Quarterhill Inc T.QTRH

Wilan 4 Yr Average Gross Margin Means Sell Wilan subsidiary

[shareholders1]

...After the Apple settlement.

I used 2018 and 2017 FS (in $US) and converted at 1.25. I have done this quickly, so anyone that has their own long term spreadsheet with accurate numbers, please feel free to correct mine.

2017 to 2020 Ave Annual Gross Margin = $42,443  Cdn

This is before below the line, Opex.

Average Annual Opex (incl non-cash) =   $65,498. A good/ reasonable % of this would be attributable to Wilan.

The BoD needs an overhaul.

Wilan must be sold to a more efficient patent licensing operator. Based on my rough #'s, Wilan does not seem to be efficient at all.

[Eccm]

Quarterhill would not exist without win. Why the urgency to kill the goose that lays the golden egg(s)?

[shareholders1]

How are you counting golden eggs?  Are you using QTRH Press Release Headlines with gross $ license numbers, or are you using  $'s after direct costs? Or how about the gross settlement $'s after both direct costs and QTRH's  very large operating costs? The later includes about $1m in annual BoD fees, and who knows how many layers of bureaucracy in both Canada and US

[Capharnaum]

I think you're mistaken if you think that corporate costs would change even if they sold Wilan.

[Capharnaum]

I looked at Wilan specifically... their SG&A costs were on average $2M per year if you look at the last four years. Last year, it was $3.4M. Direct cost of revenue was on average 63%. Using an average $42M of revenue, then cash costs would be on average around $29M. This means on average, Wilan brought $13M of cash, or $52M over four years. If you would consider a 4 year average, then $13M of

[cabbieJBJ]

Shareholders, a deeper analysis indicates that a licensing business fire sale is not warranted. The licensing segment gross margin fluctuates dramatically, which is not surprising given the lumpiness of revenues.  I went back to 2015 which provides 2 full years pre ITS.  In addition, since the 2015 - 2018 the finacnials break out the below the line items you talked about in your post

[shareholders1]

Cabbie, I did NOT say Wilan should be sold via "fire sale" process. Companies are bought and sold all the time via auction type process. Wilan could be sold too. Capharnaum, i think you have confused my gross margin #s with revenue.

[cabbieJBJ]

Shareholders, you last paragraph led me to that conclusion. I don't necessarily see a sale as urgently needed, as your post suggest. However, it may be the better option. The 3 key questions in my post are important to forming an opinion on urgency.

[Justhalffull]

Have to say I agree with you Shareholder.  Patent business is not looking good.  But for the opportunity of a big Apple payout, the balance of the patent portfolio seems to be for misiscule settlements resulting is little or no profit after legals.  As for the ITS business, yes, they might make a few million a year, but I'm not in a 100 million share company for a few million

[astutein]

cabbie Most of posts today refer to results of Wilan for past years are based upon old technology 4LTE with exception of  INTEL. What no one makes mention of is our second Apple case in Germany for semiconductors relating to Pre-random memory interface  .I know nothing about this topic but I hope it is for material dollars. A  successful decision could possibly trigger a wave

[cabbieJBJ]

Astutein, the IP being asserted v. Apple in Germany is part of the Polaris portfolio that Wilan has been successfully licensing for a long time.  The IP was acquired from Infineon in 2015. I believe it was an outright purchase, so the gross margins should be attractive, if successful.  Some of the licesnsees to this portfolio include TSMC, LG, Nvidia, CXMT and Kingston, among others