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News

05 Nov, 20

QUARTERHILL ANNOUNCES THIRD QUARTER 2020 FINANCIAL RESULTS

KITCHENER, ON, Nov. 5, 2020 /PRNewswire/ - Quarterhill Inc. ("Quarterhill" or the "Company") (TSX: QTRH) (OTCQX: QTRHF), announces its financial results for the three- and nine-month periods ended September 30, 2020. The Company historically prepared its consolidated financial statements in accordance with U.S. GAAP and in U.S. dollars. Effective January 1, 2020, the Company has adopted IFRS and the Canadian dollar as its reporting currency. The Company has consistently applied the same accounting policies in its opening IFRS statement of financial position at January 1, 2019, and throughout all periods presented as if these policies had always been in effect. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.

Third Quarter 2020 Financial Highlights

  • Revenue was $88.0 million, exceeding the high-end of the expected $80.0-$87.0 million range previously provided
  • Adjusted EBITDA1 was $39.0 million, exceeding the high-end of the expected $32.0-$36.0 million range previously provided
  • Net income was $24.5 million, or $0.21 per basic and diluted common share
  • Cash generated from operations was $4.5 million
  • Cash, cash equivalents, and short-term investments were $129.7 million at September 30, 2020. Cash and equivalents declined in Q3 due primarily to working capital adjustments and the timing of collections for certain license agreements completed near quarter-end. Payment on these agreements was received subsequent to quarter-end
  • Working capital was $180.3 million at September 30, 2020

Third Quarter 2020 Operational Highlights

  • Appointed John Rim as Chief Financial Officer
  • Completed a Substantial Issuer Bid, returning $5.8 million to shareholders via the purchase of 2.7 million common shares at a purchase price of $2.15 per share
  • Launched a Normal Course Issuer Bid to acquire up to 10%, or 11.3 million, of the Company's common shares in the public float. Acquired 1.6 million Common Shares at an average price of $1.89 per share, totaling approximately $3.0 million, in the quarter
  • Strong licensing activity at WiLAN included new agreements with Intel and Kingston Technology Corporation
  • New orders at IRD included the State of New York and, internationally, in Ukraine and Paraguay

"Q3 was a busy and successful period for Quarterhill and its portfolio companies. On October 8, we announced preliminary Q3 revenue of $80-87 million and Adjusted EBITDA of $32-36 million and we are pleased to have come in above the high-end of the range for both metrics," said Paul Hill, President and CEO of Quarterhill. "These strong results were driven by a record quarter at IRD and by substantial licensing activity at WiLAN, which had its best quarter in three years. At the same time, Quarterhill delivered on its promise to return additional capital to shareholders via completion of our substantial issuer bid and the commencement of our normal course issuer bid. Q3 results, combined with our already strong balance sheet, are enabling us to consider a broad set of M&A opportunities."

Approval of Eligible Dividend
The Board of Directors has declared an eligible quarterly dividend of $0.0125 per common share payable on January 11, 2021, to shareholders of record on December 11, 2020.

Q3 2020 and Year-to-date Consolidated Financial Review
Financial statements for the three- and nine-month periods ended September 30, 2020 and for the respective comparison periods, have been prepared to reflect continuing operations and therefore exclude results during those periods from VIZIYA, which was sold by Quarterhill on May 15, 2020. The year-to-date operating results from VIZIYA, up to the date of sale on May 15, 2020, are reported as net income (loss) from discontinued operations in accordance with IFRS 5.

Consolidated revenues for the three-month period ended September 30, 2020 ("Q3 2020") were $88.0 million, compared to $21.9 million in Q3 2019. Consolidated revenues for the nine-month period ended September 30, 2020 ("YTD 2020") were $126.4 million, compared to $124.6 million in the same period last year. The majority of WiLAN's licenses are one-time in nature and significant fluctuations in revenue, gross margin, and Adjusted EBITDA can result when the volume or dollar value of licenses changes from one period to the next. Revenue was higher in the Q3 2020 and YTD 2020 periods due primarily to the closure of a greater volume, and value, of licensing contracts in 2020 than in the prior year periods.

