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April 26 2006

Sierra Wireless, Inc. (NASDAQ: SWIR, TSX: SW)
is reporting first quarter results.
 

"Strong operational execution in the first quarter of 2006 continued to
underpin a strong recovery in our business. During the first quarter, we
ramped production and shipments of our new HSDPA AirCards to customers in
North America and Europe, continued strong shipments of our AirCard580 for
EV-DO networks and significantly expanded our embedded modules business with
new design wins and growing shipments. Continued improvement in our AirCard
and embedded modules business segments drove sequential quarterly revenue
growth of 20% and revenue growth of 124% over the first quarter of 2005. Our
improved revenue performance, combined with strong gross margins and good
expense control, drove a higher than expected profit in the first quarter,"
said Jason Cohenour, President and Chief Executive Officer. While we are
pleased with our results and the progress we are making with our business
recovery, we also recognize that continued hard work and strong execution are
required before we achieve the goals we have set for ourselves in terms of
product line strength, market position and financial results."
Our revenue for the three months ended March 31, 2006 amounted to
$45.2 million, gross margin was $16.7 million, operating expenses were
$14.8 million and net earnings were $2.6 million. Our diluted earnings per
share were $0.10 for the first quarter of 2006. Our balance sheet remains
strong, with $101.7 million of cash, short-term and long-term investments.
Results for the first quarter of 2006 relative to company guidance
originally provided on January 26, 2006 are as follows:

First quarter revenue for 2006 of $45.2 million was better than our
guidance of $40.0 million. Gross margin was 36.8%, higher than our
guidance of 33.5%. Operating expenses before stock-based compensation
were $14.0 million, in-line with our guidance of $13.7 million.
Operating expenses after stock-based compensation were $14.8 million,
similarly in-line with our guidance of $14.7 million. Our net
earnings of $2.6 million, or diluted earnings per share of $0.10,
were better than our guidance of a net loss of approximately
$0.8 million, or loss per share of $0.03. Excluding stock-based
compensation, net earnings of $3.5 million were better than our
guidance of breakeven to slightly positive. Our free cash flow, being
cash flow from operations net of investments in fixed assets and
intangibles, was negative $2.2 million, consistent with our guidance
of negative cash flow. The cash used in operations in the first
quarter of 2006 includes a royalty payment of $5.0 million to an
intellectual property holder under an agreement entered into in
December 2005. The expense related to these royalties was accrued for
in prior periods.

Results for the first quarter of 2006, compared to the first quarter of
2005 are as follows:

First quarter revenue increased by 124.1% to $45.2 million in 2006,
from $20.2 million for the same period in 2005. Gross margin was
36.8% compared to 35.3% in the first quarter of the prior year.
Operating expenses were $14.8 million in the first quarter of 2006,
compared to $15.2 million for the first quarter of 2005. Net earnings
for the first quarter of 2006 were $2.6 million, or diluted earnings
per share of $0.10, compared to a net loss of $7.6 million, or loss
per share of $0.30, in the first quarter of 2005. First quarter cost
of goods sold and operating expenses include $0.1 million and
$0.8 million, respectively, of stock-based compensation, compared to
nil in the first quarter of 2005. Excluding stock-based compensation
results in operating expenses of $14.0 million and net earnings of
$3.5 million, or diluted earnings per share of $0.13, in the first
quarter of 2006.

Results for the first quarter of 2006, compared to the fourth quarter of
2005 were as follows:

Revenue for the three months ended March 31, 2006 amounted to
$45.2 million, an increase of 20% compared to $37.6 million in the
fourth quarter of 2005. Gross margins were 36.8% in the first quarter
of 2006, compared to 38.6% in the fourth quarter of 2005. Operating
expenses were $14.8 million in the first quarter of 2006, compared to
$14.6 million in the fourth quarter of 2005. Net earnings for the
first quarter of 2006 were $2.6 million, or diluted earnings per
share of $0.10, compared to net earnings of $0.9 million, or diluted
earnings per share of $0.04, in the fourth quarter of 2005. First
quarter cost of goods sold and operating expenses include
$0.1 million and $0.8 million, respectively, of stock-based
compensation, compared to nil in the fourth quarter of 2005.
Excluding stock-based compensation results in operating expenses of
$14.0 million and net earnings of $3.5 million, or diluted earnings
per share of $0.13, in the first quarter of 2006.

