Quarterhill Publicizes Fourth Quarter and Fiscal 2021 Monetary Outcomes

TORONTO, March 21, 2022 /PRNewswire/ – Quarterhill Inc. (“Quarterhill” or the “Firm”) (TSX: QTRH) (OTCQX: QTRHF), declares its monetary outcomes for the three months and yr ended December 31, 2021. All monetary info on this press launch is reported in Canadian {dollars}, until in any other case indicated.

Fiscal 2021 Highlights

• Consolidated income was $125.7 million

• Consolidated Adjusted EBITDA¹ was $5.0 million^[1]

• Money, money equivalents, and short-term investments of $72.6 million at December 31, 2021

• Working capital of $105.1 million at December 31, 2021^[1]

• Acquired Digital Transaction Consultants, LLC (“ETC”) a number one supplier of tolling and mobility programs within the Clever Transportation Programs (“ITS”) trade

• Acquired Sensor Line GmbH and VDS GmbH, as tuck-in acquisitions for Worldwide Highway Dynamics (“IRD”)

• WiLAN accomplished licensing offers with LG, Motorola and Marvell, amongst others, in addition to quite a lot of patent acquisitions associated to semiconductor applied sciences together with wired connectivity performance for numerous USB-C applied sciences

• Accomplished a $57.5 million bought-deal public providing of convertible debentures, which included the train of the complete over-allotment possibility

“2021 was characterised as a yr of M&A with the deployment of $160 million in capital on three acquisitions in our ITS enterprise,” stated Bret Kidd, President and CEO of Quarterhill. “These transactions have introduced scale to our ITS operations, established our management place within the tolling market, expanded our geographic footprint, created compelling synergy alternatives and delivered a second platform in ITS from which we are able to pursue tuck-in M&A. Our robust year-over-year income progress within the ITS phase in This autumn mirrored the primary full interval of economic outcomes from all the acquired companies and demonstrates the potential of our ITS operations.”

“We imagine there has by no means been a greater time to be in ITS. The trade has a number of market tailwinds and the necessity for ITS and user-funded infrastructure has elevated the trade outlook for progress from a mid-single digit proportion to an anticipated CAGR of 15% within the coming years. We have now two well-respected platform corporations within the house with deep and proficient groups, that are each coming off of a file yr for brand spanking new order bookings and who each have vital pipelines for brand spanking new gross sales and tuck-in M&A alternatives. Backed by Quarterhill’s robust monetary place, we imagine we’re nicely positioned to capitalize on the rising alternative in ITS.”

Story continues

“On the licensing facet of the enterprise, WiLAN had a number of licensing and patent acquisition successes in 2021 whereas contending with challenges posed by the pandemic. All year long, COVID was a hurdle for journey and in-person conferences, and the courts skilled some COVID-related delays as they work by means of their backlog of instances. Regardless of this, WiLAN accomplished quite a lot of licensing offers with LG, Motorola and Marvell, amongst others, and had optimistic Adjusted EBITDA for the fiscal yr.”

WiLAN Strategic Overview
In December 2021, Quarterhill introduced the graduation of a strategic evaluate course of for the WiLAN enterprise. A particular committee of the Board of Administrators was fashioned to supervise the method and Stout Capital, LLC (“Stout”) has been chosen because the monetary advisor to conduct the strategic evaluate. Stout is a is a world funding financial institution and advisory agency that has served corporations in additional than 80 international locations over its 30-year historical past and has substantial experience with IP transactions. Outcomes of the evaluate course of might embrace quite a lot of completely different choices, nevertheless, there isn’t a assurance that the strategic evaluate course of will consequence within the completion of any transaction or different various.

Approval of Eligible Dividend
On March 9, 2022, the Board of Administrators declared an eligible quarterly dividend of $0.0125 per widespread share payable on April 8, 2022, to shareholders of file on March 18, 2022.

