Annual Needham Growth Conference

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Transcript of Annual Needham Growth Conference

  • 1. 14th Annual Needham Growth ConferenceJanuary 11, 2012Jim Skippen, Chairman & CEO

2. SAFE HARBOURThis presentation may include predictions, estimates or other information relating to Wi-LAN Inc and its affiliates thatmight be considered forward-looking, including statements constituting forward-looking statements or forward-lookinginformation within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other UnitedStates and Canadian laws. These forward-looking statements and forward-looking information are based upon current gg pexpectations and assumptions regarding anticipated developments and other factors affecting Wi-LAN Inc. and itsaffiliates. They are not historical facts, nor are they guarantees of future performance. Because these forward-lookingstatements and forward-looking information involve risks and uncertainties, there are important factors that could causeactual results to differ materially from those expressed or implied by these forward-looking statements and forward-looking information. There can be no assurance that any forward-looking statements and forward-looking informationcontained i thi d t i d in this document will prove t b accurate. A t l results and f t t illto bet Actual lt d future events could diff materially ft ld differ t i ll from ththoseanticipated in such statements.These and all subsequent written and oral statements containing forward-looking statements and forward-lookinginformation are based on the estimates and opinions of management on the dates they are made and expresslyqualified in their entirety by this notice Except as required by applicable laws Wi-LAN Inc. assumes no obligation tonotice. laws, Incupdate forward-looking statements should circumstances or managements estimates or opinions change. Readers arecautioned not to place undue reliance on any statements of forward-looking information that speak only as of the dateof this presentation. Additional information identifying risks and uncertainties relating to Wi-LAN Inc.s business arecontained under the heading Risk Factors in Wi-LAN Inc.s August 3, 2011 Managements Discussion and Analysisand its other filings with the various Canadian securities regulators which are available online at and ggwith the U.S. Securities and Exchange Commission available at Throughout todays presentation, we willattempt to present some important factors relating to our business that may affect our predictions. You should alsoreview our SEDAR and SEC filings for a more complete discussion of our risk factors.Unless otherwise noted, all dollar amounts are in U.S. currency. TSX:WIN / NASD:WILN2 3. PATENTS AS AN ASSET CLASS Growing awareness of the value of patentsJuly 2, 2011, Wall Street Journal August 15, 2011, National Post CCompanies exploring hil i how t unlock valueto l k l July 21, 2011, Wall Street Journal July 19, 2011, Reuters TSX:WIN / NASD:WILN 3 4. ABOUT WiLAN US $730M market capitalization (Jan. 6, 2012) Revenues: licensing large patent portfolio Established business modelAnnual RevenuesQualcomm IBM InterDigital Tessera$4B $2B $300M$300M Rambus Acacia WiLAN RPX$300M $130M$105M* $100M* Fiscal 2011 financial guidance in US$ TSX:WIN / NASD:WILN4 5. WORLD CLASS TEAM LEADERSHIPJim Skippen 25 years licensing, $1B patent licensing CEO Mosaid, Borden Elliot Shaun McEwan 20 years financial and executive leadership CFO Breconridge, CalianPaul Lerner 25 years IP law and licensingSenior Legal Counsel GPC, Black & Decker, ABB Andrew Parolin 17 years engineering, marketing and licensing SVP Licensing SIGE Semiconductor, NortelDaniel Henry 15 years IP business and litigationVP Business Development ICAP Altitude Capital Baker BottsICAP, Capital,Matt Pasulka 14 years corporate and IP law VP Patent Litigation AGA Medical, Sikorsky Aircraft, Martin Marietta Rob Scott 15 years international patent lawVP Patent Administration Registered U.S. Patent Attorney Christian Dubuc 15 years engineering, marketing and licensingVP Licensing Technologies Nortel, Communications Research CentreTSX:WIN / NASD:WILN 5 6. WORLD CLASS TEAM MULTIPLE DISCIPLINESEducation and Designations*Engineers32Masters/PhDs 27Lawyers9MBAs 2Patent Agents6Accountants2 55 employees, highest revenue/employee of any Canadian public high-tech company ($2M+)* Indicates # of employees with given education/designation not # of employees serving in specific role, at October 25, 2011 TSX:WIN / NASD:WILN6 7. GROWING & DIVERSE PATENT PORTFOLIO 3000 TechnologyPatents Patents*Wireless Communication1000+ 970Wireline Communication300+750280300Digital TV & Display1500+ 20Other 20020062007 2008 20092010 2011* Issued and pending patents TSX:WIN / NASD:WILN 7 8. LICENSING EXCELLENCE Over 250 companies licensed Major litigations settled in early 2011 Signed license agreements worth 100s of $M WiLAN h d has demonstrated it can use liti ti t t t d litigation toenforce its rightsTSX:WIN / NASD:WILN8 9. STRONG REVENUE GROWTH30%+Annual Cash Revenue$105M*Growth$ 50.7M$ 35.4M$ 26.6M$19.2 M+ $ 2.1M200620072008200920102011+ Cash revenues* Fiscal 2011 financial guidance in US$ TSX:WIN / NASD:WILN 9 10. POSITIVE EARNINGS Dramatic earnings+ growth in 2011 due to litigation settlements$70M*$9M $4.8M$2.5M$2 5M $5M ($1.4M!)