Adjusted EBITDA of $12.5 million driven by strong revenue growth and
lower cost base
KITCHENER, ON, May 9, 2019 /PRNewswire/ - Quarterhill Inc.
("Quarterhill" or the "Company") (TSX: QTRH) (NASDAQ: QTRH),
announces its financial results for the three-month period ended
March 31, 2019. All financial
information in this press release is reported in U.S. dollars,
unless otherwise indicated.
First Quarter 2019 Highlights
- Revenues of $39.8 million, which
is above the estimated range of $33.0-$36.0 million
provided previously
- Recurring revenues of $5.6
million
- Adjusted EBITDA* of $12.5
million
- Net income of $29,000, or
$0.00 per basic and diluted common
share
- Cash and equivalents were $53.8
million at March 31, 2019.
Cash and equivalents declined in Q1 2019 due to working capital
adjustments which saw accounts receivable increase $27.1 million. The majority of that increase was
collected post quarter-end
- WiLAN, along with several of its wholly‑owned subsidiaries,
entered into a comprehensive semiconductor license agreement with
SK hynix Inc.
- Subsequent to quarter-end, John
Gillberry named Chairperson of the Board and James Skippen named Vice-Chairperson of the
Board
- Subsequent to quarter-end, WiLAN's wholly-owned subsidiary,
Polaris Innovations Limited ("Polaris"), granted a term license for
certain memory interface technology patents owned by Polaris to
NVIDIA Corporation
"Q1 was a strong start to the year in which we continued our
momentum from Q4 and delivered significant revenue and Adjusted
EBITDA growth both year-over-year and sequentially," said
Doug Parker, President and CEO,
Quarterhill. "With WiLAN, our licensing business, we had the type
of quarter that illustrates the positive aspects of its revenue
variability, as that business generated almost $15.0 million in Adjusted EBITDA and accordingly
a significant amount of cash flow that can be used to support our
M&A strategy. The recent license announcement with NVIDIA
reflects that WiLAN's momentum has continued into Q2 and on the
expense side we are already benefitting from the lower cost base
established through the 2018 restructuring."
"Regarding our M&A activities, while it is still somewhat of
a seller's market, we are experiencing good activity with deal flow
and continue to make progress moving a number of opportunities
through our pipeline and diligence process. With a focus on
expanding our overall M&A coverage in general, we are seeing
good opportunities to add stand-alone businesses to the portfolio
and are also seeing promising tuck-in opportunities for IRD and
VIZIYA in their existing markets and adjacencies. Those
businesses continue to perform well, and we believe that an
appropriate tuck-in could help to further accelerate their growth
prospects."
Approval of Eligible Dividend
The Board of Directors
has declared an eligible quarterly dividend of CDN $0.0125 per common share payable on July 5, 2019, to shareholders of record on
June 14, 2019.
Business Strategy and Segments
Quarterhill's
acquisition strategy focuses primarily on financial metrics while
remaining cognizant of broader technology and market trends as it
builds a portfolio of businesses that are characterized as having
recurring revenue, free cash flow and profitable growth potential.
Driven by the execution of a proven and disciplined acquisition
strategy, the Company seeks to enable shareholders to benefit from
consolidation and convergence trends in today's technology
industry. As of March 31, 2019,
Quarterhill had investments in three segments: Licensing (Wi-LAN
Inc. or "WiLAN"); Intelligent Systems (International Road Dynamics
Inc. or "IRD"); and Enterprise Software (VIZIYA Corp. or
"VIZIYA").
Q1 2019 Consolidated Financial Review
Consolidated
revenues for the three months ended March
31, 2019 ("Q1 2019") were $39.8
million, up 232% compared to $12.0
million in Q1 2018. WiLAN's Q1 2019 revenue was $28.1 million compared to $1.8 million in Q1 2018 and was the primary
driver of the year-over-year increase. Combined, IRD and VIZIYA
grew revenue organically year-over-year by 14% to $11.7 million. Recurring revenue was $5.6 million in Q1 2019 compared to $4.2 million in Q1 2018.
