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Quarterhill Announces Third Quarter 2018 Financial Results

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November 8, 2018 6:30 AM EST

OTTAWA, Nov. 8, 2018 /PRNewswire/ - Quarterhill Inc. ("Quarterhill" or the "Company") (TSX: QTRH) (NASDAQ: QTRH), announces its financial results for the three- and nine-month periods ended September 30, 2018. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.

Third Quarter 2018 Highlights

  • Revenue of $19.6 million
  • Recurring revenues of $6.3 million, representing 32% of total revenue
  • Adjusted EBITDA* of ($2.5) million
  • Net loss of ($9.3) million, or ($0.08) per common share
  • Cash and equivalents were $62.4 million at September 30, 2018
  • IRD and VIZIYA's combined revenue and Adjusted EBITDA were up 14% and 125%, respectively year over year
  • WiLAN won a $145.1 million jury award in its patent suit against Apple Inc.
  • IRD announced a five-year $8.1 million contract with the State of Hawaii

"Highlights in Q3 were led by continued strong performance at IRD and WiLAN's significant trial victory versus Apple," said Doug Parker, President & CEO of Quarterhill. "For the second quarter in a row, IRD generated good revenue and adjusted EBITDA performance and they also signed a key contract with the State of Hawaii for more than $8 million over five years. Year-to-date, IRD has contributed $32.5 million of profitable revenue to Quarterhill and with a building pipeline of business and new products in the market, we believe their outlook remains promising."

"With WiLAN, we signed several new licenses in Q3, but the big news in the quarter was the August 1st jury verdict, which awarded us $145.1 million in our patent trial versus Apple. We are obviously very pleased with the jury's decision and believe that it reflects well on our team, our portfolio and our process, and enhances our already strong reputation in the industry. On the M&A front, building our pipeline remains a top priority and we continue to see real progress in this area, which includes a series of advanced negotiations that are currently underway." 

Approval of Eligible DividendThe Board of Directors has declared an eligible quarterly dividend of CDN $0.0125 per common share payable on January 9, 2019, to shareholders of record on December 14, 2018.

Business Strategy and SegmentsOur acquisition strategy focuses primarily on financial metrics while remaining cognizant of broader technology and market trends as we build 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, we seek to enable shareholders to benefit from consolidation and convergence trends in today's technology industry. As of September 30, 2018, the Company had investments in three segments: Technology (WiLAN); Mobility (IRD); and Factory (VIZIYA).

Q3 and year-to-date 2018 Consolidated Financial ReviewQuarterhill's consolidated financial results for the three- and nine-month periods ended September 30, 2018 include a full contribution from Wi‑LAN Inc. ("WiLAN"), International Road Dynamics Inc. ("IRD") and VIZIYA Corp. ("VIZIYA"). The 2017 comparative period information for the nine-month period ended September 30, 2017, includes a full contribution from WiLAN along with IRD's results from operations for the period from June 1 to September 30, 2017 and VIZIYA's results from operations for the period from May 4 to September 30, 2017.

Consolidated revenues for the three months ended September 30, 2018 ("Q3 2018") were $19.6 million, compared to $85.9 million in Q3 2017. Consolidated revenues for the nine months ended September 30, 2018 ("year-to-date") were $52.0 million, compared to $112.1 million in the same period last year. Revenue in the comparable periods of 2017 included strong performance from WiLAN, which generated revenue of $72.6 million in Q3 2017 compared to $4.4 million in Q3 2018. Combined, IRD and VIZIYA grew revenue organically year-over-year by 14% and accounted for 77% of consolidated revenues in Q3 2018.

Gross margin for Q3 2018 was $5.1 million, or 26%, compared to $67.5 million, or 79%, in Q3 2017. Gross margin for the nine months ended September 30, 2018 was $9.3 million, or 18%, compared to $76.7 million, or 68%, in the same period last year. Gross margin comparisons reflect the variability in the WiLAN business noted above. Gross margin and gross margin percentage increased for both IRD and VIZIYA in Q3 2018 compared to Q3 2017. On a sequential basis, consolidated gross margin increased to 26.2% from 18.9% last quarter.