Recurring revenue for the Q3 2020 and YTD 2020 periods was $5.4 million and $14.9 million, compared to $4.5 million and $16.2 million in the same periods last year. The vast majority of recurring revenue is generated by IRD. Certain revenues characterized as recurring have a timing component to them and are recognized when the related work is completed. As such, the decrease in recurring revenue for the YTD 2020 period is primarily a timing-based issue and does not reflect lower renewal or retention rates.

Gross margin for the Q3 2020 and YTD 2020 periods was 51.8% and 45.2%, compared to 11.4% and 40.6% in the same periods last year. Gross margin was higher in Q3 2020 and on a year-to-date 2020 basis primarily due to lower cost of revenue on licenses entered into by WiLAN as well as higher profitability on certain projects entered into by IRD in Q3 2020. 

Operating expenses include selling, general and administrative costs ("SG&A"), research and development costs ("R&D"), depreciation and amortization of intangible assets, impairment loss on intangibles and special charges. For Q3 2020, Quarterhill had no special charges compared to a special charge recovery of $15.3 million in Q3 2019. YTD 2020, special charges were $0.9 million compared to $1.4 million in the same period last year. Excluding special charges, operating expenses for the Q3 2020 and YTD 2020 periods decreased by 9.5% and 11.8%, respectively. This reflects lower amortization of intangibles as well as lower SG&A and R&D costs, which was primarily due to reduced operating costs.

Adjusted EBITDA for the Q3 2020 and YTD 2020 periods was $39.0 million and $37.3 million, compared to ($4.4) million and $29.8 million in the same periods last year. The increase in Adjusted EBITDA was driven by strong revenue from both businesses, lower cost of revenues and ongoing cost containment.

Net income for Q3 2020 was $24.5 million, or $0.21 per basic and diluted common share, compared to net income of $12.3 million, or $0.10 per basic and diluted common share, in Q3 2019. Net income for the YTD 2020 period was $28.9 million, or $0.25 per basic common share and $0.24 per diluted common share, compared to net income of $6.3 million, or $0.05 per basic and diluted common share, in the same period last year. Net income in Q3 2020 increased due to operational strength with both portfolio companies; for the YTD 2020 period, net income increased due to higher revenue, lower costs and the gain on the sale of VIZIYA in Q2 2020. 

Cash generated from (used in) continuing operations for the Q3 2020 and YTD 2020 periods was $4.5 million and $9.9 million, compared to ($15.6) million and $13.5 million in the same periods last year. Cash and cash equivalents and short-term investments was $129.7 million at September 30, 2020, compared to $89.4 million at December 31, 2019. Working capital at September 30, 2020, was $180.3 million compared to $112.7 million at December 31, 2019.

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://produceredition.webcasts.com/starthere.jsp?ei=1388512&tp_key=4c7abf2b0a    

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 365 days at: https://produceredition.webcasts.com/starthere.jsp?ei=1388512&tp_key=4c7abf2b0a    

Telephone replay will be available from 1:00 p.m. Eastern Daylight Time on November 5, 2020 until 11:59 p.m. Eastern Daylight Time on November 19, 2020 at: 1.855.859.2056 (Toll Free North America) or 1.416.849.0833 (International).The telephone replay requires the passcode 8577096.

The table below highlights financial performance for the Company's Licensing and Intelligent Systems 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.

Segmented statements of income (loss) for the three- and nine-month periods ended September 30, 2020 and 2019 are included below: 

 

For the three months ended September 30, 2020

CONTINUING OPERATIONS

Licensing

Intelligent
Systems

Corporate

Total

Revenues

       

License

$

67,192

$

$

$

67,192

Systems

15,380

15,380

Recurring

71

5,354

5,425

 

67,263

20,734

87,997

Direct cost of revenues

32,118

10,278

42,396

Gross profit

35,145

10,456

45,601

Depreciation of right-of-use assets

61

181

15

257

Depreciation and amortization

3,449

1,522

5

4,976

Selling, general and administrative expenses

862

2,607

2,955

6,424

Research and development expenses

390

390

Impairment losses of intangible assets

62

62

Results from operations

30,711

5,756

(2,975)

