News Release Details

Quarterhill Announces Fourth Quarter and Fiscal 2019 Financial Results

02/27/2020
  • Fiscal 2019 Revenue increases 90% to $146.7 million
  • Fiscal 2019 Adjusted EBITDA of $40.0 million represents a year-over-year improvement of more than $50.0 million
  • Subsequent to year-end, in a damages-only re-trial, a jury awarded WiLAN $85.23 million in damages owed to WiLAN by Apple

KITCHENER, ON, Feb. 27, 2020 /PRNewswire/ - Quarterhill Inc. ("Quarterhill" or the "Company") (TSX: QTRH) (OTCQX: QTRHF), announces its financial results for the three- and twelve-month periods ended December 31, 2019. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.

Fiscal 2019 Highlights

  • Revenues of $146.7 million, compared to $77.4 million in 2018
  • Recurring revenue of $21.1 million, compared to $22.0 million in 2018
  • Adjusted EBITDA* of $40.0 million, compared to ($10.6) million in 2018
  • Net income of $10.5 million, or $0.09 per basic and diluted common share, compared to net loss of ($49.1) million, or ($0.41) per basic and diluted common share, in 2018
  • Cash generated (used) in operations of $7.5 million, compared to ($8.8) million in 2018
  • Cash and equivalents at December 31, 2019 were $68.6 million, compared to $67.3 million at December 31, 2018
  • Working capital at December 31, 2019 was $86.5 million, compared to $64.1 million at December 31, 2018
  • Wi-LAN Inc. ("WiLAN") completed patent license agreements with NVIDIA, LG, SK hynix Inc and three Canadian telcos, among others
  • IRD achieved record revenue and adjusted EBITDA
  • VIZIYA completed a large enterprise software agreement with a global integrated energy and chemical company, which led to significant revenue growth and margin expansion in 2019
  • Subsequent to year-end, in a damages-only re-trial, a jury awarded WiLAN $85.2 million in damages owed to WiLAN by Apple Inc.

Fourth Quarter 2019 Highlights

  • Revenues of $39.2 million, compared to $25.4 million in Q4 2018
  • Recurring revenue of $5.0 million, compared to $4.7 million in Q4 2018
  • Adjusted EBITDA* of $12.6 million, compared to $3.2 million in Q4 2018
  • Net income of $5.6 million, or $0.05 per basic and diluted common share, compared to net loss of ($19.9) million, or ($0.17) per basic and diluted common share, in Q4 2018
  • Cash used in operations was ($1.8) million, compared to $9.1 million generated from operations in Q4 2018

"2019 saw revenue and adjusted EBITDA growth on both a consolidated basis for Quarterhill as well as with each of our portfolio companies," said John Gillberry, Chairman of Quarterhill. "Adjusted EBITDA in 2019 included a contribution of more than $10 million combined from IRD and VIZIYA, which reflects the potential of our diversification strategy to generate incremental value for the business. Strong results in 2019 resulted in $86.5 million of working capital at year-end (up $22.4 million from the prior year-end) giving us a solid financial foundation from which to pursue our growth activities in 2020 and beyond.

"Our CEO search remains well underway and is proceeding in-line with our expectations. We have reviewed and met with a number of promising candidates and we have another round of meetings set up in early March. Should these interviews proceed as expected, we believe we will then be in a position to short-list our candidate pool and begin discussions that could lead to an announcement in early spring. While timing is important, the absolute most important consideration is finding the right person with the right blend of skills and experience for the role. In the interim, each of our portfolio companies is in good hands and is being run by a talented and experienced CEO who has played a part in generating the positive results we've released today."

"Subsequent to quarter-end, on January 24, we announced that WiLAN won a second jury verdict against Apple in the damages trial held in the United States District Court for the Southern District of California. This was a re-trial for damages only, resulting from the previous related trial verdict rendered in August 2018. In the jury's verdict, WiLAN was awarded $85.2 million in damages. It is important to note that in both jury trials the jury awarded WiLAN the full amount that it argued as being owed by Apple. We are pleased with the jury's decision and believe it is a reflection of our team's advocacy, the strength of our patent portfolio and the systematic and reasonable approach we take in our licensing and litigation activities The trial is now in the customary post-trial process and we will provide updates on any material developments as they occur."

Approval of Eligible Dividend
The Board of Directors has declared an eligible quarterly dividend of CDN $0.0125 per common share payable on April 3, 2020, to shareholders of record on March 20, 2020.