Operating expenses include selling, general and administrative costs, research and development costs, depreciation and amortization of intangible assets. Operating expenses for Q3 2018 were $16.8 million, compared to $31.3 million in Q3 2017. Operating expenses for the nine months ended September 30, 2018 were $46.6 million, compared to $51.5 million in the same period last year. Operating expenses in Q3 2018 included a one-time $2.3 million restructuring charge at IRD related to streamlining their operations, which, going forward, will save IRD approximately $2.2 million annually in expenses.

Adjusted EBITDA for Q3 2018 was ($2.5) million compared to $60.6 million in Q3 2017. Adjusted EBITDA for the nine months ended September 30, 2018 was ($13.8) million compared to $63.1 million in the same period last year. The variance in adjusted EBITDA for the Q3 2018 and year-to-date periods reflects the variability in the WiLAN business noted above. Adjusted EBITDA for both IRD and VIZIYA more than doubled in Q3 2018 from Q3 2017.

Net loss for Q3 2018 was ($9.3) million, or ($0.08) per basic and diluted Common Share, compared to net earnings of $26.2 million, or $0.22 per basic and diluted Common Share, in Q3 2017. Net loss for the nine months ended September 30, 2018 was ($29.2) million, or ($0.25) per basic and diluted Common Share, compared to net earnings of $22.6 million, or $0.19 per basic and diluted Common Share, in the same period last year. For the Q3 2018 and year-to-date periods, net loss increased due primarily to lower revenue from WiLAN and the restructuring charge at IRD, offset in part by improved overall operational performance at IRD and VIZIYA.

Cash consumed in operations for Q3 2018 was $9.0 million, compared to $9.3 million of cash generated from operations in Q3 2017. Cash used in operations for the nine months ended September 30, 2018 was $18.0 million, compared to $20.8 million of cash generated from operations in the same period last year. For the Q3 2018 and year-to-date periods, the difference in cash from operations compared to the same periods last year is primarily due to lower revenue in the WiLAN business, offset in part by higher revenue and adjusted EBITDA in the IRD and VIZIYA businesses.

Cash and cash equivalents and short-term investments amounted to $62.4 million at September 30, 2018, compared to $86.6 million at December 31, 2017.

The table below highlights financial performance for the Company's Technology, Mobility and Factory 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 September 30, 2018

Technology

Mobility

Factory

Corporate

Total

Revenues

$

4,445

$

12,439

$

2,695

$

-

$

19,579

Cost of revenues (excluding depreciation and amortization)

5,877

8,208

355

-

14,440

(1,432)

4,231

2,340

-

5,139

Selling, general and administrative expenses

761

2,211

1,828

2,071

6,871

Research and development expenses

-

534

368

-

902

Depreciation of property, plant and equipment

62

275

32

3

372

Amortization of intangibles

4,581

960

757

-

6,298

Special charges

-

2,320

-

-

2,320

Results from operations

(6,836)

(2,069)

(645)

(2,074)

(11,624)

Finance income

(3)

(2)

-

(135)

(140)

Finance expense

-

72

4

2

78

Foreign exchange loss (gain)

(223)

108

32

174

91

Other income

-

(247)

-

-

(247)

Loss before taxes

(6,610)

(2,000)

(681)

(2,115)

(11,406)

Current income tax expense (recovery)

912

(41)

(116)

-

755

Deferred income tax recovery

(2,103)

(504)

(264)

(9)

(2,880)

Income tax recovery

(1,191)

(545)

(380)

(9)

(2,125)

Net loss

$

(5,419)

$

(1,455)

$

(301)

$

(2,106)

$

(9,281)

Adjusted EBITDA

(2,178)

1,442

158

(1,934)

(2,512)

Other reconciling items:

Effect of deleted deferred revenue

-

8

-

-

8

Stock-based compensation

15

(52)

14

137

114

 

For the three months ended September 30, 2017

Technology

Mobility

Factory

Corporate

Total

Revenues

$

72,592

$

11,555

$

1,750

$

-

$

85,897

Cost of revenues (excluding depreciation and amortization)

9,882

8,048

495

-

18,425

62,710

3,507

1,255

-

67,472

Selling, general and administrative expenses

1,310

2,530

905

1,756

6,501

Research and development expenses

-

853

639

-

1,492

Depreciation of property, plant and equipment

82

445

28

1

556

Amortization of intangibles

5,473

1,072

791

-

7,336

Loss on disposal of intangibles

15,190

-

-

-

15,190

Special charges

-

-

-

218

218

Results from operations

40,655

(1,393)

