Wi-LAN Inc.
TSX : WIN

Wi-LAN Inc.

March 06, 2008 08:30 ET

Wi-LAN Reports First Quarter 2008 Financial Results

Company delivers revenues of $4.7 million and pro forma earnings of $2.0 million

OTTAWA, CANADA--(Marketwire - March 6, 2008) - Wi-LAN Inc. ("Wi-LAN" or the "Company") (TSX:WIN), a leading technology innovation and licensing company, today announced financial results for the first quarter ended January 31, 2008. All financial amounts are expressed in Canadian dollars.

Revenue for the first quarter of fiscal year 2008 was $4.7 million. Pro forma earnings(i) amounted to $2.0 million or $0.02 per diluted share. Operating expenses in the first quarter were $3.7 million. Total expenses were $8.4 million, which included $0.6 million of stock-based compensation expense and $4.1 million of depreciation and amortization expense resulting from increases in Wi-LAN's patent portfolio, both non-cash charges. Interest income amounted to $1.0 million during the quarter. Net earnings on a GAAP basis amounted to a loss of $1.9 million or $0.02 per diluted share.

In the first quarter of fiscal year 2008, cash and cash equivalents increased by $1.0 million to $92.5 million at January 31, 2008. This positive cash flow results from $2.9 million cash generated from operations offset by the retirement of a $0.5 million mortgage payable and the acquisition of additional patents for $1.4 million. The Company's cash equivalents include term deposits, GICs and other similar financial instruments. The Company's cash equivalents do not include any Asset Backed Commercial Paper.

"Wi-LAN delivered a positive first quarter in fiscal 2008," said Jim Skippen, President & CEO. "In the quarter we generated cash revenues of $4.7 million, managed our expenses, increased our net cash position and signed several licensing deals. In addition, I am hopeful that the determined efforts of our licensing teams during the quarter will generate positive results in the coming months."

First Quarter 2008 Highlights:

- Signed 17 wireless and V-chip license agreements.

- Appointed Shaun McEwan to the position of Chief Financial Officer.

- Announced two US patent infringement lawsuits in the Eastern District of Texas.

Operating Expense Guidance

It is Wi-LAN's practice not to provide guidance on the range of expected future revenues and earnings given the relatively early stage of its licensing programs. 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 2008 will likely be in the range of $19.0 -23.0 million, based on current plans and expectations including staff-related and legal expenses.

Conference Call Information - March 6, 2008 - 10 AM EST

Wi-LAN will conduct a conference call to discuss its financial results today at 10:00 AM Eastern Standard Time. Wi-LAN President & CEO, Jim Skippen and CFO, Shaun McEwan, will be on the call.

- To join by webcast: http://www.vcall.com/IC/CEPage.asp?ID equals 125975

- Callers from Canada or the United States, dial 1.866.585.6398 (Toll Free)

- Callers from other locations, dial 416.849.9626 (International)

About Wi-LAN

Wi-LAN, founded in 1992, is a leading technology innovation and licensing company. Our portfolio of patented inventions applies to a wide range of electronics and communications products. Some of the fundamental technologies covered by Wi-LAN's patents include: CDMA, DOCSIS, DSL, GSM/EDGE, V-chip, Wi-Fi and WiMAX. Wi-LAN has licensed its intellectual property to a growing number of companies around the world. For more information: www.wi-lan.com

Note

(i) Wi-LAN follows Canadian generally accepted accounting principles ("GAAP") in preparing its interim and annual financial statements. To assist readers in further understanding its operating performance, it is reporting pro forma earnings. Pro forma earnings is a non-GAAP financial term. Pro forma earnings represents earnings/(loss) from continuing operations before stock-based compensation, depreciation & amortization and provision for income taxes.

Forward-looking Information

Certain statements in this release, other than statements of historical fact, may include forward-looking information that involves various risks and uncertainties that face the Company; such statements may contain such words as "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions, and may be based on management's current assumptions and expectations related to all aspects of the wireless and wireline telecommunications industries and the global economy. Risks and uncertainties that may face the Company include, but are not restricted to: licensing of the Company's patents can take an extremely long time and may be subject to variable cycles; the Company is currently almost exclusively reliant on additional licensing of its patent portfolio to generate future revenues and cash flows; the Company may be required to establish the enforceability of its patents in court in order to obtain material licensing revenues; changes in patent laws or in the interpretation or application of patent laws could materially adversely affect the Company; a court may determine that certain of the Company's patents are not infringed by certain standards or products or may disagree with management with respect to whether one or more of the Company's patents apply to certain standards or products, which could adversely affect the Company; the Company will need to acquire or develop new patents to continue and grow its business; the Company has made and may make acquisitions of technologies or businesses which could materially adversely affect the Company; the Company may require investment to translate its intellectual property position into sustainable profit in the market; the viability of the Company's V-chip technology may be subject to continued government support; the Company is dependent on its key officers and employees; and the price of the Company's common shares is volatile and subject to market fluctuation.
These risks and uncertainties may cause actual results to differ from information contained in this release, when estimates and assumptions have been used to measure and report results. There can be no assurance that any statements of forward-looking information contained in this release will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral statements containing forward-looking information are based on the estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. Except as required by applicable laws, the Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change. Readers are cautioned not to place undue reliance on any statements of forward looking information that speak only as of the date of this release. Additional information identifying risks and uncertainties relating to the Company's business are contained under the heading "Risk Factors" in Wi-LAN's current Annual Information Form and its other filings with the various Canadian securities regulators which are available online at www.sedar.com.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States.

