News Release Details

WiLAN Reports Third Quarter 2009 Financial Results

09/03/2009

Revenues double from same quarter in 2008

OTTAWA, Canada – September 3, 2009 – Wi-LAN Inc. (“WiLAN” or the “Company”) (TSX:WIN), a leading technology innovation and licensing company, today announced financial results for the third quarter ended July 31, 2009. All financial amounts are expressed in Canadian dollars.

Third Quarter 2009 Highlights:

  • Revenues of $9.6 million as compared to $4.8 million in Q3 2008.
  • Pro forma earnings* of $3.5 million or 4 cents per share as compared to pro forma earnings of $495 thousand or 1 cent per share in Q3 2008.
  • GAAP net loss of $1.3 million or 1 cent per share as compared to a GAAP net loss of $3.5 million or 4 cents per share in Q3 2008.
  • Signed 15 agreements during the quarter including 11 wireless, 3 V-Chip and 1 wireline license.
  • Raised $18.0 million in bought deal financing.

“In the third quarter we delivered solid performance and made important investments in the future of our business,” said Jim Skippen, Chairman & CEO. “Our teams signed license agreements with 15 companies, including agreements with Infineon, Casio and Agilent generating a strong top line. We invested in the acquisition of valuable patented technologies, including the purchase of a 4G wireless portfolio from Nextwave Broadband. Also during the quarter, we completed a bought deal financing for $18 Million that strengthened our balance sheet and replenishes funds used in recent patent purchases. Our strong balance sheet gives us the ability to continue to purchase high quality technology portfolios, should they become available.”

Added Skippen, “We are pleased that the Court in Texas has set an accelerated schedule for our handset litigation, including a claims construction or Markman hearing, in early March 2010. Meeting this schedule will increase our investment in litigation over the next few quarters, however, we believe this investment will generate a significant return for the company.”

The Board of Directors has declared a dividend of 1.25 cents per common share. This dividend will be paid on November 4, 2009 to shareholders of record on October 14, 2009.

Investment income in the third quarter of 2009 was $730 thousand as compared to $763 thousand in the same period last year. Investment income for the nine months ended July 31, 2009 was $2.4 million as compared to $2.5 million in the comparable period in fiscal 2008.

During the third quarter of 2009, the Company reported a foreign exchange gain of $0.9 million which consisted of a realized foreign exchange gain of $0.6 million and an unrealized gain of $0.3 million on outstanding forward contracts at the end of the quarter. Foreign exchange gain for the nine months ended July 31, 2009 was $0.2 million as compared to a gain on foreign exchange of $0.3 million in the comparable 2008 fiscal period.

Patent licensing expenses represent the expenses incurred by the Company in the execution of its patent licensing programs which includes staffing and travel-related costs. During the third quarter of 2009, the Company signed wireless license agreements with eleven companies including Infineon Technologies AG, Casio Computer Co Ltd., and Agilent Technologies, Inc. This brings the total number of companies that have signed wireless licenses, as of July 31, 2009, to 73. During the quarter, WiLAN signed V-Chip license agreements with three companies. The addition of these three companies brings the total number of companies that have signed V-Chip licenses, as of July 31, 2009, to 115. The Company also signed a wireline license agreement during the third quarter of 2009.

Litigation expenses consist primarily of expenses related to enforcing and defending WiLAN’s intellectual property ownership rights in court. Litigation expenses in the third quarter of 2009 were $4.0 million representing an increase of $1.6 million over the same period last year. The increase is due to the Company’s ongoing response to declaratory judgment (DJ) claims filed by Intel Corporation and a number of other companies involving a number of WiLAN’s wireless patents including U.S. Patent No. 6,549,759 (the “759 patent”), and activities supporting the addition of the 759 patent to our notebook litigation in the Federal Court of the Eastern District of Texas.

At July 31, 2009, the Company’s net cash, comprised of cash, cash equivalents and short-term investments totaled $102.1 million, representing an increase of $3.5 million from the net cash position at April 30, 2009. The Company’s cash equivalents and short-term investments include T-bills, term deposits, GICs and other marketable securities.

Financial Guidance

The Company is refining its financial guidance for the 12 month period ending October 31, 2009. Revenues are expected to be within the range of $34 million to $36 million. Operating expenses, excluding stock-based compensation, are expected to be in the range of $28 million to $29 million. Pro forma earnings* are expected to be within the range of $9.5 million to $10.5 million. Although operating expenses increased as a result of a greater investment in litigation, the revised guidance remains within the ranges originally provided on June 4, 2009.

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 WiLAN’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 WiLAN’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. Management believes that the strength of its business should be measured by annual revenues and growth in estimated revenue backlog.

The above guidance for the 12 month period end October 31, 2009 reflects our current business indicators and expectations and is subject to fluctuations in foreign currency exchange rates. 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. WiLAN’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.

Fiscal Year End Change Financial Reporting

As previously announced, the Company has changed its fiscal year end to December 31. The Company will report unaudited financial results for its fourth quarter, ended October 31, 2009, in a press release and conference call, on December 15, 2009. The Company will report audited financial results for the 14 month period ending December 31, 2009, within the first three months of 2010. The date of the release of the audited financial results for the 14 month period ending December 31, 2009 will be announced on December 15, 2009

Conference Call Information – September 3, 2009 – 10 AM EDT

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

Calling Information

  • A live audio webcast will be available at http://www.investorcalendar.com/IC/CEPage.asp?ID=148846
  • To access the call from Canada and U.S., dial 1.877.407.0778 (Toll Free)
  • To access the call from other locations, dial 201.689.8565 (International)

Replay Information

The call will be available at http://www.investorcalendar.com/IC/CEPage.asp?ID=148846 and accessible by telephone until 11:59 PM on September 10, 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 #:330947

About WiLAN
WiLAN, founded in 1992, is a leading technology innovation and licensing company. WiLAN has licensed its intellectual property to over 190 companies worldwide. Inventions in our portfolio have been licensed by companies that manufacture or sell a wide range of communication and consumer electronics products including 3G cellular handsets, Wi-Fi-enabled laptops, Wi-Fi/DSL routers, xDSL infrastructure equipment, WiMAX base stations and digital televisions. WiLAN has a large and growing portfolio of more than 720 issued or pending patents. For more information: WiLan.com.

Note
(*) WiLAN follows Canadian generally accepted accounting principles (“GAAP”) in preparing its interim and annual financial statements. To assist readers in further understanding its operating performance, WiLAN is reporting “pro forma earnings” which is a non-GAAP financial term. WiLAN’s pro forma earnings represent earnings from continuing operations before stock-based compensation, unrealized gain or loss on foreign exchange contracts, 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 reliant on licensees paying royalties under existing licensing agreements and additional licensing of its patent portfolio to generate future revenues and increased 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; fluctuations in foreign exchange rates impact and may continue to impact the Company’s revenues and operating expenses, potentially adversely affecting financial results; 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 generation of future V-chip revenues and the likelihood of the Company signing additional V-chip licenses could be negatively impacted by changes in government regulation; 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 WiLAN’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