Wi-LAN Inc.

Wi-LAN Inc.

February 24, 2005 16:01 ET

Wi-LAN Announces 2005 First Quarter Consolidated Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: WI-LAN INC.

TSX SYMBOL: WIN

FEBRUARY 24, 2005 - 16:01 ET

Wi-LAN Announces 2005 First Quarter Consolidated
Results

CALGARY, CANADA--(CCNMatthews - Feb. 24, 2005) - Wi-LAN Inc. (TSX:WIN),
a global provider of market-leading broadband wireless communications
products and technologies and charter member of the WiMAX Forum(1),
today announced financial results for the three months ended January 31,
2005. All financial amounts are expressed in thousands of Canadian
dollars, except per share amounts or unless otherwise noted.

Income Statement: In the three months ended January 31, 2005 the Company
achieved consolidated revenue of $5,505, compared with $6,556 for the
three months ended January 31, 2004, and $6,148 for the preceding three
months ended October 31, 2004. Gross margin for the first quarter was
$2,440, compared with $3,610 in the 2004 first quarter, and a $2,895 in
the preceding three months ended October 31, 2004. Net loss for the
first quarter was $(2,448) or $(0.06) per share, compared with net loss
of $(511) or $(0.01) per share in the 2004 first quarter, and a net loss
of $(2,861) or $(0.07) per share in the preceding three months ended
October 31, 2004.

Cash Flow: Cash used in operations before changes in non-cash working
capital
for the three months ended January 31, 2005 was $(1,459), compared with
$173 for the 2004 first quarter, and $(2,025) in the preceding three
months ended October 31, 2004. Cash used in operations, including
changes in non-cash working capital, for the three months was $(4,829),
compared with $(565) for the 2004 first quarter, and $(610) in the
preceding three months ended October 31, 2004.

Balance sheet: Consolidated cash on January 31, 2005 was $8,791,
excluding $775 of restricted cash, compared with $13,768 on October 31,
2004. Working capital on January 31, 2005 was $15,705 compared with
$17,332 on October 31, 2004. Long-term debt (the mortgage on the
Company's Calgary head office building) on January 31, 2005 was $7,757
compared with $7,842 on October 31, 2004. Wi-LAN's January 31, 2005
consolidated cash and working capital is expected to be adequate to
sustain the Company's growth in existing operations.

FIRST QUARTER FINANCIAL HIGHLIGHTS

Consolidated revenue ($000's)

Consolidated revenue for the three months ended January 31, 2005 was
$5,505, which is $(1,051) or 16.0% less than revenue of $6,556 for the
2004 first quarter, and $(643) or 10.5% less than revenue of $6,148 for
the preceding three months ended October 31, 2004. First quarter sales
of Wi-LAN's Libra product series, based on Wi-LAN's patented W-OFDM
technology, were down $(485) compared to the 2004 first quarter as
customers deferred purchases of the current generation of Libra systems
in favor of the Libra MXTM product series, now scheduled for general
availability in the second fiscal quarter of 2005, rather than the
original target date of January 2005. Sales of other broadband wireless
systems were down $(335) compared to the 2004 first quarter due to
product supply issues, creating significant orders on hand for future
delivery going into the second quarter. License, technology and
engineering services revenues were nil compared to $291 in the first
quarter of 2004, and antenna sales improved by $60 compared to the first
quarter of 2004.

Wi-LAN received several large purchase orders that affected its sales of
its broadband wireless products in the three months ended January 31,
2005. Wi-LAN is currently ramping up production at its contract
manufacturers to meet the increased demand. The Company was unable to
ship all of the orders scheduled for shipment in the first quarter, and
this has created a backlog of approximately $2 million as part of the
orders on hand for future delivery mentioned above. Wi-LAN expects to
eliminate the backlog and ship most of the remaining orders on schedule
and to book them as revenue over the next two quarters.

As well, competitive pricing pressure continued to impact sales as other
broadband wireless equipment vendors are offering BWA equipment at
steeply discounted pricing to establish market share.

Wi-LAN expects product sales to grow on several fronts during the
remainder of fiscal 2005:

- Sales of Wi-LAN's new WiMAX platform, the Libra MX product series, are
expected to gain Wi-LAN a foothold in the emerging WiMAX-standard
equipment market. Wi-LAN now expects to have this equipment generally
available in the second fiscal quarter of 2005, rather than the original
target date of January 2005, and Wi-LAN's Continuity Program guarantees
its customers a seamless and economic transformation to WiMAX compliant
networks when WiMAX compliant equipment comes online later in 2005.

- Wi-LAN expects to begin to deploy WiMAX compliant Libra MX equipment
once the WiMAX Forum completes conformance and interoperability testing,
scheduled for completion in 2005.

- Sales of Wi-LAN's Ultima3, VIP and antenna product lines are expected
to continue to grow as existing customers expand their networks and new
customers capitalize on the extensive feature sets and favorable
economics of these products. Orders for these products were particularly
strong in the first quarter and this has created significant orders on
hand for future delivery as of January 31, 2005.

- Entry into the Intelligent Transportation Systems (ITS) market with
Wi-LAN's new Libra MobilisTM, the first commercially available two-way
broadband wireless product designed for a high-speed mobile environment,
is planned in 2005. The market for ITS mobile broadband wireless
equipment is in its infancy, so limited trial sales of Libra Mobilis are
expected in 2005. Wi-LAN recently completed a successful trial of Libra
Mobilis in Seoul, South Korea, and other trials are ongoing.

- License, technology and engineering services revenue is expected in
2005, but it is largely dependent on royalties from related sales of
Wi-LAN's licensees.

As reported in the prior quarter, Wi-LAN has undertaken a comprehensive
review of its sales, marketing, operations and product development
practices, including processes, product features, pricing, and personnel
and is taking the actions required to meet today's challenges. Actions
taken include:

- Wi-LAN has hired two new vice presidents to lead its sales and
marketing departments.

