News Release Details

Quarterhill Announces Second Quarter 2018 Financial Results

08/09/2018

OTTAWA, Aug. 9, 2018 /PRNewswire/ - Quarterhill Inc. ("Quarterhill" or the "Company") (TSX: QTRH) (NASDAQ: QTRH), announces its financial results for the three- and six-month periods ended June 30, 2018. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.

Second Quarter 2018 Highlights

  • Revenue of $20.4 million
  • Recurring revenues of $6.8 million, representing 34% of total revenue
  • Adjusted EBITDA* of ($4.0) million
  • Net loss of ($7.9) million, or ($0.07) per common share
  • Cash and equivalents were $73.1 million at June 30, 2018
  • Announced Mr. James (Jim) Skippen will retire from his positions as Executive Chairman of Quarterhill and interim CEO of WiLAN in August 2018; Mr. Skippen will continue as an outside director and Chair of the Quarterhill Board
  • Appointed Mr. Keaton Parekh as President and Chief Executive Officer of Wi-LAN
  • Subsequent to quarter-end, on August 1, 2018, a jury awarded WiLAN $145.1 million in damages in its patent suit against Apple Inc.

"We are very pleased with the financial and operational performance in Q2 from IRD and VIZIYA," said Doug Parker, President and CEO of Quarterhill. "Both portfolio companies generated strong total revenue, recurring revenue and Adjusted EBITDA, which is indicative of what we believe the businesses are capable of delivering on a more regular basis. With WiLAN, we continue to experience the variability in performance inherent in the patent license industry as reflected in both the Q2 numbers, but as well, in our announcement on August 1, 2018, that a jury awarded WiLAN $145.1 million in damages in its patent suit against Apple Inc. WiLAN has more than 40 litigations ongoing in multiple jurisdictions and we continue to add patent portfolios via our partner program to build our pipeline for future license activity. As we've said in the past, WiLAN's track record suggests that it can deliver significant cash flows and its performance needs to be measured over a longer period due to the underlying dynamics that exist in the patent license industry.

Our M&A pipeline continues to build behind the efforts of our experienced deal team and our revised target focus on verticalized software companies. These efforts have led to ongoing late-stage discussions with certain targets, but we will remain patient in negotiation and disciplined in our investment criteria to ensure that we are acquiring businesses with the right characteristics at the right valuations. While it can be challenging to wait for the next transaction to occur, it is important to note that as our pipeline grows, a strategy such as ours gains momentum over time and the periods in-between transactions tend to shrink over the long term."

Approval of Eligible Dividend
The Board of Directors has declared an eligible quarterly dividend of CDN $0.0125 per common share payable on October 5, 2018, to shareholders of record on September 14, 2018.

Business Strategy and Segments
Our acquisition strategy focuses primarily on financial metrics while remaining cognizant of broader technology and market trends as we build a portfolio of businesses that are characterized as having recurring revenue, free cash flow and profitable growth potential. Driven by the execution of a proven and disciplined acquisition strategy, we seek to enable shareholders to benefit from consolidation and convergence trends in today's technology industry. As of June 30, 2018, the Company had investments in three segments: Technology (WiLAN); Mobility (IRD); and Factory (VIZIYA).

Q2 and Year-to-Date 2018 Consolidated Financial Review
Quarterhill's consolidated financial results for the three- and six-months ended June 30, 2018 include a full contribution from Wi‑LAN Inc. ("WiLAN"), International Road Dynamics Inc. ("IRD") and VIZIYA Corp ("VIZIYA"). The 2017 comparative period information presented represents a full contribution from WiLAN along with IRD's results from operations for the period from June 1 to June 30, 2017 and VIZIYA's results from operations for the period from May 4 to June 30, 2017.

Consolidated revenues for the three months ended June 30, 2018 ("Q2 2018") were $20.4 million, compared to $18.6 million in Q2 2017, representing growth of 10%. Consolidated revenues for the six months ended June 30, 2018 ("Year-to-Date") were $32.4 million, compared to $26.2 million in the same period last year, representing growth of 24%. The year-over-year increases were due to the Company's diversification strategy and the inclusion of the operations of IRD and VIZIYA, which were acquired in Q2 2017.