This autumn and Fiscal 2021 Monetary Overview
The Consolidated Monetary Statements (“monetary statements”) for the three months and yr ended December 31, 2021 and for the respective comparability intervals have been ready to replicate persevering with operations and subsequently exclude leads to 2020 throughout these intervals from VIZIYA, which was bought by Quarterhill on Might 15, 2020. The 2020 working outcomes from VIZIYA, as much as the date of sale on Might 15, 2020, are reported as web earnings from discontinued operations in accordance with IFRS 5.

Quarterhill’s income is broadly segmented into ITS, reflecting the IRD and ETC companies, and Licensing, reflecting the WiLAN enterprise. ETC was acquired September 1, 2021 and in consequence, the monetary statements for the three months ended December 31, 2021 embrace a full interval of ETC’s monetary outcomes, and for the yr ended December 31, 2021, the monetary statements embrace roughly 4 months of ETC’s monetary outcomes.

Quarterhill’s Administration’s Dialogue and Evaluation and monetary statements for the three months and yr ended December 31, 2021 can be found on the Firm’s web site and at its profile at SEDAR.

Consolidated revenues for the three months ended December 31, 2021 (“This autumn 2021”) had been $51.2 million, in comparison with $18.1 million in This autumn 2020. Consolidated revenues for the yr ended December 31, 2021 (“Fiscal 2021”) had been $125.7 million, in comparison with $144.5 million in Fiscal 2020. ITS income elevated in This autumn 2021 and Fiscal 2021 due primarily to the three acquisitions – ETC, Sensor Line and VDS – accomplished in the course of the yr. This autumn 2021 ITS income was $46.5 million in comparison with $17.6 million in This autumn 2020, with the rise primarily reflecting a full interval of contribution from ETC.

Licensing income elevated in This autumn 2021 in comparison with This autumn 2020 reflecting a higher stage of licensing exercise within the interval. For Fiscal 2021, WiLAN licensing income was decrease than Fiscal 2020, due primarily to vital licensing exercise in Q3 2020. As nearly all of its licenses are typically one-time in nature, vital fluctuations in income, gross margin, and Adjusted EBITDA may result when the quantity or greenback worth of licenses adjustments from one interval to the following. Regardless of headwinds associated to the COVID-19 pandemic, WiLAN continues to point out it could actually full licensing agreements in a difficult setting.

Gross margin^[1] for This autumn 2021 was 24% in comparison with 9% in This autumn 2020. Gross margin for Fiscal 2021 was 30% in comparison with 41% in Fiscal 2020. Gross margin within the ITS phase was 28% in This autumn 2021 in comparison with 37% in This autumn 2020, and for Fiscal 2021 was 34%, in comparison with 40% in Fiscal 2020. ITS margins might fluctuate on a quarterly foundation relying totally on the character of initiatives underway in the course of the interval and the associated margin profile. Gross margin within the licensing enterprise will fluctuate based mostly on the general stage of revenues achieved along with being depending on contingent authorized and accomplice prices incurred in a respective interval relative to income generated. Gross margin within the Licensing enterprise in Fiscal 2021 was 15% in comparison with 41% in Fiscal 2020.

Working bills embrace promoting, basic and administrative prices (“SG&A”), analysis and growth prices (“R&D”), depreciation and amortization and different fees. Working bills for This autumn 2021 had been $21.4 million in comparison with $14.2 million in This autumn 2020. Working bills for Fiscal 2021 had been $65.2 million in comparison with $51.5 million in Fiscal 2020. The year-over-year will increase in working bills had been primarily pushed by the addition of the price base of ETC, Sensor Line and VDS in addition to by different fees, of which a good portion characterize acquisition-related prices.