Business Strategy and Segments
Quarterhill's acquisition strategy focuses primarily on financial metrics while remaining cognizant of broader technology and market trends as it builds 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, the Company seeks to enable shareholders to benefit from consolidation and convergence trends in today's technology industry.

Q4 and Fiscal 2019 Consolidated Financial Review
Consolidated revenues for the three months ended December 31, 2019 ("Q4 2019") were $39.2 million, compared to $25.4 million in Q4 2018, representing growth of 54%. Consolidated revenues for the twelve months ended December 31, 2019 ("FY2019") were $146.7 million, compared to $77.4 million in FY2018, representing growth of 90%. Growth for Q4 2019 and FY2019 was driven by higher revenue from all three businesses – WiLAN, IRD and VIZIYA.

Gross margin for Q4 2019 was $22.0 million, or 56%, compared to $9.6 million, or 38%, in Q4 2018. Gross margin for FY2019 was $72.9 million, or 50%, compared to $18.8 million, or 24%, in FY2018. The Q4 2019 quarter-over-quarter improvement in gross margin was due primarily to better margin performance at WiLAN and IRD, and for FY2019, the year-over-year improvement in gross margin was due to better margin performance from all three businesses – WiLAN, IRD and VIZIYA.

Operating expenses include selling, general and administrative costs ("SG&A"), research and development ("R&D") costs, depreciation, amortization and impairment losses of intangible assets and special charges. Operating expenses for Q4 2019 were $16.3 million, compared to $30.7 million in Q4 2018. Operating expenses in Q4 2018 included a $16.1 million non-cash impairment loss on goodwill. Excluding impairment loss on goodwill, the year-over-year increase in operating expenses was primarily due to higher SG&A and R&D, offset in part by lower depreciation and amortization of intangible assets. For FY2019, operating expenses were $57.8 million, compared to $77.3 million in FY2018. Excluding the impairment loss on goodwill in Q4 2018, operating expenses decreased year-over-year primarily due to lower depreciation, amortization of intangible assets and special charge expense, offset in part by higher SG&A and R&D.

Adjusted EBITDA for Q4 2019 was $12.6 million compared to $3.2 million in Q4 2018. Adjusted EBITDA for FY2019 was $40.0 million compared to ($10.6) million in FY2018. The increase in adjusted EBITDA for Q4 2019 reflects the better performance at WiLAN and IRD.  FY2019 reflects improved operations at all three portfolio companies in 2019, and in particular, at WiLAN.

Net income for Q4 2019 was $5.6 million, or $0.05 per basic and diluted Common Share, compared to net loss of ($19.9) million or ($0.17) per basic and diluted Common Share in Q4 2018. Net income for FY2019 was $10.5 million, or $0.09 per basic and diluted Common Share, compared to a net loss of ($49.1) million, or ($0.41) per basic and diluted Common Share, in FY2018. Of note, net loss for Q4 2018 and FY2018 included a $16.1 million non-cash impairment loss on goodwill. For FY2019, the Company's bottom-line improved primarily due to higher revenues and gross margins at all three portfolio companies.

Cash used in operations in Q4 2019 was ($1.8) million, compared to cash generated from operations of $9.1 million in Q4 2018. Cash used in operations in Q4 2019 reflects working capital adjustments of ($12.4) million primarily related to the timing of collections for certain patent license agreements that were completed in the quarter. A majority of these payments have subsequently been collected in Q1 2020. Cash generated from operations for FY2019 was $7.5 million, compared to cash used in operations of ($8.8) million in FY2018. Cash from operations for FY2019 benefited from the improved financial performance at all three portfolio businesses.

Cash and cash equivalents and short-term investments amounted to $68.6 million at December 31, 2019, compared to $67.3 million at December 31, 2018. Working capital at December 31, 2019 was $86.5 million, compared to $64.1 million at December 31, 2018.

The table below highlights financial performance for the Company's Licensing, Intelligent Systems and Enterprise Software 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 December 31, 2019


Licensing


Intelligent
Systems


Enterprise
Software


Corporate


Total

Revenues

$

23,175


$

13,415


$

2,567


$

-


$

39,157

Cost of revenues (excluding depreciation and amortization)


8,635



7,984



491



-



17,110



14,540



5,431



2,076



-



22,047

Selling, general and administrative expenses


1,041



3,151



2,410



1,697



8,299

Research and development expenses


-



528



960



-



1,488

Depreciation of property, plant and equipment


12



143



32



4



191

Amortization of intangibles


3,304



952



758



-



5,014

Impairment losses on intangibles


87



-



-



-



87

Special charges


15



-



859



392



1,266

Results from operations


10,081



657



(2,943)



