Wi-LAN Inc.
TSX : WIN

Wi-LAN Inc.

March 15, 2007 09:23 ET

Wi-LAN Announces 2007 First Quarter Financial Results

Record revenues of $49 million and earnings of $0.45 per share

OTTAWA, CANADA--(CCNMatthews - March 15, 2007) - Wi-LAN Inc. (TSX:WIN) ("Wi-LAN" or the "Company") announced today its financial results for the 2007 Fiscal First Quarter, the period that ends on January 31, 2007. All financial amounts are expressed in thousands of Canadian dollars, except per share amounts or unless otherwise noted.

Highlights

During the fiscal first quarter of 2007, Wi-LAN achieved record revenues and earnings. Revenues in the first quarter 2007 were $49,265, compared with $nil in first quarter 2006. Basic net earnings per share were $0.45 in Q1/07 compared with $0.08 in Q1/06.

In the first quarter of 2007, the Company completed two significant transactions:

- on December 4, 2006, Wi-LAN licensed its patent portfolio to Nokia Corporation ("Nokia") for total consideration of $49,265; and

- the Company completed a bought deal financing for net cash proceeds of $28,292 (gross proceeds of $30,000) on December 29, 2006.

Subsequent to the first quarter, Wi-LAN completed a bought deal financing for net cash proceeds of approximately $37,750 (gross proceeds of $40,000) on March 13, 2007.



Operations

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Fiscal Quarter Q1/07 Q1/06
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Three Months Ended January 31 2007 2006
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Revenues $49,265 $-
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Earnings from continuing operations
before income taxes 45,296 9,052
Provision for future income taxes (16,726) -
Earnings from continuing operations 28,570 9,052
Loss from discontinued operations - (5,662)
Net earnings 28,570 3,390
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Earnings per share
From continuing operations
Basic $0.45 $0.22
Diluted $0.43 $0.22
Net earnings
Basic $0.45 $0.08
Diluted $0.43 $0.08
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Fiscal first quarter 2007 results reflected the $49,265 of revenues from the license agreement with Nokia. Operating expenses amounted to $3,390, including the cost of salaries and benefits, bonuses and commissions, costs relating to restricted share units and deferred stock units granted under the respective plans, legal costs, patent management expenses and other expenses to operate the business. Depreciation & amortization costs of $746 were mainly the amortization expense related to the Company's patent portfolio. The provision for future income tax of $16,726 is a non-cash charge due to the application of tax losses carried forward from prior years.

First quarter 2006 earnings reflect mainly the $9,635 settlement with Cisco Systems, a $1,145 gain on the sale of property, operating expenses of $1,551, and $5,662 of losses incurred in the discontinued products and engineering services businesses that were exited in 2006.



Financial Position

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January 31, October 31,
2007 2006
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Cash and cash equivalents $57,756 $16,680
Future tax asset - 16,726
Patents 43,047 9,787

Shareholders' equity 101,606 43,274
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Since October 31, 2006, the Company's fiscal year end, cash and cash equivalents increased by $41,076 due to the $28,292 of net proceeds from the sale of common shares in December 2006 and the approximately $13,600 of cash received in January 2007 from Nokia pursuant to the license agreement. Subsequent to the first quarter, an additional approximately $37,750 of cash was received on March 13, 2007 from the sale of common shares.

The $16,726 future tax asset reported at October 31, 2006 was charged to earnings in the first quarter of 2007 as a result of the pre-tax earnings generated by the revenues from Nokia. The year end valuation allowance of $19,975 has not been adjusted.

The carrying value of patents grew to $43,047 at January 31, 2007 due to the acquisition of digital subscriber line ("DSL") patents from Nokia. The Company has already initiated steps to license those patents as part of its overall licensing program.

Management's Comments

"In the first quarter, we focused on continuing to execute our strategy to harvest the value of our patent portfolio and to grow our business through patent acquisitions. This resulted in the most successful quarter in the Company's 14-year history," said Jim Skippen, President and CEO.

"We licensed our wireless patent portfolio in a $49 million deal with Nokia, acquiring valuable DSL patents in the process, and we completed a $30 million round of financing. Not only did the Nokia deal provide high-margin revenue, it further endorsed the credibility and value of Wi-LAN's patents. Since Nokia, a number of other companies have come forward and accelerated the pace of our licensing discussions."

"The additional $40 million raised this week further strengthens our financial position, and gives us greater flexibility to actively pursue patent acquisitions and enter into litigation if that becomes necessary to achieve our licensing objectives," he added.

Operating Expense "Guidance"

It has been Wi-LAN's practice not to provide guidance on the range of expected future revenues and earnings, given the relatively early stage of its development in licensing as well as the difficulty in predicting the timing and value of patent acquisition opportunities and possible future litigation, both of which could require significant investment. In order to assist investors and other interested parties in their understanding of Wi-LAN's performance, management believes that operating expenses for the fiscal year 2007 will likely be in the range of $8.5 -10.5 million, based on current plans and expectations.

Conference Call Information -- March 15, 2007 - 10:00AM EST

Wi-LAN will conduct a conference call to discuss its fiscal year results today at 10:00 AM Eastern Time.

Participants calling from Canada or the US should call toll free: (866) 585-6398

Callers from other international locations should call: (416) 849-9626

Participants are requested to call in 10 minutes before the start of the call.

For those who prefer to join by webcast, visit www.wi-lan.com. The call will be archived there.