Gross margin for Q2 2018 was $3.9 million, or 19%, compared to $9.1 million, or 49%, in Q2 2017. Gross margin for the six months ended June 30, 2018 was $4.1 million, or 13%, compared to $9.3 million, or 35%, in the same period last year. For both Q2 2018 and the Year-to-Date period, positive and increased gross margin from IRD and VIZIYA was mostly offset by negative gross margin at WiLAN.

Operating expenses include selling, general and administrative costs, research and development costs, depreciation and amortization of intangible assets. Operating expenses for Q2 2018 were $14.7 million, compared to $12.4 million in Q2 2017. Operating expenses for the six months ended June 30, 2018 were $29.9 million, compared to $20.2 million in the same period last year. Operating expenses increased year-over-year due to the addition of the IRD and VIZIYA operations for the full reporting period in 2018.

Adjusted EBITDA for Q2 2018 was ($4.0) million compared to $4.8 million in Q2 2017. Adjusted EBITDA for the six months ended June 30, 2018 was ($11.3) million compared to $2.6 million in the same period last year. Adjusted EBITDA for the three- and six-month periods ended June 30, 2018 reflects lower revenue and negative Adjusted EBITDA from WiLAN, which offset positive Adjusted EBITDA from both the IRD and VIZIYA operations.

Net loss for Q2 2018 was ($7.9) million, or ($0.07) per basic and diluted Common Share, compared to net earnings of $3.6 million, or $0.03 per basic and diluted Common Share, in Q2 2017. For Q2 2018, net loss increased due primarily to lower revenue and a greater net loss from WiLAN, offset in part by positive net income from IRD and VIZIYA. Net loss for the six months ended June 30, 2018 was ($19.9) million, or ($0.17) per basic and diluted Common Share, compared to a net loss of ($3.6) million, or ($0.03) per basic and diluted Common Share, in the same period last year. For the Year-to-Date period, net loss increased due to lower revenue and a greater net loss from WiLAN and a loss from IRD in Q1 2018, offset in part by positive net income from IRD in Q2 2018 and from VIZIYA in both Q1 and Q2 of 2018.

Cash used from operations for Q2 2018 was ($2.4) million, compared to $3.1 million in cash generated in Q2 2017. Cash used from operations for the six months ended June 30, 2018 was ($9.0) million, compared to $11.5 million of cash generated in the same period last year. For Q2 2018, the difference in cash from operations compared to Q2 2017 is primarily due to lower revenue in the WiLAN business, offset in part by higher revenue in the IRD and VIZIYA businesses. For the Year-to-Date period, the difference in cash from operations was primarily impacted by the timing of collections for certain receivables in Q1 2017, which led to a significant change in non-cash working capital balances in that period compared to Q1 2018.

Cash and cash equivalents and short-term investments amounted to $73.1 million at June 30, 2018, compared to $86.6 million at December 31, 2017.

Subsequent Event
In a trial verdict rendered on August 1, 2018 in the United States District Court for the Southern District of California a jury awarded WiLAN $145.1 million in damages against Apple Inc. for infringement of WiLAN's US patent Nos 8,457,145 and 8,537,757.

The table below highlights financial performance for the Company's Technology, Mobility and Factory segments. For detailed results and discussion related to these segments, please refer to the Management's Discussion and Analysis document, which will be filed on SEDAR and at www.quarterhill.com in the investor section.



For the three months ended June 30, 2018


Technology



Mobility



Factory



Corporate



Total

Revenues

$

3,976



$

12,659



$

3,762



$

-



$

20,397

Cost of revenues (excluding depreciation and amortization)


8,015




8,083




441




-




16,539



(4,039)




4,576




3,321




-




3,858

Selling, general and administrative


607




2,713




1,733




1,983




7,036

Research and development


-




510




343




-




853

Depreciation of property, plant and equipment


72




284




30




2




388

Amortization of intangibles


4,714




971




757




-




6,442

Results from operations


(9,432)




98




458




(1,985)




(10,861)

Finance income


-




(6)




-




(185)




(191)

Finance expense


1




36




3




-




40

Foreign exchange loss (gain)


