Company signs record 25 licensees in third quarter
OTTAWA, Canada – September 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 third quarter ended July 31, 2008. All financial amounts are expressed in Canadian dollars.
Third Quarter 2008 Highlights:
- Q3 revenues of $4.8 million as compared to $3.2 million for the previous quarter representing a sequential increase of $1.6 million or 50%.
- Q3 Pro forma earnings of $494 thousand or 1 cent per share as compared to a loss of $540 thousand in the previous quarter - represents an increase of $1.0 million sequentially.
- GAAP net loss of $3.5 million or 4 cents per share represents an improvement of $600 thousand over the previous quarter.
- Cash, cash equivalents and short-term investments of $92.5 million represents an increase of $700 thousand from the previous quarter and $1.0 million over the nine months ended July 31, 2008.
- Signed 12 wireless, 12 V-chip and 1 DSL licenses.
- Sixth laptop vendor, ASUSTek Computer Inc., licenses Wi-Fi technology.
- Initiated patent infringement lawsuit in the Eastern District of Texas involving wireless handset vendors including Motorola Inc. and UTStarCom, Inc.
Revenues for the nine months ended July 31, 2008 were $12.8 million as compared to $54.1 million for the same period last year. Included in the nine months ended July 31, 2007 was $37.5 million of patents received in kind. Pro forma earnings for the period ended July 31, 2008 were $2.0 million or 2 cents per share as compared to $48.4 million or 64 cents per diluted share. The comparable period in 2007 included, in addition to patents received in kind, a significant non-recurring license fee of $15.3 million from Nokia.
Operating expenses for the first nine months of the year were $13.4 million. Total expenses were $27.2 million including $1.5 million of stock-based compensation expense and $12.3 million of depreciation and amortization expense, both non-cash charges. Interest income amounted to $2.5 million during the nine months ended July 31, 2008. Net earnings amounted to a loss of $9.5 million or $0.10 per share for the nine months ended July 31, 2008. Pro forma earnings for the same period were $2.0 million or $0.02 per share.
“We continued to make significant progress in growing our business in the third quarter,” said Jim Skippen, President & CEO. “Our revenue grew strongly, increasing by 50 percent compared to our second quarter and we negotiated agreements with 25 new licensees that will positively contribute to our business over the next several years. Considering our licensing achievements in the third quarter and early in the fourth quarter, our licensing program is delivering strong results in the second half of our fiscal 2008."
“The launching of a new litigation in the third quarter as well as the adjustment of a fee service agreement that dramatically reduces the success fee due to our external counsel, increased the litigation portion of our operating expenses this quarter,” said Skippen. “We consider these increased expenses to be necessary and valuable investments in our business.”
2008 Financial Guidance
Revenues for the fiscal year are expected to be within the range of $24.5 million to $25.5 million. Operating expenses, excluding stock based compensation, are expected to be in the range of $19 million to $20 million. Pro forma earnings are expected to be within the range of $8 million to $9.5 million.
The above 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 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 as well as overall market demands and the timeliness of the receipt of licensee royalty reports. In addition, certain revenues may be of a one-time nature. 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 above guidance for the fiscal year ending 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.
Conference Call Information – September 4, 2008 – 10 AM EDT
Wi-LAN will conduct a conference call to discuss its financial results today at 10:00 AM Eastern Daylight Time (EDT). Wi-LAN President & CEO Jim Skippen and CFO Shaun McEwan will be on the call.
To join by webcast: http://www.investorcalendar.com/IC/CEPage.asp?ID=133174
- Callers from Canada or the United States, dial 1.866.585.6398 (Toll Free)
- Callers from other locations, dial 416.849.9626 (International)
The call will be available at http://www.investorcalendar.com/IC/CEPage.asp?ID=133174 and accessible by telephone until 11:59 PM on September 11, 2008
- Replay Number (Toll Free): 1.866.245.6755
- Replay Number (International): 416.915.1035
- Passcode: 489775
Wi-LAN, founded in 1992, is a leading technology innovation and licensing company. Our portfolio of patented inventions applies to a wide range of consumer 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 a large and growing portfolio of more than 300 issued or pending patents. Wi-LAN has licensed its intellectual property to over 130 companies. For more information: www.wi-lan.com.