(1,108)

(1,975)

36,179

Finance income

(76)

(1)

-

(16)

(93)

Finance expense

926

43

3

(2)

970

Foreign exchange loss (gain)

(131)

409

2

(41)

239

Other income

-

(231)

-

-

(231)

Income (loss) before taxes

39,936

(1,613)

(1,113)

(1,916)

35,294

Current income tax expense (recovery)

5,082

232

(5)

-

5,309

Deferred income tax expense (recovery)

(5,369)

(858)

(291)

10,292

3,774

Income tax expense (recovery)

(287)

(626)

(296)

10,292

9,083

Net earnings (loss)

$

40,223

$

(987)

$

(817)

$

(12,208)

$

26,211

Adjusted EBITDA

61,400

707

3

(1,550)

60,560

Other reconciling items:

Effect of deleted deferred revenue

-

82

292

-

374

Increased costs from inventory step-up

-

444

-

-

444

Stock-based compensation

-

67

-

206

273

Effect of deleted prepaid expense

-

(10)

-

-

(10)

 

For the nine months ended September 30, 2018

Technology

Mobility

Factory

Corporate

Total

Revenues

$

10,188

$

32,510

$

9,287

$

-

$

51,985

Cost of revenues (excluding depreciation and amortization)

19,797

21,789

1,127

-

42,713

(9,609)

10,721

8,160

-

9,272

Selling, general and administrative expenses

1,999

7,497

5,130

6,334

20,960

Research and development expenses

-

1,593

1,101

-

2,694

Depreciation of property, plant and equipment

209

849

91

6

1,155

Amortization of intangibles

14,297

2,923

2,271

-

19,491

Special charges

-

2,320

-

-

2,320

Results from operations

(26,114)

(4,461)

(433)

(6,340)

(37,348)

Finance income

(3)

(9)

-

(510)

(522)

Finance expense

1

144

10

2

157

Foreign exchange loss (gain)

334

(164)

51

(295)

(74)

Other income

-

(884)

(269)

-

(1,153)

Loss before taxes

(26,446)

(3,548)

(225)

(5,537)

(35,756)

Current income tax expense (recovery)

1,137

158

(645)

1

651

Deferred income tax expense (recovery)

(6,928)

(1,138)

(749)

1,599

(7,216)

Income tax expense (recovery)

(5,791)

(980)

(1,394)

1,600

(6,565)

Net earnings (loss)

$

(20,655)

$

(2,568)

$

1,169

$

(7,137)

$

(29,191)

Adjusted EBITDA

(11,582)

1,891

2,101

(6,210)

(13,800)

Other reconciling items:

Effect of deleted deferred revenue

-

166

148

-

314

Stock-based compensation

26

94

24

124

268

 

For the nine months ended September 30, 2017

Technology

Mobility

Factory

Corporate

Total

Revenues

$

92,218

$

16,203

$

3,665

$

-

$

112,086

Cost of revenues (excluding depreciation and amortization)

23,644

10,800

896

-

35,340

68,574

5,403

2,769

-

76,746

Selling, general and administrative expenses

5,484

3,502

1,781

2,350

13,117

Research and development expenses

-

1,161

999

-

2,160

Depreciation of property, plant and equipment

261

493

62

1

817

Amortization of intangibles

16,097

1,308

1,262

-

18,667

Loss on disposal of intangibles

15,190

-

-

-

15,190

Special charges

-

-

-

1,512

1,512

Results from operations

31,542

(1,061)

(1,335)

(3,863)

25,283

Finance income

(467)

(1)

-

(77)

(545)

Finance expense

926

54

6

(2)

984

Foreign exchange loss (gain)

(516)

695

43

(694)

(472)

Other income

-

(300)

-

-

(300)

Income (loss) before taxes

31,599

(1,509)

(1,384)

(3,090)

25,616

Current income tax expense

6,516

333

34

-

6,883

Deferred income tax expense (recovery)

(7,869)

(920)

(485)

5,416

(3,858)

Income tax expense (recovery)

(1,353)

(587)

(451)

5,416

3,025

Net earnings (loss)