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



Consolidated Statements of Operations and Deficit
(Unaudited)
(in thousands of Canadian dollars, except per share amounts)

Three months ended January 31 2008 2007
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Revenues $4,741 $49,265
Income/(expenses) from the following
Operating expenses
Stock-based compensation (567) (143)
Other operating expenses (3,725) (3,247)
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Total operating expenses (4,292) (3,390)
Depreciation & amortization (4,143) (746)
Interest income, net 991 167
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Earnings/(loss) before income taxes (2,703) 45,296

Provision for income tax recovery/(expense)
Current (358) -
Future 1,146 (16,726)
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788 (16,726)
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Net and comprehensive earnings/(loss) (1,915) 28,570

Deficit, beginning of period (137,975) (165,592)
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Deficit, end of period $(139,890) $(137,022)
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Earnings/(loss) per share basic and diluted
Basic $(0.02) $0.45
Diluted $(0.02) $0.43

Weighted average number of common shares
Basic 93,470,768 63,957,925
Diluted 93,470,768 66,718,801
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Consolidated Balance Sheets
(Unaudited)
(in thousands of Canadian dollars)

January 31, 2008 October 31, 2007
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Assets
Current assets
Cash and cash equivalents $92,467 $91,542
Accounts receivable 2,187 2,916
Prepaid expenses and deposits 160 211
Assets held for sale 2,228 3,696
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Current assets 97,042 98,365

Furniture and equipment, net 814 785
Patents and other intangibles, net 144,227 146,955
Goodwill 16,400 16,400
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Assets $258,483 $262,505
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Liabilities and Shareholders' equity
Current liabilities
Accounts payable and accrued liabilities $3,358 $4,371
Mortgage payable related to assets
held for sale - 518
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Current liabilities 3,358 4,889

Future income tax liability 23,429 24,575
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Liabilities 26,787 29,464
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Shareholders' equity
Common shares 362,097 362,094
Contributed surplus 9,489 8,922
Deficit (139,890) (137,975)
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Shareholders' equity 231,696 233,041
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Liabilities and Shareholders' equity $258,483 $262,505
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Consolidated Statements of Cash Flows
(Unaudited)
(in thousands of Canadian dollars)

Three months ended January 31 2008 2007
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Cash provided by/(used in)

Operations
Net earnings/(loss) $(1,915) $28,570
Non-cash items
License revenue settled by
receipt of patents - (34,000)
Stock-based compensation 567 143
Depreciation & amortization 4,143 746
Income taxes (1,146) 16,726
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1,649 12,185
Change in non-cash working capital balances
Accounts receivable 729 (1,713)
Prepaid expenses and deposits 51 100
Net assets held for sale 1,468 -
Accounts payable and accrued liabilities (1,013) 976
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Cash generated from continuing operations 2,884 11,548
Cash used in discontinued operations - (66)
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Cash generated from operations 2,884 11,482
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Financing
Mortgage repayment (518) -
Proceeds on sale of com m on shares, net - 28,292
Share capital issued for cash on the
exercise of options 3 1,063
Share capital issued for cash on the
exercise of warrants - 264
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Cash generated from /(used in) financing (515) 29,619
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Investing
Purchase of furniture and equipment (81) (25)
Purchase of patents for cash (1,363) -
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Cash used in investing (1,444) (25)
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Net cash and cash equivalents generated in
the period 925 41,076
Cash and cash equivalents, beginning of
period 91,542 16,680
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Cash and cash equivalents, end of period $92,467 $57,756
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Contact Information

  • Wi-LAN Inc.
    Shaun McEwan
    CFO
    613-688-4898
    613-697-7159 (Cell)
    smcewan@wi-lan.com
    or
    Wi-LAN Inc.
    Tyler Burns
    Director, Investor Relations & Communications
    613-688-4330
    613-697-0367 (Cell)
    tburns@wi-lan.com