Gross margin for Q1 2019 was $20.0
million, or 50%, compared to $0.3
million, or 2%, in Q1 2018. Gross margin comparisons reflect
the quarterly revenue variability in the WiLAN business and its
strong performance in Q1 2019. Gross margin percentage for both IRD
and VIZIYA in Q1 2019 was 40% compared to 43% in Q1 2018. That
year-over-year change was due primarily to lower revenue at VIZIYA,
offset in part by higher revenue and margin at IRD, which was due,
in part, to the 2018 restructuring at IRD.
Operating expenses include selling, general and administrative
costs, research and development costs, depreciation and
amortization of intangible assets and special charges. Operating
expenses for Q1 2019 were $14.7
million, compared to $15.1
million in Q1 2018. Operating expenses in Q1 2019 included a
one-time $1.3 million charge related
to the restructuring at WiLAN that took place in December 2018. Excluding that one-time amount,
operating expenses decreased year-over-year by $1.7 million, even with the significant
year-over-year increase in revenue. This was due primarily to the
restructurings in 2018 at WiLAN and IRD.
Adjusted EBITDA for Q1 2019 was $12.5
million compared to ($7.3)
million in Q1 2018. The increase in adjusted EBITDA reflects
the strong quarter at WiLAN, higher revenue at IRD and the
restructurings in 2018 at WiLAN and IRD.
Net income for Q1 2019 was $29,000, or $0.00
per basic and diluted common share, compared to net loss of
$12.0 million, or ($0.10) per basic and diluted common share, in Q1
2018. The year-over-year improvement was due primarily to
significant revenue growth at WiLAN, higher revenue at IRD and the
restructurings in 2018 at WiLAN and IRD, offset in part by lower
revenue at VIZIYA.
Cash used in operations for Q1 2019 was $12.3 million, compared to $6.5 million of cash used in operations in Q1
2018. Cash used in operations in Q1 2019 was impacted by the timing
of collections and working capital adjustments. Accounts receivable
increased by $27.1 million in Q1 2019
from December 31, 2018, which
reflected the strong revenue performance at WiLAN. A majority of
these receivables were collected subsequent to quarter-end, which
will be reflected in Quarterhill's Q2 2019 financial
statements.
Cash and cash equivalents and short-term investments amounted to
$53.8 million at March 31, 2019, compared to $67.3 million at December
31, 2018. A significant portion of the Company's accounts
receivable balance was collected subsequent to
quarter-end.
The table below highlights financial performance for the
Company's Licensing, Intelligent Systems and Enterprise Software
segments. For detailed results and discussion related to these
segments, please refer to the Management's Discussion and Analysis
document, which will be filed on SEDAR and at www.quarterhill.com
in the investor section.
|
For the Three months
ended March 31, 2019
|
|
|
Licensing
|
|
|
Intelligent
Systems
|
|
|
Enterprise
Software
|
|
|
Corporate
|
|
|
Total
|
|
Revenues
|
$
|
28,125
|
|
|
$
|
9,338
|
|
|
$
|
2,375
|
|
|
$
|
-
|
|
|
$
|
39,838
|
|
Cost of revenues