First Quarter Highlights included:

- We announced an OEM design win with HP for our MC5720 PCI express
Mini Card embedded module ("Mini Card") for EV-DO networks, and
early in the quarter HP announced the availability of its first
laptop incorporating our MC5720 Mini Card. Our MC5720 Mini Card,
launched with Lenovo in the fourth quarter of 2005, was the
world's first 3G wireless mini card module for laptop OEMs. Early
in 2006, we also announced that Lenovo had selected our MC5720
Mini Card for two additional business laptop computers.

- We announced that our next generation EV-DO (Revision A) products,
the AirCard 595 PC Card and the MC5725 Mini Card, are available to
infrastructure vendors, OEM customers, and network operators for
testing and integration purposes. Subsequently, with Nortel and
Lucent Technologies, we announced over the air test calls using
EV-DO Revision A wireless technology and pre-commercial versions
of the AirCard 595 and the MC5725 Mini Card. These successful
tests confirm the commercial viability of EV-DO Revision A for
powering next-generation broadband wireless services. EV-DO
Revision A is an upgrade to current EV-DO networks and supports
faster data rates and increased system capacity, offering peak
data rates of 3.1 Mbps on the downlink and up to 1.8 Mbps on the
uplink. In conjunction with Sprint, Nortel, Lucent, HP, Lenovo and
Panasonic, our AirCard 595 and MC5725 products were successfully
demonstrated at the CTIA Wireless trade show in early April. We
expect the AirCard 595 to commence commercial shipments in the
third quarter of this year, followed by commercial shipments of
the MC 5725 Mini Card later in 2006.

- We announced design wins with both Lenovo and Fujitsu Siemens
Computers for our MC8755 Mini Card for UMTS/HSDPA networks. The
additional design win with Lenovo follows our earlier design win
with Lenovo for our MC5720 Mini Card for EV-DO networks. We
commenced initial commercial shipments of the MC8755 Mini Card
during the first quarter. With these PC OEM design wins, our HSDPA
Mini Card module will be available on a number of carrier networks
including Cingular, T-Mobile and Vodafone.

- We announced that the AirCard 850 UMTS/HSDPA wide area wireless
network card for UMTS/HSDPA networks is available from Xacom
Comunicaciones to carrier, reseller and enterprise channels in
Spain, France, and Portugal. In addition, Xacom will distribute
the MC8755 Mini Card embedded module to original equipment
manufacturers in the region for machine-to-machine (M2M) and
mobile computing applications.

- We commenced shipments of our AirCard850 to several other
customers across EMEA, including carriers and distributors in
Italy, South Africa, Spain and Switzerland. Our UMTS/HSDPA
AirCards are now approved on 12 networks around the world.

- We announced that HY-LINE Communication Products will distribute
the MC8755 Mini Card for UMTS/HSDPA networks to original equipment
manufacturers in Germany, Austria, and Switzerland for machine to
machine (M2M) and mobile computing applications.

- Together with TELES Communication Systems, we announced that TELES
has selected our MC8755 Mini Card to provide 3G wireless
connectivity for its TELES.iGATE fixed-to-mobile wireless gateway
system. TELES showcased its iGATE system at CeBIT 2006, held in
Hannover, Germany in March.

- We continued to have strong design win progress in our embedded
modules business. During the first quarter we were awarded another
HSDPA design win with a major laptop OEM. Also, in addition to
TELES Communication Systems, we secured several new design wins
with manufacturers of fixed wireless terminals for both our EVDO
and HSDPA embedded module products.

- Development of our next generation HSDPA (3.6Mbps/tri band)
AirCards and Mini Cards continued on track. We expect to launch
both of these new products in the second half of 2006.