33,492

Finance (income) expense, net

(18)

110

(85)

7

Foreign exchange (gain) loss

(280)

305

47

72

Other income

(383)

(383)

Income (loss) before taxes

31,009

5,724

(2,937)

33,796

Income tax expense

7,608

1,236

424

9,268

Net income (loss) from continuing operations

$

23,401

$

4,488

$

(3,361)

$

24,528

         

Adjusted EBITDA

$

34,353

$

7,477

$

(2,795)

$

39,035

 

 

 

For the Nine months ended September 30, 2020

CONTINUING OPERATIONS

Licensing

Intelligent
Systems

Corporate

Total

Revenues

       

License

$

77,009

$

$

$

77,009

Systems

34,521

34,521

Recurring

774

14,130

14,904

 

77,783

48,651

126,434

Direct cost of revenues

40,949

28,290

69,239

Gross profit

36,834

20,361

57,195

Depreciation of right-of-use assets

185

508

45

738

Depreciation and amortization

10,552

4,469

16

15,037

Selling, general and administrative expenses

2,586

8,424

7,535

18,545

Research and development expenses

1,814

1,814

Impairment losses of intangible assets

295

295

Special charges

659

213

872

Results from operations

23,216

4,487

(7,809)

19,894

Finance (income) expense, net

(62)

228

(327)

(161)

Foreign exchange loss (gain)

1,316

(624)

(1,205)

(513)

Other income

(1,192)

(1,192)

Income (loss) before taxes

21,962

6,075

(6,277)

21,760

Income tax expense

2,879

730

3,522

7,131

Net income (loss) from continuing operations

$

19,083

$

5,345

$

(9,799)

$

14,629

         

Adjusted EBITDA

$

34,417

$

10,186

$

(7,323)

$

37,280

 

 

 

For the three months ended September 30, 2019

CONTINUING OPERATIONS

Licensing

Intelligent
Systems

Corporate

Total

Revenues

       

License

$

4,833

$

$

$

4,833

Systems

12,586

12,586

Recurring

139

4,385

4,524

 

$

4,972

$

16,971

$

$

21,943

Direct cost of revenues

8,694

10,752

19,446

Gross profit

(3,722)

6,219

2,497

Depreciation of right-of-use assets

98

177

15

290

Depreciation and amortization

4,533

1,429

5

5,967

Selling, general and administrative expenses

559

3,121

2,729

6,409

Research and development expenses

712

712

Special charges

9

(15,286)

(15,277)

Results from operations

(8,921)

780

12,537

4,396

Finance (income) expense, net

(166)

101

(290)

(355)

Foreign exchange loss (gain)

151

(292)

(69)

(210)

Other income

(157)

(157)

(Loss) income before taxes

(8,906)

1,128

12,896

5,118

Income tax (recovery) expense

(2,725)

65

430

(2,230)

Net (loss) income from continuing operations

$

(6,181)

$

1,063

$

12,466

$

7,348

         

Adjusted EBITDA

(4,269)

2,415

(2,532)

(4,386)

 

 

 

For the Nine months ended September 30, 2019

CONTINUING OPERATIONS

Licensing

Intelligent
Systems

Corporate

Total

Revenues

       

License

$

74,360

$

$

$

74,360

Systems

34,069

34,069

Recurring

1,102

15,096

16,198

 

$

75,462

$

49,165

$

$

124,627

Direct cost of revenues

41,732

32,348

74,080

Gross profit

33,730

16,817

50,547

Depreciation of right-of-use assets

479

532

45

1,056

Depreciation and amortization

14,022

4,737

15

18,774

Selling, general and administrative expenses

1,542

9,516

8,170

19,228

Research and development expenses

2,229

2,229

Special charges

2,444

(1,042)

1,402

Results from operations

15,243

(197)

(7,188)

7,858

Finance (income) expense, net

(228)

536

(856)

(548)

Foreign exchange (gain) loss

(340)

37

458

155

Other income

(4)

(492)

(496)

Income (loss) before taxes

15,815

(278)