(excluding depreciation and amortization)
|
|
12,789
|
|
|
|
6,697
|
|
|
|
307
|
|
|
|
-
|
|
|
|
19,793
|
|
|
|
15,336
|
|
|
|
2,641
|
|
|
|
2,068
|
|
|
|
-
|
|
|
|
20,045
|
|
Selling, general and
administrative expenses
|
|
560
|
|
|
|
2,506
|
|
|
|
1,574
|
|
|
|
1,947
|
|
|
|
6,587
|
|
Research and
development expenses
|
|
-
|
|
|
|
591
|
|
|
|
588
|
|
|
|
-
|
|
|
|
1,179
|
|
Depreciation of
property, plant and equipment
|
|
41
|
|
|
|
302
|
|
|
|
31
|
|
|
|
4
|
|
|
|
378
|
|
Amortization of
intangibles
|
|
3,528
|
|
|
|
946
|
|
|
|
757
|
|
|
|
-
|
|
|
|
5,231
|
|
Special
charges
|
|
1,297
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,297
|
|
Results from
operations
|
|
9,910
|
|
|
|
(1,704)
|
|
|
|
(882)
|
|
|
|
(1,951)
|
|
|
|
5,373
|
|
Finance
income
|
|
(18)
|
|
|
|
(2)
|
|
|
|
-
|
|
|
|
(182)
|
|
|
|
(202)
|
|
Finance
expense
|
|
-
|
|
|
|
43
|
|
|
|
1
|
|
|
|
-
|
|
|
|
44
|
|
Foreign exchange loss
(gain)
|
|
(192)
|
|
|
|
192
|
|
|
|
33
|
|
|
|
209
|
|
|
|
242
|
|
Other
income
|
|
-
|
|
|
|
(74)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(74)
|
|
Income (loss) before
taxes
|
|
10,120
|
|
|
|
(1,863)
|
|
|
|
(916)
|
|
|
|
(1,978)
|
|
|
|
5,363
|
|
Current income tax
expense
|
|
3,907
|
|
|
|
134
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,041
|
|
Deferred income tax
expense (recovery)
|
|
1,948
|
|
|
|
(595)
|
|
|
|
(328)
|
|
|
|
268
|
|
|
|
1,293
|
|
Income tax expense
(recovery)
|
|
5,855
|
|
|
|
(461)
|
|
|
|
(328)
|
|
|
|
268
|
|
|
|
5,334
|
|
Net income
(loss)
|
$
|
4,265
|
|
|
$
|
(1,402)
|
|
|
$
|
(588)
|
|
|
$
|
(2,246)
|
|
|
$
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
14,755
|
|
|
|
(426)
|
|
|
|
(80)
|
|
|
|
(1,789)
|
|
|
|
12,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other reconciling
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
(21)
|
|
|
|
30
|
|
|
|
14
|
|
|
|
158
|
|
|
|
181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three months
ended March 31, 2018
|
|
|
Licensing
|
|
|
Intelligent
Systems
|
|
|
Enterprise
Software
|
|
|
Corporate
|
|
|
Total
|
|
Revenues
|
$
|
1,767
|
|
|
$
|
7,412
|
|
|
$
|
2,830
|
|
|
$
|
-
|
|
|
$
|
12,009
|
|
Cost of revenues
(excluding depreciation and amortization)
|
|
5,905
|
|
|
|
5,498
|
|
|
|
331
|
|
|
|
-
|
|
|
|
11,734
|
|
|
|
(4,138)
|
|
|
|
1,914
|
|
|
|
2,499
|
|
|
|
-
|
|
|
|
275
|
|
Selling, general and
administrative expenses
|
|
631
|
|
|
|
2,573
|
|
|
|
1,569
|
|
|
|
2,280
|
|
|
|
7,053
|
|
Research and
development expenses
|
|
-
|
|
|
|
549
|
|
|
|
390
|
|
|
|
-
|
|
|
|
939
|
|
Depreciation of
property, plant and equipment
|
|
75
|
|
|
|
290
|
|
|
|
29
|
|
|
|
1
|
|
|
|
395
|
|
Amortization of
intangibles
|
|
5,002
|
|
|
|
992
|
|
|
|
757
|
|
|
|
-
|
|
|
|
6,751
|
|
Results from
operations
|
|
(9,846)
|
|
|
|
(2,490)
|
|
|
|
(246)
|
|
|
|
(2,281)
|
|
|
|
(14,863)
|
|
Finance
income
|
|
-
|
|
|
|
(1)
|
|
|
|
-
|
|
|
|
(190)
|
|
|
|
(191)
|
|
Finance
expense
|
|
-
|
|
|
|
36
|
|
|
|
3
|
|
|
|
-
|
|
|
|
39
|
|
Foreign exchange loss
(gain)
|
|
300
|
|
|
|
(148)
|
|
|
|
(9)
|
|
|
|
(273)
|
|
|
|
(130)
|
|
Other
income
|
|
-
|
|
|
|
(250)
|
|
|
|