257




(124)




28




(196)




(35)

Other income


-




(387)




(192)




-




(579)

Earnings (loss) before taxes


(9,690)




579




619




(1,604)




(10,096)

Current income tax expense (recovery)


121




190




(95)




1




217

Deferred income tax expense (recovery)


(3,422)




(66)




(247)




1,287




(2,448)

Income tax expense (recovery)


(3,301)




124




(342)




1,288




(2,231)

Net earnings (loss)

$

(6,389)



$

455



$

961



$

(2,892)



$

(7,865)




















Adjusted EBITDA


(4,641)




1,486




1,276




(2,072)




(3,951)




















Other reconciling items:



















Effect of deleted deferred revenue


-




61




21




-




82

Stock-based compensation


5




72




10




(89)




(2)

 



For the three months ended June 30, 2017


Technology



Mobility



Factory



Corporate




Total

Revenues

$

12,048



$

4,648



$

1,915



$

-



$

18,611

Cost of revenues (excluding depreciation and amortization)


6,368




2,752




401




-




9,521



5,680




1,896




1,514




-




9,090

Selling, general and administrative


1,772




972




876




594




4,214

Research and development


-




308




360




-




668

Depreciation of property, plant and equipment


88




48




34




-




170

Amortization of intangibles


5,321




236




471




-




6,028

Special charges


-




-




-




1,294




1,294

Results from operations


(1,501)




332




(227)




(1,888)




(3,284)

Finance income


(173)




-




-




(61)




(234)

Finance expense


-




11




3




-




14

Foreign exchange loss (gain)


(100)




286




41




(653)




(426)

Other income


-




(69)




-




-




(69)

Earnings (loss) before taxes


(1,228)




104




(271)




(1,174)




(2,569)

Current income tax expense


691




101




39




-




831

Deferred income tax recovery


(1,877)




(62)




(194)




(4,876)




(7,009)

Income tax expense (recovery)


(1,186)




39




(155)




(4,876)




(6,178)

Net earnings (loss)

$

(42)



$

65



$

(116)



$

3,702



$

3,609




















Adjusted EBITDA


3,934




810




520




(504)




4,760




















Other reconciling items:



















Effect of deleted deferred revenue


-




25




242




-




267

Increased costs from inventory step-up


-




137




-




-




137

Stock based compensation


26




32




-




90




148

 


For the six months ended June 30, 2018


Technology



Mobility



Factory



Corporate



Total

Revenues

$

5,743



$

20,071



$

6,592



$

-



$

32,406

Cost of revenues (excluding depreciation and amortization)


13,920




13,581




772




-




28,273



(8,177)




6,490




5,820




-




4,133

Selling, general and administrative


1,238




5,286




3,302




4,263




14,089

Research and development


-




1,059




733




-




1,792

Depreciation of property, plant and equipment


147




574




59




3




783

Amortization of intangibles


9,716




1,963




1,514




-




13,193

Results from operations


(19,278)




(2,392)




212




(4,266)




(25,724)

Finance income


-




(7)




-




(375)




(382)

Finance expense


1




72




6




-




79

Foreign exchange loss (gain)


557




(272)




19




(469)




(165)

Other income


-




(637)




(269)




-




(906)

Earnings (loss) before taxes


(19,836)




(1,548)




456




(3,422)




(24,350)

Current income tax expense (recovery)


225




199




(529)




1




(104)

Deferred income tax expense (recovery)


(4,825)




(634)




(485)




1,608




(4,336)

Income tax expense (recovery)


(4,600)




(435)




(1,014)




1,609




(4,440)

Net earnings (loss)

$

(15,236)



$

(1,113)



$

1,470



$

(5,031)



$

(19,910)




















Adjusted EBITDA


(9,404)




449




1,943




(4,276)




(11,288)




















Other reconciling items:



















Effect of deleted deferred revenue


-




158




148




-




306

Stock-based compensation


11




146




10




(13)




154

 


For the six months ended June 30, 2017


Technology



Mobility



Factory



Corporate



Total

Revenues

$

19,626



$

4,648



$

1,915



$

-



$

26,189

Cost of revenues (excluding depreciation and amortization)


