News Release Details

wi-lan announces third quarter consolidated results

08/27/2003

Positive Cash Flow From Operations Achieved with 25% Revenue Growth

CALGARY, Canada - August 27, 2003 -Wi-LAN Inc. (TSX:WIN), a global provider of broadband wireless communications products and technologies, today announced financial results for the three months and nine months ended July 31, 2003. In the three months ended July 31, 2003 the Company generated positive cash flow from operations of $1,844 and achieved revenue of $7,497, which is 25% growth over the comparable three months in the 2002 fiscal year.  Operations were profitable in the quarter with net income for the three months of $37, compared to a net loss of $6,249 in the third quarter of the 2002 fiscal year.  All financial amounts are expressed in thousands of Canadian dollars unless otherwise noted.

Financial Highlights:

Revenue

Revenue for the three months ended July 31, 2003 was $7,497, which is $1,491 or 25% more than the $6,006 reported for the same period in fiscal year 2002, and $1,567 or 26% more than the $5,930 revenue for the prior three months ended April 30, 2003. Revenue for the nine months ended July 31, 2003 was $18,883, which is $1,849 or 11% more than the $17,034 reported for the same period in fiscal year 2002. Revenue for the nine months ended July 31, 2003 is in line with the Company’s revenue guidance for fiscal year 2003 of $25 million to $30 million.

Revenue guidance

Sales prospects for fiscal year 2003 remain positive and Wi-LAN is maintaining its fiscal year 2003 revenue guidance of $25 to $30 million. Achievement of revenue of $25 to $30 million in fiscal year 2003 will require growth over the $23.1 million revenue achieved in fiscal year 2002 of at least $1.9 million or 8%.  Wi-LAN has achieved revenue for the nine months ended July 31, 2003 of $18.9 million, which is $1.9 million or 11% more than the $17.0 million reported for the same period in fiscal year 2002.  Revenue guidance, and is expected to be achievable for the following reasons:

Several national, provincial and state regulators are 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 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.  In April Wi-LAN and Wi-Comm Communications Equipment Co. Ltd. (Wi-Comm), a Chinese joint venture company based in Beijing, China, announced a Cooperative Product Development Agreement to support further development of a full duplex, carrier class, versatile, redundant, W-ODFM based 3.5 GHz access point. We continued to make significant progress on this project in the third quarter.  We expect that this upgraded LIBRA 3000 access point will enable Wi-LAN to win significant 3.5 GHz equipment tenders in China, but the development of the new access point may delay Wi-LAN’s receipt of these tenders until the second quarter of 2004.  Meanwhile, Wi-LAN’s recently launched and certified 5.8 GHz LIBRA 5800 is expected to generate significant business in China, as operators that did not receive 3.5 GHz licenses in various cities turn to the 5.8 GHz band for deployment of broadband wireless systems.

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 of 2003 Wi-LAN 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.

  •   Additional sales of Wi-LAN products are expected to follow as Camtel and Swift move into further phases of their network build-outs.
  • 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 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.  These products include the LIBRA 3000 series and the recently announced LIBRA 5800 series.
  • 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 802.16 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. For example:
  • Wi-LAN expects to supply approximately $2 million of its 5.8 GHz Ultima3 fixed wireless access products for Guangdong Province Unicom’s 5.8 GHz Project.  Guangdong Province Unicom is a provincial subsidiary of China Unicom Limited (NYSE:CHU), a fully integrated telecommunications operator with services throughout the People’s Republic of China.
  • Wi-LAN and Adino Telecom Limited (Adino) recently announced Wi-LAN’s 2.4 GHz VINE-based VIP 110-24 fixed wireless access products and accessories will be deployed in India’s Gujarat State Wide Area Network (GSWAN).  Adino expects to order approximately $350,000 of Wi-LAN’s VIP 110-24 products over 12 months.
  • Wi-LAN Inc. recently announced that it has received several purchase orders totaling $2 Million from its distributors in the Middle East and Central Asia for its VIP 110-24 and Ultima3 products and for its new W-OFDM based 5.8 GHz LIBRA 5800 series.
  • Wi-LAN recently launched its new LIBRA 5800 series products the license-exempt 5.8 GHz version of Wi-LAN's third generation series of Non-Line-of-Sight (NLOS) fixed wireless access products. LIBRA 5800 will become generally available in September 2003 and alpha customer demand has been strong.
  • 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 additional traction.

