To celebrate the first day that WiLAN’s common shares traded on NASDAQ, WiLAN’s Chairman & CEO, Jim Skippen, rang the NASDAQ Opening Bell on June 1, 2011. To view images and video of the NASDAQ Opening Bell ceremony, click on the image above.
Investment Summary – High margin business model with large revenue potential promises strong future earnings growth.
Business Overview – Elements of WiLAN's business that should be understood by investors include:
- WiLAN generates revenues from licensing technology intellectual property.
- Inventions in our portfolio are licensed by companies that manufacture or sell a wide range of communication and consumer electronics products including 3G and 4G handsets, Wi-Fi-enabled laptops, Wi-Fi/DSL routers, xDSL infrastructure, cellular base stations, Bluetooth-enabled devices and digital television receivers.
- Over 250 companies, including Cisco, Nokia, Panasonic, Samsung, RIM, Infineon, Fujitsu, Sharp, Sony and Toshiba, have licensed WiLAN technologies.
- The amount paid by a licensee generally depends on the volume of products sold by the licensee and the royalty rate applicable to each product.
- Most license agreements call for the payment of quarterly running royalties which generate long-term recurring revenue. Agreement terms typically vary from 5 - 10 yrs.
- WiLAN provides annual revenue, operating expense and pro forma earnings guidance.
- Revenue guidance considers revenue that is expected to be collected in the fiscal year from both signed agreements and agreements that are expected to be signed during the fiscal year.
- WiLAN will, from time-to-time, use litigation to pursue compensation from companies that profit from the use of our technologies but which refuse to negotiate a reasonable license agreement.
- Investment in a given litigation, which typically spans multiple years, can generate a considerable return, however, as in all litigation there are risks. These risks are described in WiLAN’s current Annual Information Form which is available at www.sedar.com.
- Cash generated by operations typically funds the required investment in litigation.
- WiLAN believes that maintaining a strong balance sheet, is desirable to fund technology acquisitions and as an insurance that WiLAN can defend its rights in court, if necessary.
Investment Highlights
|
Dividend paying growth stock: $0.10 annual eligible dividend.
|
|
|
Solid business growth: Cash revenue increased from $2.1M in FY06 to $50.7M in FY10 (184% CAGR); Over 250 companies licensed.
|
|
|
High margin business model: Low overhead business can enjoy high margins; Operations can generate significant cash flow (FY08: $26.6M in revenue, $12.2M generated by operations).
|
|
|
Significant future revenue potential: Large markets to be licensed; 4 patent families have generated the majority of revenues to date, Over 35 families have recently been added to licensing program.
|
|
|
Valuable and growing patent portfolio: Over 3000 issued and pending patents covering technologies in large markets, portfolio has grown more than 150X since the beginning of FY07.
|
|
|
Robust growth strategy: Examine portfolio to identify new licensing programs; Generate additional revenues through licensing partnerships, acquire patent portfolios with existing revenue streams or ones capable of generating revenue in short-term; Broker non-strategic assets; Research and development supports future licensing programs. |
|
All financial amounts in Canadian dollars, unless otherwise specified.