Looks good
InterDigital Announces Fourth Quarter and Full Year 2001 Results; Company Records Fourth Consecutive Year of Positive Cash Flow
KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--Feb. 14, 2002--InterDigital Communications Corporation (Nasdaq: IDCC), a leading architect, designer and provider of wireless technology and product platforms, today announced operating results for its fourth quarter and year ended December 31, 2001.
The results were highlighted by the fourth consecutive year of positive cash flow.
During 2001, the Company made substantial additional investment in technology and product development while increasing its cash and short-term investment position to $90.4 million. The Company reported a net loss of $9.8 million, or $0.18 per share for the fourth quarter of 2001, compared to net income of $1.4 million, or $0.03 per share, for the fourth quarter of 2000.
The decrease in earnings compared to last year's fourth quarter was due primarily to reduced royalty revenue from licensees associated with a decline in mobile phone sales, expected reductions in specialized engineering services revenue from Nokia, and higher operating expenses in 2001 related to planned increases in investments in technology and product development for 3G Wideband CDMA technology platforms.
Revenues in the fourth quarter of 2001 decreased to $8.4 million from $15.8 million in last year's fourth quarter. Recurring royalty revenue in the fourth quarter of 2001 totaled approximately $6.0 million, down $5.2 million from the $11.2 million reported in the fourth quarter of 2000.
In the fourth quarter 2001, specialized engineering services revenue associated with Wideband Time Division Duplex (WTDD) technology development work for Nokia was $2.3 million, compared to $4.7 million in the comparable period last year.
For the year ended December 31, 2001, InterDigital reported a net loss of $19.4 million, or $0.36 per share, compared to net income (excluding a SAB No. 101 related adjustment) of $5.6 million, or $0.10 per share (diluted), in 2000.
Revenues for the full year 2001 were $52.6 million versus revenues for comparable activities of $51.3 million in 2000. Reported revenues in 2000 were $56.9 million, including $5.6 million of discontinued product sales.
"In spite of a very challenging environment for the wireless industry in 2001, we took important steps as a leading player in the 3G marketplace," said Howard Goldberg, President and Chief Executive Officer. "We advanced our technology and product development programs, added substantial depth to our intellectual property portfolio, grew our engineering organization, deepened our management team, improved internal processes, and enhanced our strategic relationships. At the same time, we strengthened our financial foundation by growing our cash position and adding significantly to our future cash flows with new licensing agreements. We are operating from a position of strength as we continue our work to complete our 3G technology development programs and bring products into the 3G market."
Over the previous fourteen months, InterDigital:
-- Added four royalty-bearing 3G license agreements with leading Japanese equipment producers, including NEC.
-- Resolved a long-standing dispute with NEC over 2G licensing matters.
-- Entered into a 10-year strategic alliance with Infineon Technologies AG for the development of Frequency Division Duplex (FDD) software protocol stacks as core elements in a variety of UMTS Wideband CDMA (WCDMA) silicon products.
-- Reached agreement with Nokia to increase the funding for the continued development of WTDD technology for the 3G marketplace.
-- Made significant progress in the architecture, design and development of 3G WCMDA, including WTDD and FDD technology platforms.
-- Continued its participation in and contributions to key worldwide 3G wireless standards bodies, bringing its total number of accepted contributions into the standards to more than 300.
-- Added 650 new patents and patent applications in 2001. As of January 31, 2002 the Company held more than 4,100 patents and patent applications worldwide for TDMA and CDMA technologies.
-- Added 85 engineers to its technology and product development team and strengthened its management organization with the addition of experienced executives in key departments.
-- Established research and development centers in Montreal, Canada and Munich, Germany.
-- Attained early certification under the new International Standards Organization quality standard (ISO 9001:2000) at its King of Prussia, PA, and Melville, NY, development facilities.
Rich Fagan, Chief Financial Officer, commented, "In 2002, we will remain focused on maintaining our strong balance sheet and cash position. In this regard, we expect to receive payments during 2002 and 2003 from NEC totaling $72.5 million ($53 million related to the 2G license settlement and a $19.5 million advance royalty under the 3G license agreement). In addition, once the $19.5 million advance royalty is exhausted, NEC will be obligated to pay additional recurring royalties. The Company will recognize revenue associated with the $19.5 million advance royalty under the 3G license agreement as covered products are sold. In connection with the $53 million 2G license settlement, InterDigital will recognize revenue of approximately $13 million each year for four years commencing in 2002."
Mr. Fagan concluded, "Our current view is that while we now have a broader base of 2G and 3G licensees, recurring royalty revenue in 2002 will continue to be affected by sales trends in the mobile wireless market. In particular, sales performance of leading Japanese equipment producers that form a significant portion of our licensees, our success in expanding our licensee base, and enhancing the level of payment from current licensees also will affect our 2002 royalty revenues. Total revenues in 2002 will be augmented slightly by specialized engineering service revenue as we near completion of the WTDD technology to be delivered to Nokia. Finally, our operating expense levels should grow modestly over 2001 levels. Based on expected recurring royalties, currently planned expenses and our ongoing licensing activities, we remain cautiously optimistic that we can grow revenues 10% - 20% in 2002 and we are targeting slightly negative to breakeven cash flow for the year." |
