News Release Details

Wi-LAN ANNOUNCES SECOND QUARTER UNAUDITED REVENUE AND CASH BALANCE

05/08/2002


Revenue Growth on Track with Fiscal 2002 Guidance

CALGARY, Canada - May 8, 2002 -- Wi-LAN Inc. (TSE:WIN), a global innovator of wireless data/Internet communications, today announced unaudited revenue and cash balance for the three months ended April 30, 2002, and reiterated its revenue guidance for the 2002 financial year. All financial amounts are expressed in Canadian dollars unless otherwise noted.

Financial Highlights:

  • Revenue for the three months ended April 30, 2002 was $6.2 million, which is 29% growth compared to $4.8 million for the prior three months ended January 31, 2002, and equal to the $6.2 million for the same period in 2001. Year-to-date revenue is $11 million. Sales to Asia showed significant growth in the quarter, and renewed strength was generally evident across all geographic markets.
  • The cash balance on April 30, 2002 was $8.4 million, compared to $4.8 million on January 31, 2002. The cash balance is expected to be adequate to sustain the company's current operations indefinitely, since management expects to exit fiscal 2002 with cash flow positive operations.
  • Wi-LAN continues to expect to exceed its fiscal 2001 revenues of $24.8 million in the twelve months ended October 31, 2002.

    For service providers offering broadband wireless access, the BWS 3000 Series offers superior multipath robustness, improved non-line of sight (NLOS) performance and high spectral efficiency, which translates into more customers per cell-site, maximum usage of valuable licensed spectrum and higher effective data transmission rates. Operating at an unprecedented throughput of up to 192 megabits per second per six-sector cell, and with a transmission range up to an estimated 40 kilometers, Wi-LAN's BWS 3000 Series includes access points and customer premises equipment, and can be used in broadband access applications alone or in combination with wired alternatives. Using a cellular network design, Wi-LAN's solution can easily serve a growing customer base. Network cells can be expanded quickly and cost effectively. By starting small and expanding, network operators experience early profits.

    Wi-LAN has maintained a strong sales force that, with the added presence of growing distribution channels and Original Equipment Manufacturer (OEM) agreements, is continuing to drive forward in the broadband wireless access market. Wi-LAN's Broadband Wireless Access Systems (BWS) products, based on Wi-LAN's patented Wide-band Orthogonal Frequency Division Multiplexing (W-OFDM) technology, are now shipping to several countries including China, and sales of Advanced Wireless Ethernet Bridge (AWE) products, VINE Internet Protocol (VIP) wireless Ethernet bridge products, and TIL-TEK Antennas continue worldwide.

    "With three new major customer contracts this quarter, Wi-LAN has shown steady progress in fuelling the company's future growth," said Hatim Zaghloul, Chairman, President and CEO, Wi-LAN Inc. "In addition, ongoing product improvements, such as those announced for our W-OFDM based BWS Series products, continue to extend our technological lead over competitors."

    In the second half of 2001, structural changes were put in place to improve the company's cash flow. These changes included significant staff and expenditure reductions. The fixed components of cash used in operations have been sharply reduced, while the variable components of cash used in operations going forward will only be incurred to support new sales. Fewer resources are required for product development as the main effort has shifted from development of the BWS 3000 Series, based on Wi-LAN's patented W-OFDM technology, to product enhancements and cost reductions of the full product line to improve gross margins and market penetration. Master Service Agreements and integrators have reduced the need for in-house network design.

    "The completion of a $5 million financing in the quarter and our continuing adherence to a strict cash management program has erased any concerns about Wi-LAN's survival," said Steven Bellamy, Chief Financial Officer, Wi-LAN Inc. "With growing sales and a continuing focus on cost reduction, Wi-LAN's finances are secure."


