News Release Details

WI-LAN ANNOUNCES 2003 SECOND QUARTER REVENUE AND CASH

05/07/2003

 

Quarterly Consolidated Results to be Released June 2

CALGARY, Canada - May 7, 2003 - Wi-LAN Inc. (TSE:WIN), a global provider of broadband wireless communications products and technologies, today announced its unaudited revenue and cash balance for the three months ended April 30, 2003. The company also reiterated its annual revenue guidance and quarterly cash flow guidance. All financial amounts are expressed in Canadian dollars unless otherwise noted. Financial Highlights

  • Revenue for the three months ended April 30, 2003 was $5.9 million, compared to $5.5 million for the prior three months ended January 31, 2003, and $6.2 million for the three months ended April 30, 2002. Revenue of $1.0 million was deferred pending completion of contractual obligations, although payment has been received for $0.6 million of this amount.
  • Second quarter revenue from the company's core broadband fixed wireless access products was $4.9 million, compared to $4.7 million for the prior three months ended January 31, 2003, and $4.9 million for the second quarter in 2002. Revenue from the company's TIL-TEK antenna business was $1.1 million, compared to $0.8 million for the prior three months ended January 31, 2003, and $1.3 million for the second quarter in 2002.
  • Year-to-date revenue is $11.4 million, compared to $11.0 million for the first six months of 2002. Year-to- date revenue is on target with the Company's fiscal year 2003 revenue guidance of $25 to $30 million.
  • Wi-LAN's cash balance as of April 30, 2003 was $2.6 million, compared to $3.5 million as of January 31, 2003. Cash used in operations was $0.9 million, a significant reduction from the $2.2 million used in the first quarter, in spite of cash payments of $0.5 million related to transferring Wi-LAN's California operations into its lower cost Calgary head office. Expected savings from the consolidation of operations of $0.6 million per quarter ($0.2 million per month) started to take effect in April, the last month of the quarter.
  • Wi-LAN expects product gross margins to be sustainable near the 46% level established in the first quarter of 2003 as its broadband wireless product mix continues to shift more toward its new, cost-reduced, second and third generation products.
  • Wi-LAN continues to reduce operating expenses, improve existing product gross margins and focus its product development on market-driven high-margin products. These improvements are expected to generate continued expense reductions and sales growth in line with the Company's fiscal year 2003 revenue guidance, resulting in sustainable positive cash flow from continuing operations beginning in the third quarter ending July 31, 2003.
  • "Our second quarter sales showed good progress over the prior quarter. In addition, our cash usage of $0.9 million in the quarter was significantly reduced from the first quarter cash usage of $2.2 million, in spite of significant cash outlays for transferring our California operations into our lower cost Calgary head office, with the related cash savings only starting to take effect in the last month in the quarter," said Dr. Hatim Zaghloul, Chairman and Chief Executive Officer, Wi-LAN Inc. "We expect our new cost-reduced feature-rich broadband fixed wireless access products will continue to result in improved sales and product gross margins, and our efforts in the first half of the year will result in further improvements in our results for Q3, driving sustainable positive cash flow from operations going forward."

Revenue Guidance
Sales prospects for fiscal 2003 remain positive and Wi-LAN's fiscal year 2003 revenue guidance of $25 to $30 million is achievable, given the following factors:

  • In January, the Chinese Ministry of Information Industry (MII) initiated the process to issue licenses for the 3.5 GHz frequencies in an additional 32 major Chinese cities. In February the licenses were awarded to Chinese service providers and Wi-LAN is well placed to participate with LIBRA 3000 Series equipment sales to many of the companies that won the licenses. These sales may begin as early as the third quarter, but are more likely in the fourth quarter.
  • Other national, provincial and state regulators are also moving to license 3.5 GHz spectrum, further improving sales prospects for Wi-LAN's W-OFDM based LIBRA 3000 Series. For example:
    • In the first quarter of 2003 Wi-LAN announced the sale of $1.1 million (US$745,000) of Wi-LAN's LIBRA 3000 Series products to Cameroon Telecommunications B.P. (Camtel), the national telecommunications carrier for the Republic of Cameroon.
    • In the second quarter Wi-LAN's announced its LIBRA 3000 Series will be deployed in Lagos, Nigeria's most populous state and biggest telecommunications services market, by Swift Networks Limited of Nigeria, (Swift) a multi-service telecommunications service provider in the licensed 3.5 GHz spectrum. Swift expects to order $1.5 million (US$1 million) of LIBRA products by the end of 2003.
    • In the second quarter Wi-LAN's announced its LIBRA 3000 Series will be deployed in Lagos, Nigeria's most populous state and biggest telecommunications services market, by Swift Networks Limited of Nigeria, (Swift) a multi-service telecommunications service provider in the licensed 3.5 GHz spectrum. Swift expects to order $1.5 million (US$1 million) of LIBRA products by the end of 2003. 
  • The Institute of Electrical and Electronics Engineers (IEEE) "WirelessMAN" Standard 802.16a, announced on January 30, 2003, is generating growing interest for the broadband wireless industry and is expected to result in a growing revenue stream for Wi-LAN beginning in the second half of fiscal year 2003, for the following reasons:
    • This standard incorporates Wi-LAN's patented W-OFDM (Wide-band Orthogonal Frequency Division Multiplexing) technology.
    • Wi-LAN is first to market with Standard 802.16a-like products and is dedicated to advancing the implementation of this standard.
    • Wi-LAN has a non-exclusive agreement with Fujitsu Microelectronics America (FMA) to develop and market Standard 802.16a System-on-Chip solutions.
    • Wi-LAN has joined with fellow members of the WiMAX Forum, a non-profit corporation, to help promote and certify the compatibility and interoperability of IEEE Standard 802.16a broadband wireless access equipment. Other WiMAX Forum members include Fujitsu, Intel and Nokia.
    • Equipment sales for the license-exempt 2.4 GHz and 5.8 GHz frequencies are gaining momentum worldwide, and new, high-margin license-exempt products are expected to be launched over the next three months.
    • New broadband wireless global sales prospects are growing both in size and quality, and existing distributor, value-added reseller (VAR) and original equipment manufacturer (OEM) relationships are gaining traction.

Cash Flow Management
Several actions taken in the first half of fiscal 2003 are expected to result in reduced cash expenditures going forward

  • The action taken in the first quarter to transfer Wi-LAN's California operations into its lower cost Calgary head office is expected to reduce the company's quarterly expenses by approximately $0.6 million, effective in the third quarter of the current fiscal year. Cash payments of $0.5 million were expended in the second quarter to substantially complete this action.
  • Wi-LAN entered into an $8.8 million Research and Development (R&D) investment agreement with the Government of Canada to assist Wi-LAN to develop next-generation wireless technologies. The risk- adjusted investment amount is repayable through royalties after March 2005 subject to certain terms and conditions. In addition, the Government of Canada will receive in January 2005 a five-year warrant valued at $5 million with an exercise price equal to the market price of the underlying common shares at that time.  Payments under the agreement will reduce Wi-LAN's expenses through March 2005.
  • Wi-LAN and Wi-Comm Communications Equipment Co. Ltd. (Wi-Comm), a Chinese joint venture company based in Beijing, China, signed a Cooperative Product Development Agreement to support further development of Wi-LAN's LIBRA Series commercial W-OFDM products, which have been deployed in networks in over 30 countries. Wi-Comm has agreed to pay Wi-LAN approximately $900,000 (US$600,000) to accelerate further development of the products, subject to certain terms and conditions. Wi-LAN has agreed to grant Wi-Comm a license to assemble and sell the products in China, and Wi-LAN will provide training and assistance in the assembly and deployment of the products. Wi-LAN has a 20% interest in Wi- Comm. This agreement will enable accelerated LIBRA product development while preserving Wi-LAN's cash resources.
  • Wellink, a leading South Korean provider of high-speed telecommunication systems, and Wi-LAN have agreed to collaborate to develop mobile wireless products based on Wi-LAN's patented W-OFDM technology. These mobile wireless systems are initially intended for Intelligent Transportation Systems (ITS) field trials in the Asia-Pacific region. ITS applications may include real-time video security, advertising and Internet. Wellink and Wi-LAN also intend to pursue other business opportunities related to the development and use of W-OFDM based products. This agreement will accelerate the development of Wi-LAN's W- OFDM based products for mobile applications while preserving Wi-LAN's cash resources.
  • Wi-LAN's TIL-TEK Antennas division reduced expenses beginning in April by going to a four-day work- week. A five-day work week will be reinstated if expected revenue growth in the antenna business materializes.
  • Expenses at all Wi-LAN operations continue to be tightly controlled and monitored. Immediate steps to reduce costs further will be taken as necessary throughout the company to size expenses with expected revenues, while ensuring that the technical and administrative competencies required to grow the business are retained.
"We are making progress on all fronts to ensure sustainable positive cash flow from operations, beginning in the third quarter, which started May 1," said Keith Bittner, Acting Chief Financial Officer. "We will continue to monitor our revenue, product gross margins, expenses and cash relative to our budget plan and will take whatever further action is required to ensure our success."

Quarterly Consolidated Results and Conference Call
Wi-LAN intends to release its consolidated results for the three months ended April 30, 2003 on June 2, 2003 after the markets close.