- The sales force is continuing to be restructured and upgraded. In
addition to changes previously reported, the TIL-TEK Antennas division
has recently hired a new director of sales to boost its sales effort.

- The Company plans to establish regional return and repair centers in
Europe and Asia.

- The Company is providing webinars and regional marketing presentations
explaining Wi-LAN's product strategy.

- The Company recently improved its sales opportunities by launching the
Libra Mobilis product series in October 2004 and the Libra MX product
series in November 2004, and has also added new competitively priced
products to its VIP product line and provided bundled pricing for its
Ultima3 and Libra 5800 products.

- Several new marketing initiatives are being undertaken to drive sales
growth, including intense targeting of key customer segments in which
Wi-LAN has strong competitive advantage, including transit systems
(Libra Mobilis) and competitive service providers (Libra MX); leveraging
of Wi-LAN's Libra MX platform coupled with its Continuity Program;
striking mutually beneficial OEM relationships with suppliers to target
other key customer segments including tier one Telco's; increasing
prepackaged "application solution sets" such as integrated Hotzone
solutions and VoIP solutions; and close collaboration with customers and
key partners to design and develop the industry's best-in-class WiMAX
products.

- The Company is engaging in a Six Sigma initiative to radically improve
its corporate performance and customer focus.

- The TIL-TEK Antennas division is continuing to actively seek new
market opportunities to increase its sales, and has recently signed an
Original Equipment Manufacturer (OEM) agreement that is expected to
increase future antenna sales.

Revenue from the Company's broadband wireless products for the three
months ended January 31, 2005 was $4,614, which is $(820) or 15.1% less
than the $5,434 reported for the three months ended January 31, 2004 and
$(529) or 10.3% less than the $5,143 reported for the prior three months
ended October 31, 2004. The first quarter broadband wireless revenue
consisted of:

- $1,555 from the company's Libra product series, based on Wi-LAN's
patented Wide-band Orthogonal Frequency Division Multiplexing (W-OFDM)
technology. This amount is $(485) or 23.8% less than the $2,040 of Libra
product series revenue reported for the three months ended January 31,
2004 and $153 or 10.9% more than the $1,402 reported for the prior three
months ended October 31, 2004. In the first quarter the Company
continued to experience a slow-down in its Libra series sales in
anticipation of the Libra MX product series, with general availability
now expected in the second quarter of 2005, rather than the original
target of January 2005, and in anticipation of WiMAX compliant equipment
in the second half of 2005.

- $3,059 from Wi-LAN's other broadband wireless products, which is
$(335) or 9.9% less than the $3,394 of other broadband wireless revenue
reported for the three months ended January 31, 2004 and $(682) or 18.2%
less than the $3,741 reported for the prior three months ended October
31, 2004. Orders for these products were particularly strong in the
first quarter and the Company has ramped up production at its contract
manufacturers. There remain significant orders on hand for future
delivery as of January 31, 2005.

Revenue from the Company's antenna products for the three months ended
January 31, 2005 was $891, which is $60 or 7.2% more than the $831
recorded for the three months ended January 31, 2004 and $(114) or 11.3%
less than the $1,005 reported for the prior three months ended October
31, 2004.

License, technology and engineering services revenue for the three
months ended January 31, 2005 was nil, compared to $291 reported for the
three months ended January 31, 2004. This revenue was generated as the
Company partnered with third parties to develop new applications for
Wi-LAN's W-OFDM technology, namely its Libra Mobilis products and its
Libra MX system. These products were launched in October and November
2005, and development continues on value-added features and upgrades for
Libra Mobilis and on WiMAX compliance of the Libra MX platform. Progress
regarding license, technology and engineering services revenue for the
2005 the three months ended January 31, was as follows:

- Wi-LAN's joint development of the WiMAX SoC, with Fujitsu
Microelectronics America (Fujitsu) is continuing on schedule. The SoC
will be incorporated into Wi-LAN's WiMAX compliant equipment once WiMAX
conformance testing is available later in 2005, and Wi-LAN will collect
royalties on Fujitsu's sales of the WiMAX SoC once Fujitsu begins
marketing this product.

- Wi-LAN is currently testing the WiMAX MAC software and the Company is
actively seeking opportunities to market this software.

- Wi-LAN is continuing discussions with Philips Semiconductor regarding
the licensing agreement that Wi-LAN signed with Philips in 1999. The
agreement relates to Philips' second-generation Wi-Fi (802.11a/g and
802.11g) chipsets, which became available in production quantities in Q4
2004. Wi-LAN and Philips have differing interpretations of the nature of
the agreement and are actively working towards resolving their
differences. Wi-LAN is still hopeful of an amicable resolution to this
matter that will result in payment to Wi-LAN.

- Wi-LAN's patent infringement lawsuit against Cisco Systems and OCR
Concepts Canada for sales of Cisco's 802.11a/g based Linksys and Aironet
products in Canada is progressing. A case management judge has been
appointed and Cisco has filed its statement of defense.

Product Gross Margin ($000 and % of revenue)

Product gross margin for the three months ended January 31, 2005 was
$2,440 or 44.3% of product revenue, which is $(879) or 8.7 percentage
points less than the product gross margin of $3,319 or 53.0% of product
revenue for the 2004 first quarter, and $(455) or 2.8 percentage points
less than the product gross margin of $2,895 or 47.1% of product revenue
for the prior three months ended October 31, 2004. Wi-LAN is continuing
to cost-reduce its products to maintain margins. In the three months
ended January 31, 2004, a non-cash inventory valuation adjustment
increased Wi-LAN's product gross margin by $125 and in the three months
ended January 31, 2005 the effect of the adjustment was to increase
Wi-LAN's product gross margin by $466. The inventory valuation
adjustments resulted from application of the Company's accounting policy
that provides for an inventory valuation allowance based on a continual
review of the composition, quantity, and expected future usage or sales
of inventory. In first quarters 2004 and 2005, sales of inventory were
higher than expected and some products that had been written off in
prior quarters were sold.

