WiLAN Reports 2016 Second Quarter Financial Results

OTTAWA, CANADA -- (Marketwired) -- Jul 28, 2016 -- WiLAN (TSX: WIN)(NASDAQ: WILN) today reported financial results for the three- and six-month periods ended June 30, 2016. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.

Q2 2016 Highlights


--  Revenues of $16.0 million 
--  EBITDA(i) of $7.1 million, or $0.06 per basic share 
--  Cash balance increased to $103.7 million at June 30, 2016 
--  Returned $2.0 million to shareholders in dividend payments and buyback
    purchases 
--  Acquired a patent portfolio from SRI International covering technologies
    used for intelligent personal assistants in handsets and tablets 
--  Acquired patents from Barron Associates related to fitness tracking
    technology used in wearable devices 
--  Entered into partnerships with University of Waterloo and University of
    Saskatchewan 

Year-to-Date 2016 Highlights


--  Revenues of $46.1 million 
--  EBITDA(i) of $27.0 million, or $0.23 per basic share 
--  GAAP net earnings of $1.8 million, or $0.01 per basic share 
--  Returned $5.4 million to shareholders in dividend payments and buyback
    purchases 

"Operational highlights in the quarter centered on the partnerships we signed with two of Canada's top Universities - the University of Waterloo and University of Saskatchewan - and on the patent acquisitions we made," said Jim Skippen, CEO of WiLAN. "The patents acquired from SRI International have a particularly noteworthy background since they were filed in connection with the development of the product that eventually became the SIRI voice-activated assistance program that is used in many Apple products."

Added Skippen, "As evidenced by our results so far in 2016, our financial performance can fluctuate quarter to quarter depending on the size and timing of new licenses. While this is a fact of life for every business in the patent industry, we believe we are firmly on track to continue growing over the long-term. Heading into the second half of 2016, we have 43 partners, 50 patent portfolios and more than 60 ongoing litigations, which collectively form a solid pipeline of license opportunities to drive future results."

Approval of Eligible Dividend

The Board of Directors declared an eligible quarterly dividend of CDN $0.0125 per common share to be paid on October 6, 2016, to shareholders of record on September 16, 2016.

Q2 and Year-to-Date 2016 Revenue Review

In the three month period ended June 30, 2016, WiLAN generated revenues of $16.0 million, compared with $35.0 million in the same period last year. In the six month period ended June 30, 2016, WiLAN generated revenues of $46.1 million, compared with $55.4 million in the same period last year.

The difference in revenue for both periods is primarily attributable to a greater level of fixed payment license agreements signed during the three month period ended June 30, 2015, and in particular, due to a large license agreement signed with Samsung in that period.

Q2 and Year-to-Date 2016 Operating Expense Review

Cost of revenue expenses

In the three month period ended June 30, 2016, cost of revenue totaled $16.1 million compared with $16.1 million in the same period last year. In the six month period ended June 30, 2016, cost of revenue totaled $34.1 million compared with $35.6 million in the same period last year.

The decrease in cost of revenue for the six month period ended June 30, 2016, is primarily attributable to a decrease in litigation expense partially offset by an increase in patent maintenance, prosecution, and evaluation costs, contingent partner payments and legal fees, and amortization expense. In general, patent licensing expenses are proportional to the breadth and depth of our licensing programs and should be expected to increase as we add programs to our business operations.


                            ------------------------------------------------
                            ------------------------------------------------
                                  Three months ended        Six months ended
                                June 30,    June 30,    June 30,    June 30,
                                    2016        2015        2016        2015
                            ------------------------------------------------
                            ------------------------------------------------
                                                                            
Compensation and benefits    $     2,313 $     1,952 $     4,166 $     3,944
Litigation                           596       3,145       1,488       9,385
Patent maintenance,                                                         
 prosecution, and evaluation       2,377       1,352       5,425       2,696
Contingent partner payments                                                 
 and legal fees                      797         121       2,725         776
Amortization of patents            9,850       9,134      19,872      17,979
Stock-based compensation              45         112         135         238
Other                                165         315         324         579
                            ------------------------------------------------
                             $    16,143 $    16,131 $      34,135  $        35,597
                                                        ------------------------------------------------
                                                        ------------------------------------------------

 

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