Wi-Lan Inc. continues to bleed
There is no respite for the Calgary-based Wi-Lan Inc. on the financial front. The company has been in the red for quite some time, and now the problem seems to have aggravated to the extent where it simply can be dubbed as bleeding. Going by the Q4 numbers released by the company, Wi-Lan’s losses have now mounted to $16.9 million, nearly six times higher than a year earlier.
According to the company’s own admission, the financial performance has turned dismal owing to the fact that it had to borne several unexpected charges including a write down of intangible assets. For instance, there was a $2.5-million charge for accrued retention bonuses, severance costs, bad debt expense and warranty accruals and a $1.6-million inventory adjustment. The wireless technology developer which had also got into a spat with U.S. communications equipment giant Cisco Systems has witnessed a hefty fall in its revenue in Q4 — $4.9 million as against $6.1 million in the corresponding period last year.
The biggest cause of worry for the company certainly is a drastic drop in sales of flagship wireless products in the fourth quarter. In this given period, sales figures of its established products nose dived to just $1.7 million, down from $3.7 million in the quarter ending Oct. 31, 2004. Owing to this dismal performance, company’s cash balance reserves have dwindled to just $3.7 million and it is now looking to financial restructuring options for which it has hired GMP Securities as advisor. The company is also borrowing up to $2 million short-term loan, probably to meet its operational cost requirements. All in all, the situation only seems to be turning from bad to worse for a company which had shown a lot of promise in the past.
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