13,762




2,752




401




-




16,915



5,864




1,896




1,514




-




9,274

Selling, general and administrative


4,174




972




876




594




6,616

Research and development


-




308




360




-




668

Depreciation of property, plant and equipment


179




48




34




-




261

Amortization of intangibles


10,624




236




471




-




11,331

Special charges


-




-




-




1,294




1,294

Results from operations


(9,113)




332




(227)




(1,888)




(10,896)

Finance income


(391)




-




-




(61)




(452)

Finance expense


-




11




3




-




14

Foreign exchange loss (gain)


(385)




286




41




(653)




(711)

Other income


-




(69)




-




-




(69)

Earnings (loss) before taxes


(8,337)




104




(271)




(1,174)




(9,678)

Current income tax expense


1,434




101




39




-




1,574

Deferred income tax recovery


(2,500)




(62)




(194)




(4,876)




(7,632)

Income tax expense (recovery)


(1,066)




39




(155)




(4,876)




(6,058)

Net earnings (loss)

$

(7,271)



$

65



$

(116)



$

3,702



$

(3,620)




















Adjusted EBITDA


1,747




810




520




(504)




2,573




















Other reconciling items:



















Effect of deleted deferred revenue


-




25




242




-




267

Increased costs from inventory step-up


-




137




-




-




137

Stock-based compensation


57




32




-




90




179

 

Conference Call and Webcast
Quarterhill will host a conference call to discuss its financial results today at 10:00 AM Eastern Time.

Webcast Information  
The live audio webcast will be available at: https://event.on24.com/wcc/r/1798009/38336DD85E0DB116C040273B8E599958

Dial-in Information 

  • To access the call from Canada and U.S., dial 1.888.231.8191 (Toll Free)
  • To access the call from other locations, dial 1.647.427.7450 (International)

Replay Information 
Webcast replay will be available for 90 days at: https://event.on24.com/wcc/r/1798009/38336DD85E0DB116C040273B8E599958

Telephone replay will be available from 1:00 PM ET on August 9, 2018 until 11:59 PM ET on August 16, 2018 at: 1.855.859.2056 (Toll Free) or 1.416.849.0833 (International). The telephone replay requires the passcode 9748019.

Non-GAAP Disclosure*
Quarterhill follows U.S. GAAP in preparing its interim and annual financial statements. We use the term "Adjusted EBITDA" to mean net earnings (loss) from continuing operations before: (i) income taxes; (ii) finance expense or income; (iii) amortization and impairment of intangibles; (iv) special charges and other one-time items; (v) depreciation of property, plant and equipment; (vi) effects of deleted deferred revenue; (vii) the effects of fair value step up in inventory acquired; (viii) stock based compensation; (ix) foreign exchange (gain) loss; and * equity in earnings and dividends from joint ventures. Adjusted EBITDA is used by Quarterhill management to assess our normalized cash generated on a consolidated basis and in our operating segments. Adjusted EBITDA is also a performance measure that may be used by investors to analyze the cash generated by Quarterhill and our operating segments. ADJUSTED EBITDA IS NOT A MEASURE OF FINANCIAL PERFORMANCE UNDER U.S. GAAP. IT DOES NOT HAVE ANY STANDARDIZED MEANING PRESCRIBED BY U.S. GAAP AND IS THEREFORE UNLIKELY TO BE COMPARABLE TO SIMILARLY TITLED MEASURES USED BY OTHER COMPANIES. ADJUSTED EBITDA SHOULD NOT BE INTERPRETED AS AN ALTERNATIVE TO NET EARNINGS AND CASH FLOWS FROM OPERATIONS AS DETERMINED IN ACCORDANCE WITH U.S. GAAP OR AS A MEASURE OF LIQUIDITY.

About Quarterhill
Quarterhill is focused on the disciplined acquisition, management and growth of companies in dedicated technology areas including, vertical market software and solutions, intelligent industrial systems, and innovation and licensing. Quarterhill's emphasis is on seeking out acquisition opportunities at reasonable valuations that provide a foundation for recurring revenues, predictable cash flows and margins, profitable growth, intimate customer relationships and dedicated management teams.  Quarterhill is listed on the TSX and NASDAQ under the symbol QTRH. For more information: www.quarterhill.com.