$

32,952

$

(922)

$

(933)

$

(8,506)

$

22,591

Adjusted EBITDA

63,147

1,517

523

(2,054)

63,133

Other reconciling items:

Effect of deleted deferred revenue

-

107

534

-

641

Increased costs from inventory step-up

-

581

-

-

581

Stock-based compensation

57

99

-

296

452

Effect of deleted prepaid expense

-

(10)

-

-

(10)

 

Conference Call and WebcastQuarterhill 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/1858362/6CC5061D06CF512665FE4AF163E1FFBB

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 InformationWebcast replay will be available for 90 days at: https://event.on24.com/wcc/r/1858362/6CC5061D06CF512665FE4AF163E1FFBB 

Telephone replay will be available from 1:00 PM ET on November 8, 2018 until 11:59 PM ET on November 15, 2018 at: 1.855.859.2056 (Toll Free) or 1.416.849.0833 (International). The telephone replay requires the passcode 9560049.

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 earnings (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 earnings 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 EARNINGS AND CASH FLOWS FROM OPERATIONS AS DETERMINED IN ACCORDANCE WITH U.S. GAAP OR AS A MEASURE OF LIQUIDITY.

About QuarterhillQuarterhill 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 InformationThis 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 March 1, 2018 annual information form for the year ended December 31, 2017 (the "AIF"). Copies of the AIF may be obtained at www.sedar.com or www.sec.gov. 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 September 30,

Nine months ended September 30,

2018

2017

2018

2017

Revenues

$

19,579

$

85,897

$

51,985

$

112,086

Cost of revenues (excluding depreciation and amortization)

14,440

18,425

42,713

35,340

5,139

67,472

9,272

76,746

Operating expenses

Selling, general and administrative expenses

6,871

6,501

20,960

13,117

Research and development expenses

902

1,492

2,694

2,160

Depreciation of property, plant and equipment

372

556

1,155

817

Amortization of intangibles

6,298

7,336

19,491

18,667

Loss on disposal of intangible assets

-

15,190

-

15,190

Special charges

2,320

218

2,320

1,512

16,763

31,293

46,620

51,463

Results from operations

(11,624)

36,179

(37,348)

25,283

Finance income

(140)

(93)

(522)

(545)

Finance expense

78

970

157

984

Foreign exchange loss (gain)

91

239

(74)

(472)

Other income

(247)

(231)

(1,153)

(300)

Income (loss) before taxes

(11,406)

35,294

(35,756)

25,616

Current income tax expense

755

5,309

651

6,883

Deferred income tax expense (recovery)

(2,880)

3,774

(7,216)

(3,858)

Income tax expense (recovery)

(2,125)

9,083

(6,565)

3,025

Net earnings (loss)

$

(9,281)

$

26,211

$

(29,191)

$

22,591

Net earnings (loss) per share

  Basic and fully diluted

$

(0.08)

$

0.22

$

(0.25)

$

0.19

Weighted average number of common shares

  Basic

118,817,466

118,627,249

118,752,303

118,595,713

  Fully diluted

118,817,466

118,627,249

118,752,303

118,595,713

 

Quarterhill Inc.

Supplemental Condensed Consolidated Interim Statements of Operations Information

(Unaudited)

(in thousands of United States dollars)

Three months ended September 30,

Nine months ended September 30,

2018

2017

2018

2017

Revenues

  License

$

4,762

$

72,158

$

12,898

$

91,470

  Systems

7,885

6,759

19,757

9,826

  Services

660

780

2,040

1,494

  Recurring

6,272

6,200

17,290

9,296

Total revenues

$

19,579

$

85,897

$

51,985

$

112,086

Cost of revenues (excluding depreciation and amortization)

  License

$

5,927

$

9,864

$

19,927

$

23,706

  Systems

5,281

4,740

13,392

6,638

  Services

305

500

995

821

  Recurring

2,927

3,321

8,399

4,175

Total cost of revenues

$

14,440

$

18,425

$

42,713

$

35,340

 

Quarterhill Inc.

