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Message: Fiscal YE Oct 31-07
| Wi-LAN Reports Fourth Quarter Fiscal Year 2007 Financial Results |
| 10 Jan 2008 08:35 ET MarketwireWi-LAN Inc.January 10, 2008 - 08:35:14 AMWi-LAN Reports Fourth Quarter Fiscal Year 2007 Financial ResultsOTTAWA, CANADA--(Marketwire - Jan. 10, 2008) - Wi-LAN Inc. (TSX:WIN) ("Wi-LAN"or the "Company"), a leading technology innovation and licensing company,today announced financial results for the fourth quarter and fiscal year endedOctober 31, 2007. All financial amounts are expressed in Canadian dollars.Operating & Financial Review(in thousands except per share amounts)-------------------------------------------------------------------------- Three months ended Years ended October October October October 31/07 31/06 31/07 31/06----------------------------------------------------------------------------------------------------------------------------------------------------Revenues $7,169 $12 $61,270 $2,108Pro forma earnings/(loss)(1) 4,865 (912) 53,225 10,684GAAP earnings 1,231 16,295 27,617 14,109Pro forma diluted earnings/(loss)per share $0.05 $- $0.66 $0.22GAAP diluted earnings per share $0.01 $0.27 $0.34 $0.29----------------------------------------------------------------------------------------------------------------------------------------------------Fourth quarter revenues were $7.2 million, which included both cash andin-kind consideration consisting of patents valued at $4.6 million. Managementvalued these patents based in part on a valuation report prepared by a majoraccounting firm. Pro forma earnings amounted to $4.9 million or $0.05 perdiluted share. Operating expenses were $4.2 million, reflecting growth in theCompany's workforce and increased legal expenses. Total expenses were $8.1million, which included $0.8 million of stock-based compensation expense and$3.9 million of depreciation and amortization expense resulting from increasesin Wi-LAN's patent portfolio, both non-cash charges. Interest income amountedto $1.1 million during the quarter. Net earnings on a GAAP basis amounted to$1.2 million or $0.01 per diluted share.Cash payments from a number of license agreements that were signed in thethird and fourth quarters of fiscal 2007, including agreements with FujitsuLimited and a licensee announced in a press release dated June 28, 2007, willbegin in the first quarter of 2008. Accordingly, these payments are notincluded in fourth quarter revenues.In fiscal 2007, Wi-LAN generated revenues of $61.3 million. Pro forma earningsamounted to $53.2 million or $0.66 per diluted share. Operating expensesamounted to $13.4 million. Total expenses were $36.8 million, which included$2.2 million of stock-based compensation expense, $7.8 million of deprecationand amortization expense and a provision for income tax of $15.6 million, allnon-cash charges. Interest income amounted to $3.2 million. Net earnings on aGAAP basis amounted to $27.6 million or $0.34 per diluted share.Financial Position(in thousands of Canadian dollars except shares outstanding)----------------------------------------------------------------------------------------------------------------------------------------------------Fiscal quarter Q4/07 Q3/07 Q2/07 Q1/07 Q4/06As at Oct 31/07 July 31/07 Apr 30/07 Jan 31/07 Oct 31/06--------------------------------------------------------------------------Cash and cash equivalents $91,542 $100,515 $94,967 $57,756 $16,680Future tax asset - - - - 16,726Patents and other intangibles, net 146,955 138,684 42,295 43,047 9,787Goodwill 16,400 17,683 - - -Total assets 262,505 263,574 140,087 103,396 44,775Future income tax liability 24,575 25,721 - - -Total liabilities 29,464 33,384 2,587 1,790 1,501Shareholders' equity $233,041 $230,190 $137,500 $101,606 $43,274Shares outstanding (end of period) 93,470 93,255 75,167 69,038 61,099----------------------------------------------------------------------------------------------------------------------------------------------------In the fourth quarter of fiscal 2007, cash and cash equivalents decreased by$9.0 million to $91.5 million at October 31 2007, due mainly to costsassociated with the purchase of patents.For the fiscal year ending October 31, 2007, Wi-LAN's cash position increasedby a total of $74.9 million, including $66 million from the sale of shares inDecember 2006 and March 2007, $12.2 million generated from continuingoperations, and $5.8 million received upon the acquisition of Tri-Vision. TheCompany's cash equivalents include term deposits, GICs and other similarfinancial instruments. The Company's cash equivalents do not include any AssetBacked Commercial Paper.The Company's patents and other intangibles have grown from a net book valueof $9.8 million at October 31, 2006 to a net book value of $147.0 million atOctober 31, 2007 including V-chip patents and other intangibles acquired inthe purchase of Tri-Vision, patents received in licensing agreements withNokia, Fujitsu and an unnamed licensee valued at $42.1 million as well asother patents acquired during the fiscal year.Results for fiscal year 2006 are generally not comparable to those of fiscal2007, as Wi-LAN was in the process of transforming itself into a licensingbusiness, and discontinuing its products manufacturing and engineeringservices businesses in the 2006 periods.Management Comments"Wi-LAN achieved significant operating and financial accomplishments in fiscalyear 2007," said Jim Skippen, President & CEO. "In the fiscal year wegenerated record revenue and record earnings and acquired Tri-VisionInternational. We signed 20 wireless and V-chip licensing agreements, many ofwhich strengthen our recurring revenue base and demonstrate Wi-LAN's abilityto monetize, through negotiation, our portfolio of patented