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Unwired Planet, Inc. Announces Fourth Quarter and Fiscal Year 2014 Financial Results

Companies mentioned in this article: Unwired Planet, Inc.

RENO, Nev. -- (BUSINESS WIRE) -- Unwired Planet, Inc. (NASDAQ: UPIP) today announced financial results for the fourth quarter and fiscal year 2014.

Revenue for the fourth quarter ended June 30, 2014 was $36.4 million, while operating income from continuing operations totaled $25.0 million. Revenue for the fiscal year ended June 30, 2014 was also $36.4 million, and operating income from continuing operations for the year totaled $3.4 million.

“The Lenovo transaction obviously had a significant positive impact for us in fiscal 2014. While it continues to be a tough licensing environment, we remain committed to pursuing licensing on a fair, reasonable and non-discriminatory basis,” said Eric Vetter, president and chief administrative officer of Unwired Planet.

On a GAAP basis, net income for the fourth fiscal quarter ended June 30, 2014 was $24.3 million, or $0.22 earnings per share, compared with a net loss of $8.7 million, or $0.09 per share, in the June quarter of the preceding year. Net income for the fiscal year ended June 30, 2014 was $0.4 million, compared to a net loss of $47.6 million, or $0.53 per share during the previous year.

On a non-GAAP basis, net income for the fourth fiscal quarter ended June 30, 2014 was $26.9 million, or $0.24 per share, compared with a net loss of $4.9 million, or $0.05 per share, in the June quarter of the preceding year. Non-GAAP net income for the fiscal year ended June 30, 2014 was $4.8 million, or $0.04 per share, compared with a net loss of $25.8 million, or $0.27 per share in the previous year. Non-GAAP net income/loss excludes restructuring, stock-based compensation, consultant stock-based compensation, strategic and post strategic costs, discontinued operations, and the tax impact of these items.

A reconciliation between net income/loss and net income/loss per share from a GAAP basis to a non-GAAP basis is provided below in a table immediately following the Condensed Consolidated Statements of Cash Flows.

Conference Call Information

Unwired Planet has scheduled a conference call for 5:00 p.m. eastern daylight time today to discuss its financial results for its fourth quarter and full fiscal year 2014. Interested parties may access the conference call over the Internet through the company's website at www.unwiredplanet.com or by telephone at 888-438-5491 or 719-457-2627 (international). A replay of the conference call will be available for one week (August 21), beginning at 5:00 p.m. PT on August 14 by calling 888-203-1112. The replay can be accessed internationally by calling 719-457-0820, access code: 8696150#.

A live webcast of the call, together with supplemental financial information, will also be available on the Investors section of Unwired Planet’s website at http://www.unwiredplanet.com/investors. A replay will be available on the website for at least three months.

About Unwired Planet

Unwired Planet, Inc. (NASDAQ: UPIP) is the inventor of the Mobile Internet and a premier intellectual property company focused exclusively on the mobile industry. The company's patent portfolio of approximately 2,500 issued and pending US and foreign patents, includes technologies that allow mobile devices to connect to the Internet and enable mobile communications. The portfolio spans 2G, 3G, and 4G technologies, as well as cloud-based mobile applications and services. Unwired Planet's portfolio includes patents related to key mobile technologies, including baseband mobile communications, mobile browsers, mobile advertising, push notification technology, maps and location based services, mobile application stores, social networking, mobile gaming, and mobile search. Unwired Planet is headquartered in Reno, Nevada. References in this release to Unwired Planet may be to Unwired Planet, Inc. or its subsidiaries.

Cautionary Note Regarding Forward Looking Statements

Any statements in this press release with respect to future events or expectations, including statements regarding the Company’s licensing activities and related recognition of revenue and expectations regarding enhancing shareholder value are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1943 and Section 27A of the Securities Act of 1933. These forward-looking statements are subject to many risks and uncertainties that could cause actual results to differ materially from those projected. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Unwired Planet assumes no obligation to update the forward-looking statements included in this press release.

