region we may not be able to grow our international operations and our ability to increase our revenue will be negatively impacted.

Government regulation could result in increased costs and inability to sell our products.

Our products are subject to certain mandatory regulatory approvals in the United States, Canada and other countries in which we operate. In the United States, the Federal Communications Commission regulates many aspects of communications devices. In Canada, similar regulations are administered by the Ministry of Industry, through Industry Canada. Although we have obtained all the necessary Federal Communications Commission, Industry Canada and other required approvals for the products we currently sell, we may not obtain approvals for future products on a timely basis, or at all. In addition, regulatory requirements may change or we may not be able to obtain regulatory approvals from countries other than the United States and Canada in which we may desire to sell products in the future.

Fluctuations in exchange rates between the United States dollar and the Canadian dollar may affect our operating results.

We are exposed to fluctuations in the exchange rate between the United States dollar and the Canadian dollar through our operations in Canada. To reduce our risk because of currency fluctuations, we purchase inventory, other cost of sales items and many of our services in United States dollars. If the Canadian dollar rises relative to the United States dollar, our operating results may be negatively impacted. To date, we have not entered into any foreign currency futures contracts as part of a hedging policy, but we have purchased Canadian currency to cover our Canadian currency requirements for the next fiscal quarter.  We have entered into distribution agreements in Europe and the Asia-Pacific region that are denominated primarily in U.S. dollars.  We expect that as our business expands in Europe and the Asia-Pacific region, we will also be exposed to additional foreign currency transactions and to the associated currency risk.  To date, we have not entered into any futures contracts.

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SIERRA WIRELESS, INC.

Consolidated Statements of Operations and Deficit

(Expressed in thousands of United States dollars, except per share amounts)

(Prepared in accordance with United States generally accepted accounting principles (GAAP))

(Unaudited)

See accompanying notes to consolidated financial statements.

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SIERRA WIRELESS, INC.

Consolidated Statements of Comprehensive Income

(Expressed in thousands of United States dollars)

(Prepared in accordance with United States GAAP)

(Unaudited)

See accompanying notes to consolidated financial statements.

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SIERRA WIRELESS, INC.

Consolidated Balance Sheets

(Expressed in thousands of United States dollars)

(Prepared in accordance with United States GAAP)