(77)
|
|
|
|
-
|
|
|
|
(327)
|
|
Loss before
taxes
|
|
(10,146)
|
|
|
|
(2,127)
|
|
|
|
(163)
|
|
|
|
(1,818)
|
|
|
|
(14,254)
|
|
Current income tax
expense (recovery)
|
|
104
|
|
|
|
9
|
|
|
|
(434)
|
|
|
|
-
|
|
|
|
(321)
|
|
Deferred income tax
expense (recovery)
|
|
(1,403)
|
|
|
|
(568)
|
|
|
|
(238)
|
|
|
|
321
|
|
|
|
(1,888)
|
|
Income tax expense
(recovery)
|
|
(1,299)
|
|
|
|
(559)
|
|
|
|
(672)
|
|
|
|
321
|
|
|
|
(2,209)
|
|
Net income
(loss)
|
$
|
(8,847)
|
|
|
$
|
(1,568)
|
|
|
$
|
509
|
|
|
$
|
(2,139)
|
|
|
$
|
(12,045)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
(4,763)
|
|
|
|
(1,037)
|
|
|
|
667
|
|
|
|
(2,204)
|
|
|
|
(7,337)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other reconciling
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of deleted
deferred revenue
|
|
-
|
|
|
|
97
|
|
|
|
127
|
|
|
|
-
|
|
|
|
224
|
|
Stock-based
compensation
|
|
6
|
|
|
|
74
|
|
|
|
-
|
|
|
|
76
|
|
|
|
156
|
|
Conference Call and Webcast
Quarterhill will host a
conference call to discuss its financial results today at
10:00 AM Eastern Time.
Webcast Information
The live audio webcast will be
available
at: https://event.on24.com/wcc/r/1987812/73FBBC42A1F9A206D58155EE2E34819D
Dial-in Information
- To access the call from Canada
and U.S., dial 1.888.231.8191 (Toll Free)
- To access the call from other locations,
dial 1.647.427.7450 (International)
Replay Information
Webcast replay will be available for 90 days
at: https://event.on24.com/wcc/r/1987812/73FBBC42A1F9A206D58155EE2E34819D
Telephone replay will be available from 1:00 p.m. Eastern Time on May 9, 2019 until 11:59
p.m. Eastern Time on May 16,
2019 at: 1.855.859.2056 (Toll Free) or 1.416.849.0833
(International). The telephone replay requires the passcode
5782399.
Non-GAAP Disclosure*
Quarterhill follows U.S. GAAP in
preparing its interim and annual financial statements. We use the
term "Adjusted EBITDA" to mean net income (loss) from continuing
operations before: (i) income taxes; (ii) finance expense or
income; (iii) amortization and impairment of intangibles; (iv)
special charges and other one-time items; (v) depreciation of
property, plant and equipment; (vi) effects of deleted deferred
revenue; (vii) the effects of fair value step up in inventory
acquired; (viii) stock based compensation; (ix) foreign exchange
(gain) loss; and * equity in income and dividends from joint
ventures. Adjusted EBITDA is used by Quarterhill management to
assess our normalized cash generated on a consolidated basis and in
our operating segments. Adjusted EBITDA is also a performance
measure that may be used by investors to analyze the cash generated
by Quarterhill and our operating segments. ADJUSTED EBITDA IS NOT A
MEASURE OF FINANCIAL PERFORMANCE UNDER U.S. GAAP. IT DOES NOT HAVE
ANY STANDARDIZED MEANING PRESCRIBED BY U.S. GAAP AND IS THEREFORE
UNLIKELY TO BE COMPARABLE TO SIMILARLY TITLED MEASURES USED BY
OTHER COMPANIES. ADJUSTED EBITDA SHOULD NOT BE INTERPRETED AS AN
ALTERNATIVE TO NET INCOME AND CASH FLOWS FROM OPERATIONS AS
DETERMINED IN ACCORDANCE WITH U.S. GAAP OR AS A MEASURE OF
LIQUIDITY.