Product gross margin

Product gross margin remained strong as Wi-LAN’s new cost-reduced feature-rich broadband fixed wireless access products dominated the sales mix. Wi-LAN currently targets a consolidated product gross margin of 50%.  Product gross margin for the three months ended July 31, 2003 was 50% compared with 32% before inventory write-downs for the same period in fiscal year 2002, and compared with 52% for the prior three months ended April 30, 2003. Product gross margin for the nine months ended July 31, 2003 was 49% compared with 31% before inventory write-downs for the same period in fiscal year 2002.  There were no inventory write-downs in the nine months ended July 31, 2003.

Operating expense

Operating expense for the three months ended July 31, 2003 was $3,524, a reduction of $1,091 or 24% compared with $4,615 for the same period in fiscal year 2002, and a reduction of $427 or 11% compared with $3,951 for the prior quarter ended April 30, 2003. Operating expense for the nine months ended July 31, 2003 excluding one-time operations consolidation costs was $11,761, a reduction of $1,942 or 17% compared with $13,703 for the same period in fiscal year 2002. Operating expense for the nine months ended July 31, 2003 including one-time operations consolidation costs was $12,695, a reduction of $1,008 or 7% compared with $13,703 for the same period in fiscal year 2002. In the first quarter, Wi-LAN took action to further reduce quarterly expenses and improve operational efficiency by consolidating its California operations into its lower cost Calgary head office. This action reduced the Company’s quarterly expenses by approximately $0.6 million per quarter, beginning in the third quarter, and resulted in one-time operations consolidation costs of $934 in the three months ended April 30, 2003. In addition, Wi-LAN’s TIL-TEK Antennas division reduced expenses beginning in April by going to a four-day workweek for the majority of its workers. A five-day workweek will be reinstated at TIL-TEK if revenue growth in the antennas division is sustained.  Expenses at Wi-LAN’s operations will continue to be tightly controlled and monitored. Immediate steps to reduce costs further will be taken as necessary to size expenses with expected revenue, while ensuring that the technical and administrative competencies required to grow the business are retained.

Cash flow management

Net cash flow from operations for the three months ended July 31, 2003 was $1,844, an improvement of $3,733 compared with cash flow from operations of $(1,889) for the same period in fiscal year 2002, and an improvement of $2,654 compared with cash flow from operations of $(810) for the prior quarter ended April 30, 2003. Cash flow from operations excluding a $1.4 million payment from Technology Partnerships Canada, which was recorded as a reduction to research and development expenses, was $0.4 million, meeting Wi-LAN’s guidance of achieving sustainable cash flow from operations in the quarter. Net cash flow from operations for the nine months ended July 31, 2003 was $(1,015), an improvement of $3,108 or 75% compared with $(4,123) for the same period in fiscal year 2002. A lengthening sales cycle and cash payments of $629 related to the consolidation of the California operations, which resulted in the elimination of 12 employee positions, contributed to increased cash usage in the nine months ended July 31, 2003. Wi-LAN’s cash balance was $4,468 on July 31, 2003 and this amount, combined with an equity financing with gross proceeds of $10,360 that closed on after the quarter-end on August 13, is expected to be adequate to sustain the Company’s current operations. Ongoing improvements in revenue, gross margin and working capital are expected to continue to generate positive cash flow from operations in future quarters.  Several actions taken in the first nine months of fiscal year 2003 are expected to result in reduced cash expenditures going forward:

  • The consolidation and transfer of Wi-LAN’s California operations into its lower cost Calgary head office has reduced the Company’s quarterly expenses by approximately $0.6 million per quarter, beginning in the third quarter.
  • 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 workweek for most of its workers. A five-day workweek will be reinstated at TIL-TEK if revenue growth in the antennas division is sustained. 
  • 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 revenue, while ensuring that the technical and administrative competencies required to grow the business are retained.

