Wi-LAN’s (TSX:WIN) recent loss of a lawsuit against Apple “is a tactical setback, not a strategic setback,” according to Jim Skippen, the company’s president and CEO.
© Mark Holleron
Jim Skippen is the CEO of Wi-LAN (file photo).
Mr. Skippen spoke to investors on a conference call Wednesday morning after the Ottawa-based patent-licensing company announced decreased revenues and a slip into the red compared to last year.
“Litigation is unpredictable,” said Mr. Skippen. “Some court rulings will occasionally go against us, regardless of the merits.”
He said the company has plans to seek a new trial or make an appeal.
“Even if we lose a trial the story is almost never over.”
Revenue at the Ottawa-based patent licensing company during the three-month period ending Sept. 30 was down slightly to US$20.7 million from $21.3 million the year before.
The company reported an adjusted loss of $0.3 million. That’s compared to adjusted earnings of $9.3 million for the same period the year before.
The company’s GAAP loss was $6.5 million, which is down from $2.2 million in GAAP earnings a year ago.
The company blamed the loss on an increase in litigation costs.
Those more than doubled during the quarter, increasing from $7.1 million this time last year to $14.4 million.
With the settlement of several other lawsuits, Mr. Skippen said he expects the company’s litigation costs to decline.
“We’ve gotten rid of six defendants and 15 matters,” he said, “so that’s a lot less litigation that’s going on.”
The company expects litigation costs to be between $6.3 million and $8 million during the fourth quarter.
But Mr. Skippen said “things could change very quickly.”
Mr. Skippen also addressed a strategic review the company announced last week, which essentially put the company up for sale.
“In no way do we think our share price fairly values our business,” he said. “The board of directors strongly believes WiLAN has been pursuing the correct business strategy, although it can always be improved and it must evolve as the market changes.”
The strategic review has no time frame and may not end with any transaction, he said.
“Keep in mind that our current business strategy and management team have accomplished many things. These include transforming a bankrupt company with no employees, no revenues, a handful of patents and no cash in the bank into one of the world’s most respected patent licensing companies,” said Mr. Skippen, pointing out that the company has licensed patents to over 275 companies.
WiLAN also announced a dividend of four cents per eligible share, which is to be paid in January to shareholders of record on Dec.13.
The company also said it returned $7.8 million to shareholders during the last quarter, through dividends and share buybacks. "
Despite the loss and the dividend payments, WiLAN still has $142.3 million in cash and cash equivalents and short-term investments.
The company is also forecasting increased revenue during its fourth quarter, estimating revenues of $28.4 million “without any new agreements,” said Shaun McEwan, the company’s CFO.
Shares in the company were down two cents by mid-afternoon on Wednesday, to $3.37 a share.
On Wednesday the company also announced definitive license agreements with HTC and Sierra Wireless.