About Quarterhill
Quarterhill is focused on the
disciplined acquisition, management and growth of companies in
dedicated technology areas including, vertical market software and
solutions, intelligent industrial systems, and innovation and
licensing. Quarterhill's emphasis is on seeking out acquisition
opportunities at reasonable valuations that provide a foundation
for recurring revenues, predictable cash flows and margins,
profitable growth, intimate customer relationships and dedicated
management teams. Quarterhill is listed on the TSX and NASDAQ
under the symbol QTRH. For more information:
www.quarterhill.com.
Forward-looking Information
This news release contains
forward-looking statements and forward-looking information within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995 and other United States and
Canadian securities laws. Forward-looking statements and
forward-looking information are based on estimates and assumptions
made by Quarterhill in light of its experience and its perception
of historical trends, current conditions, expected future
developments and the expected effects of new business strategies,
as well as other factors that Quarterhill believes are appropriate
in the circumstances. Many factors could cause Quarterhill's actual
performance or achievements to differ materially from those
expressed or implied by the forward-looking statements or
forward-looking information. Such factors include, without
limitation, the risks described in Quarterhill's February 28, 2019 annual information form for the
year ended December 31, 2018 (the
"AIF"). Copies of the AIF may be obtained at www.sedar.com and as
part of Quarterhill's Form 40-F for the year ended December 31, 2018 filed with the U.S. Securities
and Exchange Commission and available at www.sec.com. Quarterhill
recommends that readers review and consider all of these risk
factors and notes that readers should not place undue reliance on
any of Quarterhill's forward-looking statements. Quarterhill has no
intention, and undertakes no obligation, to update or revise any
forward-looking statements or forward-looking information, whether
as a result of new information, future events or otherwise, except
as required by law.
All trademarks and brands mentioned in this release are the
property of their respective owners.
Quarterhill
Inc.
|
|
Condensed
Consolidated Interim Statements of Operations
|
|
(Unaudited)
|
|
(in thousands of
United States dollars, except share and per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
2019
|
|
|
2018
|
|
Revenues
|
$
|
39,838
|
|
|
$
|
12,009
|
|
Cost of revenues
(excluding depreciation and amortization)
|
|
19,793
|
|
|
|
11,734
|
|
|
|
20,045
|
|
|
|
275
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
6,587
|
|
|
|
7,053
|
|
Research and
development expenses
|
|
1,179
|
|
|
|
939
|
|
Depreciation of
property, plant and equipment
|
|
378
|
|
|
|
395
|
|
Amortization of
intangibles
|
|
5,231
|
|
|
|
6,751
|
|
Special
charges
|
|
1,297
|
|
|
|
-
|
|
|
|
14,672
|
|
|
|
15,138
|
|
Results from
operations
|
|
5,373
|
|
|
|
(14,863)
|
|
|
|
|
|
|
|
|
|
Finance
income
|
|
(202)
|
|
|
|
(191)
|
|
Finance
expense
|
|
44
|
|
|
|
39
|
|
Foreign exchange loss
(gain)
|
|
242
|
|
|
|
(130)
|
|
Other
income
|
|
(74)
|
|
|
|
(327)
|
|
Income (loss) before
taxes
|
|
5,363
|
|
|
|
(14,254)
|
|
|
|
|
|
|
|
|
|
Current income tax
expense (recovery)
|
|
4,041
|
|
|
|
(321)
|
|
Deferred income tax
expense (recovery)
|
|
1,293
|
|
|
|
(1,888)
|
|
Income tax expense
(recovery)
|
|
5,334
|
|
|
|
(2,209)
|
|
Net income
(loss)
|
$
|
29
|
|
|
$
|
(12,045)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share
|
|
|
|
|
|
|
|
Basic and fully
diluted
|
$
|
0.00
|
|
|
$
|
(0.10)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares
|
|
|
|
|
|
|
|
Basic
|
|
118,817,466
|
|
|
|
118,658,249
|
|
Fully
diluted
|
|
118,817,466
|
|
|
|
118,658,249
|
|
Quarterhill
Inc.