Net Income

The Company’s net income for the three months ended July 31, 2003 was $37, compared with net income operating of $(6,249) for the same period in fiscal year 2002, an improvement of $6,286. The Company’s net income for the three months ended July 31, 2003 increased by $1,026 when compared with $(989) for the prior three months ended April 30, 2003. 

Financial Summary

(In thousands of $Canadian)

3 months ended

9 months ended

Statement of Operations Info.

July 31, 2003

Apr. 30, 2003

July 31, 2002

July 31, 2003

July 31,2002

Product revenue

         

North America

$     3,271

$     2,796

$     3,018

$     8,146

$    7,844

Europe

775

492

847

2,148

2,406

Asia & other international

3,451

2,550

2,141

8,497

6,784

Subtotal

7,497

5,838

6,006

18,791

17,034

Licensing and technology

0

92

0

92

0

Total revenue

7,497

5,930

6,006

18,883

17,034

Product gross margin

         

 Before write-downs (2)

50%

52%

32%

49%

31%

 After write-downs

50%

52%

18%

49%

11%

EBITDA (1)

    470

    (538)

    (3,164)

    (1,460)

(10,770)

Operating income (loss)

198

(850)

(3,530)

(3,336)

(11,835)

Net income (loss)

37

(989)

(6,249)

(3,740)

8,318

Earnings per share ($ / share)

$     0.00

$     (0.03)

$     (0.20)

$     (0.12)

$     0.28

Cash Flow Information

July 31, 2003

Jan. 31, 2003

July 31, 2002

July 31, 2003

July 31,2002

Cash flow from operations

$    1,844

$    (810)

$    (1,889)

$    (1,015)

$   (4,123)

Financing

25

(54)

(71)

(80)

4,562

Investments

(8)

(18)

(52)

(23)

274

Discontinued operations

0

0

0

0

166

Change in cash

1,861

(882)

(2,012)

(1,118)

879

Cash, beginning of period

2,607

3,489

8,424

5,586

5,533

Cash, end of period

4,468

2,607

6,412

4,468

6,412

Balance Sheet Information

July 31, 2003

Apr.30, 2003

Jan. 31, 2003

Oct. 31, 2002

 

Working capital

$     5,926

$     3,932

$   4,845

$     7,303

 

Long term debt

0

0

0

0

 

Shareholders’ equity

12,891

10,928

11,887

14,640

 

Total assets

21,554

19,566

21,700

25,119

 

Notes: (1) EBITDA is calculated by adding back Operations consolidation costs and Depreciation and amortization to Operating income (loss).  EBITDA is not a recognized measure under Canadian generally accepted accounting principles (GAAP).  Management believes in addition to net income, EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company's principle business activities prior to consideration of how those activities are financed or how the results are taxed in various jurisdictions.  Investors should be cautioned, however, that EBITDA should not be construed as an alternative to net income determined in accordance with GAAP as an indicator of the Company's performance.  The Company's method of calculating EBITDA may differ from other companies and, accordingly, EBITDA may not be comparable to measures used by other companies.

(2)    Before inventory write-downs (2002 only).

Other Financial Details:

Segmented revenue

  • Revenue from the Company’s broadband fixed wireless access products for the three months ended July 31, 2003 was $6,205, which is $1,299 or 26% more than the $4,906 reported for the same period in fiscal year 2002 and $1,435 or 30% more than the $4,770 reported for the prior three months ended April 30, 2003. Revenue from the Company’s broadband fixed wireless access products for the nine months ended July 31, 2003 was $15,660, which is $2,424 or 18% more than the $13,236 reported for the same period in fiscal year 2002. Over the past several quarters, competitors in the fixed wireless access sector have typically seen flat or declining revenue. As a result Wi-LAN believes it has continued to increase its market share in this sector. This positions the Company well for future growth as telecom carriers begin to divert spending from wireline applications to broadband fixed wireless access.
  • Revenue from the Company’s antenna products for the three months ended July 31, 2003 was $1,292, which is $192 or 17% more than the $1,100 recorded for the same period in fiscal year 2002 and $224 or 21% more than the $1,068 recorded for the prior three months ended April 30, 2003. Revenue from the Company’s antenna products for the nine months ended July 31, 2003 was $3,131, which is $667 or 18% less than the $3,798 recorded for the same period in fiscal year 2002. Wi-LAN’s TIL-TEK Antennas division reduced expenses beginning in April by going to a four-day workweek for the majority of its workers. The second and third quarters showed early indications that the antenna market may be improving. A five-day workweek will be reinstated at TIL-TEK if revenue growth in the antennas division is sustained.
  • License, technology and engineering services revenue for the three months ended July 31 in both 2003 and 2002 was $nil.  License, technology and engineering services revenue for the nine months ended July 31, 2003 was $92 compared to $nil reported for the same period in fiscal year 2002.  This revenue was generated in the three months ended April 30, 2003 as the Company partnered with third parties to develop new applications for its W-OFDM (Wide-Band Orthogonal Frequency Division Multiplexing) technology.  Wi-LAN’s license, technology and engineering services revenue strategy is twofold:
    • The Company focuses on licensing its technology and patents to major semiconductor companies because a small number of major semiconductor companies account for most of the market. This strategy helps to ensure Wi-LAN’s intellectual property will not act as a deterrent against market acceptance of W-OFDM technology, since device manufacturers can develop applications with the licensed semiconductor components without having to negotiate a license agreement with Wi-LAN.  The Company’s non-exclusive licensing agreements with Philips Semiconductor (Philips) and Fujitsu Microelectronics America did not generate any royalties in the nine months ended July 31, 2003.
    • Wi-LAN signed an Application Specific Integrated Circuit (ASIC) development and technology licensing agreement with Philips in 1999. The Philips agreement obligates Philips to pay Wi-LAN royalties for any ASICs that Philips develops and markets based on the Institute of Electrical and Electronics Engineers (IEEE) Local Area Network (LAN) Standard 802.11a, which Wi-LAN believes uses its patented W-OFDM technology. This agreement generated initial fees of $1.4 million over the 2000 to 2001 period, but has not generated any royalties to date because Philips has not yet produced any 802.11a ASICs.
  • Wi-LAN signed an agreement with Fujitsu Microelectronics America in the fourth quarter of fiscal year 2002. The Fujitsu Microelectronics America agreement is to develop, market and license IEEE "WirelessMAN" Standard 802.16a System-on-Chip solutions. It is expected to generate royalty revenue in fiscal year 2004.
  • In addition, Wi-LAN partners with interested parties to develop new applications of its W-OFDM technology. The IEEE WirelessMAN (Wireless Municipal Area Networks) Standard 802.16a was announced on January 30, 2003. This is yet another broadband wireless standard that incorporates Wi-LAN’s patented W-OFDM technology. Wi-LAN is first to market with Standard 802.16a-like products and has joined with fellow members of the WiMAX Forum, a non-profit corporation, to help promote and certify the compatibility and interoperability of IEEE 802.16 equipment. Other WiMAX Forum members include Airspan, Alvarion, Aperto Networks, Ensemble Communications, Fujitsu, Hughes Network Systems, Intel, Nokia, the OFDM Forum and Proxim.  The group’s efforts will help accelerate the introduction of IEEE Standard 802.16a wireless broadband equipment into the marketplace, speeding up last-mile broadband deployment worldwide. This issue is generating growing interest from the broadband wireless industry.

Geographic product revenue

During the nine months ended July 31, 2003, product sales in Asia and other international markets grew by 27%, which more than offset an 11% decline in European sales, while North American product revenue showed a 4% improvement, compared to the same nine months in fiscal year 2002.

