Transcript
Corporate Overview
May 30, 2012
Safe Harbour
Certain statements in this presentation, 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. There can be no assurance that any statements of forward-looking information contained in this document 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.
Unless otherwise noted, all dollar amounts are in United States currency.
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• Leader in IP licensing
• TSX (WIN) and NASDAQ (WILN)
• Corporate headquarters in Ottawa, Canada US headquarters in Miami, Florida
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WiLAN
Monetizing patents is becoming “business as usual”
• Growing awareness of the value of patents
• Companies exploring how to unlock value
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Business Model
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GLADIOS IP
License partner owned patents
CORE
License owned patents
STRATEGIC/LARGE MEDIUM SMALL
WIRELESS ACCESS TV & DIGITAL DISPLAY CLOUD COMPUTING
INTELLECTUAL PROPERTY LICENSING
REVENUE
Business Model
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Licenses owned patents Licenses partner owned patents
Licensing Success
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FY 2011 Settled all major litigations from 2007 to 2010 19 COMPANIES LICENSED
6 Years of Backlog 5 YEARS OF BACKLOG
Licensing Success
COMPANIES LICENSED
AGREEMENTS WORTH 100’s OF MILLIONS
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255 +
Agreement Types
• 80% Fixed Payments
• 20% Running Royalties
Revenue Growth
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ANNUAL REVENUE INCREASE
+ CASH REVENUES
2006 2007 2008 2009 2010 2011 2005
$1.9M $17.5M
$25.9M $30.6M
$49.2M
$105.8M
$0
OVER $100M IN 5 YEARS
+
115% INCREASE
$4.8M $2.5M
($1.4M!)
Positive Earnings
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2004 2005 2006 2007 2008 2009 2010 2011
($5.9M)
($23.9M)
$9M $4.8M
$71.5M
+ Adjusted Earnings are earnings from continuing operations before stock-based compensation expense, depreciation and amortization expense, interest expense, unrealized foreign exchange gains or losses, provision for income taxes and certain other non-cash, one-time, or non-recurring charges
! Continuing operations
Adjusted Earnings+
2011: 5th consecutive cash flow positive year
Strong Balance Sheet
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Net cash* $200M
Long-term debt $0
Deferred tax assets $22M
Annual dividend CDN $0.12
Share buyback (2011 and 2012) + CDN $14.6M
* At December 31, 2011, net of the cash required to retire the debenture in January 2012 + Expenditure in FY 2011 and to date in FY 2012
Q1 2012 Highlights
• Revenue of $24.7M, 14% above guidance
• Adjusted earnings of $15.4M, up 46% year over year
• Quarterly dividend of CDN $0.03 per share
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Q1 2012 Highlights
• Launched litigation against Research in Motion
• Partner, 01Communique, launched litigation against Bomgar Corporation
• Hired Chief Operating Officer, Michael Vladescu
• Established US Headquarters in Miami, Florida
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Q2 Financial Guidance
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Revenue+ $19.7M
Operating Expenses $11M to $13.5M
Adjusted Earnings $6.6M to $9.1M
+ Actual revenues reported may exceed the guidance provided due to the receipt of royalty reports, signing of new license agreements and completion of licensee audits, all after the guidance is provided.
Core Programs
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Large and Growing Patent Portfolio
20 270 300
750 970
3,000+
2006 2007 2008 2009 2010 2011
Number of Patents and Applications
Core Programs
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Cellular infrastructure 70%
Handset 80%
Cloud computing 95%
TV & Display 70%
Wi-Fi, DSL, Bluetooth, other 15%
Global Equipment Market - Percentage Unlicensed
Core Programs
Over $1.5 Trillion
Wi-Fi, DSL, Bluetooth
TV & Display
Handsets
Cellular Infrastructure
Cloud Computing
$80B
$920B
$250B $140B
Unlicensed Global Equipment Market - 5 Years*
* Estimated using market research data from various sources including Display Search, Dell’Oro, Strategy Analytics, IDC, WiLAN
$40B
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License Opportunities
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Prospects Products In Litigation
Cellular infrastructure Yes
Cellular handsets
Yes
Cellular infrastructure Yes
Cellular handsets Yes
Cellular handsets Yes
Cellular handsets Yes
Cellular handsets Yes
Digital televisions Yes
Prospects Products In Litigation
Digital televisions No
Cellular handsets No
Cellular handsets No
Digital televisions No
Digital televisions No
Digital televisions No
Gladios IP
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• Established in 2010 as a subsidiary of WiLAN
• Mandate:
• Form strategic licensing partnerships with large, medium and small IP holders
• Establish customized licensing programs • Generate significant licensing revenues
without necessarily requiring transfer of title on assets
Gladios IP
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REMOTE ACCESS
7 PARTNERSHIPS ADDRESSING LARGE MARKETS
GAMBLING
ANNUAL MARKET
$100B+ INTERNET
ADVERTISING
NETWORKING TECHNOLOGY
ONLINE GAMING
NETWORK ACCESS
Strengthening Our Business
• Reduce agreement term
• US headquarters – Florida
• Continue to invest in R&D
• Divest non-core assets
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World-Class Team
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Michael Vladescu COO
Shaun McEwan CFO
Matt Pasulka VP Patent Litigation
Paul Lerner Senior Legal
Counsel
Dan Henry VP Business Development
Jim Skippen CEO
Education and Designations*
Engineers 32
Masters/PhDs 27
Lawyers 9
MBAs 3
Patent Agents 6
Accountants 2
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Key Litigations
COURT: Texas 3GPP Case
HSPA
Defendants
Technology
2012 2013
Markman – April 2012
Trial – April 2013
Mediation
Key Litigations
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Wi-Fi, CDMA
Defendant
Technology
2012 2013
Markman – February 2013
Trial – August 2013
HTC Case COURT: Texas
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Key Litigations
Wi-Fi, CDMA
2012 2013 2014
Markman – February 2013
Trial – March 2014
COURT: Texas Handset2 Case
Defendant
Technology
COURT: New York
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Key Litigations
V-Chip
2012 2013
Appeal Hearing – Q4 2012 (estimated)
Trial – Q4 2013 (estimated)
Defendant
Technology
LG Case
COURT: Florida
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Key Litigations
Bluetooth, Email/Text Editing
2012 2013
Trial – Q1 2013 (estimated)
RIM Case
Defendant
Technology
Bomgar (01 Communique) Case
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Key Litigations
Remote Access
2012
Trial – August 2012
Defendant
Technology
COURT: Virginia
ANALYSTS TSX: WIN NASD: WILN
Public Market Presence
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Analyst Rating
Byron Capital Markets Buy
Canaccord Genuity Buy
CIBC World Markets Sector Outperform
Craig-Hallum Capital Buy
Davenport & Co. Buy
Fraser Mackenzie Strong Buy
Northland Capital Sector Outperform
Paradigm Capital Buy
Versant Partners Buy
All Recommend “Buy”
Conclusion
• Licensing success has driven strong financial performance
• Beginning to realize business potential
• Robust growth strategy
• Foundation necessary to deliver results
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