Wi-LAN Reports Q1

Wi-LAN announced financial results for the three months ended January 31, 2006

March 1, 2006

2 Min Read

CALGARY, Alberta -- Wi-LAN Inc. (TSX:WIN) today announced financial results for the three months ended January 31, 2006. All financial amounts are expressed in thousands of Canadian dollars, except per share amounts or unless otherwise noted.

FINANCIAL HIGHLIGHTS ($000'S)

Wi-LAN's consolidated revenue for the three months ended January 31, 2006 was $4,460, compared with $5,505 for the three months ended January 31, 2005, and $4,633 for the prior three months ended October 31, 2005.

Intellectual Property (IP) Division revenue was $777 in the 2006 first quarter, compared to $nil of license, technology and engineering services revenue in the first quarter of 2005, and $439 of license, technology and engineering services revenue in the prior three months ended October 31, 2005. As well, in the quarter Wi-LAN received net proceeds of $9,635 pursuant to its settlement agreement with Cisco Systems Inc. announced on December 2, 2005. Wi-LAN has realigned its resources to increase its corporate focus on providing IP products and services to the broadband wireless access industry. Wi-LAN's IP Division is positioned to provide its customers with industry-leading products and services including key WiMAX (IEEE 802.16) physical layer (PHY) and Media Access Control (MAC) core designs and software, semiconductor intellectual property design expertise, reference design kits for WiMAX subscriber and base stations, and access to Wi-LAN's extensive broadband wireless patent portfolio. Target customers for the division include commercial broadband wireless access equipment manufacturers, integrated circuit (IC) manufacturers, and original design manufacturers (ODM's).

Product Division revenue, including broadband wireless and antenna products, was $3,683 for the 2006 first quarter, compared to $5,505 of product revenue in the three months ended January 31, 2005, and $4,494 of product revenue in the prior three months ended October 31, 2005. On February 1, 2006, Wi-LAN announced it would exit its Product Division in an orderly manner. The company is pursuing potential partners interested in purchasing one or more of its commercial broadband wireless access product lines. Wi-LAN expects to ultimately reduce its workforce by approximately 50 positions through this phased action. On February 10, 2006 Wi-LAN announced it has entered into an agreement to sell its TIL-TEK Antenna assets for expected net proceeds of approximately $2 million. Wi-LAN expects to complete both of these actions by April 30, 2006.

Gross profit for the first quarter was $493 or 11.1% of revenue, compared to $2,440 or 44.3% of revenue in the 2005 first quarter, and $36 or 0.7% of revenue in the preceding three months ended October 31, 2005. IP Division gross profit for the first quarter was $749 or 96.4% of revenue. Product Division gross profit (loss) for the first quarter was $(256). Product Division gross profit was impacted negatively in the first quarter by inventory adjustments included in cost of goods sold, as detailed below under net income.

Wi-LAN Inc. (Toronto: WIN) (Nasdaq: WILN)

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