(2,093)



5,702

Finance income


(124)



(2)



-



(259)



(385)

Finance expense


(1)

#


53



1



-



53

Foreign exchange (gain) loss


(476)



181



(12)



423



116

Other expense (income)


6

#


(289)



(2)



-



(285)

Income (loss) before taxes


10,676



714



(2,930)



(2,257)



6,203

Current income tax expense (recovery)


1,823

#


(105)



(1,035)



-



683

Deferred income tax (recovery) expense


(23)

#


(52)



(178)



139



(114)

Income tax expense (recovery)


1,800



(157)



(1,213)



139



569

Net income (loss)

$

8,876


$

871


$

(1,717)


$

(2,396)


$

5,634
















Adjusted EBITDA


13,509



2,161



(1,288)



(1,766)



12,616
















Other reconciling items:















Stock-based compensation


10



20



6



(69)



(33)

Dividends from joint venture


-



389



-



-



389

 


For the twelve months ended December 31, 2019


Licensing


Intelligent
Systems


Enterprise
Software


Corporate


Total

Revenues

$

79,808


$

50,392


$

16,520


$

-


$

146,720

Cost of revenues (excluding depreciation and amortization)


39,995



32,312



1,526



-



73,833



39,813



18,080



14,994



-



72,887

Selling, general and administrative expenses


2,547



10,753



7,542



7,880



28,722

Research and development expenses


-



2,308



2,825



-



5,133

Depreciation of property, plant and equipment


92



866



138



16



1,112

Amortization of intangibles


13,772



3,791



3,029



-



20,592

Impairment losses on intangibles


87



-



-



-



87

Special charges


1,851



-



859



(537)



2,173

Results from operations


21,464



362



601



(7,359)



15,068

Finance income


(328)



(17)



-



(911)



(1,256)

Finance expense


(1)



390



4



1



394

Foreign exchange (gain) loss


(730)



207



23



766



266

Other expense (income)


3



(659)



(2)



-



(658)

Income (loss) before taxes


22,520



441



576



(7,215)



16,322

Current income tax expense


5,774



202



15



-



5,991

Deferred income tax expense (recovery)


1,767



(1,212)



(639)



(113)



(197)

Income tax expense (recovery)


7,541



(1,010)



(624)



(113)



5,794

Net income (loss)

$

14,979


$

1,451


$

1,200


$

(7,102)


$

10,528
















Adjusted EBITDA


37,275



5,507



4,676



(7,467)



39,991
















Other reconciling items:















Stock-based compensation


9



99



49



413



570

Dividends from joint venture


-



389



-



-



389

 


For the three months ended December 31, 2018


Licensing


Intelligent
Systems


Enterprise
Software


Corporate


Total

Revenues

$

10,623


$

12,541


$

2,252


$

-


$

25,416

Cost of revenues (excluding depreciation and amortization)


7,742



7,805



314



-



15,861



2,881



4,736



1,938



-



9,555

Selling, general and administrative expenses


599



2,753



1,593



1,087



6,032

Research and development expenses


-



429



448



-



877

Depreciation of property, plant and equipment


48



280



30



4



362

Amortization of intangibles


4,434



950



758



-



6,142

Impairment losses on intangibles


509



-



-



-



509

Impairment loss on goodwill


-



16,066



-



-



16,066

Special charges


2,498



115



-



(1,942)



671

Results from operations


(5,207)



(15,857)



(891)



851



(21,104)

Finance income


(33)



(2)



-



(402)



(437)

Finance expense


1



61



1



-



63

Foreign exchange loss (gain)


612



(392)



115



(453)



(118)

Other (income) expense


-



(58)



77



-



19

(Loss) income before taxes


(5,787)



(15,466)



(1,084)



1,706



(20,631)

Current income tax expense (recovery)


656



(92)



(137)



-



427

Deferred income tax (recovery) expense


(4,334)



(593)



(186)



3,984



(1,129)

Income tax (recovery) expense


(3,678)



(685)



(323)



3,984



(702)

Net loss

$

(2,109)


$

(14,781)


$

(761)


$

(2,278)


$

(19,929)
















Adjusted EBITDA


2,302



1,901



(89)



(951)



3,163
















Other reconciling items:















Stock-based compensation


20



30



14



136



200

Dividends from joint venture


-



317



-



-



317

 


