WiLAN Reports Fiscal Year 2010 Financial Results

OTTAWA, CANADA--(Marketwire - March 2, 2011) - Wi-LAN Inc. ("WiLAN" or the "Company") (TSX:WIN), a leading technology innovation and licensing company, today announced financial results for the twelve month period ended December 31, 2010.

Financial results for the twelve month period ended December 31, 2010 and dividend amounts are provided in Canadian dollars. With the adoption of International Financial Reporting Standards ("IFRS") by Canadian publicly accountable enterprises, effective for the fiscal year beginning January 1, 2011, WiLAN will change to reporting its financial results in United States dollars. As such, the amounts provided in financial guidance for the fiscal year ending December 31, 2011 are in U.S. dollars.

Fiscal Year 2010 Highlights:

• Revenues of $50.7 million as compared to $35.4 million in the comparable period last year, representing an increase of $15.3 million or 43 percent.

• Adjusted earnings* of $5.0 million or 5 cents per share as compared to adjusted earnings of $2.5 million or 3 cents per share in the comparable period last year.

• Signed licenses with 28 companies bringing the total number of companies licensed to over 240.

• Increased the size of the Company's patent portfolio to over 970 issued and pending patents.

• Returned $4.9 million to shareholders in dividend payments.

• Declared $0.025 per common share dividend for the fourth quarter of 2010.

• Raised gross proceeds of $22.3 million in a bought deal financing.

The Board of Directors has declared an eligible quarterly dividend of $0.025 per common share. This dividend will be paid on April 6, 2011 to shareholders of record on March 15, 2011.

Revenue Review

In the twelve month period ended December 31, 2010, WiLAN generated revenues of $50.7 million as compared to $35.4 million in the fourteen month period ended December 31, 2009. Three licensees each accounted for more than 10% of revenues from royalties for the twelve month period ended December 31, 2010, whereas four licensees each accounted for more than 10% of revenues from royalties for the fourteen month period ended December 31, 2009. For the twelve month period ended December 31, 2010, the top ten licensees accounted for 75% of revenues from royalties, whereas in the fourteen month period ended December 31, 2009 the top ten licensees accounted for 72% of revenues from royalties.

Operating Expense Review

In the twelve month period ended December 31, 2010, patent licensing expenses totaled $5.6 million as compared to $4.1 million in the fourteen month period ended December 31, 2009. During fiscal 2010, WiLAN signed license agreements with 28 companies. Companies that licensed WiLAN's technologies during the year included Proxim Wireless Corporation and Sharp Corporation. In addition, LG Electronics, Inc. and UTStarcom Inc. negotiated settlements to end patent infringement litigation.

Litigation expenses amounted to $29.8 million in the twelve month period ended December 31, 2010 as compared to $21.3 million in the fourteen month period ended December 31, 2009. This increase in expenses is due primarily to the level of activities in the Company's patent enforcement actions in Texas involving U.S. Patent Nos. 5,282,222, RE37802, 5,956,323 and 6,549,759 and preparations for the Company's litigation in New York involving U.S. Patent No. 5,828,402. The Texas patent enforcement actions accounted for approximately 75% and the New York litigation matter accounted for approximately 9% of litigation expenses in the twelve month period ended December 31, 2010.

Research and development expenses in the twelve month period ended December 31, 2010 were $3.8 million as compared to $4.1 million in the fourteen month period ended December 31, 2009.

General and administrative expenses in the twelve month period ended December 31, 2010, totaled $7.2 million as compared to $6.1 million in the fourteen month period ended December 31, 2009. Excluding the effects of foreign exchange gains and losses, general and administrative expense in 2010 was $6.9 million as compared to $7.2 million for the comparable 2009 period.

In the twelve month period ended December 31, 2010, depreciation and amortization expense totaled $21.4 million as compared to $20.3 million in the fourteen month period ended December 31, 2009. This increase in absolute dollars is a result of the acquisitions completed during fiscal 2009.

Investment income for the twelve month period ended December 31, 2010 was $0.7 million as compared to $2.7 million in the fourteen month period ended December 31, 2009. The decline in investment income is attributable to i) a particular corporate initiative the Company undertook to acquire certain marketable securities with an average cost of $1.6 million which were subsequently sold for gross proceeds of approximately $3.0 million resulting in a gain of approximately $1.4 million being realized in the fourteen month period ended December 31, 2009 and ii) the lower overall yields available on the Company's short-term investments.