($5.9M)($23.9M) 2004 20052006 2007 2008 20092010 2011! Continuing operations* Fiscal 2011 financial guidance in US$+ Adjusted Earnings are earnings from continuing operations before stock-based compensation expense, depreciation & amortization expense, interest expense, unrealized foreign exchangegains or losses, provision for income taxes and certain other non-cash, one-time, or non-recurring charges. TSX:WIN / NASD:WILN 10 11. STRONG FINANCIAL POSITION Net cash*$ 197 M Long-term debt+ Long term$0 Deferred tax asset $25 MListed on NASDAQ Global Select Market Annual dividendCDN $0.10 All figures in $US unless otherwise indicated* At September 30, 2011+ Excludes net proceeds from convertible debenture scheduled to be repaid 01/31/12 which was listed as long-term debt in Wi-LAN Inc. 2011 Third Quarter Consolidated Financial Results InterimReport TSX:WIN / NASD:WILN11 12. WILAN HAS JUST BEGUN FIVE YEAR STRATEGY Increase revenue to $200M+ Current programs Gladios IP licensing partnerships New programs (acquisitions, R&D)(acquisitionsTSX:WIN / NASD:WILN 12 13. WILAN HAS JUST BEGUN FIVE YEAR STRATEGY Deliver strong earnings while investing in: Enforcement Portfolio growth Operations and team Research and development Licensing programs and capability TSX:WIN / NASD:WILN13 14. REVENUE DRIVERS - CURRENT PROGRAMS Today Future2010 Device Sales:2014 Device Sales:2010 Device Sales:Over $100B (WW)Over $25B (WW)Over $140B (WW)3G2010 Device Sales:2010 Device Sales: Over $26B (NA) Over $100B (WW)Incremental Revenue Opportunity: $700M to $1.3B*Sources: Display Search, DellOro, Strategy Analytics, IDC, WiLAN* Estimate considers unit volumes of infringing products, wholesale value of infringing products, fair royalty rates, remaining patent lives. Not an estimate of potential annual revenues TSX:WIN / NASD:WILN14 15. REVENUE DRIVERS - LICENSE OPPORTUNITIESNew LicensesProducts Renewed/Expanded LicensesProducts Cellular infrastructure Digital televisions g Cellular handsets Cellular handsets Cellular handsets Cellular infrastructure Cellular handsets Cellular handsets Digital televisions Cellular handsets Cellular handsetsDSL infrastructure Digital televisionsTSX:WIN / NASD:WILN 15 16. SIGNIFICANT LITIGATIONSTechnologyDevicesRemainingAgreementsPhase Timeline Defendants / Settlements20112012 2013 2014 -SummaryV-ChipDTVLG Judgment (Expected June 2012)3GPPCellular Alcatel-Lucent, LG DiscoveryBase Ericsson, Sony Ericsson, (April 8, 2013)Stations HTCWi-Fi, CDMA Cellular Apple, InitialHandsets Alcatel-Lucent,Pleadings (March 10, 2014) Dell, HP, HTC, Kyocera, Novatel WirelessWireless, Sierra Wireless TSX:WIN / NASD:WILN 16 17. REVENUE DRIVERS GLADIOS IP WiLAN subsidiary Partnerships to generate additional revenuewith limited risk and investment S partnerships to dateSixRemote Access Internet AdvertisingOn-line Gambling Networking TechnologyOn-line GamingInternet ConnectivityTSX:WIN / NASD:WILN 17 18. NEW PROGRAMS - PATENT ACQUISITIONS Significant financial resources on hand $190M+ Proven ability to acquire undervalued assets DOCSIS patent Bluetooth patentsWireless patentsTSX:WIN / NASD:WILN18 19. PATENT ACQUISITIONS TSX:WIN / NASD:WILN 19 20. RESEARCH AND DEVELOPMENT R&D drives future revenue prospectsand business opportunities Next generation wireless technology Spectrum sensing in Whitespace LTE in picocell networks TSX:WIN / NASD:WILN 20 21. Q3 2011 HIGHLIGHTS Revenue of $27.8M, up 147% year-over-year Adjusted earnings* of $22.8M, compared to $0.9M in Q3 2010 Quarterly dividend of CDN $0.025 per share* Adjusted Earnings are earnings from continuing operations before stock-based compensation expense, depreciation & amortization expense, interest expense, unrealized foreign exchangegains or losses, provision for income taxes and certain other non-cash, one-time, or non-recurring charges. TSX:WIN / NASD:WILN21 22. ANALYST COVERAGEAll analysts have buy recommendationsAnalyst RatingTargetByron Capital Markets Buy CDN$7Canaccord GC d GenuityitBuyBCDN$10Craig-Hallum CapitalBuy$15CIBCSector OutperformCDN$10Davenport & CoBuy$11Fraser MackenzieStrong Buy CDN$14Northland Capital Sector OutperformCDN$11Paradigm CapitalBuyCDN$11Versant PartnersBuy CDN$8.40CDN$8 40TSX:WIN / NASD:WILN22 23. CONCLUSION Significant value generated over last five years Just beginning to realize business potential Five year growth strategy to drive long-termand sustained increase in shareholder valueVALUEGROWTH TSX:WIN / NASD:WILN 23