For the twelve months ended December 31, 2018


Licensing


Intelligent
Systems


Enterprise
Software


Corporate


Total

Revenues

$

20,811


$

45,051


$

11,539


$

-


$

77,401

Cost of revenues (excluding depreciation and amortization)


27,539



29,594



1,441



-



58,574



(6,728)



15,457



10,098



-



18,827

Selling, general and administrative expenses


2,598



10,250



6,723



7,421



26,992

Research and development expenses


-



2,022



1,549



-



3,571

Depreciation of property, plant and equipment


257



1,129



121



10



1,517

Amortization of intangibles


18,731



3,873



3,029



-



25,633

Impairment losses on intangibles


509



-



-



-



509

Impairment loss on goodwill


-



16,066



-



-



16,066

Special charges


2,498



2,435



-



(1,942)



2,991

Results from operations


(31,321)



(20,318)



(1,324)



(5,489)



(58,452)

Finance income


(36)



(11)



-



(912)



(959)

Finance expense


2



205



11



2



220

Foreign exchange loss (gain)


946



(556)



166



(748)



(192)

Other income


-



(942)



(192)



-



(1,134)

Loss before taxes


(32,233)



(19,014)



(1,309)



(3,831)



(56,387)

Current income tax expense (recovery)


1,793



66



(782)



1



1,078

Deferred income tax (recovery) expense


(11,262)



(1,731)



(935)



5,583



(8,345)

Income tax (recovery) expense


(9,469)



(1,665)



(1,717)



5,584



(7,267)

Net (loss) income

$

(22,764)


$

(17,349)


$

408


$

(9,415)


$

(49,120)
















Adjusted EBITDA


(9,280)



3,793



2,011



(7,161)



(10,637)
















Other reconciling items:















Effect of deleted deferred revenue


-



167



147



-



314

Stock-based compensation


46



124



38



260



468

Dividends from joint venture

0


317


0


0


317

 

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/2189235/1F40377701F38205A1A0891EE7E28C0C 

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/2189235/1F40377701F38205A1A0891EE7E28C0C   

Telephone replay will be available from 1:00 p.m. Eastern Time on February 27, 2020 until 11:59 p.m. Eastern Time on March 5, 2020 at: 1.855.859.2056 (Toll Free) or 1.416.849.0833 (International). The telephone replay requires the passcode 3232057.

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 income (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) stock based compensation; (viii) foreign exchange (gain) loss; and (ix) equity in income and dividends from joint ventures. Adjusted EBITDA is a measure used by our management to analyze the performance of 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 INCOME AS DETERMINED IN ACCORDANCE WITH U.S. GAAP.

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 under the symbol QTRH and on the OTCQX Best Market under the symbol QTRHF. 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 February 27, 2020 annual information form for the year ended December 31, 2019 (the "AIF"). Copies of the AIF may be obtained at www.sedar.com. 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.

Consolidated Statements of Operations

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















Three months ended 
December 31,



Twelve months ended 
December 31,



2019



2018



2019



2018

Revenues












License

$

22,965


$

10,646


$

87,068


$

23,544

Systems


10,482



9,495



36,108



29,252

Services


687



589



2,490



2,629

Recurring


5,023



4,686



21,054



21,976



39,157



25,416



146,720



77,401

Cost of revenues (excluding depreciation and amortization)












License


8,635



7,775



40,012



27,702

Systems


6,216



5,553



22,550



18,945

Services


491



281



1,509



1,276

Recurring


1,768



2,252



9,762



10,651



17,110



15,861



73,833



58,574



22,047



9,555



72,887



18,827

 Operating expenses












Depreciation of property, plant and equipment


191



362



1,112



1,517

Amortization of intangibles


5,014



6,142



20,592



25,633

Selling, general and administrative expenses


8,299



6,032



28,722



26,992

Research and development expenses


1,488



877



5,133



3,571

Impairment losses on intangible assets


87



509



87



509

Impairment loss on goodwill


-



16,066



-



16,066

Special charges


1,266



671



2,173



2,991



16,345



30,659



57,819



77,279

 Results from operations


5,702



(21,104)



15,068



(58,452)













Finance income


(385)



(437)



(1,256)



(959)

Finance expense


53



63



394



220

Foreign exchange loss (gain)


116



(118)



266



(192)

Other (income) expense


(285)



19



(658)



(1,134)

Income (loss) before taxes


6,203



(20,631)



16,322



(56,387)













Current income tax expense


683



427



5,991



1,078

Deferred income tax recovery


(114)



(1,129)



(197)



(8,345)

Income tax expense (recovery)


569



(702)



5,794



(7,267)













Net income (loss)

$

5,634


$

(19,929)


$

10,528


$

(49,120)













Net income (loss) per share












Basic

$

0.05


$

(0.17)


$

0.09


$

(0.41)

Diluted

$

0.05


$

(0.17)


$

0.09


$

(0.41)













Weighted average number of common shares












Basic


118,817,466



118,817,466



118,817,466



118,768,728

Diluted


118,817,466



118,817,466



118,817,466



118,768,728

 


Quarterhill Inc.