Operating expenses ($000's)

Operating expenses for the three months ended January 31, 2005 were
$5,084, an increase of $805 or 18.8% compared with $4,279 for the 2004
first quarter, and a decrease of $(468) or 8.4% compared with $5,552 for
the prior quarter ended October 31, 2004.

Sales and marketing (S&M) expense for the quarter ended January 31, 2005
was $1,210, a decrease of $(172) or 12.5% compared with $1,382 for the
2004 first quarter, and a decrease of $(417) or 25.6% compared with
$1,627 for the prior quarter ended October 31, 2004. Although Wi-LAN
continued to strengthen its marketing effort in the first quarter, under
the leadership of John Seliga, the new Vice President of Marketing,
spending was more focused on activities and events that would be most
effective in generating new sales leads. As well, because Wi-LAN's sales
staff have a large variable component to their compensation, the
quarterly reduction in sales caused a reduction in sales expenditures.

Research and development (R&D) expense for the quarter ended January 31,
2005 was $1,794, an increase of $206 or 13.0% compared with $1,588 for
the 2004 first quarter, and a decrease of $(239) or 11.8% compared with
$2,033 for the prior quarter ended October 31, 2004. During the quarter
Wi-LAN continued to develop its Libra MX system, its Libra Mobilis
products, the WiMAX compliant SoC in collaboration with Fujitsu, and the
WiMAX MAC software. Wi-LAN will continue to monitor its R&D expenses to
support both short-term and long-term goals.

In prior periods the Company accounted for its obligation to issue
warrants under the Technology Partnerships Canada (TPC) program as a
charge (amortization of TPC warrants) to R&D expense and an accrual to
shareholders' equity. In accordance with revised Canadian standards for
accounting for the settlement of financial obligations with the future
issuance of equity instruments, effective November 1, 2004 the Company
accounts for its obligation to TPC as a financial liability. R&D expense
is reduced by received and accrued cash receipts from TPC, and increased
by the non-cash amortization of future warrants owed to TPC, as detailed
in the following table:



------------------------------------------------------------------------
Three months ended
-----------------------------------------------
$000's Jan. 31, 2005 Oct. 31, 2004 Jan. 31, 2004
------------------------------------------------------------------------
Total R&D expenditures $ 2,184 $ 2,622 $ 1,508
Less: TPC contributions 600 800 400
% of expenditures 27.5% 30.5% 26.5%
------------------------------------------------------------------------
Cash R&D expense 1,584 1,822 1,108
Add: Amortization of
TPC warrants 210 211 480
------------------------------------------------------------------------
Reported R&D expense 1,794 2,033 1,588
------------------------------------------------------------------------
------------------------------------------------------------------------


Wi-LAN intends to maintain key R&D expenditures in order to complete the
development of products for potentially large opportunities for WiMAX
and Intelligent Transportation Systems (ITS) products. Essential product
development projects are as follows:

- The WiMAX market is expected to reach the fully commercial stage once
the WiMAX Forum makes conformance testing available in 2005, and to grow
to a substantial size thereafter as mobile applications are addressed.
Several projects are underway to further develop Wi-LAN's Libra MX
equipment. Wi-LAN expects to begin to deploy WiMAX compliant Libra MX
equipment in 2005.

- Wi-LAN is proceeding with lab tests of the WiMAX SoC. For further
information refer to "License, Technology and Engineering Services
Revenue" described above.

- Wi-LAN is testing the WiMAX MAC software and is actively seeking
opportunities to market this software.

Operations expense for the quarter ended January 31, 2005 was $483, an
increase of $39 or 8.8% compared with $444 for the 2004 first quarter,
and a decrease of $(193) or 28.6% compared with $676 for the prior
quarter ended October 31, 2004. The decrease compared to the preceding
quarter was largely due to a reduction in spending on the Company's
customer satisfaction program that began in Q2 2004 and fewer product
refurbishment initiatives.

General and administration (G&A) expense for the quarter ended January
31, 2005 was $788, an increase of $107 or 15.7% compared with $681 for
the 2004 first quarter, and an increase of $26 or 3.4% compared with
$762 for the prior quarter ended October 31, 2004. G&A expenses vary
from quarter to quarter due to variations in finance, legal, business
development, investor relations and corporate communications activities.

Interest on long term debt was $108 for the quarter ended January 31,
2005, compared to $nil in the three months ended January 31, 2004, and
an increase of $6 or 5.9% compared with $102 for the prior quarter ended
October 31, 2004. This expense is due to the mortgage on the Company's
head office building, which the Company purchased in March 2004. The
Company leased the building in 2003, so no interest on long-term debt
was recorded in that quarter. The purchase of the building was an
operating decision that has reduced cash operating costs by $0.3 million
over the ten months since the purchase.

Net Loss ($000's)

Net loss for the first quarter was $(2,448) or $(0.06) per share,
compared with net loss of $(511) or $(0.01) per share in the 2004 first
quarter, and a net loss of $(2,861) or $(0.07) per share in the
preceding three months ended October 31, 2004. The changes in the net
loss in the three months ended January 31, 2005 resulted partly from the
changes in gross margin and operating expenses described previously.
Excluding these, the net loss for the three months ended January 31,
2005 was improved by $38 over the three months ended January 31, 2004,
and was improved by $400 over the three months ended October 31, 2004 by
non-operating items including interest and bank charges, interest income
earned on cash balances, gains on disposal (minor disposals of assets
and equity investments), other income (largely rental revenue), and
foreign exchange gains and losses (gains and losses on foreign exchange
transactions and the translation of revenue and expense from US dollars
to Canadian dollars) and income tax (large corporations tax).