(6,790)

8,747

Income tax expense (recovery)

7,652

(1,013)

(347)

6,292

Net income (loss) from continuing operations

$

8,163

$

735

$

(6,443)

$

2,455

         

Adjusted EBITDA

$

32,187

$

5,176

$

(7,529)

$

29,834

 

1 Non-IFRS Disclosure

 

Quarterhill  has  historically  used  a  set  of  metrics  when  evaluating  our  operational  and  financial  performance.  We continually monitor, evaluate and update these metrics as required to ensure they provide information considered most useful, in the opinion of our management, to any decision-making based on Quarterhill's performance. This section defines, quantifies and analyzes the key performance indicators used by our management and referred to elsewhere in this  press release,  which  are  not  recognized  under  IFRS  and  have  no  standardized  meaning  prescribed  by  IFRS.  These indicators and measures are therefore unlikely to be comparable to similar measures presented by other issuers.

In this press release, we use the Non-IFRS 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 right-of-use assets and property, plant and equipment; (vi) effects of  deleted  deferred  revenue;  (vii)  stock-based  compensation;  (viii)  foreign  exchange  (gain)  loss;  and  (ix)  equity  in earnings and dividends from joint ventures. Adjusted EBITDA is used by our 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 should not be interpreted as an alternative to net income and cash flows from operations as determined in accordance with IFRS or as a measure of liquidity.

About Quarterhill
Quarterhill is a growth-oriented company in the Intellectual Property and Intelligent Transportation System (ITS) industries. Our goal is to pursue an investment strategy that capitalizes on attractive market trends in both ITS and its adjacent markets. Quarterhill is listed on the TSX under the symbol QTRH and on the OTCQX Best Market under the symbol QTRHF. For more information: www.quarterhill.com

Forward-looking Information
This news release contains forward-looking statements regarding Quarterhill and its business. Forward-looking statements 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. The forward-looking events and circumstances discussed herein may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting Quarterhill, including: potential risks and uncertainties relating to the ultimate geographic spread of the novel coronavirus ("COVID-19"); the severity of the disease; the duration of the COVID-19 outbreak; actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact; the potential negative impacts of COVID-19 on the global economy and financial markets and any resulting impact on Quarterhill and/or its business. Other factors include, without limitation, the risks described in Quarterhill's February 27, 2020 annual information form for the year ended December 31, 2019 (the "AIF"). Copies of the AIF may be obtained at www.sedar.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, whether as a result of new information, future events or otherwise, except as required by law.

Quarterhill Inc.

Interim Condensed Consolidated Statements of Income and Comprehensive Income and (Loss)

(Unaudited)

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

           
 

Three months ended
September 30,

 

Nine months ended
September 30,

 

2020

 

2019

 

2020

 

2019

Revenues

             

License

$

67,192

 

$

4,833

 

$

77,009

 

$

74,360

Systems

15,380

 

12,586

 

34,521

 

34,069

Recurring

5,425

 

4,524

 

14,904

 

16,198

 

87,997

 

21,943

 

126,434

 

124,627

Direct cost of revenues

             

License

32,064

 

8,694

 

40,867

 

41,732

Systems

8,202

 

7,497

 

20,776

 

21,721

Recurring

2,130

 

3,255

 

7,596

 

10,627

 

42,396

 

19,446

 

69,239

 

74,080

Gross profit

45,601

 

2,497

 

57,195

 

50,547

Operating expenses

             

Depreciation of right-of-use assets

257

 

290

 

738

 

1,056

Depreciation of property, plant and equipment

250

 

188

 

721

 

1,086

Amortization of intangibles

4,726

 

5,779

 

14,316

 

17,688

Selling, general and administrative expenses

6,424

 

6,409

 

18,545

 

19,228

Research and development expenses

390

 

712

 

1,814

 

2,229

Impairment losses on intangibles

62

 

 

295

 

Special charges

 

(15,277)

 

872

 

1,402

 

12,109

 

(1,899)

 

37,301

 

42,689

Results from operations

33,492

 

4,396

 

19,894

 