Consolidated Adjusted EBITDA for This autumn 2021 was $0.9 million in comparison with detrimental Adjusted EBITDA of ($6.1) million in This autumn 2020. Consolidated Adjusted EBITDA for Fiscal 2021 was $5.0 million in comparison with $31.2 million in Fiscal 2020. Consolidated Adjusted EBITDA elevated in This autumn due primarily to progress within the ITS companies and the acquisitions made in that phase in the course of the yr. Adjusted EBITDA decreased in Fiscal 2021 primarily because of the vital stage of licensing exercise at WiLAN in Fiscal 2020. On a phase foundation, the ITS enterprise generated Adjusted EBITDA of $4.1 million in This autumn 2021 and $12.7 million for Fiscal 2021. The Licensing phase had detrimental Adjusted EBITDA in This autumn 2021 of ($1.5) million and achieved optimistic Adjusted EBITDA for Fiscal 2021 of $1.2 million regardless of the difficult setting.

Money generated from persevering with operations for This autumn 2021 was $0.8 million in comparison with $24.1 million in This autumn 2020. Money (utilized in) generated from persevering with operations for Fiscal 2021 was ($13.3) million in comparison with $35.2 million in Fiscal 2020. Money and money equivalents and short-term investments had been $72.6 million at December 31, 2021, in comparison with $141.3 million at December 31, 2020, with the lower reflecting money deployed on the acquisitions made in 2021. Working capital at December 31, 2021, was $105.1 million in comparison with $159.7 million at December 31, 2020. Throughout This autumn 2021, on October 27, 2021, Quarterhill accomplished a $57.5 million bought-deal public providing of unsecured subordinated convertible debentures which is mirrored within the stability sheet as at December 31, 2021.

Convention Name and Webcast

Quarterhill will host a convention name to debate its monetary outcomes right now at 10:00 AM Jap Time.

Webcast Info

The reside audio webcast will probably be out there at:

https://produceredition.webcasts.com/starthere.jsp?ei=1528257&tp_key=1d

Dial-in Info

• To entry the decision from Canada and U.S., dial 1.888.664.6392 (Toll Free)

• To entry the decision from different places, dial 1.416.764.8659 (Worldwide)

Replay Info

Webcast replay will probably be out there for twelve months at:

https://produceredition.webcasts.com/starthere.jsp?ei=1528257&tp_key=1d

Phone replay will probably be out there till 11:59 p.m. Jap Daylight Time on March 28, 2022 at: 1.888.390.0541 (Toll Free North America) or 1.416.764.8677 (Worldwide).The phone replay requires the passcode 380252.

¹Non-IFRS Monetary Measures and Non-IFRS Ratios

Quarterhill makes use of each IFRS and sure non-IFRS monetary measures to evaluate efficiency. Non-IFRS monetary measures are monetary measures disclosed by an organization that (a) depict historic or anticipated future monetary efficiency, monetary place or money circulation of an organization, (b) with respect to their composition, exclude quantities which might be included in, or embrace quantities which might be excluded from the composition of essentially the most immediately comparable monetary measure disclosed within the major monetary statements of the corporate, (c) usually are not disclosed within the monetary statements of the corporate and (d) usually are not a ratio, fraction, proportion or comparable illustration. Non-IFRS ratios are monetary measures disclosed by an organization which might be within the type of a ratio, fraction, proportion or comparable illustration that has a non-IFRS monetary measure as a number of of its parts, and that aren’t disclosed within the monetary statements of the corporate.

These non-IFRS monetary measures and non-IFRS ratios usually are not standardized monetary measures below IFRS, and, subsequently, are unlikely to be akin to comparable monetary measures offered by different corporations. Administration believes these non-IFRS monetary measures and non-IFRS ratios present clear and helpful supplemental info to assist traders consider our monetary efficiency, monetary situation, and liquidity utilizing the identical measures as administration. These non-IFRS monetary measures and non-IFRS ratios shouldn’t be thought-about as an alternative choice to, or superior to, measures of economic efficiency ready in accordance with IFRS.