Cash Management ($000's)

Consolidated cash on January 31, 2005 was $8,791 ($9,566 including
restricted cash of $775 provided as security on the mortgage on the
Company's head office building), a reduction of $(4,977) compared with
$13,768 on October 31, 2004, and a reduction of $(18,155) compared with
$26,946 on January 31, 2004. The three-month reduction of consolidated
cash of $(4,977) consisted of $(4,829) used in operations (including
changes in non-cash working capital balances), $(60) used in financing,
and $(88) spent on investments.

Cash used in operations in the three months ended January 31, 2005,
including changes in non-cash working capital balances, of $(4,829) was
due to the cash net loss from continuing operations, which decreased
cash from operations by $(1,459), and changes in non-cash operating
working capital balances that reduced cash from operations by $(3,370)
in the three months ended January 31, 2005 compared to the three months
ended January 31, 2004. Changes in non-cash working capital balances
were caused primarily by changes in accounts payable and accrued
liabilities, which reduced cash by $(2,740).

Cash used in financing and cash used in investing accounted for a total
cash reduction of $(148) in the three months ended January 31, 2005.
Cash used in financing was due primarily to payments against long-term
debt. Long-term debt in the amount of $8,000, of which $7,757 was
outstanding at January 31, 2005, was assumed with regard to Wi-LAN's
purchase of its Calgary head office building in March 2004. Cash used in
investing is attributable to the amount and timing of cash flow for the
purchase and sale of capital and intangible assets, for equity interests
in certain private companies, and from proceeds on disposal of equity
interests in companies.



Quarterly Financial Summary
------------------------------------------------------------------------
------------------------------------------------------------------------
($000's unless
stated otherwise) 3 months ended
------------------------------------------------------------------------
------------------------------------------------------------------------
Statement of Jan. 31, Oct. 31, July 31, Apr. 30, Jan. 31,
Operations Info. 2005 2004 2004 2004 2004
------------------------------------------------------------------------
------------------------------------------------------------------------
Revenue - geographic
Americas $ 2,803 $ 3,552 $ 3,292 $ 3,512 $ 3,052
Europe, Middle East
& Africa 1,425 2,187 2,026 2,147 2,314
Asia Pacific 1,277 409 826 829 1,190
------------------------------------------------------------------------
Total revenue 5,505 6,148 6,144 6,488 6,556
------------------------------------------------------------------------
Revenue by product
category
OFDM radios 1,555 1,402 1,419 1,742 2,040
Other radios 3,059 3,741 3,614 3,621 3,394
Antennas 891 1,005 1,072 1,125 831
------------------------------------------------------------------------
Subtotal 5,505 6,148 6,105 6,488 6,265
------------------------------------------------------------------------
License, tech. &
eng. revenue - - 39 - 291
------------------------------------------------------------------------
Total revenue 5,505 6,148 6,144 6,488 6,556
------------------------------------------------------------------------
Product gross margin(1) 2,440 2,895 2,861 2,921 3,319
% of product revenue 44.3% 47.1% 46.9% 45.0% 53.0%
------------------------------------------------------------------------
Operating income (loss) (2,644) (2,657) (2,239) (1,810) (669)
Net income (loss) (2,448) (2,861) (2,168) (1,509) (511)
Earnings (loss)
per share ($/share) $ (0.06) $ (0.07) $ (0.05) $ (0.04) $ (0.01)
------------------------------------------------------------------------
------------------------------------------------------------------------
Jan. 31, Oct. 31, July 31, Apr. 30, Jan. 31,
Cash Flow Information 2005 2004 2004 2004 2004
------------------------------------------------------------------------
------------------------------------------------------------------------
Cash from (used in)
operations(2) $ (4,829) $ (610) $ (4,002) $ (794) $ (565)
Financing (60) (874) (22) 10,758 1,539
Investments (88) (92) (5,507) (12,035) (1,581)
------------------------------------------------------------------------
Change in cash (4,977) (1,576) (9,531) (2,071) (607)
Cash, beginning
of period 13,768 15,344 24,875 26,946 27,553
------------------------------------------------------------------------
Cash, end of period 8,791 13,768 15,344 26,946 26,946
------------------------------------------------------------------------
------------------------------------------------------------------------
Balance Sheet Jan. 31, Oct. 31, July 31, Apr. 30, Jan. 31,
Information 2005 2004 2004 2004 2004
------------------------------------------------------------------------
------------------------------------------------------------------------
Working capital $ 15,705 $ 17,332 $ 20,218 $ 27,332 $ 28,522
Long term debt 7,757 7,842 7,932 8,000 0
Shareholders' equity 33,851 36,731 41,881 38,715 36,504
Total assets 49,673 54,234 55,349 53,666 45,511
------------------------------------------------------------------------