innovations. Inaddition, we strengthened our team and completed a number of strategic patentacquisitions.""In 2008, we look to build on our accomplishments of 2007. We hope that agrowing momentum for negotiated licenses, particularly in the Wi-Fi, WiMAX andV-chip markets, along with the determined efforts of our licensing teams willgenerate additional license agreements. Building upon Wi-LAN's rich historyof research and development, we hope continuing efforts in this area willresult in important innovations. We are confident that our activities in 2008will enhance long-term shareholder value."Operating Expense "Guidance"It has been Wi-LAN's practice not to provide guidance on the range of expectedfuture revenues and earnings, given the relatively early stage of itsdevelopment in licensing as well as the difficulty in predicting the timingand value of patent acquisition opportunities and possible future litigation,both of which could require significant investment. In order to assistinvestors and other interested parties in their understanding of Wi-LAN'sperformance, management believes that operating expenses for the fiscal year2008 will likely be in the range of $22.0-27.0 million, based on current plansand expectations including staff-related and legal expenses.Conference Call Information - January 10, 2008 - 10 AM ESTWi-LAN will conduct a conference call to discuss its financial results todayat 10:00 AM Eastern Standard Time. Wi-LAN CEO, Jim Skippen and acting CFO,Phil Martin, will be on the call.- Callers from Canada or the United States: 1.866.585.6398 (Toll Free)- Callers from other locations: 1.416.849.9626 (International)- To join by webcast: www.wi-lan.comAbout Wi-LANWi-LAN, founded in 1992, is a leading technology innovation and licensingcompany. Our portfolio of patented inventions applies to a wide range ofelectronics and communications products. Some of the fundamental technologiescovered 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 growingnumber of companies around the world. For more information: www.wi-lan.com.Note(1) Wi-LAN follows Canadian generally accepted accounting principles ("GAAP")in preparing its interim and annual financial statements. To assist readers infurther understanding its operating performance, it is reporting pro formaearnings. Pro forma earnings is a non-GAAP financial term. Pro forma earningsrepresents earnings/(loss) from continuing operations before stock-basedcompensation, depreciation & amortization and provision for income taxes.Forward-looking InformationCertain statements in this release, other than statements of historical fact,may include forward-looking information that involves various risks anduncertainties. These may include, without limitation, statements based oncurrent assumptions and expectations involving a number of risks anduncertainties related to all aspects of the wireless and wirelinecommunications industry and the global economy. These risks and uncertaintiesinclude, but are not restricted to: the almost exclusive reliance of theCompany on licensing its patent portfolio to generate revenues and cash flows;that the Company may be required to establish the enforceability of itspatents in court to obtain material licensing revenues; that the Company willneed to acquire or develop new patents to continue to grow its business; thatthe Company requires investment to translate its intellectual propertyposition into sustainable profit in the market; that the Company is dependenton the performance of its key officers and employees; that changes in patentlegislation or in the interpretation or application of patent litigation couldmaterially adversely affect the Company; and that the Company has and may makeacquisitions of products, technologies or businesses which could materiallyadversely affect the Company. These risks and uncertainties may cause actualresults to differ from information contained herein, when estimates andassumptions have been used to measure and report results. There can be noassurance that such forward-looking statements will prove to be accurate.Actual results and future events could differ materially from thoseanticipated in such statements. These and all subsequent written and oralforward-looking statements are based on the estimates and opinions ofmanagement on the dates they are made and expressly qualified in theirentirety by this notice. The Company assumes no obligation to updateforward-looking statements should circumstances or management's estimates oropinions change.Wi-LAN Inc.Consolidated Statements of Operations and Deficit(in thousands of Canadian dollars, except per share amounts)Years ended October 31 2007 2006----------------------------------------------------------------------------------------------------------------------------------------------Revenues $61,270 $2,108Income/(expenses) from the following Operating expenses Stock-based compensation (2,222) (447) Other operating expenses (11,198) (5,274)----------------------------------------------------------------------- Total operating expenses (13,420) (5,721) Depreciation & amortization (7,766) (676) Settlement - 9,635 Gain on sale of property - 1,145 Gain on debt settlement - 2,919 Other income - 29 Interest Interest income 3,153 219 Interest expense on long-term debt - (97)-----------------------------------------------------------------------Earnings from continuing operations before income taxes 43,237 9,561Provision for income tax recovery/(expense) Current (16,766) - Future 1,146 16,726----------------------------------------------------------------------- (15,620) 16,726-----------------------------------------------------------------------Earnings from continuing operations 27,617 26,287Loss from discontinued operations - (12,178)-----------------------------------------------------------------------Net