Company confirms $140 million of estimated revenue backlog
OTTAWA, Canada – June 4, 2008 – Wi-LAN Inc. (“Wi-LAN” or the “Company”) (TSX: WIN), a leading technology innovation and licensing company, today announced financial results for the second quarter ended April 30, 2008. All financial amounts are expressed in Canadian dollars.
Revenue for the second quarter of fiscal year 2008 was $3.2 million. Operating expenses in the second quarter were $4.6 million. Total expenses were $9.1 million, which included $0.5 million of stock-based compensation expense and $4.1 million of depreciation and amortization expense, both non-cash charges. Interest income amounted to $0.8 million during the quarter. Net earnings amounted to a loss of $4.1 million or $0.04 per basic and diluted share. Pro forma earnings* amounted to a loss of $0.5 million or $0.01 per diluted share.
Revenues for the six months ended April 30, 2008 were $8.0 million. Operating expenses for the first half of the year were $8.3 million. Total expenses were $17.5 million including $1.0 million of stock-based compensation expense and $8.2 million of depreciation and amortization expense, both non-cash charges. Interest income amounted to $1.8 million during the six months ended April 30, 2008. Net earnings amounted to a loss of $6.0 million or $0.06 per share for the six months ended April 30, 2008. Pro forma earnings for the same period were $1.5 million or $0.02 per share.
In the second quarter of fiscal year 2008, cash and cash equivalents decreased by $0.6 million to $91.8 million at April 30, 2008. Over the six month period ended April 30, 2008, the Company generated positive cash flow of $0.3 million. The Company's cash equivalents include T-Bills, term deposits and GICs.
Second Quarter 2008 Highlights:
- Added 10 wireless licensees;
- Added 7 V-chip licensees; and
- Patent licensing industry veteran Robert Bramson elected to Wi-LAN’s board of directors.
“I am pleased with the progress that our business has continued to make this quarter,” said Jim Skippen, President & CEO. “The number and variety of signings to date has established a solid recurring revenue base and reinforces our overall strategy. Our business has now reached a maturity level that permits us to be more confident in our licensing program.”
“The confidence that we have in our business is demonstrated, in part, by our decision to provide more fulsome financial disclosure, including our first ever release of annual revenue and pro forma earnings guidance as well as our current backlog position.”
2008 Financial Guidance
The following statements are forward-looking and actual results may differ materially. The “Forward-looking Information” section at the end of this news release provides information on various risks and uncertainties that the Company faces. Additional information identifying risks and uncertainties relating to the Company’s business are contained under the heading “Risk Factors” in Wi-LAN’s current Annual Information Form and its other filings with the various Canadian securities regulators which are available online at www.sedar.com. Annual financial guidance for fiscal 2008 is provided to assist investors and other interested parties in understanding Wi-LAN’s performance. The reader is cautioned that using this information for any other purpose may be inappropriate.
The Company's estimated revenue backlog represents its estimates of revenues yet to be recorded from signed license agreements. These estimates consider the market forecasts for the technologies covered within the Company’s patent portfolio, publicly available and, in certain cases, privately provided forecasts for existing licensees’ product sales, and the relevant license rates in effect in these signed agreements. The timing of license agreement closings, breadth and depth of product portfolios licensed and other external market forces may cause the Company's estimated revenue backlog to vary from one quarter to the next. As at April 30, 2008, the Company’s estimated revenue backlog position was approximately $140 million. The Company expects this estimated revenue backlog will be recognized over the remaining terms of the license agreements which range from four to eight years.
The Company’s revenues result from the licensing of intellectual property which, by its very nature, is directly affected by the timing of the closure of license agreements, the nature and extent of specific licenses including actual rates, product sales by licensees which can be subject to seasonality and overall market demands as well as the timeliness of the receipt of licensee royalty reports. Thus, quarter-to-quarter fluctuations in revenue are normal and should be expected. Management believes that the strength of its business should be measured by annual revenues and growth in estimated revenue backlog.
The following guidance for the fiscal year ended October 31, 2008 reflects our current business indicators and expectations. Due to their nature, certain income and expense items, such as significant settlements from companies involved in current enforcement actions, new significant litigation or defense actions that could arise during the course of the year, losses on asset impairments or realized foreign exchange losses cannot be accurately forecast. Accordingly, we exclude forecasts of such items from our guidance. Additionally, the Company’s revenues result from the licensing of intellectual property which, by its very nature, is directly affected by the timing of the closure of license agreements, the nature and extent of the license including actual rates, the product sales by licensees which can be subject to seasonality and overall market demands as well as the timeliness of the receipt of licensee royalty reports. Wi-LAN’s imperative is to negotiate the best possible license as measured over the long-term and accordingly, the timing of actual license signings may vary from that forecasted. Actual results may vary materially from the guidance provided as a consequence of the above noted factors.
Revenues for the fiscal year are expected to be within the range of $15 million to $20 million. Operating expenses, excluding stock based compensation, are expected to be in the range of $16 million to $19 million. Pro-forma earnings are expected to be within the range of $2 million to $5 million.
Wi-LAN, founded in 1992, is a leading technology innovation and licensing company. Our portfolio of patented inventions applies to a wide range of electronics and communications products. Some of the fundamental technologies covered by Wi-LAN’s patents include: CDMA, DOCSIS, DSL, GSM/EDGE, V‑chip, Wi-Fi and WiMAX. Wi-LAN has licensed its intellectual property to over 100 companies. For more information: www.wi-lan.com.