Forward-looking Information
This news release contains forward-looking statements and forward-looking information within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and other United States and Canadian securities laws.  Forward-looking statements and forward-looking information are based on estimates and assumptions made by Quarterhill in light of its experience and its perception of historical trends, current conditions, expected future developments and the expected effects of new business strategies, as well as other factors that Quarterhill believes are appropriate in the circumstances. Many factors could cause Quarterhill's actual performance or achievements to differ materially from those expressed or implied by the forward-looking statements or forward-looking information. Such factors include, without limitation, the risks described in Quarterhill's March 1, 2018 annual information form for the year ended December 31, 2017 (the "AIF"). Copies of the AIF may be obtained at www.sedar.com or www.sec.gov. Quarterhill recommends that readers review and consider all of these risk factors and notes that readers should not place undue reliance on any of Quarterhill's forward-looking statements. Quarterhill has no intention, and undertakes no obligation, to update or revise any forward-looking statements or forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

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

Quarterhill Inc.

Condensed Consolidated Interim Statements of Operations

(Unaudited)

(in thousands of United States dollars, except share and per share amounts)

















Three months ended June 30,



Six months ended June 30,


2018



2017



2018



2017

Revenues

$

20,397



$

18,611



$

32,406



$

26,189

Cost of revenues (excluding depreciation and
amortization)


16,539




9,521




28,273




16,915



3,858




9,090




4,133




9,274

Operating expenses















Selling, general and administrative


7,036




4,214




14,089




6,616

Research and development


853




668




1,792




668

Depreciation of property, plant and equipment


388




170




783




261

Amortization of intangibles


6,442




6,028




13,193




11,331

Special charges


-




1,294




-




1,294



14,719




12,374




29,857




20,170

Results from operations


(10,861)




(3,284)




(25,724)




(10,896)
















Finance income


(191)




(234)




(382)




(452)

Finance expense


40




14




79




14

Foreign exchange gain


(35)




(426)




(165)




(711)

Other income


(579)




(69)




(906)




(69)

Loss before taxes


(10,096)




(2,569)




(24,350)




(9,678)
















Current income tax expense (recovery)


217




831




(104)




1,574

Deferred income tax recovery


(2,448)




(7,009)




(4,336)




(7,632)

Income tax recovery


(2,231)




(6,178)




(4,440)




(6,058)

Net earnings (loss)

$

(7,865)



$

3,609



$

(19,910)



$

(3,620)
















Net earnings (loss) per share
















Basic and fully diluted       

$

(0.07)



$

0.03



$

(0.17)



$

(0.03)
















Weighted average number of common shares
















Basic


118,779,445




118,587,106




118,719,182




118,579,684


Fully diluted


118,779,445




118,587,106




118,719,182




118,579,684

 

Quarterhill Inc.

Supplemental Condensed Consolidated Interim Statements of Operations Information

(Unaudited)

(in thousands of United States dollars)

















Three months ended June 30,



Six months ended June 30,


2018



2017



2018



2017

Revenues
















License                                

$

5,643



$

12,321



$

8,136



$

19,312


Systems


7,179




3,067




11,872




3,067


Services


727




714




1,380




714


Recurring


6,848




2,509




11,018




3,096


Total revenues

$

20,397



$

18,611



$

32,406



$

26,189
















Cost of revenues (excluding depreciation and
amortization)
















License

$

8,069



$

6,448



$

14,000



$

13,842


Systems


4,645




1,898




8,111




1,898


Services


385




321




690




321


Recurring


3,440




854




5,472




854

Total cost of revenues

$

16,539



$

9,521



$

28,273



$

16,915

 

Quarterhill Inc.

Condensed Consolidated Interim Statements of Comprehensive Income (Loss)

(Unaudited)

(in thousands of United States dollars)


Three months ended June 30,



Six months ended June 30,


2018



2017



2018



2017

Net earnings (loss)

$

(7,865)



$

3,609



$

(19,910)



$

(3,620)
















Other comprehensive income (loss):
















Foreign currency translation adjustment


(1,481)




533




(2,271)




533

Comprehensive income (loss)

$

(9,346)



$

4,142



$

(22,181)



$

(3,087)

 

Quarterhill Inc.

