News Release Details

Wi-LAN CLOSES CALIFORNIA OFFICE TO REDUCE EXPENSES AND IMPROVE OPERATIONAL EFFICIENCY

02/11/2003

 

Seamless Transfer of Sales Channels and Technology has Been Addressed

CALGARY, Canada - February 11, 2003 - Wi-LAN Inc. (TSE:WIN), a global provider of broadband wireless communications products and technologies, today announced it is closing its office in California and consolidating the California operations into its lower cost Calgary head office to improve operational efficiency and reduce the company's quarterly expenses by approximately $0.6 million. Wi-LAN is managing a seamless transfer of sales channels and technology to the Calgary head office and no adverse effects are anticipated from the office closure.

"Although sales prospects for the remainder of 2003 remain positive, we felt it was time to further reduce Wi-LAN's operating expenses and cash flow breakeven point by consolidating operations and eliminating duplicative functions. We have therefore decided to close our Santa Barbara, California location," said Dr. Sayed-Amr El-Hamamsy, President and Chief Operating Officer, Wi-LAN Inc. "I believe we are financially secure and we expect positive cash flow from operations in the third quarter, but we will continue to monitor our revenue, expenses and cash relative to our budget plan and take whatever further action is required. We are managing the transfer of sales channels and technology to our remaining personnel to ensure no adverse effects on the company's sales prospects or technical expertise."

The executive team recognized that the Company's quarterly revenue, which has been averaging approximately $6 million over the past several quarters, does not support having separate operations in Santa Barbara, California, where business expenses are much higher than at the head office location in Calgary, Canada. Also, efficiencies will be gained by eliminating duplication of operational and administrative functions and consolidating them into the Calgary head office.

"I am confident in our ability to continue to sustain our ongoing operations with our current cash and working capital resources," said Keith Bittner, Acting Chief Financial Officer. "The consolidation of the California operations into our much lower cost Calgary head office location will improve our cash flow from operations significantly in the third quarter of 2003 and going forward."

Wi-LAN has addressed the needs of the business going forward. The sales relationships in the California office are being transferred to Wi-LAN's remaining U.S. and international sales representatives. With regard to technology transfer, Wi-LAN Technologies Inc. (WTI) will continue as Wi-LAN's U.S. subsidiary because Wi-LAN's patent-pending VINE Internet Protocol technology is assigned to WTI. Also, arrangements have been made with key employees at the California office to ensure that their expertise is retained in Wi-LAN.

Wi-LAN continues to tighten spending controls, liquidate product inventory and improve product gross margins. The California office closure is expected to result in a charge to operations of $0.9 million and a staff reduction of 12 people, leaving Wi-LAN with a headcount of 108 employees, including 46 employees at its TIL-TEK Antennas Division in Kemptville, Ontario. This reduction in personnel expenses and other operating expenditures is expected to reduce the company's quarterly expenses by approximately $0.6 million. In addition, Wi-LAN's TIL-TEK Antennas Division will manage revenues and expenses to contribute positive cash flow from operations of at least $0.3 million per quarter, effective immediately. These improvements, along with continued sales growth in line with the Company's fiscal year 2003 revenue guidance of $25 to $30 million, are expected to generate positive cash flow from continuing operations for the three months ended July 31, 2003.

About Wi-LAN Inc.
Wi-LAN is a global provider of broadband wireless communications products and technologies, specializing in solutions for secure wireless provision of high-speed data and telephone over distance for enterprises and telecom service providers. Wi-LAN's broadband wireless access products are known worldwide for their high quality and industry-leading technology. Wi-LAN believes its W-OFDM patents are necessary for the implementation of devices using the IEEE standards 802.16a, 802.11a or 802.11g, the ETSI BRAN HiperLAN/2 standard or the current draft of the ETSI BRAN HiperMAN proposed standard. 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.

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