For a detailed discussion of these and other factors that may cause these forward looking statements not to come true, please refer to the risk factors discussed in Unwired Planet’s filings with the U.S. Securities and Exchange Commission ("SEC"), including the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2013. These documents are available through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov or from Unwired Planet’s website at www.unwiredplanet.com.

 
UNWIRED PLANET, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
   
June 30,
  2014     2013  

ASSETS

Current assets:
Cash and cash equivalents $ 93,877 $ 47,613
Short-term investments 40,068 10,793
Restricted cash 378 17,251
Accounts receivable - 88
Prepaid and other current assets   666     420  
Total current assets 134,989 76,165
Property and equipment, net 187 212
Long-term investments 11,745 -
Initial direct license costs, net 2,061 -
Debt issuance costs and other assets, net   1,459     1,861  
Total assets $ 150,441   $ 78,238  
 

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 1,181 $ 2,317
Fee share obligation 12,850 -
Deferred revenue 5,005 -
Accrued liabilities 1,577 2,817
Accrued legal expense 4,054 3,686
Accrued compensation 605 1,057
Accrued restructuring costs   254     594  
Total current liabilities 25,526 10,471
Accrued restructuring costs, net of current portion - 259
Fee share obligation, net of current portion 7,182 -
Long-term note payable 25,693 22,096
Deferred revenue, net of current portion 28,566 -
Other long-term liabilities   403     1,485  
Total liabilities   87,370     34,311  
Stockholders' equity
Preferred stock - -
Common stock 111 100
Treasury stock (884 ) (575 )
Additional paid-in-capital 3,243,757 3,224,769
Accumulated other comprehensive income 24 2
Accumulated deficit   (3,179,937 )   (3,180,369 )
Total stockholders' equity   63,071     43,927  
Total liabilities and stockholders' equity $ 150,441   $ 78,238  
 
UNWIRED PLANET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
       
Three Months Ended Fiscal Year Ended June 30,
  2014     2013     2014     2013  
Net revenue $ 36,396 $ 85 $ 36,396 $ 121
 
Operating costs and expenses:
Sales and marketing expense - 27 - 109
Patent licensing expenses 6,816 4,705 23,008 16,281
General and administrative 4,554 4,960 9,975 21,451
Restructuring and other related costs   9     (77 )   9     1,771  
Total operating costs and expenses   11,379     9,615     32,992     39,612  
Operating income (loss) from continuing operations 25,017 (9,530 ) 3,404 (39,491 )
 
Interest income 26 16 121 189
Interest expense (979 ) (31 ) (3,697 ) (34 )
Other income (expense), net   360     823     625     (301 )
Income (loss) from continuing operations   24,424     (8,722 )   453     (39,637 )
 
Income taxes   -     42     -     42  
 
Income (loss) from continuing operations 24,424 (8,764 ) 453 (39,679 )
 
Discontinued operations:
Gain (loss) on sale of discontinued operations, net of tax - - - (150 )
Gain (loss) from discontinued operations, net of tax   (80 )   55     (20 )   (7,784 )
Income (loss) from discontinued operations, net of tax (80 ) 55 (20 ) (7,934 )
       
Net income (loss) $ 24,344   $ (8,709 ) $ 433   $ (47,613 )
 
Basic/Diluted net income (loss) per share from:
Continuing operations $ 0.22 $ (0.09 ) $ - $ (0.44 )
Discontinued operations   -     -     -     (0.09 )
Net income (loss) per share $ 0.22   $ (0.09 ) $ -   $ (0.53 )
 
Weighted average shares outstanding
Basic 111,236 92,078 108,032 90,843
Diluted 112,621 92,078 108,703 90,843
 
UNWIRED PLANET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except per share data)
       
Three Months Ended June 30, Fiscal Year Ended June 30,
  2014     2013     2014     2013  
Cash flows from operating activities:
Net income (loss) $ 24,344 $ (8,709 ) $ 433 $ (47,613 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

3,193 2,133 7,804 10,534
Changes in operating assets and liabilities:   51,111     (1,277 )   66,039     (32,865 )
Net cash provided by (used in) operating activities   78,648     (7,853 )   74,276     (69,944 )
 