------------------------------------------------------------------------
------------------------------------------------------------------------
($000's unless stated otherwise) 3 months ended
------------------------------------------------------------------------
------------------------------------------------------------------------
Oct. 31, July 31, Apr. 30,
Statement of Operations Info. 2003 2003 2003
------------------------------------------------------------------------
------------------------------------------------------------------------
Revenue - geographic
Americas $ 3,288 $ 3,462 $ 3,201
Europe, Middle East & Africa 2,621 2,625 1,510
Asia Pacific 2,022 1,416 1,261
------------------------------------------------------------------------
Total revenue 7,931 7,503 5,972
------------------------------------------------------------------------
Revenue by product category
OFDM radios 2,114 769 811
Other radios 4,210 5,436 3,958
Antennas 1,464 1,298 1,111
------------------------------------------------------------------------
Subtotal 7,788 7,503 5,880
------------------------------------------------------------------------
License, tech. & eng. revenue 143 - 92
------------------------------------------------------------------------
Total revenue 7,931 7,503 5,972
------------------------------------------------------------------------
Product gross margin(1) 3,545 3,728 3,143
% of product revenue 45.5% 49.7% 51.9%
------------------------------------------------------------------------
Operating income (loss) (617) 204 (808)
Net income (loss) (866) 37 (989)
Earnings (loss) per share ($/share) $ (0.03) $ 0.00 $ (0.03)
------------------------------------------------------------------------
------------------------------------------------------------------------
Oct. 31, July 31, Apr. 30,
Cash Flow Information 2003 2003 2003
------------------------------------------------------------------------
------------------------------------------------------------------------
Cash from (used in) operations(2) $ 755 $ 1,844 $ (810)
Financing 22,302 25 (54)
Investments 28 (8) (18)
------------------------------------------------------------------------
Change in cash 23,085 1,861 (882)
Cash, beginning of period 4,468 2,607 3,489
------------------------------------------------------------------------
Cash, end of period 27,553 4,468 2,607
------------------------------------------------------------------------
------------------------------------------------------------------------
Oct. 31, July 31, Apr. 30,
Balance Sheet Information 2003 2003 2003
------------------------------------------------------------------------
------------------------------------------------------------------------
Working capital $ 28,607 $ 5,926 $ 3,932
Long term debt 0 0 0
Shareholders' equity 34,880 12,891 10,928
Total assets 44,683 21,554 19,566
------------------------------------------------------------------------
(1) Excluding license, technology and engineering services revenue.
(2) Includes change in non-cash operating working capital balances.


FIRST QUARTER OPERATIONS HIGHLIGHTS

New Product Launch

On November 15, 2005 Wi-LAN announced the launch of Libra MX at the
Wireless Broadband Forum in Cambridge, U.K. Libra MX is the industry's
first WiMAX platform that meets the performance and throughput
requirements of today's demanding point-to-point and point-to-multipoint
broadband applications while providing a guaranteed, economic and
straightforward migration path to WiMAX compliant networks. Based on
Wi-LAN's patented W-OFDM technology - the foundation for WiMAX
Certified(1) products - Libra MX is a powerful and flexible solution,
including both base stations and subscriber units, for a wide variety of
broadband wireless applications. For additional information please refer
to Wi-LAN's website at www.wi-lan.com/news/press/20051115.html.

Large Product Orders

On January 12, 2005 Wi-LAN announced receipt of a $6.0 million (US$5.0
million) order for Wi-LAN's broadband wireless solutions to provide data
and voice services to remote towns in a harsh arid environment. Wi-LAN
expects to fill the order in the first half of 2005.

Extreme Product Deployment

On December 7, 2005, the northernmost city in the world (71 degrees
north), Hammerfest, Norway, formally opened its broadband wireless
education network. Hammerfest has deployed Wi-LAN's Libra system, giving
11 area schools broadband Internet access. This network features
wireless links up to 36 km and speeds up to 16 megabits-per-second.

Product Trials

In January Wi-LAN successfully completed a trial of Libra Mobilis in
Seoul, South Korea. The demonstration featured several access points
backhauled with Libra 5800, creating a totally wireless infrastructure.
Transmission speeds of 13 Mbps with seamless handoff were achieved.
Other Asian and European trials are ongoing.

Executive Appointments

In December 2004, Wi-LAN's TIL-TEK Antennas division appointed Paul
Stevens as Director of Sales to drive sales growth. Mr. Stevens' most
recent position was Vice President, Sales and Marketing for Systems
Resource Group, a systems integrator and value-added reseller based in
the Bahamas. From 2000 to 2003 he was Director of Sales for Government
and Corporate Accounts at Telus Communications, where he grew sales from
$0 to $45 million annually and received the Presidents Award for
National Sales Achievement in 2001 and 2002. Mr. Stevens holds a
Bachelor of Business Administration degree from Bishops University and
has completed executive sales management training at Queens University.

CONFERENCE CALL INFORMATION

Wi-LAN will hold a conference call to discuss the consolidated results
on February 24, 2005 at 5:00 p.m. EST. The call-in number will be (866)
814-8449 (toll free North America), or 0-011 (800) 436-379-76 (toll free
outside North America), or (703) 639-1368. The access code is 654236.
Participants are advised to call in 10 minutes early. The call will be
webcast from Wi-LAN's website at www.wi-lan.com and will be archived
there.

A replay of the call will be available until 11:59 p.m. EST on March 3,
2005 by calling (888) 266-2081 (toll free North America) or (703)
925-2533 (outside North America). The access code for the replay is
654236.

Wi-LAN participants will be:

Mr. Bill Hews - Chairman of the Corporate Governance Committee, Board of
Directors

Mr. Bill Dunbar - President and Chief Executive Officer

Mr. Keith Bittner - Acting Chief Financial Officer

Mr. Ken Wetherell - Vice President, Corporate Communications & Investor
Relations

About Wi-LAN Inc.

Wi-LAN is a global provider of broadband wireless communications
products and technologies, offering businesses, including telecom
service providers, and government enterprises effective, economic and
secure wireless high-speed communications solutions. Wi-LAN specializes
in high-speed Internet access, data network extension, wireless
Voice-over-IP, and wireless data and telephony backhaul, utilizing its
high quality products and industry-leading technologies. Wi-LAN's
broadband wireless solutions feature an all-inclusive 2-year parts and
labor warranty and are supported by 24/7 customer service.