  • Wi-LAN’s North American product revenuefor the three months ended July 31, 2003 was $3,271, which is $253 more than the $3,018 reported for the same period in fiscal year 2002, and $475 more than the $2,796 reported for the prior three months ended April 30, 2003. North American product revenue for the nine months ended July 31, 2003 was $8,146, which is $302 more than the $7,844 reported for the same period in fiscal year 2002.
  • Wi-LAN’s European product revenuefor the three months ended July 31, 2003 was $775, which is $72 less than the $847 reported for the same period in fiscal year 2002, and $283 more than the $492 reported for the prior three months ended April 30, 2003. European product revenue for the nine months ended July 31, 2003 was $2,148, which is $258 less than the $2,406 reported for the same period in fiscal year 2002.
  • Wi-LAN’s Asian and other international product revenuefor the three months ended July 31, 2003 was $3,451, which is $1,310 more than the $2,141 reported for the same period in fiscal year 2002, and $901 more than the $2,550 reported for the prior three months ended April 30, 2003. Asian and other international product revenue for the nine months ended July 31, 2003 was $8,497, which is $1,713 more than the $6,784 reported for the same period in fiscal year 2002.

Third Quarter Operations Highlights

Major sales agreements

  • On May 26, 2003 Wi-LAN announced it expects to supply approximately $2 million of its Ultima3 fixed wireless access products for Guangdong Province Unicom’s 5.8 GHz Project.  Guangdong Province Unicom is a provincial subsidiary of China Unicom Limited (NYSE:CHU), a fully integrated telecommunications operator with services throughout the People’s Republic of China. Wi-Comm United Communications Inc. (WCU), a distributor of Wi-LAN products in China, will supply the equipment for deployment in 12 cities with a total urban population in excess of 4 million. Project completion is expected in 2003, pending completion of site surveys.  Guangdong Province is ranked first in China for the size of its consumer goods market, for its industrial output, and for its external trade.  The province also has one of the most advanced telecommunications networks in the country.
  • On May 29, 2003 Wi-LAN and Adino Telecom Limited (Adino) announced Wi-LAN’s VINE-based VIP 110-24 fixed wireless access products and accessories will be deployed in India’s Gujarat State Wide Area Network (GSWAN).  GSWAN, which has been operational for two years, will be expanded using the VIP 110-24 products to provide voice, video and data services for many additional offices and departments of the State Government.  Adino expects to order approximately $350,000 (US$225,000) of Wi-LAN’s VIP 110-24 products over 12 months.  Additional sales of Wi-LAN products are expected to follow as GSWAN moves into further phases of its network buildout. Gujarat State is has a population in excess of 50 million and is one of India's wealthiest and most industrialized states. Adino is a well-established broadband solutions company in India, and has been the distributor throughout India for Motorola India Limited, Commercial, Government and Industrial Solutions (CGISS) Sector since 1994.

New international distributors and partners

  • On May 12, 2003 Wi-LAN announced two major system integrators and product distributors in Russia, CompTek International (Comptek) and Diamond Communications (Diamond), have added Wi-LAN’s Ultima3 Series broadband fixed wireless access products to their extensive suite of integrated network solutions.  The Ministry of Communication of the Russian Federation recently approved the Ultima3 Series for deployment in Russia.  CompTek is a well-established distributor of high technology networking and telecom equipment with a distribution network covering almost all of the Former Soviet Union (FSU), including active authorized regional dealers in more than 120 cities.  Diamond is a leading network technologies system integrator and product distributor in the Russian telecommunications market.
  • On June 25, 2003Wi-LAN announced it has joined forces with Radionet Ltd., a Finnish wireless technology company specializing in the development, design and sale of city-wide outdoor wireless broadband networks, to market Wi-LAN’s broadband fixed wireless access products in Finland and other Nordic countries. Radionet will now offer Wi-LAN’s products to telecommunications operators, Internet service providers (ISPs), telephone companies, business enterprises and system integrators for point-to-multipoint last mile access and point-to-point backhaul configurations.  

