Company’s first quarter revenues increase 33 percent over same quarter last year
OTTAWA, Canada – March 5, 2009 – Wi-LAN Inc. (TSX: WIN) (“Wi-LAN” or the “Company”), a leading technology innovation and licensing company, today announced financial results for the first quarter ended January 31, 2009. All financial amounts are expressed in Canadian dollars.
First Quarter 2009 Highlights:
- Revenues of $6.3 million as compared to $4.7 million in Q1 2008.
- Pro forma earnings* of $808 thousand or 1 cent per share as compared to pro forma earnings of $2.0 million or 2 cents per share in Q1 2008.
- GAAP net loss of $3.8 million or 4 cents per share as compared to a GAAP net loss of $1.9 million or 2 cents per share in Q1 2008.
- Signed agreements with 12 companies including 10 wireless and 2 V-Chip licenses.
“We are pleased with the solid progress our business made during this first quarter,” said Jim Skippen, Chairman & CEO. “Not only did we sign a six-year license for wireless technologies with electronics giant Samsung, we also signed new multi-year licenses with eleven other companies. With revenues 33 percent higher in this quarter than last year, and an increasing revenue backlog, our licensing program continues to deliver strong results.”
Mr. Skippen added, “At this time, we are making significant investments in litigation and technology development which we are confident will drive future growth. We are particularly pleased that despite these significant investments, and despite the tougher economic climate, our business continued to deliver positive cash flow.”
Interest income in the first quarter of 2009 was $0.4 million as compared to $1.0 million in the first quarter of 2008. The $0.6 million reduction is due to the decline in interest rates.
The Company incurred a foreign exchange loss of $0.6 million during the first quarter of 2009. This loss consisted of a $0.2 million loss on contracts that matured during the quarter and an unrealized loss of $0.4 million on outstanding forward contracts at the end of the quarter. At January 31, 2009, the Company had forward contracts to sell $9.0 million U.S. dollars at an average rate of $1.184 Canadian per U.S. dollar.
Patent licensing expenses represent the expenses incurred by the Company in the execution of its patent licensing programs which includes staffing and travel-related costs. During the first quarter of 2009, Wi-LAN signed license agreements for wireless-related technologies with ten companies including wireless handset vendors Samsung Electronics Co., Ltd. and Pantech & Curitel Communications, Inc. In addition, Wi-LAN licensed two companies, NVIS Audio & Video Tech and Unique Craft to V-Chip technology.
Litigation expenses increased in the first quarter of 2009. These expenses consist primarily of expenses related to enforcing and defending Wi‑LAN’s intellectual property ownership rights in court. The increase was due, in part, to the Company’s response to declaratory judgment (DJ) claims filed by Intel Corporation and a number of other companies involving a number of Wi‑LAN’s wireless patents including U.S. Patent No. 6,549,759 (the “759 patent”).
All of the companies that filed these DJ actions in California are also defendants in the Company’s Texas litigation. During the first quarter of 2009, the Texas court granted Wi-LAN’s motion to add the 759 patent to the Company’s Texas litigation. With this ruling, the Texas case will cover additional products including dual-mode Wi-Fi/WiMAX and some Bluetooth products.
Wi-LAN initiated a share purchase program on October 15, 2008, which is ongoing, pursuant to which Wi-LAN expects to purchase up to 5 percent of its outstanding common shares. During the quarter ended January 31, 2009, the Company repurchased 469,300 shares for cancellation at an average price of $1.42. In total, the Company has repurchased 684,300 shares at an average price of $1.36.
In the first quarter of fiscal 2009, cash and cash equivalents decreased by $2.0 million to $99.4 million. The decrease in cash and cash equivalents was due to $0.7 million used to repurchase shares and $1.3 million consumed in operations. The Company’s cash equivalents include T‑bills, term deposits and GICs.
2009 Financial Guidance
The Company is maintaining its 2009 financial guidance. Revenues for the fiscal year ended October 31, 2009 are expected to be within the range of $30.0 million to $34.0 million. Operating expenses, excluding stock based compensation, are expected to be in the range of $23.0 million to $26.0 million. Pro forma earnings are expected to be within the range of $9.5 million to $13.0 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 2009 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, 2009 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. 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 – March 5, 2009 – 10 AM EST
Wi-LAN will conduct a conference call to discuss its financial results today at 10:00 AM Eastern Standard Time. Wi-LAN CEO, Jim Skippen and CFO, Shaun McEwan, will be on the call.
The call will be available at http://www.investorcalendar.com/IC/CEPage.asp?ID=141218
and accessible by telephone until 11:59 PM on March 12, 2009.
- Replay Number (Toll Free): 1.877.660.6853
- Replay Number (International): 201.612.7415
- Replay passcodes (both required for playback)
Account #: 286
Conference ID #:314416
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 170 companies. For more information: www.wi-lan.com.