Wi-LAN intends to hold a conference call to discuss the consolidated results on June 3, 2003 at 9:00 a.m. MST (11:00 a.m. EST, 8:00 a.m. PST). The call-in number will be 1-800-419-0128 (North America) or 703-464-5612. The confirmation number is 6493534. Participants are advised to call in 10 minutes early. The call will be audio webcast from Wi-LAN's website at www.wi-lan.com and will be archived there.

A replay of the call will be available until 9:59 p.m. MST (11:59 p.m. EST, 8:59 p.m. PST) on June 10, 2003 at 1-888-266-2081 (North America) or 703-925-2533 (passcode: 6493534).

About Wi-LAN Inc.
Wi-LAN is a global provider of broadband wireless communications products and technologies, specializing in high-speed Internet access, LAN/WAN extension and broadband wireless access. Wi-LAN's broadband wireless access products are known worldwide for their high quality and industry-leading technology. 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 as well as the current drafts of the IEEE802.16a and ETSI BRAN HiperMAN proposed standards. Wi-LAN licenses its W-OFDM technology and has executed non-exclusive W-OFDM license agreements with semiconductor companies. Wi-LAN is the Chair Company of the OFDM Forum (www.ofdm-forum.com). 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.wilan.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.

With our Interactive Analyst Center (IAC), historical financial data, both quarterly and annual, is available in an easy to access spreadsheet format. View and export our financial statements, non-GAAP reconciliations as well as share information.

Disclaimer

Please note that you are now entering a website directly or indirectly maintained by a third party (the "External Site") and that you do so at your own risk.

Wi-LAN Inc. and its affiliates (“WIN”) have no control over the External Site, any data or other content contained therein or any additional linked websites. The link to the External Site is provided for convenience purposes only.

By clicking “Accept” you acknowledge and agree that neither WIN nor third party provider Virtua Research, Inc. (“Virtua) is responsible, or accepts or assumes any responsibility or liability whatsoever for, the content, the data or the technical operation of the Linked Site. Further, by entering the External Site, you also acknowledge and agree that you completely and irrevocably waive any and all rights and claims against WIN and Virtua and further acknowledge and agree that in no event shall WIN or Virtua, or their respective officers, employees, directors and agents be liable for any (i) indirect, consequential, incidental, special, compensatory or punitive damages, (ii) damages for loss of income, loss of business profits, business interruption, loss of data or business information, loss of or damage to property, (iii) claims of third parties, or (iv) other pecuniary loss, arising out of or related to the Legal Notice, this disclaimer or the External Site

By entering the External Site, you further acknowledge and agree that the disclaimer of warranties and limitations of liability set out in this disclaimer shall apply regardless of the causes, circumstances or form of action giving rise to the loss, damage, claim or liability, even if such loss, damage, claim or liability is based upon breach of contract (including, without limitation, a claim of fundamental breach or breach of a fundamental term), tort (including, without limitation, negligence), strict liability or any other legal or equitable theory, and even if WIN and Virtua are advised of the possibility of the loss, damage, claim or liability. The waiver and release specifically includes, without limitation, any and all rights and claims pertaining to the processing of personal data, including but not limited to any rights under any applicable data protection statute(s).

If in any jurisdiction, any part of this disclaimer is held to be unenforceable by a court of competent jurisdiction, such part of this disclaimer shall be restricted or eliminated to the minimum extent and the remaining disclaimer shall otherwise remain in full force and effect.

Please note the information presented is deemed representative at the time of its original release. Changes in historical information may occur due to adjustments in accounting and reporting standards & procedures.

Non-GAAP Information

In addition to disclosing results determined in accordance with GAAP, WIN may also disclose certain non-GAAP and pro forma non-GAAP results of operations, including certain ratios, operational and miscellaneous data, as well as net income, diluted earnings per share, operating expenses, and operating income that make certain adjustments or exclude certain charges and gains that are outlined in the schedules included in this website. Management believes that this non-GAAP and pro forma non-GAAP information provides investors with additional information to assess WIN operating performance by making certain adjustments or excluding costs or gains and assists investors in comparing WIN's operating performance to prior periods. Management uses this non-GAAP and pro forma non-GAAP information, along with GAAP information, in evaluating its historical operating performance. WIN and Virtua also take no responsibility for third party pricing data provided for informational purposes and certain ratio results formulated from the provided third party pricing data.

The non-GAAP information is not prepared in accordance with GAAP and may not be comparable to non-GAAP information used by other companies. The non-GAAP information should not be viewed as a substitute for, or superior to, other data prepared in accordance with GAAP.

Decline Agree

Copyright © . All rights reserved. Q4 Web Systems