At December 31, 2010, the Company's net cash, comprised of cash, cash equivalents and short- term investments totaled $109.0 million, representing an increase of $14.2 million from the net cash position at December 31, 2009. During the 2010 fiscal year, WiLAN invested $5.1 million in acquiring patented inventions and a total of $4.9 million in dividend payments. This investment was offset by net proceeds from a bought deal financing totaling $20.9 million. The Company's cash equivalents and short-term investments include T-bills, term deposits, GICs and other marketable securities.

Earnings Review

In the twelve month period ended December 31, 2010, WiLAN generated adjusted earnings of $5.0 million or 5 cents per share as compared to $2.5 million or 3 cents per share in the fourteen month period ended December 31, 2009. The difference in adjusted earnings between the reporting periods is due primarily to the increase in revenue partially offset by an increase in licensing and litigation expenses, and a decrease in investment income.

The Company reported a net loss of $22.1 million or 21 cents per share in the twelve month period ended December 31, 2010, as compared to a net loss of $1.7 million or 2 cents per share in the fourteen month period ended December 31, 2009. The fiscal 2009 results benefited from a one-time tax gain of $19.6 million generated by a corporate restructuring that took place on October 1, 2009, without which the net loss for 2009 would have been $17.9 million.

Subsequent Events

Subsequent to the end of fiscal 2010, the Company signed a number of significant license agreements with major technology corporations and as a result the Company expects revenues to increase and operating expenses to decrease in the current fiscal year.

In February 2011, the Company raised net cash proceeds of approximately $71.3 million through the sale of 11,400,000 common shares by way of short form prospectus. The financing was priced at $6.60 per common share.

Financial Guidance

Revenues for the fiscal year ending December 31, 2011 are expected to be in the range of $110.0 million to $115.0 million. Operating expenses, excluding stock-based compensation, depreciation & amortization and unrealized gains or losses on foreign exchange contracts, all non-cash charges, are expected to be in the range of $33.0 million to $38.0 million. Adjusted Earnings* are expected to be in the range of $75.0 million to $80.0 million.

The above statements are forward-looking and actual results may differ materially. The "Forward- looking Information" section at the end of this news release provides information on various risks and uncertainties that the Company faces. Additional information identifying risks and uncertainties relating to the Company's business are contained under the heading "Risk Factors" in WiLAN's current Annual Information Form and its other filings with the various Canadian securities regulators which are available online at www.sedar.com. Annual financial guidance for fiscal 2011 is provided to assist investors and other interested parties in understanding WiLAN's performance. The reader is cautioned that using this information for any other purpose may be inappropriate.

The Company's revenues result from the licensing of intellectual property which, by its very nature, is directly affected by the timing of the closure of license agreements, the nature and extent of specific licenses including actual rates, product sales by licensees which can be subject to seasonality as well as overall market demands and the timeliness of the receipt of licensee royalty reports. In addition, certain revenues may be of a one-time nature. Thus, quarter-to-quarter fluctuations in revenue are normal and should be expected. Management believes that the strength of its business should be measured by annual revenues.

The above guidance for the twelve month period ended December 31, 2011 reflects our current business indicators and expectations and is subject to fluctuations in foreign currency exchange rates. Due to their nature, certain income and expense items, such as significant settlements from companies involved in current enforcement actions, new significant litigation or defense actions that could arise during the course of the year, losses on asset impairments or realized foreign exchange losses cannot be accurately forecast. Accordingly, we exclude forecasts of such items from our guidance. WiLAN's imperative is to negotiate the best possible license as measured over the long- term and accordingly, the timing of actual license signings may vary from that forecasted. Actual results may vary materially from the guidance provided as a consequence of the above noted factors.

About WiLAN

WiLAN, founded in 1992, is a leading technology innovation and licensing company. WiLAN has licensed its intellectual property to over 240 companies worldwide. Inventions in our portfolio have been licensed by companies that manufacture or sell a wide range of communication and consumer electronics products including 3G cellular handsets, Wi-Fi-enabled laptops, Wi-Fi/DSL routers, xDSL infrastructure equipment, WiMAX base stations and V-Chip-enabled digital television receivers. WiLAN has a large and growing portfolio of more than 1100 issued or pending patents. For more information: www.wilan.com.

Note

* WiLAN follows GAAP in preparing its interim and annual financial statements. The Company has now adopted the term Adjusted Earnings instead of Pro forma Earnings which has been used in previous years, although the Company's definition of Adjusted Earnings remains the same as its definition of Pro forma Earnings, being earnings from continuing operations before stock-based compensation, unrealized gain or loss on foreign exchange contracts, depreciation & amortization, provision for income taxes and certain other one-time charges. Adjusted Earnings is a non-GAAP financial term.