Wi-LAN believes its portfolio of patents, including its core W-OFDM
patents and 17 patents and patent applications acquired from Ensemble
Communications in May 2004, are necessary for the implementation of
devices using the IEEE 802.16 WirelessMAN Standard (1) and the ETSI BRAN
HiperMAN(1) standard (the WiMAX Forum(1) standards). As well, Wi-LAN's
W-OFDM patents are believed to be required for the implementation of
devices using the IEEE standards 802.11a and 802.11g (the 2nd generation
Wi-Fi Alliance(1) standards), and the ETSI BRAN HiperLAN/2(1) standard.
Wi-LAN licenses its patented technology and has executed non-exclusive
W-OFDM license agreements with semiconductor and broadband wireless
equipment companies.

Wi-LAN is the chair company of the OFDM Forum and a charter member of
the WiMAX Forum (www.wimaxforum.org). Wi-LAN's common shares trade on
The Toronto Stock Exchange under the symbol "WIN." Detailed information
on Wi-LAN can be found at www.wi-lan.com.

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. These may include, without limitation,
statements based on current expectations involving a number of risks and
uncertainties related to all aspects of the wireless communications
industry. These risks and uncertainties include, but are not restricted
to, continued increased demand for the Company's products, the Company's
ability to maintain its technological leadership in the field of
high-speed wireless communications, the Company's ability to attract and
retain key employees, the enforceability of the Company's patents, and
the availability of key components.

These uncertainties may cause actual results to differ from information
contained herein. There can be no assurance that such statements 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 forward-looking statements are based on the
estimates and opinions of management on the dates they are made and
expressly qualified in their entirety by this notice. The Company
assumes no obligation to update forward-looking statements should
circumstances or management's estimates or opinions change.

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




Wi-LAN INC.
Consolidated Balance Sheet
(in thousands of Canadian dollars)
------------------------------------------------------------------------
------------------------------------------------------------------------
January 31, October 31,
2005 2004
(Unaudited)
------------------------------------------------------------------------

Assets

Current assets:
Cash and cash equivalents $ 8,791 $ 13,768
Accounts receivable 6,592 6,837
Inventories 3,730 3,278
Prepaid expenses and deposits 767 348
-----------------------------------------------------------------------
19,880 24,231


Restricted cash 775 775

Property, plant and equipment 12,017 12,121

Long-term investments 231 231

Trademarks, patents and licenses (Note 3) 10,406 10,512

Goodwill 6,364 6,364
------------------------------------------------------------------------
$ 49,673 $ 54,234
------------------------------------------------------------------------
------------------------------------------------------------------------

Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable and accrued liabilities $ 3,530 $ 6,270
Deferred revenue 66 66
Warranty liabilities 214 214
Capital lease obligation 11 -
Current portion of long-term debt 354 349
-----------------------------------------------------------------------
4,175 6,899


Capital lease obligation 25 -

Deferred revenue 80 80

Warranty liabilities 263 267

Long-term debt 7,403 7,493

Warrant obligation (Notes 2 (b) and 7) 3,876 2,764


Shareholders' equity:
Share capital (Notes 2, 3 and 5) 184,858 185,734
Contributed surplus (Note 2 (a) and 5 (a)) 5,364 400
Deficit (156,371) (149,403)
-----------------------------------------------------------------------
33,851 36,731
------------------------------------------------------------------------
$ 49,673 $ 54,234
------------------------------------------------------------------------
------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.


Wi-LAN INC.
Consolidated Statements of Operations and Deficit
(Unaudited)
(in thousands of Canadian dollars, except per share amounts)
------------------------------------------------------------------------
------------------------------------------------------------------------
Three months ended January 31
2005 2004
------------------------------------------------------------------------
Revenue:
Product $ 5,505 $ 6,265
License, technology and engineering services - 291
-----------------------------------------------------------------------
5,505 6,556

Cost of product sales (Note 6) 3,065 2,946
------------------------------------------------------------------------
2,440 3,610

Expenses:
Sales and marketing 1,210 1,382
Research and development (Note 7) 1,794 1,588
Operations 483 444
General and administrative 788 681
Interest on long-term debt 108 -
Depreciation and amortization 342 184
Stock-based compensation (Note 2 (a) and 5 (a)) 359 -
-----------------------------------------------------------------------
5,084 4,279

------------------------------------------------------------------------
Operating loss before the following (2,644) (669)

Interest and bank charges (40) (20)
Interest income 60 138
Gain on disposal of long-term investments 8 -
Other income 138 34
Foreign exchange gain 30 6
------------------------------------------------------------------------
Net loss (2,448) (511)

Deficit, beginning of period (149,403) (142,354)
Stock-based compensation (Note 2 (a)) (4,520) -

------------------------------------------------------------------------
Deficit, end of period $ (156,371) $ (142,865)
------------------------------------------------------------------------
------------------------------------------------------------------------

Loss per share - basic and diluted $ (0.06) $ (0.01)
------------------------------------------------------------------------
------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.


Wi-LAN INC.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands of Canadian dollars)
------------------------------------------------------------------------
------------------------------------------------------------------------
Three months ended January 31
2005 2004
------------------------------------------------------------------------

Cash provided by (used in):

Operations:
Net loss $ (2,448) $ (511)
Items not involving cash:
Depreciation and amortization 342 184
Gain on disposal of long-term investments (8) -
Cost of excess space - (56)
Fair value of warrants issued to Technology
Partnership Canada (Note 7) 211 479
Stock-based compensation and research and
development expense (Note 2 (a) and 5 (a)) 444 77
----------------------------------------------------------------------
(1,459) 173

Change in non-cash operating working
capital balances:
Accounts receivable 245 23
Inventories (452) (50)
Prepaid expenses and deposits (419) (11)
Accounts payable and accrued liabilities (2,740) (365)
Deferred revenue - (290)
Cost of excess space - (46)
Warranty liabilities (4) 1
----------------------------------------------------------------------
(4,829) (565)

Financing:
Share capital issued for cash - 1,428
Share capital issued for cash on exercise
of stock options 25 161
Share issue costs - (10)
Long-term debt (85) -
Capital lease payments - (40)
-----------------------------------------------------------------------
(60) 1,539

Investments:
Property and equipment (65) (1,580)
Trademarks, patents and licenses (31) (1)
Proceeds from disposal of long-term investment 8 -
-----------------------------------------------------------------------
(88) (1,581)

------------------------------------------------------------------------
(4,977) (607)

Cash and cash equivalents, beginning of period 13,768 27,553
------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 8,791 $ 26,946
------------------------------------------------------------------------
------------------------------------------------------------------------
Cash and cash equivalents consists of cash on hand, balances with banks
and short-term deposits.