    Operations Highlights
    Several significant strategic initiatives were accomplished in the first quarter, including:
  • Financing: On February 14, 2002 Wi-LAN completed a financing in the form of a public offering of 1.5 million units at a price of $3.40 per unit. Each unit consisted of one common share and one-half of one common share purchase warrant. Each full warrant entitles the holder to acquire one common share of Wi-LAN at an exercise price of $4.25 at any time on or before February 14, 2004. The offering was sold to a syndicate of underwriters led by Research Capital Corporation and including Yorkton Securities Inc. and Acumen Capital Finance Partners Ltd. The gross proceeds were $5.2 million. The net proceeds of $4.8 million are being used to provide additional funding for product development, to support sales growth and for general corporate purposes.
  • Second Chinese Customer: On February 26, 2002 Wi-LAN announced its Chinese joint venture, Wi-Comm, will supply China Communications, a state-owned network operator in China providing nationwide broadband data and Internet services, with Wi-LAN's 3.5 GHz BWS 3000 System. China Communications is the second customer for Wi-Comm's $9 million purchase order of Wi-LAN's W-OFDM based BWS 3000 system in the 2002 calendar year. Both customers are deploying networks in the city of Nanjing, with a population of 5.2 million. Nanjing is one of five cities (total population of 50 million) in which the Ministry of Information Industry (MII), the super-agency overseeing telecommunications, multimedia, broadcasting, satellites, and the Internet, has issued licenses for 3.5 GHz spectrum for city-wide deployments. In the first half of 2002, it is expected that the MII will issue licenses for 3.5 GHz spectrum in an additional 32 cities (total population of 200 million).
  • US Supply Contract: On March 21, 2002 Wi-LAN announced it has been selected to supply over $500,000 (US$350,000) of its AWE products over a one-year period to Prime Companies, Inc. (OTC BB: PRMC) to provide wireless high-speed Internet service in an upscale housing development in California. Prime Companies, Inc. (Prime) is a licensed provider of local multipoint distribution services (LMDS) and a competitive local exchange carrier (CLEC) that operates in several states throughout the US.
  • New Zealand OEM: On April 8, 2002 Wi-LAN announced it has signed an Original Equipment Manufacturer (OEM) agreement with Hermes Technology Limited (Hermes Technology) for more than $6 million (more than US$4 million) of its VIP 110-24 product over a two-year period. Hermes Technology intends to sell the product to rural broadband wireless service providers in New Zealand, Australia and surrounding island countries.
  • Product Improvements: Wi-LAN announced that its market-leading BWS 3000 Series products, based on its patented W-OFDM (Wide-band Orthogonal Frequency Division Multiplexing) technology, now incorporate software that increases the transmission range from 20 kilometres up to an estimated 40 kilometres. In addition, the BWS 3000 Series products now offer Committed Information Rate (CIR) and Maximum Burst Rate (MBR) to allow service providers to differentiate services by customer performance needs and price points. For service providers offering broadband wireless access, the BWS 3000 Series offers superior multipath robustness, improved non-line of sight (NLOS) performance and high spectral efficiency, which translates into more customers per cell-site, maximum usage of valuable licensed spectrum and higher effective data transmission rates.
  • Awards: Wi-LAN received the Association of Professional Engineers, Geologists and Geophysicists of Alberta (APEGGA) Project Achievement Award for its BWS 3500 Project, which resulted in the W-OFDM based BWS 3000 Series products. The award recognized the project for demonstrating outstanding engineering skills and representing a substantial contribution to technical progress and the betterment of society. Also, Wi-LAN's TIL-TEK Antennas division (TIL-TEK), located in Kemptville, Ontario, won the Ontario Global Traders Award of Merit in Market Expansion, Products for the Eastern Ontario region. The award recognizes the pioneering spirit of TIL-TEK in overcoming difficult obstacles to significantly increase its export sales in new markets.

    Quarterly Consolidated Results
    Wi-LAN intends to release its consolidated results for the three months ended April 30, 2002 on June 12, 2002. A conference call to discuss the results will be held on June 13 at 11 a.m. EDT. Details with regard to the call will be press released and posted on Wi-LAN's website at www.wi-lan.com.

    About Wi-LAN Inc.

    Wi-LAN is a global innovator in the field of high-speed wireless data communications, specializing in high-speed Internet access, LAN/WAN extension and broadband wireless access. Wi-LAN is the Chair Company of the OFDM Forum (www.ofdm-forum.com). Wi-LAN believes its W-OFDM patent is necessary for the implementation of devices using the IEEE 802.11a, IEEE 802.11g or ETSI BRAN HiperLAN/2 standards. Wi-LAN's products are known worldwide for their high quality and industry-leading technology. Wi-LAN's common shares trade on The Toronto Stock Exchange under the symbol "WIN." Detailed information on Wi-LAN can be found at www.wi-lan.com.

    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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