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 reliant on licensees paying royalties under existing licensing agreements and additional licensing of its patent portfolio to generate future revenues and increased 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; fluctuations in foreign exchange rates impact and may continue to impact the Company's revenues and operating expenses, potentially adversely affecting financial results; 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 generation of future V-Chip revenues and the likelihood of the Company signing additional V-Chip licenses could be negatively impacted by changes in government regulation; the Company is dependent on its key officers and employees; the price of the Company's common shares is volatile and subject to market fluctuation; and the Company may be negatively affected by reduced consumer spending due to the uncertainty of economic and geopolitical conditions.

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 WiLAN'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.

Wi-LAN Inc.
Consolidated Statements of Operations and Deficit
(in thousands of Canadian dollars, except per share amounts)
		Twelve months ended December 31, 2010			Fourteen months ended December 31, 2009
Revenues
	Royalties	$	46,895		$	35,425
	Brokerage		3,830			-
		$	50,725		$	35,425
Operating expenses
	Patent licensing		5,606			4,143
	Litigation		29,800			21,275
	Research and development		3,773			4,084
	General and administration		7,195			6,097
	Unrealized foreign exchange gain		-			(26	)
	Stock-based compensation		1,893			3,024
	Depreciation & amortization		21,421			20,310
	Restructuring charges		755			-
	Total operating expenses		70,443			58,907
	Investment income		702			2,710
Loss before income taxes			(19,016	)		(20,772	)
Provision for income tax expense (recovery)
	Current		3,136			2,632
	Future		-			(21,736	)
			3,136			(19,104	)
Net and comprehensive loss			(22,152	)		(1,668	)
Deficit, beginning of period			(4,102	)		(147,161	)
Dividends			(6,193	)		(2,434	)
Reduction of stated capital			-			147,161
Deficit, end of period		$	(32,447	)	$	(4,102	)
Loss per share
	Basic	$	(0.21	)	$	(0.02	)
	Diluted	$	(0.21	)	$	(0.02	)
Weighted average number of common shares
	Basic	103,289,548				97,011,499
	Diluted	103,289,548				97,011,499

Wi-LAN Inc.
Consolidated Balance Sheets
(in thousands of Canadian dollars)
		December 31,			December 31,
As at			2010			2009
Assets
Current assets
	Cash and cash equivalents	$	82,190		$	72,763
	Short-term investments		26,825			22,025
	Accounts receivable		2,226			485
	Prepaid expenses and deposits		212			149
	Assets held for sale		-			2,188
Current assets			111,453			97,610
Furniture and equipment, net			565			703
Patents and other intangibles, net			125,388			141,132
Goodwill			13,449			13,449
Assets		$	250,855		$	252,894
Liabilities and Shareholders' equity
Current liabilities
	Accounts payable and accrued liabilities	$	11,740		$	11,774
Current liabilities			11,740			11,774
Liabilities			11,740			11,774
Shareholders' equity
	Common shares		255,875			228,421
	Contributed surplus		15,687			16,801
	Deficit		(32,447	)		(4,102	)
Shareholders' equity			239,115			241,120
Liabilities and Shareholders' equity		$	250,855		$	252,894

Wi-LAN Inc.
Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
			Twelve months ended December 31, 2010			Fourteen months ended December 31, 2009
Cash generated from (used in)
Operations
Net and comprehensive loss			$	(22,152	)	$	(1,668	)
	Non-cash items
		Stock-based compensation		1,893			3,024
		Depreciation & amortization		21,421			20,310
		Provision for income tax recovery		-			(21,736	)
		Loss on disposal of assets		82			-
				1,244			(70	)
	Change in non-cash working capital balances
		Accounts receivable		(1,741	)		2,956
		Prepaid expenses and deposits		(63	)		(39	)
		Accounts payable and accrued liabilities		5,892			(2,762	)
Cash generated from operations				5,332			85
Financing
	Proceeds on sale of common shares, net			20,938			16,899
	Common shares repurchased in Normal Course Issuer Bid			-			(944	)
	Dividends			(4,886	)		(2,434	)
	Common shares issued for cash on the exercise of options			4,205			712
	Common shares issued for cash from Employee Share Purchase Plan			154			118
Cash generated from financing				20,411			14,351
Investing
	Sale (purchase) of short-term investments			(4,800	)		40,654
	Assets held for sale			2,188			41
	Purchase of furniture and equipment			(445	)		(319	)
	Purchase of patents			(13,259	)		(20,817	)
Cash (used in) generated from investing				(16,316	)		19,559
Net cash and cash equivalents generated in the period				9,427			33,995
Cash and cash equivalents, beginning of period				72,763			38,768
Cash and cash equivalents, end of period			$	82,190		$	72,763