|
|
Supplemental
Condensed Consolidated Interim Statements of Operations
Information
|
|
(Unaudited)
|
|
(in thousands of
United States dollars)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
2019
|
|
|
2018
|
|
Revenues
|
|
|
|
|
|
|
|
License
|
$
|
27,980
|
|
|
$
|
2,493
|
|
Systems
|
|
5,602
|
|
|
|
4,693
|
|
Services
|
|
646
|
|
|
|
653
|
|
Recurring
|
|
5,610
|
|
|
|
4,170
|
|
Total
revenues
|
$
|
39,838
|
|
|
$
|
12,009
|
|
|
|
|
|
|
|
|
|
Cost of revenues
(excluding depreciation and amortization)
|
|
|
|
|
|
|
|
License
|
$
|
12,806
|
|
|
$
|
5,931
|
|
Systems
|
|
3,793
|
|
|
|
3,466
|
|
Services
|
|
290
|
|
|
|
305
|
|
Recurring
|
|
2,904
|
|
|
|
2,032
|
|
Total cost of
revenues
|
$
|
19,793
|
|
|
$
|
11,734
|
|
|
|
|
|
|
|
|
|
Quarterhill
Inc.
|
|
Condensed
Consolidated Interim Statements of Comprehensive Income
(Loss)
|
|
(Unaudited)
|
|
(in thousands of
United States dollars)
|
|
|
Three months ended
March 31,
|
|
|
2019
|
|
|
2018
|
|
Net income
(loss)
|
$
|
29
|
|
|
$
|
(12,045)
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss):
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
599
|
|
|
|
(790)
|
|
Comprehensive income
(loss)
|
$
|
628
|
|
|
$
|
(12,835)
|
|
|
|
|
|
|
|
|
|
Quarterhill
Inc.
|
|
Condensed
Consolidated Interim Balance Sheets
|
|
(Unaudited)
|
|
(in thousands of
United States dollars)
|
|
|
|
|
|
|
|
|
|
As at
|
March 31,
2019
|
|
|
December 31,
2018
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
50,406
|
|
|
$
|
63,929
|
|
Short-term
investments
|
|
1,161
|
|
|
|
1,139
|
|
Restricted short-term
investments
|
|
2,200
|
|
|
|
2,200
|
|
Accounts
receivable
|
|
37,900
|
|
|
|
10,812
|
|
Other current
assets
|
|
21
|
|
|
|
91
|
|
Unbilled
revenue
|
|
4,359
|
|
|
|
3,990
|
|
Income taxes
receivable
|
|
-
|
|
|
|
198
|
|
Inventories
|
|
5,939
|
|
|
|
5,960
|
|
Prepaid expenses and
deposits
|
|
2,038
|
|
|
|
2,332
|
|
|
|
104,024
|
|
|
|
90,651
|
|
Non-current
assets
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
351
|
|
|
|
415
|
|
Right-of-use
assets
|
|
2,649
|
|
|
|
-
|
|
Property, plant and
equipment
|
|
2,503
|
|
|
|
2,655
|
|
Intangible
assets
|
|
82,545
|
|
|
|
87,425
|
|
Investment in joint
venture
|
|
3,984
|
|
|
|
3,822
|
|
Deferred income tax
assets
|
|
25,061
|
|
|
|
27,141
|
|
Goodwill
|
|
25,303
|
|
|
|
25,303
|
|
TOTAL
ASSETS
|
$
|
246,420
|
|
|
$
|
237,412
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Bank
indebtedness
|
$
|
2,670
|
|
|
$
|
2,598
|
|
Accounts payable and
accrued liabilities
|
|
24,837
|
|
|
|
18,103
|
|
Income taxes
payable
|
|
63
|
|
|
|
-
|
|
Right-of-use lease
liabilities
|
|
681
|
|
|
|
-
|
|
Current portion of
deferred revenue
|
|
5,631
|
|
|
|
4,670
|
|
Current portion of
long-term debt
|
|
295
|
|
|
|
299
|
|
Contingent
consideration
|
|
929
|
|
|
|
929
|
|
|
|
35,106
|
|
|
|
26,599
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
Deferred
revenue
|
|
1,291
|
|
|
|
1,435
|
|
Right-of-use lease
liabilities
|
|
1,783
|
|
|
|
-
|
|
Long-term
debt
|
|
153
|
|
|
|
173
|
|
Deferred income tax
liabilities
|
|
3,540
|
|
|
|
4,337
|
|
TOTAL
LIABILITIES
|
|
41,873
|
|
|
|
32,544
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
Capital
stock
|
|
419,111
|
|
|
|
419,111
|
|
Additional paid-in
capital
|
|
23,138
|
|
|
|
22,957
|
|
Accumulated other
comprehensive income
|
|
16,842
|
|
|
|
16,243
|
|
Deficit
|
|
(254,544)
|
|
|
|
(253,443)
|
|
|
|
204,547
|
|
|
|
204,868
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
|
$
|
246,420
|
|
|
$
|
237,412
|
|
Quarterhill
Inc.