Condensed Consolidated Interim Statements of Comprehensive Income (Loss)

(Unaudited)

(in thousands of United States dollars)

Three months ended September 30,

Nine months ended September 30,

2018

2017

2018

2017

 Net earnings (loss)

$

(9,281)

$

26,211

$

(29,191)

$

22,591

 Other comprehensive income (loss):

 Foreign currency translation adjustment

424

3,209

(1,847)

3,742

Comprehensive income (loss)

$

(8,857)

$

29,420

$

(31,038)

$

26,333

 

Quarterhill Inc.

Condensed Consolidated Interim Balance Sheets

(Unaudited)

(in thousands of United States dollars)

As at

September 30, 2018

December 31, 2017

Current assets

Cash and cash equivalents

$

57,698

$

81,818

Short-term investments

1,200

1,236

Restricted short-term investments

3,500

3,500

Accounts receivable

16,425

19,298

Other current assets

16

13

Unbilled revenue

6,647

3,045

Income taxes receivable

241

144

Inventories

6,080

5,083

Prepaid expenses and deposits

3,383

4,129

95,190

118,266

Non-current assets

Property, plant and equipment

2,955

3,801

Intangible assets

95,002

114,944

Investment in joint venture

3,980

3,383

Deferred income tax assets

26,913

20,195

Goodwill

42,091

42,587

TOTAL ASSETS

$

266,131

$

303,176

Liabilities

Current liabilities

Bank indebtedness

$

5,674

$

3,568

Accounts payable and accrued liabilities

15,093

20,487

Income taxes payable

29

599

Patent finance obligation

-

4,090

Current portion of deferred revenue

5,752

6,733

Current portion of long-term debt

77

115

Contingent consideration

4,474

4,474

31,099

40,066

Non-current liabilities

Deferred revenue

1,616

884

Long-term debt

347

401

Deferred income tax liabilities

5,315

7,291

TOTAL LIABILITIES

38,377

48,642

Shareholders' equity

Capital stock

419,111

418,873

Additional paid-in capital

22,757

22,489

Accumulated other comprehensive income

18,264

20,111

Deficit

(232,378)

(206,939)

227,754

254,534

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

266,131

$

303,176

 

Quarterhill Inc.

 Condensed Consolidated Interim Statements of Cash Flows

(Unaudited)

(in thousands of United States dollars)

Three months ended September 30,

Nine months ended September 30,

2018

2017

2018

2017

Cash generated from (used in):

Operations

Net earnings (loss)

$

(9,281)

$

26,211

$

(29,191)

$

22,591

  Non-cash items

Stock-based compensation

114

273

268

452

Depreciation and amortization

6,671

7,892

20,647

19,484

Foreign exchange loss (gain)

(51)

(20)

111

(166)

Equity in earnings from joint venture

(246)

(231)

(884)

(300)

Loss on disposal of assets

(26)

(5)

(25)

(5)

Loss on disposal of intangible assets

-

15,190

-

15,190

Deferred income tax expense (recovery)

(2,880)

3,774

(7,216)

(3,858)

Accrued investment income

-

922

-

772

Embedded derivatives

(2)

11

(3)

21

  Changes in non-cash working capital balances

(3,273)

(44,740)

(1,650)

(33,422)

Cash generated (used) from operations

(8,974)

9,277

(17,943)

20,759

Financing

Dividends paid

(1,143)

(1,173)

(3,469)

(3,401)

Bank indebtedness

993

401

2,106

1,924

Repayment of long-term debt

(17)

(372)

(92)

(396)

Common shares repurchased under normal course issuer bid

-

-

-

(552)

Common shares issued for cash from Employee Share Purchase Plan

-

-

27

33

Cash used in financing

(167)

(1,144)

(1,428)

(2,392)

Investing

Business acquisitions, net of cash acquired

-

(1,112)

-

(67,415)

Purchase of restricted short-term investments

-

-

-

(3,500)

Proceeds from sale of property, plant and equipment

43

-

54

-

Purchase of property and equipment

(253)

(142)

(419)

(256)

Repayment of patent finance obligations

(1,389)

(15,389)

(4,167)

(18,167)

Purchase of intangibles

(25)

(8)

(114)

(12)

Cash used in investing

(1,624)

(16,651)

(4,646)

(89,350)

Foreign exchange gain (loss) on cash held in foreign currency

48

20

(103)

247

Net decrease in cash and cash equivalents

(10,717)

(8,498)

(24,120)

(70,736)