Condensed Consolidated Interim Balance Sheets

(Unaudited)

(in thousands of United States dollars)












As at





June 30, 2018



December 31,
2017

Current assets












Cash and cash equivalents





$

68,415



$

81,818


Short-term investments






1,177




1,236


Restricted Short-term investments






3,500




3,500


Accounts receivable






15,043




19,298


Other current assets






14




13


Unbilled revenue






6,782




3,045


Income taxes receivable






198




144


Inventories






5,801




5,083


Prepaid expenses and deposits






3,146




4,129







104,076




118,266

Non-current assets












Property, plant and equipment






3,059




3,801


Intangible assets






100,898




114,944


Investment in joint venture






3,998




3,383


Deferred income tax assets






25,227




20,195


Goodwill






41,774




42,587

TOTAL ASSETS





$

279,032



$

303,176












Liabilities











Current liabilities












Bank indebtedness





$

4,681



$

3,568


Accounts payable and accrued liabilities






15,944




20,487


Income taxes payable






-




599


Patent finance obligation






1,379




4,090


Current portion of deferred revenue






6,145




6,733


Current portion of long-term debt






86




115







28,235




35,592

Non-current liabilities












Contingent consideration






4,474




4,474


Deferred revenue






1,736




884


Long-term debt






355




401


Deferred income tax liabilities






6,592




7,291

TOTAL LIABILITIES






41,392




48,642

Shareholders' equity












Capital stock






419,111




418,873


Additional paid-in capital






22,643




22,489


Accumulated other comprehensive income






17,840




20,111


Deficit






(221,954)




(206,939)







237,640




254,534

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY





$

279,032



$

303,176


 

Quarterhill Inc.

 Condensed Consolidated Interim Statements of Cash Flows

(Unaudited)

(in thousands of United States dollars)

















Three months ended June 30,



Six months ended June 30,



2018




2017




2018




2017

Cash generated from (used in):















Operations















Net earnings (loss)

$

(7,865)



$

3,609



$

(19,910)



$

(3,620)


Non-cash items

















Stock-based compensation


(2)




147




154




179



Depreciation and amortization


6,830




6,197




13,976




11,592



Foreign exchange loss (gain)


84




(99)




162




(146)



Equity in earnings from joint venture


(388)




(69)




(638)




(69)



Loss on disposal of assets


-




-




1




-



Deferred income tax recovery


(2,448)




(7,011)




(4,336)




(7,632)



Accrued investment income


-




(74)




-




(150)



Embedded derivatives


(3)




10




(1)




10


Changes in non-cash working capital balances


1,362




392




1,623




11,318

Cash generated (used) from operations


(2,430)




3,102




(8,969)




11,482

Financing

















Dividends paid


(1,155)




(1,099)




(2,326)




(2,228)



Bank indebtedness


3,170




1,523




1,113




1,523



Repayment of long-term debt


(60)




(24)




(75)




(24)



Common shares repurchased under normal course
issuer bid


-




(552)




-




(552)



Common shares issued for cash from Employee
Share Purchase Plan


27




33




27




33

Cash generated (used) in financing


1,982




(119)




(1,261)




(1,248)

Investing

















Business acquisitions, net of cash acquired


-




(66,303)




-




(66,303)



Purchase of restricted short-term investments


-




-




-




(3,500)



Proceeds from sale of property, plant and equipment


-




-




11




-



Purchase of property and equipment


(43)




(107)




(166)




(114)



Repayment of patent finance obligations


(1,389)




(1,389)




(2,778)




(2,778)



Purchase of intangibles


(48)




(4)




(89)




(4)

Cash used in investing


(1,480)




(67,803)




(3,022)




(72,699)

Foreign exchange gain (loss) on cash held in foreign
currency


(76)




192




(151)




227

Net decrease in cash and cash equivalents


(2,004)




(64,628)




(13,403)




(62,238)

Cash and cash equivalents, beginning of period


70,419




108,943




81,818




106,553

Cash and cash equivalents, end of period

$

68,415



$

44,315



$

68,415



$

44,315

 

Quarterhill Inc.