7,858

Finance income

(146)

 

(499)

 

(528)

 

(1,157)

Finance expense

153

 

144

 

367

 

609

Foreign exchange loss (gain)

72

 

(210)

 

(513)

 

155

Other income

(383)

 

(157)

 

(1,192)

 

(496)

Income before taxes

33,796

 

5,118

 

21,760

 

8,747

Current income tax expense

325

 

342

 

1,669

 

5,797

Deferred income tax expense (recovery)

8,943

 

(2,572)

 

5,462

 

495

Income tax expense (recovery)

9,268

 

(2,230)

 

7,131

 

6,292

               

Net income from continuing operations

$

24,528

 

$

7,348

 

$

14,629

 

$

2,455

Net income from discontinued operations

 

4,927

 

14,255

 

3,835

Net income

$

24,528

 

$

12,275

 

$

28,884

 

$

6,290

Other comprehensive income (loss) that may be reclassified subsequently to net income:

 Foreign currency translation adjustment

(4,693)

 

1,661

 

5,182

 

(7,208)

 Comprehensive income (loss)

$19,835

 

$13,936

 

$34,066

 

$(918)

               

Net income per share

             

From continuing operations

$0.21

 

$0.06

 

0.13

 

0.02

From discontinued operations

$ —

 

$0.04

 

0.12

 

0.03

Net income per share - Basic

$0.21

 

$0.10

 

0.25

 

0.05

               

From continuing operations

$0.21

 

$0.06

 

0.12

 

0.02

From discontinued operations

$ —

 

$0.04

 

0.12

 

0.03

Net income per share - Diluted

$0.21

 

$0.10

 

0.24

 

0.05

 

 

Quarterhill Inc.

Interim Condensed Consolidated Statements of Financial Position

(Unaudited)

(in thousands of Canadian dollars)

           

As at

September 30, 2020

 

December 31, 2019

 

January 1, 2019

Current assets

         

Cash and cash equivalents

$

124,130

 

$

87,870

 

$

87,029

Short-term investments

5,549

 

1,550

 

1,551

Restricted short-term investments

 

 

2,995

Accounts receivable (net of allowance for doubtful accounts)

72,043

 

42,925

 

14,719

Other current assets

145

 

108

 

124

Unbilled revenue

16,059

 

8,965

 

5,432

Income taxes receivable

220

 

137

 

270

Inventories (net of obsolescence)

10,241

 

8,570

 

8,114

Prepaid expenses and deposits

3,412

 

2,242

 

2,927

 

231,799

 

152,367

 

123,161

Non-current assets

         

Accounts receivable

667

 

3,846

 

565

Right-of-use assets

3,622

 

4,502

 

3,972

Property, plant and equipment

2,977

 

2,826

 

3,614

Intangible assets

64,867

 

89,534

 

119,015

Investment in joint venture

6,701

 

5,233

 

5,203

Deferred income tax assets

27,494

 

33,270

 

36,948

Goodwill

16,910

 

32,977

 

34,446

 

123,238

 

172,188

 

203,763

TOTAL ASSETS

$

355,037

 

$

324,555

 

$

326,924

           

Liabilities

         

Current liabilities

         

Bank indebtedness

$

3,214

 

$

4,026

 

$

3,537

Accounts payable and accrued liabilities

40,198

 

25,755

 

24,644

Dividends payable

1,498

 

 

Income taxes payable

344

 

203

 

Current portion of lease liabilities

886

 

998

 

1,120

Contingent liabilities

 

 

1,265

Current portion of deferred revenue

5,339

 

8,638

 

6,357

Current portion of long-term debt

43

 

59

 

407

 

51,522

 

39,679

 

37,330

Non-current liabilities

         

Deferred revenue

3,103

 

1,513

 

1,954

Long-term lease liabilities

2,746

 

3,550

 

2,604

Long-term debt

268

 

271

 

236

Deferred income tax liabilities

368

 

3,297

 

5,905

 

6,485

 

8,631

 

10,699

TOTAL LIABILITIES

$

58,007

 

$

48,310

 

$

48,029

           

Shareholders' equity

         

Capital stock

$

561,269

 

$

570,553

 

$

570,553

Contributed surplus

32,455

 

32,011

 

31,252

Accumulated other comprehensive income

16,118

 

10,936

 

22,112

Deficit

(312,812)

 

(337,255)

 

(345,022)

 

297,030

 

276,245

 

278,895

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

355,037

 

$

324,555

 

$

326,924

 

 

Quarterhill Inc.