Consolidated Statements of Comprehensive Income (Loss)

(in thousands of United States dollars)















Three months ended 
December 31,



Twelve months ended 
December 31,



2019



2018



2019



2018













Net income (loss)

$

5,634


$

(19,929)


$

10,528


$

(49,120)

Other comprehensive income (loss):












Foreign currency translation adjustment


343



(2,021)



554



(3,868)

Comprehensive income (loss)

$

5,977


$

(21,950)


$

11,082


$

(52,988)

 


Quarterhill Inc.

Consolidated Balance Sheets

(in thousands of United States dollars)







As at

December 31, 2019


December 31, 2018

Current assets






Cash and cash equivalents

$

67,422


$

63,929

Short-term investments


1,189



1,139

Restricted short-term investments


-



2,200

Accounts receivable (net of allowance for doubtful accounts)


32,936



10,812

Other current assets


83



91

Unbilled revenue


6,879



3,990

Income taxes receivable


105



198

Inventories (net of obsolescence)


6,576



5,960

Prepaid expenses and deposits


1,720



2,332



116,910



90,651

Non-current assets






Accounts receivable


2,951



415

Right-of-use assets


3,570



-

Property, plant and equipment


2,168



2,655

Intangible assets


68,699



87,425

Investment in joint venture


4,015



3,822

Deferred income tax assets


25,497



27,141

Goodwill


25,303



25,303



132,203



146,761

TOTAL ASSETS

$

249,113


$

237,412







Liabilities






Current liabilities






Bank indebtedness

$

3,089


$

2,598

Accounts payable and accrued liabilities


19,762



18,103

Income taxes payable


156



-

Current portion of right-of-use lease liabilities


766



-

Current portion of deferred revenue


6,628



4,670

Current portion of long-term debt


45



299

Contingent consideration


-



929



30,446



26,599

Non-current liabilities






Deferred revenue


1,161



1,435

Right-of-use lease liabilities


2,724



-

Long-term debt


208



173

Deferred income tax liabilities


2,530



4,337



6,623



5,945

TOTAL LIABILITIES


37,069



32,544







Shareholders' equity






Capital stock


419,111



419,111

Additional paid-in capital


23,527



22,957

Accumulated other comprehensive income


16,797



16,243

Deficit


(247,391)



(253,443)



212,044



204,868

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

249,113


$

237,412

 


Quarterhill Inc.

Condensed Consolidated Interim Statements of Cash Flows

(in thousands of United States dollars)















Three months ended 
December 31,



Twelve months ended 
December 31,



2019



2018



2019



2018

Cash generated from (used in):












Operations












Net income (loss)

$

5,634


$

(19,929)


$

10,528


$

(49,120)

Non-cash items












Stock-based compensation


(33)



200



570



468

Depreciation and amortization


5,205



6,503



21,704



27,150

Foreign exchange (gain) loss


(24)



188



(85)



(942)

Equity (earnings) loss from joint venture


(289)



(58)



(659)



299

Loss on disposal of intangibles


162



-



162



-

Impairment losses on intangibles


87



509



87



509

Impairment losses on goodwill


-



16,066



-



16,066

Contingent consideration adjustment


-



(3,545)



(929)



(3,545)

(Gain) loss on disposal of assets


(16)



-



551



(24)

Deferred income tax recovery


(114)



(1,129)



(197)



(8,345)

Embedded derivatives


(11)



(75)



8



(78)

Changes in non-cash working capital balances


(12,391)



10,414



(24,192)



8,763

Cash generated (used in) from operations


(1,790)



9,144



7,548



(8,799)

Financing












Dividends paid


(1,128)



(1,136)



(4,476)



(4,605)

Bank indebtedness


(664)



(3,076)



491



(970)

Repayment of long-term debt


42



48



(219)



(44)

Common shares issued for cash from Employee Share
Purchase Plan


-


-



-



27

Cash used in financing


(1,750)



(4,164)



(4,204)



(5,592)

