News Release Details

WI-LAN ADJUSTS 2004 FINANCIAL GUIDANCE

07/06/2004

 

Click To Play Video of Wi-LAN CEO discussing guidance on ROBTv

CALGARY, Canada - July 6, 2004 -- Wi-LAN Inc. (TSX:WIN), a global provider of broadband wireless communications products and technologies, today adjusted its revenue, cash flow and net income guidance for the twelve months ended October 31, 2004. All financial amounts are expressed in Canadian dollars unless otherwise noted.

Revenue Guidance: Wi-LAN expects revenue for the twelve months ended October 31, 2004 to be in the range of $25 to $28 million. Achieving or exceeding the upper end of this range depends largely on the timing of new product introductions, customer decision making processes and licensing revenue. Prior 2004 annual revenue guidance was $32 million to $37 million. Revenue guidance has been reduced for the following reasons:

While Wi-LAN's CONTINUITY PROGRAMTM has been instrumental in encouraging vendors to deploy Wi-LAN's pre-WiMAX equipment today, the company is experiencing a slow-down in sales in anticipation of Wi-LAN's Libra MX product series later this fall and of Wi-MAX Certified(1) equipment in the first half of 2005. Wi-LAN continues to expect to be the first vendor to introduce WiMAX Certified equipment in the first half of 2005.

Wi-LAN is also experiencing a dramatic shift in the marketplace as a result of the expectation of the introduction of WiMAX Certified equipment in the very near future. Wi-LAN's traditional early adopter customer base, including enterprises, school districts, and small wireless internet service providers (ISPs), is currently shifting to larger potential customers. Large telecommunications carriers, cable companies, utility companies and even large retailers are showing interest in deploying broadband wireless access (BWA) networks to offer voice, video and data services to their customers or to improve the efficiency of their operations. While these opportunities are huge, these types of customers take action in a deliberate manner, increasing the length of Wi-LAN's typical sales cycle.

Competitive pricing pressure has increased as other broadband wireless equipment vendors are offering near-obsolete equipment at bargain basement pricing to establish market share, particularly in the Chinese market. Wi-LAN is undertaking a comprehensive review of its sales and marketing practices, including pricing and personnel, and has begun to make the changes required to meet today's challenges.



Wi-LAN's antenna division, TIL-TEK Antennas, continues to expect modest sales growth over the summer months primarily due to cellular infrastructure maintenance. However, such growth has yet to materialize and the division is actively investigating other market opportunities to increase its sales.

Cash Flow Guidance: Wi-LAN expects cash flow from operations for the twelve months ended October 31, 2004 to be not less than negative $(6) million. Prior guidance for 2004 cash flow from operations was not less than $2 million. Cash flow guidance has been lowered as a result of lower revenue and ongoing costs that are being incurred for essential product development projects. Wi-LAN believes it is critical to maintain key product development expenditures, in spite of lagging revenue, because the company must complete the development of products for potentially large future WiMAX and Intelligent Transportation Systems (ITS) opportunities. The extent of product development activity needed over the next 12 months is unprecedented in Wi-LAN's history, but this development activity is finite. Afterwards expenditures, particularly research and development, will be sized to revenue and gross margin to ensure cash flow positive operations. Essential product development projects are as follows:

Several projects are underway to develop Wi-LAN's WiMAX Certified equipment, which Wi-LAN expects to be the first such equipment to be commercially available in the first half of 2005. This market is estimated by Intel to be in the range of seven million units sold annually, a multi-billion dollar market, by 2007 and to grow significantly thereafter as mobile applications are addressed. Wi-LAN believes it can significantly grow its share of this market by being the first to introduce WiMAX Certified equipment.

Wi-LAN has agreed to provide Wellink, its South Korean ITS equipment co-development partner, with broadband mobile wireless products valued at several million dollars over the next 12-months. The agreement is subject to certain terms and conditions, including feature enhancements of Wi-LAN's LIBRA 5800 Transit Mobility products. These mobile wireless systems are initially intended for broadband communications for high-speed trains in the Asia-Pacific region, including real-time video security, video advertising and broadband wireless Internet. Wi-LAN believes that the global demand for this equipment will be significant over the next few years, driven largely by the requirement for better security on public transportation systems, and that Wi-LAN has, as with the WiMAX market, a significant technology lead over its competition that it must maintain in order to capitalize on the expected market demand.



Net Income Guidance: Wi-LAN expects net income for fiscal year 2004 of not less than negative $(7) million. Prior guidance for 2004 net income was not less than $0.5 million. Meeting net income guidance is dependant on meeting revenue and cash flow guidance.

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 high-speed communications solutions. 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 802.16 WirelessMAN Standard * and the ETSI BRAN HiperMAN* standard (the WiMAX* standards), the IEEE standards 802.11a and 802.11g (the 2nd generation Wi-Fi* standards), and the ETSI BRAN HiperLAN/2* 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

Certain statements in this release, other than statements of historical fact, may include forward-looking information that involves various risks and uncertainties. These may include, without limitation, statements based on current expectations involving a number of risks and uncertainties related to all aspects of the wireless 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 wireless communications, the Company's ability to attract and retain 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.

* All trademarks and brands mentioned in this release are the property of their respective owners.

For more information please contact:

Wi-LAN Inc.
Corporate Communications and Investor Relations
Ken Wetherell
Ph: (403) 207-6329
E-mail: kwetherell@wi-lan.com

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