News Release Details

Wi-LAN's Third Quarter Unaudited Broadband Wireless Revenue Continues Quarter-Over-Quarter Growth

08/08/2001


Strategic Acquisition and Growing Sales Provide 103% Increase in Third Quarter Revenue


CALGARY, Canada - August 8, 2001

Wi-LAN Inc. (TSE:WIN), a leading innovator in wireless data/Internet communications, announced unaudited broadband wireless revenue for the three months ended July 31, 2001 of $7.1 million, an increase of 103 percent over the same period in 2000, and 27 percent growth over the second quarter of fiscal 2001. Wi-LAN met its third quarter guidance of $7.0 to $9.0 million in broadband wireless revenue, which was revised upwards on July 5, 2001 from the $6.0 to $9.0 million forecast in May. The increase in broadband wireless revenue is primarily due to the fulfillment of sales agreements and the first reported quarter with a full three months of revenue from UC Wireless, a wholly-owned U.S. subsidiary acquired in the second quarter of 2001. 

Wi-LAN has traditionally provided financial guidance for broadband wireless revenue only, which includes broadband wireless revenue from TIL-TEK, UC Wireless and Wi-LAN, but does not include revenue from DTS, its majority-owned U.S. subsidiary, and narrowband antenna sales. Wi-LAN will continue with its practice of excluding DTS in its wireless revenue guidance. However, Wi-LAN will include narrowband antenna revenue in future revenue guidance for three reasons: narrowband antenna sales have been relatively small, amounting to only 12% of wireless revenue this quarter; TIL-TEK, Wi-LAN's antenna subsidiary, is 100% owned by Wi-LAN; and TIL-TEK does not manage its business to differentiate between narrowband and broadband antenna sales. In the three months ended July 31, 2001, narrowband antenna sales contributed $1.0 million, resulting in total wireless revenue of $8.1 million for the third quarter. This amount, which includes Wi-LAN and wholly-owned subsidiaries UC Wireless and TIL-TEK revenues, will be reported against in the early release of revenues for the fourth quarter of 2001.

"We are very pleased with our continued revenue growth," said Hatim Zaghloul, CEO and Chairman, Wi-LAN. "We are starting to reap the benefits of the many initiatives Wi-LAN has completed in the last year, and we continue to make significant progress in expanding our sales in the global market."

"Wi-LAN has made some difficult decisions to operate in this challenging economic climate. Our commitment to our customers and shareholders is still first and foremost as we seek out new opportunities to expand our presence as the leader in wireless solutions," said Peter Kinash, Chief Financial Officer, Wi-LAN. "By taking advantage of opportunities in enterprise markets and securing increased distribution of Wi-LAN's full product offering, the company is focused on growing sales and operating margins." 


Third Quarter Highlights:

Several significant strategic initiatives were accomplished in the third quarter, including:

  • Closing of a public financing for gross proceeds of $11.6 million.
  • Certification by the Federal Communications Commission (FCC) of Wi-LAN's W-OFDM based BWS 300-24 product for use in the 2.4 GHz band in the United States. Wi-LAN is the first company to receive certification from the FCC for the use of OFDM technology in the 2.4 GHz band.
  • Strengthening of Wi-LAN's Canadian distribution channel through the addition of Graybar Canada and Alliance Cables as Gold Certified Partners in the Channel Partner Program. 
  • Announcement of a Master Service Agreement with General Dynamics Wireless Services, a Massachusetts-based systems integrator, in order to provide a superior total wireless communications solution to the client. 
  • Increased reach and penetration into Asia, a large and rapidly growing market for high-speed Internet access, through the signing of two authorized distributor agreements and certification of Wi-LAN's AWE 120-58 in China by the State Regulatory Radio Commission.
  • Third party validation of Wi-LAN's AWE 120-24 advanced wireless Ethernet bridge based on the "NetWORKS as Advertised" award from Miercom, an independent networking consultancy and product test centre based in Princeton Junction, New Jersey. 
  • Appointment of Henry Burkhalter to Wi-LAN's Board of Directors. Mr. Burkhalter, former Chief Operating Officer of WorldCom Wireless Solutions, is an experienced leader in the wireless industry and he is expected to provide valuable counsel for Wi-LAN's strategic planning, while his experience in U.S. government relations will be instrumental in future company initiatives.
  • Restructuring of Wi-LAN's business, which is expected to improve cash flow used in operations by approximately $1.5 million per month. This will allow Wi-LAN to improve cash flow and operating margin while continuing to focus on increasing sales revenue and market position. 

Financial Outlook:

Wi-LAN is targeting wireless revenue of between $8.0 and $10 million in the fourth quarter of 2001. Meeting the company's revenue goals is subject to various risk factors, some of which are set out under the title "Forward Looking Information" at the end of this release. 

Wi-LAN recently indicated its view that the slowdown in the telecommunications industry will last well into 2002, and as a result we expect that in preparing our consolidated third quarter report, write downs will be taken in the carrying value of certain long-term assets, particularly goodwill related to DTS, and inventories.

Quarterly Consolidated Results:

Wi-LAN intends to release its consolidated results for the three months ended July 31, 2001 in mid-September 2001. A conference call to discuss the results will be held on the following day. Details with regard to the call will be posted on Wi-LAN's website at www.wi-lan.com.

All financial information in this document is reported in Canadian dollars, unless otherwise indicated. 


Forward Looking Information:

Certain statements in this release, other than statements of historical fact, are forward-looking information that involves various risks and uncertainties. These can include, without limitation, statements based on current expectations involving a number of risks and uncertainties related to all aspects of the wireless data communications industry. These risks and uncertainties include, but are not restricted to, continued increased demand for the Company's products, the Company's ability to maintain its technological leadership in the field of high-speed data communications, the Company's ability to attract and maintain key employees, the enforceability of the Company's patents, and the availability of key components. 

These uncertainties may cause actual results to differ from information contained herein. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral forward-looking statements are based on the estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. The Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

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