Wi-LAN INC.
Notes to Consolidated Financial Statements,
(Unaudited)
Three months ended January 31, 2005 and 2004
(tabular amounts in thousands of Canadian dollars)


1. Significant Accounting Policies

The accompanying unaudited consolidated financial statements for Wi-LAN
Inc. (the "Company" or "Wi-LAN") have been prepared in accordance with
Canadian generally accepted accounting principles for interim financial
information, including all normal recurring adjustments that are, in the
opinion of management, necessary for a fair presentation of the
financial position, operations, and cash flows for the interim period.
As the interim financial statements do not contain all of the
disclosures required in annual financial statements, they should be read
in conjunction with the audited annual financial statements of the
Company. The Company is in compliance with all financial reporting
requirements for interim financial statements. The financial information
included herein is unaudited; however, during the interim period
presented, there have been no changes to the accounting policies as
detailed in the audited financial statements dated October 31, 2004
except as indicated in note 2 below. The consolidated financial
statements include the accounts of Wi-LAN and its wholly-owned
subsidiaries. Certain comparative information has been reclassified to
conform to the current year's presentation.

2. Change in Accounting Policies

a) Stock-Based Compensation

Prior to November 1, 2004, the Company applied the fair value based
method of accounting only to stock options granted to contract personnel
and warrants issued under research and development contracts for
non-recoverable research and development expenses, and applied the
intrinsic value method of accounting to employee stock options. Under
the intrinsic method, any consideration paid by employees on the
exercise of stock options was credited to share capital and no
compensation expense was recognized.

Canadian generally accepted accounting principles were recently amended
to require entities to account for employee stock options using the fair
value based method, beginning November 1, 2004. Under the fair value
based method, compensation cost is measured at fair value at the date of
grant and is expensed over the option's vesting period. In accordance
with one of the transitional provisions permitted, the Company has
retroactively applied the fair value based method to all employee stock
options granted on or after November 1, 2001 and prior to November 1,
2004. The Company has not restated prior year's reported amounts, and
accordingly, has adjusted 2005 opening deficit at November 1, 2004 by
$4,520,000, and contributed surplus by the same amount. Options granted
in 2005 are expensed in the current financial statements in accordance
with the standard previously described by charging stock-based
compensation and increasing contributed surplus. On exercise of stock
options, cash received is credited to share capital and the amount
previously charged to contributed surplus is credited to share capital.

b) Warrant Obligation to Technology Partnerships Canada

Effective November 1, 2004, the Company was required under Canadian
generally accepted accounting principles to change its method of
accounting for fixed obligations that may be settled with equity
instruments in the future. This requires the Company to account for the
obligation to Technology Partnerships Canada ("TPC") as debt rather than
equity in share capital as was the previous accounting treatment. If,
and when the warrants, which have a fair value of $5 million, are
exercised then this obligation would be treated again as equity and
shown as share capital. This change has been applied retroactively with
restatement of prior period financial statements for comparative
purposes.

3. Patent Portfolio Purchase from Ensemble Communications Inc.

On May 21, 2004 the Company acquired, from Ensemble Communications Inc.,
a US based private company, 17 US patents and patent applications,
including their foreign counterparts for cash, share consideration and
ongoing royalties as described below.

Under the terms of the purchase Agreement, Wi-LAN paid approximately
$5.34 million (US$3.9 million) and issued 1,933,100 special warrants,
which were exercised into Wi-LAN common shares for no further
consideration but are subject to certain time-based escrow release
provisions have expired on delivery of the final escrowed share
certificate on February 15, 2005. The fair value of the related Wi-LAN
common shares at the date of purchase was considered to be $2.57 per
share, or $4.97 million. Under agreed price protection provisions, more
or less shares may be issued to the vendor depending upon the market
price of the Company's common shares. Wi-LAN will pay the vendor a
royalty in the range of 5% to 15%, depending on quantities, timing and
other factors, of any royalty revenue that it receives from the
purchased patents for a five-year period commencing the date of
purchase. Wi-LAN has granted the vendor a fixed security interest in
certain of the acquired patents, on account of Wi-LAN's obligation to
pay royalties.

As at January 31, 2005, Wi-LAN issued an additional 346,589 shares
(246,748 in the three months ended January 31, 2005) to Ensemble
Communications Inc. at prices ranging from $1.40 to $1.85 per share
under the price protection provisions of the agreement. The value of
shares issued on May 21, 2004 has been reduced by approximately
$540,000, the estimated fair value of these additional shares.

4. Segmented Information

The Company operates in one industry which is the development,
manufacture and sale, and licensing of products and technology for
wireless and wireline communications. The Company evaluates performance
as one entity. Substantially all of the Company's assets are located in
Canada.



