Patent licencing firm Wi-LAN Inc. (TSX:WIN) foresees lower legal expenses on the back of new licence agreements that generated record profits for the Ottawa company in Q1 2011.
WiLAN CEO Jim Skippen (File photo)
According to WiLAN chief executive Jim Skippen, the pacts came as a result of a flurry of recent lawsuit settlements and will accordingly decrease legal fees in the coming months.
That line item, and a one-time tax gain, both contributed to WiLAN's increased $22.1 million loss in fiscal 2010.
In the first quarter of 2011, litigation expenses were US$11.4 million compared with $3.8 million last year. The increases were due to "extensive pre-trial preparations" ahead of several large lawsuits WiLAN was involved in recently, the firm said.
Recent agreements signed include firms such as Broadcom Corp., Intel Corp., Marvell Technology Group Ltd. and Motorola Mobility Inc.
"I stated many times before, my belief that our past investment in litigation could generate a significant return in the future," Mr. Skippen stated.
"Our record revenues and earnings in the first quarter signal the beginning of that return to WiLAN and its shareholders.”
The company posted record net earnings of US$19.8 million, or 17 cents a share, on record revenues of $26.3 million, awarding shareholders a dividend of CDN$0.025 per common share.
Last year at the same time, WiLAN disclosed net earnings of CDN$1.1 million, or one cent a share, on revenues of $15.9 million. The firm switched to reporting in U.S. dollars in 2011.
The company maintained its fiscal 2011 guidance of revenues between US$110 million to $115 million and earnings between $75 million to $80 million. Operating expenses will be between $33 million to $36 million.