Friday, January 11, 2008

Wi-LAN, an Ottawa technology licensing company, said yesterday it expects to generate profitable results in the new fiscal year as new patent deals stay ahead of high litigation and other expenses.

However, it said the results will be determined by actual new patent licence deals and it was not making a firm forecast. The company reported a strong increase in revenues in the fourth quarter to $7.17 million compared to just $12,000 a year earlier when a new licensing program was just getting started. Profits fell 92 per cent to $1.23 million because of big initial deals with Nokia a year earlier.

The stock was one of Ottawa's and Canada's hottest early last year as it made several deals to raise cash, buy more patents and increase momentum as a pure-play licensing player in the communication industry. But the stock ran into trouble last summer as nervous investors shied away from promising companies with prospects, but little immediate revenue to show. The stock fell from the $5 range last July to $2.24 prior to the announcement of the results. The stock rose one cent yesterday following release of the results.

The company said it has no plans to start a stock buyback program to boost the stock price, though it has more than $90 million in cash reserves and expects to be profitable this year.

Chief executive officer Jim Skippen said in a statement: "In the fiscal year we generated record revenue and record earnings and acquired Tri-Vision International. We signed 20 wireless and V-chip licensing agreements, many of which strengthen our recurring revenue base and demonstrate Wi-LAN's ability to monetize, through negotiation, our portfolio of patented innovations. In addition, we strengthened our team and completed a number of strategic patent acquisitions.

"In 2008, we look to build on our accomplishments of 2007. We hope that a growing momentum for negotiated licenses, particularly in the Wi-Fi, WiMAX and V-chip markets, along with the determined efforts of our licensing teams will generate additional licence agreements."

More than 60 per cent of the revenues in the latest quarter were generated by the value of patents that Wi-LAN received as payment in licensing deals. Wi-LAN said slightly more than half the direct patent payments of $2.6 million during the quarter came from V-Chip technology that allows parents to manage children's TV viewing.

It said cash payments from more recent licensing agreements announced with Fujitsu and undisclosed customers late last year will start to generate results in the next quarterly results.

Wi-LAN results and share prices soared a year ago on early deals for technology licensing agreements.

© The Ottawa Citizen 2008