IDC earnings:
biz.yahoo.com
Thursday February 25, 8:43 am Eastern Time
Company Press Release
InterDigital Communications Corporation Reports Strongest Financial Performance in History
Improvement Attributed to Successful Patent Licensing
KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--Feb. 25, 1999-- InterDigital Communications Corporation (ASE: IDC) reported today the strongest financial performance in the Company's history. For the full year of 1998, InterDigital earned $.75 per share (diluted) on net income of $36.7 million, primarily due to its successful patent licensing efforts and disciplined focus on cost management.
This performance compares to a net loss of $34.5 million, or ($.72) per share (diluted), for the full year of 1997. Fourth quarter earnings in 1998 totaled $.36 per share (diluted) on net income of $17.5 million, compared to a loss of $11.9 million, or ($.25) per share (diluted) during the same period in 1997.
Revenues for the year ending December 31, 1998 totaled $99.2 million compared to $49.8 million generated in fiscal year 1997. The increase resulted from higher licensing and alliance revenues associated with (i) establishing a new alliance partnership with Alcatel, (ii) four new TDMA patent licensing relationships, and (iii) additional licensing revenue from two existing TDMA patent licensees.
InterDigital's licensing and alliance revenues during 1998 totaled approximately $92.5 million while product and related service revenues totaled $6.7 million. During the fourth quarter, revenues totaled $37.9 million, compared to $2.5 million during the same period in 1997.
InterDigital ended 1998 with approximately $52 million in cash and short-term investments as compared to $26 million at the end of 1997. In addition, cash flow is expected to be strong in the first quarter of 1999. This is due to expected cash payments of approximately $40 million from the above noted additional licensing revenue and a new relationship with Nokia.
In line with InterDigital's previously announced plan to reduce its resource commitment to the UltraPhone® product, the Company recorded non-cash charges against earnings in 1998 of approximately $9 million, $5.5 million of which was taken in the fourth quarter, to reduce the carrying value of inventory on hand.
''We made important strides in 1998 to enhance our strategic direction and strengthen our organization. We have affirmed our position as an innovative provider of air interface technology. In doing so, we have reduced our efforts in supplying full finished systems and therefore, cut operating expenses in areas of lesser strategic importance and strengthened our overall financial position.
''We are focused on establishing more relationships in the industry where our technology can be used commercially and we have been successful in our efforts. Our tremendous success with TDMA patent licensing indicates that InterDigital's technical inventions are recognized and respected by the wireless industry. Additionally, our new relationship with Nokia is evidence of our commitment to find new areas, such as high-speed data applications suitable for Internet access, where we can apply our technical expertise to establish additional revenue opportunities,'' explained William Doyle, President.
''InterDigital's success in 1998 has created momentum for technology and product development in 1999. We still expect licensing and alliance revenue to be the largest contributor to 1999 financial results. Based on the quality of our patent portfolio and our past performance in attracting new licensees, we believe this area of our business represents further revenue opportunities. In addition, our development project with Nokia is now underway, which we expect will generate engineering services revenue over the next several years and add to the strength of InterDigital's patent portfolio, creating future revenue potential.
''We continue to seek opportunities to strengthen our position in the telecommunications industry, maximizing our technical expertise. We believe we can capture opportunities in the wireless local loop market while positioning ourselves as a leading technology provider for third generation and mobile markets,'' Mr. Doyle said.
Period Ended December 31,
Three Months Twelve Months
------------ -------------
1998 1997 1998 1997
------ ------ ------ ------
(in thousands, except per share data)
Revenues $37,854 $2,503 $99,221 $49,836
Net Income (Loss) 17,588 (11,881) 36,968 (34,267)
Preferred Stock Dividend (63) (64) (255) (256)
Net Income (Loss)
Applicable to
Common Shareholders $17,525 ($11,945) $36,713 ($34,523)
Net Income (Loss)
Per Common
Share - Diluted $0.36 ($0.25) $0.75 ($0.72)
Weighted Average Number
of Common Shares
Outstanding
- Diluted 48,752 48,219 48,771 48,166
InterDigital is an innovative technology developer for the wireless telecommunications industry. In conjunction with the B-CDMA Alliance(tm), which includes Samsung and Alcatel, InterDigital is commercializing its new B-CDMA(tm) technology for use in wireless communication products.
The Company is also developing new technology with Nokia to address high data rate applications for third generation products. InterDigital®, Broadband Code Division Multiple Access(tm), and B-CDMA(tm) are among the trademarks of InterDigital Communications Corporation. For more information, please visit InterDigital's web site: www.interdigital.com.
This press release contains forward looking statements reflecting InterDigital's current beliefs and expectations as to its cash position in the first quarter of 1999, anticipated sources of 1999 revenue including timing of payments and strategic goals. Such statements are subject to risks and uncertainties.
Actual outcomes could materially differ from those expressed in any such forward looking statements due to a variety of factors. These factors include but are not limited to: failure of licensees and alliance partners to meet expectations or commitments; inability to successfully negotiate licensing agreements for InterDigital's intellectual property or to enforce InterDigital's rights under its license agreements, failure to enter additional sufficient strategic alliances necessary to achieve the Company's business objectives, Nokia's exercise of its rights to terminate the development project for convenience, technical, financial or other difficulties or delays in the development, re-engineering, production, testing or commercialization and marketing of InterDigital's products or technologies and adverse outcomes of legal proceedings relating to InterDigital's assertion of its patent rights. InterDigital undertakes no duty to publicly update any forward looking statements, whether as a result of new information, future events or otherwise. |
