Quarterhill Inc T.QTRH

Dividend Maintained?

[Barrhavenite]

A question for the more informed here. Cabbie, VG, Moribund etc. It is expected for QTRH to divest of Wilan at some point to become a pureplay ITS. Is it safe to say the dividend will be suspended at that point or before?

[cabbieJBJ]

There is no info to inform of a change or otherwise.  Your guess Barrhavenite; if you want to start a rumor tho...have at it.  Why would you even ask that?  FUD?

[Barrhavenite]

Cabbie...no false rumour, no fear created. Wilan is for sale as it has been for years off and on but no buyers. ITS is QTRH's future and I question whether the dividend would be maintained as a growth company opposed to value.  

[cabbieJBJ]

Fair enough barhavenite.  Against a comp basket of ITS companies, QTRH is one of the few that pay a divvy.  That could be a point of differentiation as well.  The annual cost is ~USD $4.3M. My basket of public ITS comps is: USA - ITI, REKR, VRRM, ROP, DATK, GSI, CUBI, CNDT and offshore - TAGM-B-ST, QFR.OL, KTCG.VI and S63.SI

[Barrhavenite]

Agreed Cabbie. QTRH is one of few and that dividend is coming from the steady flow of cash through the patent business not the ITS side. Whether Wilan is divested of next month, next year or whenever I ask the question whether the dividend is sustainable as a pure ITS company. IMO, it is not.

[cabbieJBJ]

It is NOT a question of sustainability barhavenite.  It will be a question of choice.  The ITS business will produce a much more predictable and sustainable annual cash flow than patent monetization.

[Buyreallow]

Debateable whether or not ITS business can deliver a sustainable cash flow.  Extremely competitive, tight margins, technological advancements will make it difficult to deliver consistently long term.

[cabbieJBJ]

Well, if that's your honest belief barhavenite, I suggest you sell your shares and boogie on down to Carling Ave. and apply for a job.  Doesn't look like you've done your homework on ETC, its technology and the technology rub off/contrubution from the wireless and semiconductor expertise within QTRH.  If QTRH can manage ITS margins through inflation, they will do just fine.

[redcoats]

I'd bail if I were you. Oh, wait! You already have, and would like to get back in, lower. LOL 

[v_guerriero]

Except, one big thing, ETC is a sub scale ITS company vs Transcore, Conduent,  etc.  Some of these at scale players have 10-20X the R&D budget and don't have to finance litigation campaigns and losses for an IP subsidiary.   Any sign of success from ETC will lead to competitive responses.   You can look at the facts of the ITS business.  It doesn't produce

[Barrhavenite]

Thanks Cabby and VG for your informed opinions. The dividend is important while we wait and time will tell whether WiLan remains a public company. Chug along QTRH with the dividend or the market cap will be adjusted to the downside considerably and quickly.

[cabbieJBJ]

Just to provide my perspective on weegee's assumptions and opinions.  As usual, weegee's statements are presented as facts, but are, in fact, mostly opinions based on assumptions. The only facts in his post: QTRH is NOT at scale compared to Conduent/Transcore: TRUE.  However, it is a solid second tier player with a strong growth trajectory; recall that the ETC/IRD units has

[v_guerriero]

And you always forget to include the debt, the patent finance obligations and the expected Sharp and Vizio losses and the Viziya arbitration payment that when all added together are MORE than the cash on hand.   They don't have $150M of cash to spend.  If they do spend that, the overall risk profile and bankruptcy risk profile would change dramatically (especially if they spend

[cabbieJBJ]

I didn't forget anything weegee. EBIDTA from acquisitions cover the financing cost, with money left over. That's OK with me for a growth company. So far, performance seems in line with that objective. .