|
|
Condensed
Consolidated Interim Statements of Cash Flows
|
|
(Unaudited)
|
|
(in thousands of
United States dollars)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
2019
|
|
|
2018
|
|
Cash generated from
(used in):
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
29
|
|
|
$
|
(12,045)
|
|
Non-cash
items
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
181
|
|
|
|
156
|
|
Depreciation and
amortization
|
|
5,609
|
|
|
|
7,146
|
|
Foreign exchange loss
(gain)
|
|
(62)
|
|
|
|
78
|
|
Equity in income from
joint venture
|
|
(74)
|
|
|
|
(250)
|
|
Loss on disposal of
assets
|
|
-
|
|
|
|
1
|
|
Deferred income tax
expense (recovery)
|
|
1,293
|
|
|
|
(1,888)
|
|
Embedded
derivatives
|
|
70
|
|
|
|
2
|
|
Changes in non-cash
working capital balances
|
|
(19,374)
|
|
|
|
261
|
|
Cash used in
operations
|
|
(12,328)
|
|
|
|
(6,539)
|
|
Financing
|
|
|
|
|
|
|
|
Dividends
paid
|
|
(1,130)
|
|
|
|
(1,171)
|
|
Bank
indebtedness
|
|
72
|
|
|
|
(2,057)
|
|
Repayment of long-term
debt
|
|
(24)
|
|
|
|
(15)
|
|
Cash used in
financing
|
|
(1,082)
|
|
|
|
(3,243)
|
|
Investing
|
|
|
|
|
|
|
|
Proceeds from sale of
property, plant and equipment
|
|
-
|
|
|
|
11
|
|
Purchase of property
and equipment
|
|
(158)
|
|
|
|
(123)
|
|
Repayment of patent
finance obligations
|
|
-
|
|
|
|
(1,390)
|
|
Purchase of
intangibles
|
|
(20)
|
|
|
|
(40)
|
|
Cash used in
investing
|
|
(178)
|
|
|
|
(1,542)
|
|
Foreign exchange gain
(loss) on cash held in foreign currency
|
|
65
|
|
|
|
(75)
|
|
Net decrease in cash
and cash equivalents
|
|
(13,523)
|
|
|
|
(11,399)
|
|
Cash and cash
equivalents, beginning of period
|
|
63,929
|
|
|
|
81,818
|
|
Cash and cash
equivalents, end of period
|
$
|
50,406
|
|
|
$
|
70,419
|
|
Quarterhill
Inc.