Wi-LAN representatives will be:

Jim Skippen, President & CEO and Steve Bower, CFO

A replay of the call will be available until 11:59 PM EST on 3/23/2007:

Replay Number (Toll Free): 866-245-6755

Replay Number (International): 416-915-1035

Passcode: 721476

About Wi-LAN Inc.

Wi-LAN, which was founded in 1992, licenses intellectual property that drives a full range of products providing access in wireless and wireline telecommunications markets. Some of the fundamental technologies covered by Wi-LAN's patents include: CDMA, Wi-Fi, WiMAX and DSL. Wi-LAN has already licensed its intellectual property to a number of major companies, including Cisco, Fujitsu and Nokia.

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 and wireline communications industry and the global economy. These risks and uncertainties include, but are not restricted to: the Company is almost exclusively reliant on additional licensing of its patent portfolio to generate future revenues and cash flows; acquisitions of additional products, technologies or businesses could materially adversely affect the Company; the Company is dependent on the performance of its key officers and employees and the need to attract and retain personnel; the Company may be required to establish the enforceability of the Company's patents in court to obtain material licensing revenues; the Company needs to acquire or develop new patents to continue to grow its business; the Company will need to invest to translate its intellectual property position into sustainable profit in the market; and changes in patent legislation or in the interpretation or application of patent litigation that could materially adversely affect the Company. These risks and uncertainties may cause actual results to differ from information contained herein, when estimates and assumptions have been used to measure and report results. There can be no assurance that such forward-looking statements will prove to be accurate. Actual result 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.

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



Wi-LAN Inc.
Consolidated Statements of Operations and Deficit
(Unaudited)
(in thousands of Canadian dollars, except per share amounts)

Three Months Ended January 31 2007 2006
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Revenues $49,265 $-

Income/(expenses) from the following:
Operating expenses (3,390) (1,551)
Depreciation & amortization (746) (138)
Settlement - 9,635
Gain on sale of property - 1,145
Interest:
Interest income 177 16
Interest expense on long-term debt - (55)
Other interest expense (10) -
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Earnings from continuing operations
before income taxes 45,296 9,052

Provision for income taxes (16,726) -
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Earnings from continuing operations 28,570 9,052
Loss from discontinued operations - (5,662)
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Net earnings 28,570 3,390

Deficit, beginning of period (165,592) (179,701)
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Deficit, end of period $(137,022) $(176,311)
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Earnings/(loss) per share
Continuing operations
Basic $0.45 $0.22
Diluted $0.43 $0.22
Discontinued operations
Basic $- $(0.14)
Diluted $- $(0.14)
Net earnings
Basic $0.45 $0.08
Diluted $0.43 $0.08
Weighted average number of shares
Basic 63,957,925 41,948,829
Diluted 66,718,801 41,948,829
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Wi-LAN Inc.
Consolidated Balance Sheets
(Unaudited)
(in thousands of Canadian dollars)

January 31, 2007 October 31, 2006
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Assets
Current assets:
Cash and cash equivalents $57,756 $16,680
Accounts receivable 2,113 400
Future tax asset - 16,726
Prepaid expenses and deposits 287 387
Assets of discontinued businesses - 621
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Current assets 60,156 34,814

Furniture and equipment, net 193 174
Patents, net 43,047 9,787
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Assets $103,396 $44,775
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $1,790 $814
Liabilities of discontinued businesses - 687
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Current liabilities 1,790 1,501

Shareholders' equity:
Common shares 232,677 202,396
Contributed surplus 5,951 6,470
Deficit (137,022) (165,592)
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Shareholders' equity 101,606 43,274
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Liabilities and Shareholders' Equity $103,396 $44,775
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Wi-LAN Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands of Canadian dollars)

Three Months Ended January 31 2007 2006
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Cash provided by/(used in)
Operations
Earnings from continuing operations $28,570 $9,052
Non-cash items: -
Stock-based compensation 143 50
Depreciation & amortization 746 138
Settlement - (9,635)
Gain on sale of property - (1,145)
Gain on sale of patents - (429)
Patents acquired (34,000) -
Future income tax 16,726 -
Other non-cash items - 211
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12,185 (1,758)

Change in non-cash working capital balances:
Accounts receivable (1,713) 165
Prepaid expenses and deposits 100 59
Accounts payable and accrued liabilities 976 11
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Cash generated from/(used in) continuing operations 11,548 (1,523)
Cash used in discontinued operations (66) (4,818)
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Cash generated from/(used in) operations 11,482 (6,341)
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Financing
Proceeds on sale of common shares, net of share
issuance costs 28,292 -
Share capital issued for cash on the exercise
of options 1,063 -
Share capital issued for cash on the exercise
of warrants 264 -
Cash received from loan payable - 2,000
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Cash generated from continuing operations 29,619 2,000
Cash used in discontinued operations - (14)
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Cash generated from financing 29,619 1,986
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Investing
Purchase of furniture and equipment (25) (1)
Purchase of patents and trademarks - (6)
Restricted cash - (2,000)
Proceeds from settlement, net - 9,635
Proceeds from sale of patents - 1,510
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Cash (used in)/generated from continuing operations (25) 9,138
Cash used in discontinued operations - (99)
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Cash (used in)/generated from investing (25) 9,039
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Net cash and cash equivalents generated
in the period 41,077 4,684
Cash and cash equivalents, beginning of period 16,680 3,690
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Cash and cash equivalents, end of period $57,757 $ 8,374
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Contact Information