Cash and cash equivalents, beginning of period

68,415

44,315

81,818

106,553

Cash and cash equivalents, end of period

$

57,698

$

35,817

$

57,698

$

35,817

 

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, 2017

$

419,485

$

21,036

$

16,225

$

(212,602)

$

244,144

Comprehensive income:

Net income

-

-

-

22,591

22,591

Other comprehensive income

-

-

3,742

-

3,742

Shares and options issued:

Stock-based compensation expense

-

452

-

-

452

Shares issued upon acquisition

662

-

-

-

662

Sale of shares under Employee Share Purchase Plan

33

-

-

-

33

Shares repurchased under normal course issuer bid

(1,342)

790

-

-

(552)

Dividends declared

-

-

-

(3,401)

(3,401)

Balance - September 30, 2017

$

418,838

$

22,278

$

19,967

$

(193,412)

$

267,671

Balance - December 31, 2017

$

418,873

$

22,489

$

20,111

$

(206,939)

$

254,534

Implementation of ASU 2014-09

-

-

-

4,272

4,272

Implementation of ASU 2016-16

-

-

-

2,949

2,949

Balance - January 1, 2018, revised

418,873

22,489

20,111

(199,718)

261,755

Comprehensive loss:

Net loss

-

-

-

(29,191)

(29,191)

Other comprehensive loss

-

-

(1,847)

-

(1,847)

Shares and options issued:

Stock-based compensation expense

-

268

-

-

268

Deferred stock units converted to shares

211

-

-

-

211

Shares issued under Employee Share Purchase Plan

27

-

-

-

27

Dividends declared

-

-

-

(3,469)

(3,469)

Balance - September 30, 2018

$

419,111

$

22,757

$

18,264

$

(232,378)

$

227,754

 

Quarterhill Inc.

Reconciliations of GAAP Net Loss to Adjusted EBITDA

(Unaudited)

(in thousands of United States dollars, except share and per share amounts)

Three months ended September 30,

Nine months ended September 30,

Adjusted EBITDA

2018

2017

2018

2017

Net earnings (loss)

$

(9,281)

$

26,211

$

(29,191)

$

22,591

Adjusted for:

Income tax expense (recovery)

(2,125)

9,083

(6,565)

3,025

Foreign exchange loss (gain)

91

239

(74)

(472)

Finance expense

78

970

157

984

Finance income

(140)

(93)

(522)

(545)

Special charges

2,320

218

2,320

1,512

Amortization of intangibles

6,298

7,336

19,491

18,667

Loss on disposal of intangible

-

15,190

-

15,190

Depreciation of property, plant and equipment

372

556

1,155

817

Effect of deleted deferred revenue

8

374

314

641

Increased costs from inventory step-up

-

444

-

581

Effect of deleted prepaid expenses

-

(10)

-

(10)

Stock-based compensation

114

273

268

452

Other income

(247)

(231)

(1,153)

(300)

Adjusted EBITDA

$

(2,512)

$

60,560

$

(13,800)

$

63,133

Adjusted EBITDA per share

Net earnings (loss)

$

(0.08)

$

0.22

$

(0.25)

$

0.19

Adjusted for:

Income tax expense (recovery)

(0.02)

0.08

(0.06)

0.03

Foreign exchange loss (gain)

-

-

-

-

Finance expense

-

0.01

-

0.01

Finance income

-

-

-

-

Special charges

0.02

-

0.02

0.01

Amortization of intangibles

0.05

0.06

0.16

0.16

Loss on disposal of intangible

-

0.13

-

0.13

Depreciation of property, plant and equipment

-

-

0.01

0.01

Effect of deleted deferred revenue

-

-

-

0.01

Increased costs from inventory step-up

-

-

-

-

Effect of deleted prepaid expenses

-

-

-

-

Stock-based compensation

-

-

-

-

Other income

-

-

(0.01)

-

Adjusted EBITDA per share

$

(0.03)

$

0.50

$

(0.13)

$

0.55

Weighted average number of Common Shares

  Basic

118,817,466

118,627,249

118,752,303

118,595,713

 

Cision View original content:http://www.prnewswire.com/news-releases/quarterhill-announces-third-quarter-2018-financial-results-300746319.html

SOURCE Quarterhill Inc.


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