News Release Details

Wi-LAN Announces 2007 Second Quarter Financial Results

06/08/2007
OTTAWA, Canada – June 8, 2007 – Wi-LAN Inc. (TSX: WIN) (“Wi-LAN” or the “Company”) announced today its financial results for the 2007 Fiscal Second Quarter, the period that ends April 30, 2007. All financial amounts are expressed in thousands of Canadian dollars, except per share amounts or unless otherwise noted.

Highlights

Following Wi-LAN’s exceptional first quarter, that included a $49.2 million licensing agreement with Nokia, the Company’s second quarter was in line with its expectations.

Revenues were $75 thousand, based on a small paid-up royalty agreement. Operating expenses amounted to $2.2 million. Net of $1.1 million of depreciation & amortization expense, the net loss was $2.3 million, or 3 cents per share.

During the fiscal second quarter of 2007, Wi-LAN announced two significant transactions:

  • A bought deal financing for net cash proceeds of $37,622 (gross proceeds of approximately $40,000) on March 29, 2007; and
  • An intellectual property (“IP”) partnership with March Networks Corporation, including Wi-LAN becoming the exclusive licensing agent for March Networks’ patents and March Networks licensing Wi-LAN’s wireless patents on April 3, 2007. March Networks should begin reporting royalties in Wi-LAN’s fiscal third quarter.

Subsequent to the second quarter, Wi-LAN signed a definitive agreement with Tri-Vision International Ltd. (TSX: TVL), whereby Wi-LAN plans to acquire Tri-Vision by way of amalgamation. Tri-Vision’s shareholders will vote on the acquisition at a meeting scheduled for June 28, 2007.

In addition to Wi-LAN’s already strong patent portfolio in the communications and consumer electronics markets, the combined company will have access to the high-growth V-chip market, the only solution to parental controls mandated by the U.S. Federal Communications Commission for digital receiver products such as TVs and set-top boxes used in the United States.

Also subsequent to the quarter, Wi-LAN announced the acquisition of a key communications patent that it believes would be infringed by any cable modem or cable set-top box used, sold or manufactured in the United States, as well as OFDM patents related to Wi-Fi and WiMAX.

Operations

Q2/07 revenues were $75 (Q2/06 - nil) from paid-up licensing fees. Operating and depreciation & amortization expenses amounted to $3,254 in Q2/07 and $1,705 in Q2/06, with the increase due to growth in the staff hired for licensing and Wi-LAN’s growing IP, and the additions to the Company’s patent portfolio. Interest income amounted to $904 in Q2/07, up from $34 in Q2/06 due to growth in the Company’s cash and short-term investments following equity financing. In Q2/06, there was a one-time $2,919 gain on debt settlement. In Q2/06, the Company discontinued its products and engineering services businesses, resulting in the $6,412 loss for the quarter.

First half 2007 (H1/07) revenues totalled $49,340 (H1/06 – nil) due mostly to a paid-up license with Nokia Corporation. H1/07 operating and depreciation & amortization expenses increased to $7,390 from $3,394 for H1/06, also due to staffing increases and higher amortization expense. In H1/06, there was a total of $13,699 of non-recurring gains, including a $9,635 settlement with Cisco.

Financial Position

In Q2/07, Wi-LAN raised approximately $37,622 (gross $40,000) of cash through the sale of 5,714,300 common shares priced at $7.00 per share. In Q1/07, the Company raised approximately $28,292 (gross $30,000) of cash through the sale of 6,666,700 common shares priced at $4.50 per share. The future tax asset of $16,726 recorded in Q4/06 was charged to earnings in Q1/07.

Management‘s Comments

“Despite modest second quarter revenues, I’m pleased with the progress we’ve continued to make on a number of fronts to strengthen and grow our position as a patent licensing powerhouse,” said Jim Skippen, President & CEO.

“We added new senior staff and board members who are well versed in patent licensing, and raised $40 million to more aggressively pursue the many opportunities ahead of us. We added fundamental patents to our already powerful arsenal of IP and opened up a new, complementary market in the cable modem and set-top box space. We also made solid progress in our licensing discussions.”

“Our definitive agreement with Tri-Vision, which we signed on May 11th, adds another dimension. It expands our licensing opportunities to another large and growing market; the V-chip content filtering software mandated by the Federal Communications Commission and directly tied to the future of digital television, set-top boxes and other products throughout North America. Since both companies share many target licensees, it provides further ammunition to sign companies to our patent portfolio.”


Operating Expense “Guidance”

It has been Wi-LAN’s practice not to provide guidance on the range of expected future revenues and earnings, given the relatively early stage of its development in licensing as well as the difficulty in predicting the timing and value of patent acquisition opportunities and possible future litigation, both of which could require significant investment. In order to assist investors and other interested parties in their understanding of Wi-LAN’s performance, management believes that operating expenses for the fiscal year 2007 will likely be in the range of [$9.0-10.5 million], based on current plans and expectations.

Conference Call Information – June 8, 2007 – 10AM ET

Wi-LAN will conduct a conference call to discuss its fiscal year results today at 10:00AM Eastern Time. Wi-LAN CEO, Jim Skippen and CFO, Steve Bower, will be on the call.

A replay will be available until 11:59 PM on June 15, 2007:

  • Replay Number (Toll Free) 1.866.245.6755
  • Replay Number (International) 1.416.915.1035
  • Passcode: 392530

About Wi-LAN Inc.

Wi-LAN, which was founded in 1992, licenses intellectual property that drives a full range of products in communications and consumer electronics markets. Some of the fundamental technologies covered by Wi-LAN’s patents include: Wi-Fi, WiMAX, CDMA, DSL, DOCSIS, cable modems and set-top boxes. Wi-LAN has already licensed its intellectual property to a number of major companies, including Cisco, Fujitsu, March Networks and Nokia.

- ## -

For more information please contact Wi-LAN:

Steve Bower, CFO
C: 1.613.697.7159
O: 1.613.688.4898
E-mail: sbower@wi-lan.com

 

Lynne Bermel, Director Corporate Communications
C: 1.613.864.4058
O: 1.613.688.4897
E-mail: lbermel@wi-lan.com
Website: www.wilan.com




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