------------------------------------------------------------------------
------------------------------------------------------------------------
Three months ended January 31
2005 2004
------------------------------------------------------------------------

Revenue by Geographic Region:
Americas $ 2,803 $ 3,052
Europe Middle East and Africa 1,425 2,314
Asia Pacific 1,277 1,190
------------------------------------------------------------------------
Total $ 5,505 $ 6,556
------------------------------------------------------------------------
------------------------------------------------------------------------

------------------------------------------------------------------------
------------------------------------------------------------------------
Three months ended January 31
2005 2004
------------------------------------------------------------------------

Revenue by Product Category:
W-OFDM (1) $ 1,555 $ 2,040
Other data radios 3,059 3,394
Antennas 891 831
License, technology and engineering services - 291
------------------------------------------------------------------------
Total $ 5,505 $ 6,556
------------------------------------------------------------------------
------------------------------------------------------------------------

(1) Wi-LAN's Libra series products use a specific form of Wi-LAN's
patented W-OFDM technology, known as 256 sub-carrier OFDM, that is
the basic technology required for WiMAX Certified products. Wi-LAN
expects to be first to market with WiMAX Certified products in the
first half of 2005. The WiMAX Forum is an industry-led, non-profit
corporation formed to help promote and certify the compatibility and
interoperability of broadband wireless products using the IEEE
802.16 and ETSI HiperMAN wireless MAN specifications.


5. Share Capital

a) Issued and Outstanding

The issued and outstanding common shares of the company, along with
securities convertible into common shares, are as follows:



------------------------------------------------------------------------
------------------------------------------------------------------------
January 31, October 31,
2005 2004
------------------------------------------------------------------------
Issued and outstanding:
Common shares 42,089,664 41,818,416

Securities convertible into common shares:
Employee stock options 3,837,082 3,389,105
Stock options issued to underwriters 1,026,750 1,093,688
Share purchase warrants 3,721,700 3,721,700
------------------------------------------------------------------------
------------------------------------------------------------------------


The Company has recorded total stock-based compensation of $444,000 of
which $85,000 (2004 - $77,000) relates to the three months portion of
the three year amortization of the fair value of stock options issued to
personnel and warrants issued under research and development contracts
for non-recoverable research and development expenses. Contributed
surplus has been increased by $444,000 in 2005 and share capital has
been increased by $77,000 for 2004 awards. These stock options and
warrants were valued using the Black-Scholes pricing model for
estimating the fair value of the stock options issued using the
assumptions stated in Note 5 (b).

b) Share Options

During the three months ended January 31, 2005 pursuant to the Company's
2001 Employee Share Option Plan, the Company authorized for issuance to
directors, officers and employees 799,625 options to purchase common
shares at exercise prices ranging from $1.38 to $1.60.

Using the Black-Scholes pricing model for estimating the fair value of
options, these options have an average fair value of $1.69 per share.
Options vest at various times and in varying amounts ranging from
immediate vesting of all options to 25% of the options vesting on the
third anniversary of the option grant date.

The Company uses the Black-Scholes pricing model for estimating the fair
value of the stock options issued with the following weighted average
assumptions:



------------------------------------------------------------------------
------------------------------------------------------------------------
Risk free interest rate 5%
Volatility 57%
Expected option life (in years) - less than 50,000 options 3.0
Expected option life (in years) - greater than 50,000 options 4.0
Dividend yield 0%
------------------------------------------------------------------------


c) Per Share Amounts

The calculation of basic loss per common share is based on the weighted
average number of common shares outstanding for the three months ended
January 31, 2005 and 2004 of 41.9 million and 38.7 million respectively.
The diluted per share amounts are not presented separately as the result
would be anti-dilutive.

6. Inventory Allowance

Included in the cost of sales for the three months ended January 31,
2005 and 2004 is a reduction of our inventory related to previously
reserved inventory of $125,000 and $466,000 respectively. The inventory
adjustment is a combination of a recovery of previous inventory
valuation allowances on sales of product and the application of the
Company's accounting policy that provides for an inventory valuation
allowance based on a continual review of the composition, quantity, and
expected future usage or sales of inventory.

7. Technology Partnerships Canada

Under an agreement signed on March 31, 2003 and effective November 1,
2002, with the Government of Canada's Technology Partnerships Canada
program, the Company is eligible to receive conditionally repayable
research and development funding amounting to a maximum of $8.8 million
to support the development of next-generation wireless technologies.
Under the terms of the agreement, an amount up to a maximum of $12.2
million is to be repaid based on a rate of 1.24% of annual sales in
excess of $30 million, commencing November 1, 2005.

In addition, the TPC is to receive warrants having a fair value of $5
million measured on the date of issuance, no later than January 31,
2005, using the Black-Scholes pricing model and exercisable for a
five-year term, subject to regulatory approvals. If the regulatory
authorities do not approve the warrants, the Company is obligated to
repay $5 million with interest effective January 31, 2005. The Company
is accruing its obligation to issue the warrants based on a proration of
its expected claims for funding under the agreement. An amount of $.21
million for the three months ended January 31, 2005 has been charged to
research and development expense and the credit has been recorded as
contingent debt in 2005 and share capital in 2004. Since inception of
the agreement, the Company has accrued $3.88 million of its obligation
to issue the warrants.

Effective May 20, 2004 the Company and the Government of Canada executed
an amendment to the Agreement. Under the terms of the amendment
agreement, the period for making qualifying expenditures was extended
from March 31, 2005 to June 30, 2006. Under the amendment agreement, the
repayment commences on February 1, 2007 instead of November 1, 2005. In
addition, the Company's obligation to issue $5 million of warrants, and
the alternative obligation to repay $5 million with interest to TPC if
regulatory approval for issuance of the warrants is not received, is to
be no later than June 30, 2006 instead of no later than January 31, 2005.

The Company has received or accrued $.60 million for the three months
ended January 31, 2005 from TPC and has recorded those amounts as a
reduction of research and development expenses. Since inception of the
Agreement, the Company has received or accrued $5.12 million.


-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Wi-LAN Inc.
    Ken Wetherell
    Corporate Communications and Investor Relations
    (403) 207-6329
    (403) 273-5100 (FAX)
    Email: kwetherell@wi-lan.com
    Website: www.wi-lan.com