and comprehensive earnings 27,617 14,109Deficit, beginning of period (165,592) (179,701)-----------------------------------------------------------------------Deficit, end of period $(137,975) $(165,592)----------------------------------------------------------------------------------------------------------------------------------------------Earnings/(loss) per share - basic and diluted Continuing operations Basic $0.36 $0.54 Diluted $0.34 $0.54 Discontinued operations Basic $- $(0.25) Diluted $- $(0.25) Net earnings Basic $0.36 $0.29 Diluted $0.34 $0.29 Weighted average number of shares Basic 77,784,956 48,447,178 Diluted 80,090,229 48,777,982-----------------------------------------------------------------------Wi-LAN Inc.Consolidated Balance Sheets(in thousands of Canadian dollars)As at October 31 2007 2006----------------------------------------------------------------------------------------------------------------------------------------------AssetsCurrent assets Cash and cash equivalents $91,542 $16,680 Accounts receivable 2,916 400 Future tax asset - 16,726 Prepaid expenses and deposits 211 387 Assets held for sale 3,696 - Assets of discontinued businesses - 621-----------------------------------------------------------------------Current assets 98,365 34,814Furniture and equipment, net 785 174Patents and other intangibles, net 146,955 9,787Goodwill 16,400 ------------------------------------------------------------------------Assets $262,505 $44,775----------------------------------------------------------------------------------------------------------------------------------------------Liabilities and Shareholders' EquityCurrent liabilities Accounts payable and accrued liabilities $4,371 $814 Mortgage payable related to assets held for sale 518 - Liabilities of discontinued businesses - 687-----------------------------------------------------------------------Current liabilities 4,889 1,501Future income tax liability 24,575 ------------------------------------------------------------------------Liabilities 29,464 1,501-----------------------------------------------------------------------Shareholders' equity Common shares 362,094 202,396 Contributed surplus 8,922 6,470 Deficit (137,975) (165,592)-----------------------------------------------------------------------Shareholders' equity 233,041 43,274-----------------------------------------------------------------------Liabilities and Shareholders' Equity $262,505 $44,775-----------------------------------------------------------------------Wi-LAN Inc.Consolidated Statements of Cash Flows(in thousands of Canadian dollars)Years ended October 31 2007 2006----------------------------------------------------------------------------------------------------------------------------------------------Cash provided by/(used in)Operations Earnings from continuing operations $27,617 $26,287 Non-cash items License revenue settled by receipt of patents (42,096) - Stock-based compensation 2,222 447 Depreciation & amortization 7,766 676 Non-cash settlement - (9,635) Gain on sale of property - (1,145) Gain on sale of patents - (429) Income taxes 15,580 (16,726) Other non-cash items - (4,403)----------------------------------------------------------------------- 11,089 (4,928) Change in non-cash working capital balances Accounts receivable (1,019) (400) Prepaid expenses and deposits 691 66 Net assets held for sale (162) - Accounts payable and accrued liabilities 1,595 (892)----------------------------------------------------------------------- Cash generated from /(used in) continuing operations 12,194 (6,154) Cash used in discontinued operations (66) (7,800)-----------------------------------------------------------------------Cash generated from /(used in) operations 12,128 (13,954)-----------------------------------------------------------------------Financing Mortgage repayment (37) Proceeds on sale of common shares, net 65,914 14,738 Share capital issued for cash on the exercise of options 1,674 479 Share capital issued for cash on the exercise of warrants 765 233 Loan proceeds - 2,000 Loan repayment - (2,000)----------------------------------------------------------------------- Cash generated from continuing operations 68,316 15,450 Cash used in discontinued operations - (61)-----------------------------------------------------------------------Cash generated from financing 68,316 15,389-----------------------------------------------------------------------Investing Transaction costs incurred on acquisition of Tri-Vision (1,771) - Cash received on acquisition of Tri-Vision 5,782 - Purchase of furniture and equipment (672) (107) Purchase of patents for cash (8,921) (6) Proceeds from settlement, net - 9,635 Proceeds from sale of patents - 1,510----------------------------------------------------------------------- Cash generated from /(used in) continuing operations (5,582) 11,032 Cash generated from discontinued operations - 523-----------------------------------------------------------------------Cash generated from /(used in) investing (5,582) 11,555-----------------------------------------------------------------------Net cash and cash equivalents generated in the period 74,862 12,990Cash and cash equivalents, beginning of period 16,680 3,690-----------------------------------------------------------------------Cash and cash equivalents, end of period $91,542 $16,680----------------------------------------------------------------------- FOR FURTHER INFORMATION PLEASE CONTACT: Wi-LAN Inc. Phil Martin Acting CFO O: 1-613-688-4895 C: 1-613-867-4895pmartin@wi-lan.com Wi-LAN Inc. Tyler Burns Director, Investor Relations & Communications O:1-613-688-4330 C: 1-613-697-0367 tburns@wi-lan.com |
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