Adjusted EBITDA – Non-IFRS Monetary Measures

We use the non-IFRS monetary measure “Adjusted EBITDA” to imply web (loss) earnings adjusted for (i) earnings taxes, (ii) finance expense or earnings; (iii) amortization and impairment of intangibles; (iv) different fees and different on-time objects; (v) depreciation of right-of-use property and property, plant and tools; (vi) stock-based compensation; (vii) international alternate (achieve) loss; and (viii) different earnings which incorporates fairness in earnings from joint ventures, and (ix) dividends acquired from joint ventures. Adjusted EBITDA is utilized by our administration to evaluate our normalized money generated on a consolidated foundation and in our working segments. Adjusted EBITDA can also be a efficiency measure that could be utilized by traders to research the money generated by Quarterhill and our working segments. Adjusted EBITDA shouldn’t be interpreted as a substitute for web loss and money flows from operations as decided in accordance with IFRS or as measure of liquidity. Essentially the most immediately comparable IFRS monetary measure is Web (loss) earnings.

Adjusted EBITDA per share – Non-IFRS ratio

Adjusted EBITDA per share is calculated as Adjusted EBITDA divided by the fundamental weighted common of widespread shares. Adjusted EBITDA per share is utilized by our administration and traders to research money generated by Quarterhill on a per share foundation. Essentially the most comparable IFRS measure is earnings per share.

Supplementary Monetary Measures

Supplementary monetary measures are monetary measures disclosed by an organization that (a) are, or are meant to be, disclosed on a periodic foundation to depict the historic or anticipated future monetary efficiency, monetary place or money circulation of an organization (b) usually are not disclosed within the monetary assertion of the corporate, (c) usually are not non-IFRS monetary measures, and (d) usually are not non-IFRS ratios.

Key supplementary measures disclosed are as follows:

Gross margin %
Calculated as gross revenue as a proportion of income.

Working capital
Calculated as whole present property minus whole present liabilities.

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About Quarterhill

Quarterhill is a number one supplier of tolling and enforcement options within the Clever Transportation System (ITS) trade, in addition to, by means of its Wi-LAN Inc. subsidiary, a pacesetter in Mental Property licensing. Our objective is world management in ITS, through natural progress of the Digital Transaction Consultants, LLC (ETC) and Worldwide Highway Dynamics, Inc. (IRD) platforms, and by persevering with an acquisition-oriented funding technique that capitalizes on enticing progress alternatives inside ITS and its adjoining markets. Quarterhill is listed on the TSX below the image QTRH and on the OTCQX Finest Market below the image QTRHF. For extra info: www.quarterhill.com

Ahead-looking Info

This information launch comprises forward-looking statements concerning Quarterhill and its enterprise. Ahead-looking statements are based mostly on estimates and assumptions made by Quarterhill in mild of its expertise and its notion of historic tendencies, present situations, anticipated future developments and the anticipated results of latest enterprise methods, in addition to different elements that Quarterhill believes are applicable within the circumstances. The forward-looking occasions and circumstances mentioned herein might not happen and will differ materially because of recognized and unknown danger elements and uncertainties affecting Quarterhill, together with: potential dangers and uncertainties referring to the last word geographic unfold of the novel coronavirus (“COVID-19”); the severity of the illness; the length of the COVID-19 outbreak; actions that could be taken by governmental authorities to comprise the COVID-19 outbreak or to deal with its affect; the potential detrimental impacts of COVID-19 on the worldwide economic system and monetary markets and any ensuing affect on Quarterhill and/or its enterprise. Different elements embrace, with out limitation, the dangers described in Quarterhill’s March 20, 2022 annual info type for the yr ended December 31, 2021 (the “AIF”). As well as, readers are additionally urged to evaluate the extra danger elements disclosed in our Administration’s Dialogue and Evaluation for our three months and yr ended December 31, 2021 and 2020 filed right now on www.sedar.com. Quarterhill recommends that readers evaluate and think about all of those danger elements and notes that readers shouldn’t place undue reliance on any of Quarterhill’s forward-looking statements. Quarterhill has no intention, and undertakes no obligation, to replace or revise any forward-looking statements, whether or not because of new info, future occasions or in any other case, besides as required by legislation.

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SOURCE Quarterhill Inc.