Condensed Consolidated Interim Statements of Cash Flows

(Unaudited)

(in thousands of Canadian dollars)

 

 

Three months ended
September 30,

 

Nine months ended
September 30,

 

2020

 

2019

 

2020

 

2019

Cash generated from (used in) Operations

             

Net income from continuing operations

$

24,528

 

$

7,348

 

$

14,629

 

$

2,455

Non-cash items

             

Stock-based compensation expense

248

 

238

 

444

 

744

Depreciation of right-of-use assets

257

 

290

 

738

 

1,056

Interest expense on lease liabilities

59

 

67

 

171

 

170

Depreciation and amortization

4,976

 

5,967

 

15,037

 

18,774

Foreign exchange (gain) loss

(38)

 

46

 

(232)

 

(81)

Equity in earnings from joint venture

(383)

 

(157)

 

(1,192)

 

(496)

Impairment losses on intangibles

62

 

 

295

 

Loss (gain) on disposal of assets

14

 

(26)

 

4

 

759

Deferred income tax expense (recovery)

8,943

 

(2,572)

 

5,462

 

495

Long-term accounts receivable

 

 

 

(85)

Embedded derivatives

69

 

(106)

 

(32)

 

26

Contingent consideration adjustment

 

(15,286)

 

 

(1,042)

Changes in non-cash working capital balances

(34,231)

 

(11,425)

 

(25,414)

 

(9,239)

Cash generated from (used in) continuing operations

4,504

 

(15,616)

 

9,910

 

13,536

Net cash flows attributable to discontinuing operations

 

(439)

 

(4,349)

 

430

Net cash generated from (used in) operating activities

4,504

 

(16,055)

 

5,561

 

13,966

Financing

             

Dividends paid

(1,443)

 

(1,475)

 

(2,924)

 

(4,450)

Bank indebtedness

(3,596)

 

(1,005)

 

(612)

 

1,561

Payment of lease liabilities

(274)

 

(318)

 

(860)

 

(1,189)

Repayment of long-term debt

(8)

 

(25)

 

(128)

 

(325)

Exercise of stock options

 

 

14

 

Repurchase of shares for cancellation

(9,322)

 

 

(9,322)

 

Common shares issued from Performance Stock Units

 

 

24

 

Cash used in continuing operations

(14,643)

 

(2,823)

 

(13,808)

 

(4,403)

Net cash flows attributable to discontinuing operations

 

(8)

 

 

(27)

Net cash used in financing activities

(14,643)

 

(2,831)

 

(13,808)

 

(4,430)

Investing

             

Proceeds from disposition of a subsidiary

 

 

49,400

 

Cash sold on disposition of a subsidiary

 

 

(1,825)

 

Purchase of short-term investments

(4,054)

 

 

(4,054)

 

Proceeds from sale of restricted short-term investments

 

132

 

 

132

Proceeds from sale of property, plant and equipment

16

 

30

 

32

 

30

Purchase of property and equipment

(309)

 

(312)

 

(1,196)

 

(811)

Purchase of intangibles

(30)

 

(1,759)

 

(55)

 

(1,884)

Cash (used in) generated from continuing operations

(4,377)

 

(1,909)

 

42,302

 

(2,533)

Net cash flows attributable to discontinuing operations

 

(37)

 

(81)

 

(160)

Net cash (used in) generated from investing activities

(4,377)

 

(1,946)

 

42,221

 

(2,693)

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

(2,869)

 

900

 

2,286

 

(2,721)

Net (decrease) increase in cash and cash equivalents

(17,385)

 

(19,932)

 

36,260

 

4,122

Cash and cash equivalents, beginning of period

141,515

 

111,083

 

87,870

 

87,029

Cash and cash equivalents, end of period

$

124,130

 

$

91,151

 

124,130

 

91,151

 

Quarterhill Inc.