|
|
Condensed
Consolidated Interim Statements of Shareholders' Equity
|
|
(Unaudited)
|
|
(in thousands of
United States dollars)
|
|
|
Capital
Stock
|
|
|
Additional
Paid-in Capital
|
|
|
Accumulated
Other
Comprehensive
Income
|
|
|
Deficit
|
|
|
Total
Equity
|
|
Balance - January 1,
2018, revised
|
$
|
418,873
|
|
|
$
|
22,489
|
|
|
$
|
20,111
|
|
|
$
|
(199,718)
|
|
|
$
|
261,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(12,045)
|
|
|
|
(12,045)
|
|
Other comprehensive
loss
|
|
-
|
|
|
|
-
|
|
|
|
(790)
|
|
|
|
-
|
|
|
|
(790)
|
|
Stock-based
compensation expense
|
|
-
|
|
|
|
156
|
|
|
|
-
|
|
|
|
-
|
|
|
|
156
|
|
Dividends
declared
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,171)
|
|
|
|
(1,171)
|
|
Balance - March 31,
2019
|
$
|
418,873
|
|
|
$
|
22,645
|
|
|
$
|
19,321
|
|
|
$
|
(212,934)
|
|
|
$
|
247,905
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - January 1,
2019
|
$
|
419,111
|
|
|
$
|
22,957
|
|
|
$
|
16,243
|
|
|
$
|
(253,443)
|
|
|
$
|
204,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
29
|
|
|
|
29
|
|
Other comprehensive
income
|
|
-
|
|
|
|
-
|
|
|
|
599
|
|
|
|
-
|
|
|
|
599
|
|
Stock-based
compensation expense
|
|
-
|
|
|
|
181
|
|
|
|
-
|
|
|
|
-
|
|
|
|
181
|
|
Dividends
declared
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,130)
|
|
|
|
(1,130)
|
|
Balance - March 31,
2019
|
$
|
419,111
|
|
|
$
|
23,138
|
|
|
$
|
16,842
|
|
|
$
|
(254,544)
|
|
|
$
|
204,547
|
|
Quarterhill
Inc.
|
|
Reconciliations of
GAAP Net Income (Loss) to Adjusted EBITDA
|
|
(Unaudited)
|
|
(in thousands of
United States dollars, except share and per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
Adjusted
EBITDA
|
2019
|
|
|
2018
|
|
Net income
(loss)
|
$
|
29
|
|
|
$
|
(12,045)
|
|
|
|
|
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
Income tax expense
(recovery)
|
|
5,334
|
|
|
|
(2,209)
|
|
Foreign exchange loss
(gain)
|
|
242
|
|
|
|
(130)
|
|
Finance
expense
|
|
44
|
|
|
|
39
|
|
Finance
income
|
|
(202)
|
|
|
|
(191)
|
|
Special
charges
|
|
1,297
|
|
|
|
-
|
|
Amortization of
intangibles
|
|
5,231
|
|
|
|
6,751
|
|
Depreciation of
property, plant and equipment
|
|
378
|
|
|
|
395
|
|
Effect of deleted
deferred revenue
|
|
-
|
|
|
|
224
|
|
Stock-based
compensation
|
|
181
|
|
|
|
156
|
|
Other
income
|
|
(74)
|
|
|
|
(327)
|
|
Adjusted
EBITDA
|
$
|
12,460
|
|
|
$
|
(7,337)
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
per share
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
-
|
|
|
$
|
(0.10)
|
|
|
|
|
|
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
|
|
Income tax expense
(recovery)
|
|
0.04
|
|
|
|
(0.02)
|
|
Foreign exchange loss
(gain)
|
|
-
|
|
|
|
-
|
|
Finance
expense
|
|
-
|
|
|
|
-
|
|
Finance
income
|
|
-
|
|
|
|
-
|
|
Special
charges
|
|
0.01
|
|
|
|
-
|
|
Amortization of
intangibles
|
|
0.04
|
|
|
|
0.06
|
|
Depreciation of
property, plant and equipment
|
|
-
|
|
|
|
-
|
|
Effect of deleted
deferred revenue
|
|
-
|
|
|
|
-
|
|
Stock-based
compensation
|
|
-
|
|
|
|
-
|
|
Other
income
|
|
-
|
|
|
|
-
|
|
Adjusted EBITDA
per share
|
$
|
0.09
|
|
|
$
|
(0.06)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of Common Shares
|
|
|
|
|
|
|
|
Basic
|
|
118,817,466
|
|
|
|
118,658,249
|
|
View original
content:http://www.prnewswire.com/news-releases/quarterhill-announces-first-quarter-2019-financial-results-300847053.html
SOURCE Quarterhill Inc.