Condensed Consolidated Interim Statements of Shareholders' Equity

(Unaudited)

(in thousands of United States dollars)


Capital Stock



Additional
Paid-in Capital



Accumulated
Other
Comprehensive Income



Deficit



Total Equity

Balance - January 1, 2017

$

419,485



$

21,036



$

16,225



$

(212,602)



$

244,144




















Comprehensive loss:




















Net loss


-




-




-




(3,620)




(3,620)


Other comprehensive income


-




-




533




-




533

Shares and options issued:




















Stock-based compensation expense


-




179




-




-




179


Shares issued upon acquisition


662




-




-




-




662


Sale of shares under Employee Share Purchase Plan


33




-




-




-




33


Shares repurchased under normal course issuer bid


(1,342)




790




-




-




(552)

Dividends declared


-




-




-




(2,228)




(2,228)

Balance - June 30, 2017

$

418,838



$

22,005



$

16,758



$

(218,450)



$

239,151




















Balance - December 31, 2017

$

418,873



$

22,489



$

20,111



$

(206,939)



$

254,534

Implementation of ASU 2014-09


-




-




-




4,272




4,272

Implementation of ASU 2016-16


-




-




-




2,949




2,949

Balance - January 1, 2018, revised


418,873




22,489




20,111




(199,718)




261,755




















Comprehensive loss:




















Net loss


-




-




-




(19,910)




(19,910)


Other comprehensive loss


-




-




(2,271)




-




(2,271)

Shares and options issued:




















Stock-based compensation expense


-




154




-




-




154


Deferred stock units converted to shares


211




-




-




-




211


Shares issued under Employee Share Purchase Plan


27




-




-




-




27


Dividends declared


-




-




-




(2,326)




(2,326)

Balance - June 30, 2018

$

419,111



$

22,643



$

17,840



$

(221,954)



$

237,640


 

Quarterhill Inc.

Reconciliations of GAAP Net Loss to Adjusted EBITDA

(Unaudited)

(in thousands of United States dollars, except share and per share amounts)

















Three months ended June 30,



Six months ended June 30,

Adjusted EBITDA

2018



2017



2018



2017

Net earnings (loss)

$

(7,865)



$

3,609



$

(19,910)



$

(3,620)
















Adjusted for:
















Income tax recovery


(2,231)




(6,178)




(4,440)




(6,058)


Foreign exchange gain


(35)




(426)




(165)




(711)


Finance expense


40




14




79




14


Finance income


(191)




(234)




(382)




(452)


Amortization of intangibles


6,442




6,028




13,193




11,331


Special charges


-




1,294




-




1,294


Depreciation of property, plant and equipment


388




170




783




261


Effect of deleted deferred revenue


82




267




306




267


Increased costs from inventory step-up


-




137




-




137


Stock-based compensation


(2)




148




154




179


Other income


(579)




(69)




(906)




(69)

Adjusted EBITDA

$

(3,951)



$

4,760



$

(11,288)



$

2,573
















Adjusted EBITDA per share















Net earnings (loss)

$

(0.07)



$

0.03



$

(0.17)



$

(0.03)
















Adjusted for:
















Income tax recovery


(0.02)




(0.05)




(0.04)




(0.05)


Foreign exchange gain


-




-




-




(0.01)


Finance expense


-




-




-




-


Finance income


-




-




-




-


Amortization of intangibles


0.05




0.05




0.11




0.10


Special charges


-




0.01




-




0.01


Depreciation of property, plant and equipment


-




-




0.01




-


Effect of deleted deferred revenue


-




-




-




-


Increased costs from inventory step-up


-




-




-




-


Stock-based compensation


-




-




-




-


Other income


-




-




(0.01)




-

Adjusted EBITDA per share

$

(0.04)



$

0.04



$

(0.10)



$

0.02
















Weighted average number of Common Shares















Basic


118,779,445




118,587,106




118,719,182




118,579,684

 

Cision View original content:http://www.prnewswire.com/news-releases/quarterhill-announces-second-quarter-2018-financial-results-300694586.html

SOURCE Quarterhill Inc.

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