News Release Details

Wi-LAN Reports Fourth Quarter and Fiscal Year 2008 Financial Results

01/13/2009

Company’s fourth quarter revenues increase 90 percent over same quarter last year

OTTAWA, Canada – January 13, 2009 Wi-LAN Inc. (TSX: WIN) (“Wi-LAN” or the “Company”), a leading technology innovation and licensing company, today announced financial results for the fourth quarter and fiscal year ended October 31, 2008. All financial amounts are expressed in Canadian dollars.

Fourth Quarter 2008 Highlights:

  • Q4 revenues of $13.7 million as compared to $7.2 million in Q4 2007.

  • Q4 pro forma earnings of $9.1 million or 10 cents per share as compared to pro forma earnings of $4.9 million or 5 cents per share in Q4 2007.

  • GAAP net earnings of $277 thousand or $nil per share as compared to $1.2 million or 1 cent per share in Q4 2007.

  • Signed agreements with 25 companies including 12 wireless, 9 V-chip and 4 DSL licenses.

  • Leading wireless handset vendor, Research In Motion Limited, licenses wireless technologies.

Fiscal 2008 Highlights:

  • Cash revenues of $26.6 million as compared to $19.2 million in fiscal 2007, representing a sequential increase of $7.4 million or 39 percent.

  • Pro forma earnings of $11.0 million or 12 cents per share as compared to pro forma earnings of $53.2 million or 66 cents per share in fiscal 2007.

  • GAAP net loss of $9.2 million or 10 cents per share.

  • Cash, cash equivalents and short-term investments of $101.4 million represent an increase of $9.9 million over fiscal 2007 ended October 31, 2007.

  • Signed agreements with 79 companies including 35 wireless, 39 V-chip and 5 DSL licenses.

  • Initiated a patent infringement lawsuit in the Eastern District of Texas involving wireless handset vendors including Motorola Inc. and LG Electronics.

Fourth quarter revenues were $13.7 million as compared to $7.2 million in the fourth quarter of 2007. Pro forma earnings amounted to $9.1 million or $0.10 per diluted share. Operating expenses were $5.4 million. Total expenses were $10.1 million, which included $0.5 million of stock-based compensation expense and $4.2 million of depreciation and amortization expense, both non-cash charges. Interest income amounted to $0.7 million during the quarter. Income tax expense amounted to $4.0 million for the quarter. Net earnings amounted to a profit of $277 thousand or $nil per diluted share.

In fiscal 2008, Wi-LAN generated revenues of $26.6 million. Pro forma earnings amounted to $11.0 million or $0.12 per diluted share. Operating expenses amounted to $18.8 million. Total expenses were $37.3 million, which included $2.0 million of stock-based compensation expense and $16.5 million of depreciation and amortization expense, both non-cash charges. Interest income amounted to $3.2 million for the year. Income taxes expense amounted to $1.7 million for the year. Net earnings amounted to a loss of $9.2 million or $0.10 per diluted share.

Wi-LAN initiated a share purchase program on October 15, 2008, which is ongoing, pursuant to which Wi-LAN expects to purchase up to 5 percent of its outstanding common shares. During the month ended October 31, 2008, the Company repurchased 215,000 shares for cancellation at an average price of $1.24.

In the fourth quarter of fiscal 2008, cash, cash equivalents and short-term investments increased by $8.9 million to $101.4 million. For the fiscal year ending October 31, 2008, Wi‑LAN’s cash position increased by a total of $9.9 million. The Company’s cash equivalents include T-bills, term deposits and GICs while its short-term investment consists of a banker’s acceptance issued by a large Canadian financial institution.

Management Comments

“Wi-LAN delivered solid operational and financial accomplishments in fiscal 2008,” said Jim Skippen, Chairman & CEO. “In fiscal 2008, Wi‑LAN negotiated license agreements with 79 companies, which is a five-fold increase over 2007. Fiscal 2008 cash revenues, which were almost 40 percent higher than 2007, signal the growing strength of our licensing program. Our cash earnings, at over 40 percent of revenues, demonstrate the potential of our business to generate very favourable margins. Ending the year with a net cash position exceeding $101 million, gives us the ability to aggressively pursue our strategic plan.”

Mr. Skippen added, “Our fiscal 2009 financial guidance, which contemplates top line improvements and solid bottom line performance, reflects the cautious optimism that we have for our business despite the current uncertain economic conditions. In fiscal 2009, we will continue to make the investments we believe are necessary and desirable to position the company for future success. One such exciting investment is our research and development effort, which will focus on solving technology challenges facing next-generation femtocell and whitespace networks. All in all, we believe that 2009 will be another strong year for Wi-LAN, with the potential for a number of exciting developments.”

2009 Financial Guidance

Revenues for the fiscal year ended October 31, 2009 are expected to be within the range of $30.0 million to $34.0 million. Operating expenses, excluding stock based compensation, are expected to be in the range of $23.0 million to $26.0 million. Pro forma earnings are expected to be within the range of $9.5 million to $13.0 million.