Interim Condensed Consolidated Statements of Changes in Shareholders' Equity

For the nine months ended September 30, 2020 and 2019

(In thousands of Canadian dollars)

 

Capital
Stock

 

Contributed
Surplus

 

Accumulated
Other
Comprehensive
Income

 

Deficit

 

Total
Equity

January 1, 2019

$

570,553

 

$

31,252

 

$

22,112

 

$

(345,022)

 

$

278,895

                   

Net income

 

 

 

6,290

 

6,290

Other comprehensive loss

 

 

(7,208)

 

 

(7,208)

Stock-based compensation expense

 

744

 

 

 

744

Dividends declared

 

 

 

(4,450)

 

(4,450)

September 30, 2019

570,553

 

31,996

 

14,904

 

(343,182)

 

274,271

                   
                   

January 1, 2020

$

570,553

 

$

32,011

 

$

10,936

 

$

(337,255)

 

$

276,245

                   

Net income

 

 

 

28,884

 

28,884

Repurchase of shares for cancellation

(9,322)

 

 

 

 

(9,322)

Other comprehensive income

 

 

5,182

 

 

5,182

Stock-based compensation expense

 

444

 

 

 

444

Exercise of options

14

 

 

 

 

14

Common shares issued from performance stock units

24

 

 

 

 

24

Dividends declared

 

 

 

(4,441)

 

(4,441)

September 30, 2020

561,269

 

32,455

 

16,118

 

(312,812)

 

297,030

 

 

Quarterhill Inc.

Reconciliations of Net income to Adjusted EBITDA

(Unaudited)

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

   
 

Three months ended September 30,

 

2020

 

2019

 

$

Per Share

 

$

Per Share

Net income from continuing operations

$

24,528

$

0.21

 

$

7,348

$

0.06

Adjusted for:

         

Income tax expense (recovery)

9,268

0.08

 

(2,230)

(0.02)

Foreign exchange loss (gain)

72

 

(210)

Finance expense

153

 

144

Finance income

(146)

 

(499)

Special charges

 

(15,277)

(0.13)

Impairment losses on intangible assets

62

 

Amortization of intangibles

4,726

0.05

 

5,779

0.05

Depreciation of property, plant and equipment

250

 

188

Depreciation of right-of-use assets

257

 

290

Stock based compensation expense

248

 

238

Other income

(383)

 

(157)

Adjusted EBITDA

$

39,035

$

0.34

 

$

(4,386)

$

(0.04)

           

Weighted average number of Common Shares

         

Basic

 

115,990,313

   

118,817,466

 

 

Quarterhill Inc.

Reconciliations of Net income to Adjusted EBITDA

(Unaudited)

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

   
 

Nine months ended September 30, 2020

 

2020

 

2019

 

$

Per Share

 

$

Per Share

Net income from continuing operations

$

14,629

$

0.13

 

$

2,455

$

0.02

Adjusted for:

         

Income tax expense

7,131

0.06

 

6,292

0.05

Foreign exchange (gain) loss

(513)

 

155

Finance expense

367

 

609

0.01

Finance income

(528)

 

(1,157)

(0.01)

Special charges

872

0.01

 

1,402

0.01

Impairment losses on intangible assets

295

 

Amortization of intangibles

14,316

0.12

 

17,688

0.15

Depreciation of property, plant and equipment

721

 

1,086

0.01

Depreciation of right-of-use assets

738

0.01

 

1,056

0.01

Stock based compensation expense

444

 

744

0.01

Other income

(1,192)

(0.01)

 

(496)

(0.01)

Adjusted EBITDA

$

37,280

$

0.32

 

$

29,834

$

0.25

           

Weighted average number of Common Shares

         

Basic

 

117,884,124

   

118,817,466

 

 

Cision View original content:http://www.prnewswire.com/news-releases/quarterhill-announces-third-quarter-2020-financial-results-301166992.html

SOURCE Quarterhill Inc.

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