Quarterhill Inc T.QTRH

RE:RE:RE:Qtrh

[cabbieJBJ]

Homework is right.  Even if there is ZERO imporvement in direct cost management, there are ~$33M of extraordinary items in 2022 that won't appear in 2023:

• Viziya arbitration settlement identified by HW: $14.6M
• "Learning" from unanticipated implementation costs: $10.5M
• Cost of staffing and other ciosts cutting measures: $4M
• Savings from cost cutting measures: $4M

2022 was a year of learning.  The company had never been awarded contracts of the size and scope that they did in late 2021 and 2022.  While the performance should have been much better, there is value from learning from mistakes - so long as they do not repeat.  All these contracts are past the mid point s,o JG is credible when he says there should not be any more major surprises.  While there will always be unanticipated items, the company claims it has implemented a more rigorous review of project progress and costs.  This, in concert with exposure to a wider audience (JG's words), should  lead to early recognition of issues.  In principle this is the right approach.