Annual and Special Meeting of...
Transcript of Annual and Special Meeting of...
Tuesday, April 23, 2013 – 10:00 AM
Ottawa, Ontario
Annual and Special Meeting of Shareholders
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.
April 23, 20132
Business Environment
Patent Monetization Is Big BusinessNokia Sees Patent Portfolio as Increasing Source of RevenueNokia Sees Patent Portfolio as Increasing Source of Revenue
Samsung to pay Microsoft Royalties for All Android Phones it sells
Samsung to pay Microsoft Royalties for All Android Phones it sells
Microsoft, Facebook Strike$550M Patent Deal
Microsoft, Facebook Strike$550M Patent Deal
* Source: Arora, A, Fosfuri,A, Gambardella, A. 2009. Managing licensing in a market for technology, June 2009,
$200BANNUAL GLOBAL
LICENSING REVENUE *
April 23, 20134
Large Corporations Want To Monetize Patents
April 23, 20135
40%
Large CorporationsSmall Companies, Inventors,
Universities
99%60%
Small Portfolio Owners Want Their Fair Share
April 23, 20136
WiLAN Today
Diversified Business Model
• 3,000+ Patents, 250 Essential• Wireless, Digital TV and Display• Active Technology Research
Core Licensing
• Gladios IP• 12 Partnerships
Partner Licensing
April 23, 20138
Licensing Success
COMPANIES LICENSED
April 23, 20139
Strong Revenues
1 Cash Revenues
2006 2007 2008 2009 2010 2011 2012
1
$30.6M
$49.2M
$105.8M
$25.9M$17.5M
$1.9M
$88MANNUAL REVENUE
2006 to 2012
April 23, 201310
Strong Earnings And Cash Flow
• 6th Year of Positive Cash Flow
• $34M Cash Generated
$88M
FY 2012
Revenue
$41.8M
Adjusted Earnings +
47% of Revenue
April 23, 201311+ Adjusted Earnings are earnings from continuing operations before stock-based compensation expense, depreciation & 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.
Solid Balance Sheet
Cash *$176.9
($1.46/share)Deferred Tax Assets * $20.8M
Long-Term Debt $0
* at December 31, 2012
April 23, 201312
Increasing Dividend
13 April 23, 2013
$0.05 *
$0.10$0.12
$0.14
June2009
March2010
March2012
September2012
$0.16
March2013
ANNUAL ELIGIBLE
IN LESS THAN 4 YEARS
* All annual dividend amounts in Canadian currency
Returning Capital
April 23, 201314
Acquisitions Strengthen Portfolio
150 Patents and Applications40 Patents and Applications
Network Management and Mobile Media
April 23, 201315
Partnerships Gaining Momentum
7
10
12
2011 2012 2013
April 23, 201316
Focused Research
GLOBAL INNOVATOR
IEEE PATENT POWER 2012 RANKING
Source: http://spectrum.ieee.org/at-work/innovation/patent-power-2012
April 23, 201317
World-Class Team
Education and Designations *
Engineers 25
Masters/PhDs 16
Lawyers 10
MBAs 4
Patent Agents 3
Accountants 3
* Indicates number of employees with given education/designation, not number of employees serving in specific role
+ Average number of employees in fiscal 2012: 48
55 Employees
April 23, 201318
2012 Revenue/Employee+: $1.8M+
WiLAN Future
Core Licensing Strategy
April 23, 201320
Build Portfolio
Acquisitions Research
Wireless WirelessDigital TV
and Display
EmergingAreas
Core Licensing Strategy
April 23, 201321
Get the Right Agreement
Royalty Rate
Patents
Products
Term
Core Licensing Strategy
April 23, 201322
If Negotiation Fails, Litigate
Partner Licensing Strategy
23 April 23, 2013
ex·per·tisejudgment, etc. of an expert
PartnerPatentsCash and Expertise
Partner with Patent Owner
Partner Licensing Strategy
24 April 23, 2013
Partner with Law Firm
Large, Untapped Market
Wi-Fi, DSL, Bluetooth
TV andDisplay
Handsets
CellularInfrastructure
Emerging Areas
* Estimated using market research data from various sources including Display Search, Dell’Oro, Strategy Analytics, IDC, WiLAN
Gladios
$80B
$920B
$250B
$140B$40B $100B
April 23, 201325
Increasing Pressure
10 New Litigations
April 23, 201326
INVESTED IN LITIGATION
NovemberOctober
Setting The Stage
July August September
April 23, 201327
3GPP HSPA LTE Wi-Fi, CDMA,LTE, HSPA
Digital TV V-Chip
Bluetooth
Focused Capital Allocation
% of Cash Flow Target (approx.)
Dividend 40
Investment (e.g. patent acquisitions) 40
Share buyback/other 20
April 23, 201328
Conclusion
Value and Growth
April 23, 201329
Tuesday, April 23, 2013 – 10:00 AM
Ottawa, Ontario
Annual and Special Meeting of Shareholders