Quarterhill Inc. (NASDAQ:QTRH) Q1 2019 Earnings Conference Call Transcript

May 09, 2019 • 10:00 am ET

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Quarterhill Inc. (NASDAQ:QTRH) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and welcome to Quarterhill's First Quarter Fiscal 2019 Financial Results Conference Call. On this mornings call, we have Doug Parker, Quarterhill's President and Chief Executive officer; and Shaun McEwan, Quarterhill's Chief Financial Officer. At this time, all participants are in a listen-only mode. Following management's presentation, we will conduct the question-and-answer session, during which analysts are invited to ask questions. (Operator Instructions)

Earlier this morning, Quarterhill issued a news release announcing its financial results for the three months ended March 31st, 2019. This news release along with the company's MD&A and financial statements will be available on Quarterhill's website and will be filed on SEDAR and EDGAR. Certain matters discussed in today's conference call or answers that may be given to questions could constitute forward-looking statements. Actual results could differ materially from those anticipated. Risk factors that could affect results are detailed in the company's annual information form and other public filings that are made available on SEDAR and EDGAR.

During this conference call, Quarterhill will refer to adjusted EBITDA. Adjusted EBITDA does not have any standardized meaning prescribed by U.S. GAAP. Adjusted EBITDA is defined in the company's quarterly and annual filings that are also made available on SEDAR and EDGAR. Please note that all financial information provided is in U.S. dollars unless otherwise specified.

I would now like to turn the meeting over to Mr. Parker. Please go ahead, sir.

Executive
Doug Parker

Good morning, everyone, and thank you for joining us on today's call. I will start things off with an overview of business activity in Q1, followed by some comments on our M&A efforts. Shaun will then take a more detailed look at some of the key numbers and then we'll open it up to questions.

Q1 was a strong start to the year and continued our operational momentum for Q4 of last year. WiLAN had a good quarter with business generating strong revenue and adjusted EBITDA. WiLAN's results showed us the positive side of the variable inherent in its business model and its ability to ultimately generate good cash flow in a given quarter. IRD also had a good quarter with strong year-over-year growth in what is typically a seasonally slow period for that business.

Looking at the high level numbers, we grew significantly over Q1 last year. Q1 revenue was $39.8 million, ahead of the forecast range of $33 million to $36 million we had provided with our year-end results, and adjusted EBITDA was $12.5 million. We ended the quarter with cash and equivalents of $53.8 million, which was down from year-end but that was due primarily to a $27.1 million increase in receivables in Q1. A majority of that increase was collected post-quarter end, so Shaun will provide an update later on in the call as to the cash balance on hand today.

Looking briefly at each of our businesses, I'll start with WiLAN. WiLAN did $28.1 million of revenue in the quarter and $14.8 million of adjusted EBITDA. These numbers were up significantly year-over-year