The above statements are forward-looking and actual results may differ materially. The “Forward-looking Information” section at the end of this news release provides information on various risks and uncertainties that the Company faces. Additional information identifying risks and uncertainties relating to the Company’s business are contained under the heading “Risk Factors” in Wi-LAN’s current Annual Information Form and its other filings with the various Canadian securities regulators which are available online at www.sedar.com. Annual financial guidance for fiscal 2009 is provided to assist investors and other interested parties in understanding Wi-LAN’s performance. The reader is cautioned that using this information for any other purpose may be inappropriate.

The Company’s revenues result from the licensing of intellectual property which, by its very nature, is directly affected by the timing of the closure of license agreements, the nature and extent of specific licenses including actual rates, product sales by licensees which can be subject to seasonality as well as overall market demands and the timeliness of the receipt of licensee royalty reports. In addition, certain revenues may be of a one-time nature. Thus, quarter-to-quarter fluctuations in revenue are normal and should be expected.

The above guidance for the fiscal year ending October 31, 2009 reflects our current business indicators and expectations. Due to their nature, certain income and expense items, such as significant settlements from companies involved in current enforcement actions, new significant litigation or defense actions that could arise during the course of the year, losses on asset impairments or realized foreign exchange losses cannot be accurately forecast. Accordingly, we exclude forecasts of such items from our guidance. Additionally, the Company’s revenues result from the licensing of intellectual property which, by its very nature, is directly affected by the timing of the closure of license agreements, the nature and extent of the license including actual rates, the product sales by licensees which can be subject to seasonality and overall market demands as well as the timeliness of the receipt of licensee royalty reports. Wi-LAN’s imperative is to negotiate the best possible license as measured over the long-term and accordingly, the timing of actual license signings may vary from that forecasted. Actual results may vary materially from the guidance provided as a consequence of the above noted factors.

Conference Call Information – January 13, 2009 – 10 AM EST

Wi-LAN will conduct a conference call to discuss its financial results today at 10:00 AM Eastern Standard Time. Wi-LAN CEO, Jim Skippen and CFO, Shaun McEwan, will be on the call.

Calling Information

Replay Information

The call will be available at http://www.investorcalendar.com/IC/CEPage.asp?ID=139019 and accessible by telephone until 11:59 PM on January 20, 2009

  • Replay Number (Toll Free): 1.877.660.6853
  • Replay Number (International): 201.612.7415
  • Replay passcodes (both required for playback)
    Account #: 286
    Conference ID #: 307513


About Wi-LAN

Wi-LAN, founded in 1992, is a leading technology innovation and licensing company. Our portfolio of patented inventions applies to a wide range of consumer electronics and communications products. Some of the fundamental technologies covered by Wi-LAN’s patents include: CDMA, DOCSIS, DSL, GSM/EDGE, V‑chip, Wi-Fi and WiMAX. Wi-LAN has a large and growing portfolio of more than 300 issued or pending patents. Wi-LAN has licensed its intellectual property to over 160 companies. For more information: www.wilan.com.

Note
(*)Wi-LAN follows Canadian generally accepted accounting principles (“GAAP”) in preparing its interim and annual financial statements. To assist readers in further understanding its operating performance, Wi-LAN is reporting “pro forma earnings” which is a non-GAAP financial term.  Wi-LAN’s pro forma earnings represent earnings from continuing operations before stock-based compensation, depreciation & amortization and provision for income taxes.


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 that face the Company; such statements may contain such words as “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions, and may be based on management’s current assumptions and expectations related to all aspects of the wireless and wireline telecommunications industries and the global economy. Risks and uncertainties that may face the Company include, but are not restricted to: licensing of the Company’s patents can take an extremely long time and may be subject to variable cycles; the Company is currently almost exclusively reliant on additional licensing of its patent portfolio to generate future revenues and cash flows; the Company may be required to establish the enforceability of its patents in court in order to obtain material licensing revenues; changes in patent laws or in the interpretation or application of patent laws could materially adversely affect the Company; a court may determine that certain of the Company’s patents are not infringed by certain standards or products or may disagree with management with respect to whether one or more of the Company’s patents apply to certain standards or products, which could adversely affect the Company; the Company will need to acquire or develop new patents to continue and grow its business; the Company has made and may make acquisitions of technologies or businesses which could materially adversely affect the Company; the Company may require investment to translate its intellectual property position into sustainable profit in the market; the viability of the Company’s V-chip technology may be subject to continued government support; the Company is dependent on its key officers and employees; the price of the Company’s common shares is volatile and subject to market fluctuation; and the Company may be negatively affected by reduced consumer spending due to the uncertainty of economic and geopolitical conditions. These risks and uncertainties may cause actual results to differ from information contained in this release, when estimates and assumptions have been used to measure and report results. There can be no assurance that any statements of forward-looking information contained in this release 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 statements containing forward-looking information are based on the estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. Except as required by applicable laws, the Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change. Readers are cautioned not to place undue reliance on any statements of forward-looking information that speak only as of the date of this release. Additional information identifying risks and uncertainties relating to the Company’s business are contained under the heading “Risk Factors” in Wi-LAN’s current Annual Information Form and its other filings with the various Canadian securities regulators which are available online at www.sedar.com.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States.

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

- ## -

For more information, please contact:

Shaun McEwan, CFO
O: 1.613.688.4898
C: 1.613.697.7159
Email: smcewan@wilan.com

Tyler Burns, Director, Investor Relations & Communications
O: 1.613.688.4330
C: 1.613.697.0367
Email: tburns@wilan.com

 

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