Cash flows from investing activities:
Purchases of property and equipment (10 ) (5 ) (72 ) (269 )
Payments to vendors related to the sale of discontinued operations - - - (1,893 )
Proceeds from sale of discontinued operations - - - 600
Purchases of short-term investments - - (29,854 ) (10,014 )
Proceeds from sales and maturities of investments 10,000 10,778 37,107 52,389
Purchases of long-term investments   (6,504 )   -     (48,483 )   (948 )
Net cash provided by (used in) investing activities   3,486     10,773     (41,302 )   39,865  
 
Cash flows from financing activities:
Proceeds from note payable, net of discounts - 22,066 - 22,066

Proceeds from registered direct issuance of common stock, net of offering costs

- 14,785 - 14,785
Proceeds from rights offering issuance of common stock - - 12,500 -
Proceeds from exercise of stock options 941 175 2,571 1,701
Payment of debt and equity issuance costs - - (1,472 ) -
Purchase of treasury stock (90 ) (575 ) (309 ) (575 )
Employee stock purchase plan   -     -     -     6  
Net cash provided by financing activities   851     36,451     13,290     37,983  
 
Net increase in cash and cash equivalents 82,985 39,371 46,264 7,904
Cash and cash equivalents at beginning of period   10,892     8,242     47,613     39,709  
Cash and cash equivalents at end of period $ 93,877   $ 47,613   $ 93,877   $ 47,613  
 

Non-GAAP Measure

The Company’s stated results include the non-GAAP measures: non-GAAP net loss and non-GAAP net loss per share. These non-GAAP measures exclude certain items that generally are non-recurring events or are non-cash items that many other companies exclude, in order to compare Unwired Planet with other companies, such as stock-based compensation. These non-GAAP measures also exclude items which management does not consider in evaluating Unwired Planet’s on-going business, such as restructuring costs and discontinued operations. Unwired Planet considers non-GAAP net income (loss) to be an important metric because it provides a useful measure of the operational performance of Unwired Planet and is used by Unwired Planet's management for that purpose. In addition, investors often use measures such as these to evaluate the financial performance of a company. These non-GAAP measures are presented for supplemental informational purposes only for understanding Unwired Planet's operating results. These non-GAAP results should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies.

       
UNWIRED PLANET, INC.
RECONCILIATION FROM GAAP INCOME (LOSS) TO NON-GAAP INCOME (LOSS) - UNAUDITED
(In thousands, except per share data)
 
 
Three Months Ended June 30, Fiscal Year Ended June 30,
Reconciliation from GAAP 2014 2013 2014 2013
Income (loss) to Non-GAAP Income (loss):
Net Income (loss) $ 24,344 $ (8,709 ) $ 433 $ (47,613 )
Exclude:
Restructuring costs - (77 ) 9 1,771
Stock-based compensation 372 2,003 2,222 6,235
Consultant stock-based compensation 2,130 1,540 2,130 1,540
Strategic costs - - - 2,877
Post strategic costs - 377 - 1,450
Discontinued operations, net of tax 80 (55 ) 20 7,934
Tax impact related to unusual transactions   -   -     -   42  
Non-GAAP net Income (loss) $ 26,926 $ (4,921 ) $ 4,814 $ (25,764 )
 
GAAP net Income (loss) per share $ 0.22 $ (0.09 ) $ - $ (0.52 )
Exclude:
Restructuring costs - - - 0.02
Stock-based compensation - 0.02 0.02 0.07
Consultant stock-based compensation 0.02 0.02 0.02 0.02
Strategic costs - - - 0.03
Post strategic costs - - - 0.02
Discontinued operations, net of tax - - - 0.09
Tax impact related to unusual transactions   -   -     -   -  
Non-GAAP net Income (loss) per share $ 0.24 $ (0.05 ) $ 0.04 $ (0.27 )
 
Shares used in computing net loss per share
Basic 111,236 92,078 108,032 90,843
Diluted 112,621 92,078 108,703 90,843


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