New product launch and certification

On July 9, 2003 Wi-LAN launched LIBRA 5800, the license-exempt 5.8 GHz version of Wi-LAN's third generation series of Non-Line-of-Sight (NLOS) Fixed Wireless Access (FWA) products. LIBRA is the only product series today that uses the same W-OFDM (Wide-band Orthogonal Frequency Division Multiplexing) technology that has been approved as the mainstream physical layer in the IEEE WirelessMAN Standard 802.16a and in the current draft of ETSI HiperMAN. This wireless Metropolitan Area Network (wireless MAN) W-OFDM delivers robust outdoor NLOS performance that Wi-LAN has proven in various commercial networks in over 30 countries worldwide. LIBRA 5800 delivers powerful and spectrally efficient performance of up to 32 megabits per second (Mbps) data rate in narrow 10 MHz channels and a range of up to 66 kilometres (41 miles) in a point-to-point configuration, or an aggregated data rate of up to 192 Mbps per six-sector cell and a radius of up to 35 kilometres (22 miles) in a point-to-multipoint configuration. LIBRA 5800 also features multi-layered security and has tiered service management and user-friendly network management, all in a new lightweight, easy to install, weatherproof, single unit design.

On August 26, 2003 Wi-LAN announced that its LIBRA 5800 product, has been certified for use in the 5.8 GHz frequency band in China. This certification opens the door for sales of the LIBRA 5800 in combination with other approved Wi-LAN products in China's large and growing wireless market. The State Regulatory Radio Commission (SRRC), the Chinese government agency responsible for regulating spectrum allocation, granted the certification.

Executive changes

On May 22, 2003 Greg Masuda was promoted from Director of Operations to Vice President of Operations, and Shawn Taylor was promoted from Chief Scientist to Vice President of Technology.

Subsequent Events

The following events happened after the July 31 end of the first quarter:

Major sales agreements

On August 7, 2003 Wi-LAN announced today that it has received several Purchase orders totaling CND $2Million from its Gold Partners and Distributors in the Middle East and Central Asia Region for its VIP 110-24 and Ultima3 products and for its new W-OFDM based LIBRA 5800 system.

Equity financing

On August 13 Wi-LAN announced the closing of the public offering of 3.91 million units at a price of $2.65 per unit including 510,000 units issued upon the exercise of the underwriters over-allotment option for aggregate gross proceeds of $10.36 million. The underwriters were Orion Securities Inc. and First Associates Investments Inc. The net proceeds of the offering will be used to provide additional working capital to support sales growth.  Each unit consists of one common share and one-half of one common share purchase warrant. Each full warrant will entitle the holder to acquire one common share of Wi-LAN at an exercise price of $3.10 at any time on or before August 13, 2005.

Conference Call Information

Wi-LAN will hold a conference call to discuss the consolidated results on August 28, 2003 at 9:00 a.m. MDT (11:00 a.m. EDT, 8:00 a.m. PDT). The call-in number will be 1-800-413-7610 (North America) or 703-464-5606 (outside North America). The confirmation code is 991839. 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. MDT (11:59 p.m. EDT, 8:59 p.m. PDT) on September 4, 2003 by calling 1-888-266-2081 (North America) or 703-925-2533 (outside North America). The access code for the replay is 991839.

Wi-LAN participants will be:

Dr. Sayed-Amr El-Hamamsy - President and Chief Operating Officer
Mr. Keith Bittner - Acting Chief Financial Officer
Mr. Ken Wetherell - Vice President, Corporate Communications & Investor Relations

About Wi-LAN Inc.

Wi-LAN is a global provider of broadband wireless communications products and technologies, offering businesses, including telecom service providers, and government enterprises effective, economic and secure wireless solutions for provision of high-speed communications. Wi-LAN specializes in high-speed Internet access, data network extension, and wireless data and telephony backhaul, utilizing its high quality products and industry-leading technologies.  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 proposed ETSI BRAN HiperMAN 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) and an active member of the WiMAX Forum (www.wimaxforum.org) 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

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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.

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