Investing












Dividends received from joint venture


389



317



389



317

Proceeds from sale of restricted short-term investments


2,100



1,300



2,200



1,300

Proceeds from sale of property, plant and equipment


10



-



33



54

Purchase of property and equipment


(393)



(156)



(1,123)



(575)

Repayment of patent finance obligations


-



-



-



(4,167)

Purchase of intangibles


(4)



(19)



(1,429)



(133)

Cash from (used in) investing


2,102



1,442



70



(3,204)

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


14



(191)



79



(294)

Net (decrease) increase in cash and cash equivalents


(1,424)



6,231



3,493



(17,889)

Cash and cash equivalents, beginning of period


68,846



57,698



63,929



81,818

Cash and cash equivalents, end of period

$

67,422


$

63,929


$

67,422


$

63,929

 

Consolidated Statements of Shareholders' Equity











(in thousands of United States dollars)























Capital
Stock

Additional
Paid-in
Capital

Accumulated

Other

Comprehensive

Income

Deficit

Total
Equity

Balance - January 1, 2018

$

418,873

$

22,489

$

20,111

$

(199,718)

$

261,755












Comprehensive loss:











Net loss


-


-


-


(49,120)


(49,120)

Other comprehensive loss


-


-


(3,868)


-


(3,868)

Shares and options issued:











Stock-based compensation expense


-


468


-


-


468

Conversion of deferred stock units to common shares


211


-


-


-


211

Sale of shares under Employee Share
 
Purchase Plan


27


-


-


-


27

Dividends declared


-


-


-


(4,605)


(4,605)

Balance - December 31, 2018

$

419,111

$

22,957

$

16,243

$

(253,443)

$

204,868












Balance - January 1, 2019


419,111


22,957


16,243


(253,443)


204,868












Comprehensive income:











Net income


-


-


-


10,528


10,528

Other comprehensive income


-


-


554


-


554

Options issued:











Stock-based compensation expense


-


570


-


-


570

Dividends declared


-


-


-


(4,476)


(4,476)

Balance - December 31, 2019

$

419,111

$

23,527

$

16,797

$

(247,391)

$

212,044

 

Quarterhill Inc.












Reconciliations of GAAP Net Income (Loss) to
Adjusted EBITDA












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














For the three months ended
December 31,


For the twelve months ended
December 31,

Adjusted EBITDA

2019


2018


2019


2018













Net income (loss)

$

5,634


$

(19,929)


$

10,528


$

(49,120)













Adjusted for:












Income tax expense (recovery)


569



(702)



5,794



(7,267)

Foreign exchange loss (gain)


116



(118)



266



(192)

Finance expense


53



63



394



220

Finance income


(385)



(437)



(1,256)



(959)

Special charges


1,266



671



2,173



2,991

Amortization of intangibles


5,014



6,142



20,592



25,633

Impairment losses on intangible assets


87



509



87



509

Impairment loss on goodwill


-



16,066



-



16,066

Depreciation of property, plant and equipment


191



362



1,112



1,517

Effect of deleted deferred revenue


-



-



-



314

Stock based compensation


(33)



200



570



468

Dividend from joint venture


389



317



389



317

Other income


(285)



19



(658)



(1,134)

Adjusted EBITDA

$

12,616


$

3,163


$

39,991


$

(10,637)














For the three months ended
December 31,


For the twelve months ended
December 31,

Adjusted EBITDA per share

2019


2018


2019


2018













Net income (loss)

$

0.05


$

(0.17)


$

0.09


$

(0.42)













Adjusted for:












Income tax expense (recovery)


-



(0.01)



0.05



(0.07)

Foreign exchange loss (gain)


-



-



-



-

Finance expense


-



-



-



-

Finance income


-



-



(0.01)



-

Special charges


0.01



0.01



0.02



0.03

Amortization of intangibles


0.05



0.05



0.18



0.21

Impairment losses on intangible assets


-



-



-



-

Impairment loss on goodwill


-



0.14



-



0.14

Depreciation of property, plant and equipment


-



-



0.01



-

Effect of deleted deferred revenue


-



-



-



-

Stock based compensation


-



-



-



-

Dividend from joint venture


-



-



-



-

Other income


-



-



-



-

Adjusted EBITDA per share

$

0.11


$

0.02


$

0.34


$

(0.11)

 

Cision View original content:http://www.prnewswire.com/news-releases/quarterhill-announces-fourth-quarter-and-fiscal-2019-financial-results-301012401.html

SOURCE Quarterhill Inc.

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