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Gizmodo - Apple's Looking for MacBook 3G Testers: Hmmmm - Macbook 3g
Giorgio Verzoletto - An AT&T exec hinted at a MacBook with built-in 3G earlier, and now Apple’s looking for a Mac Hardware QA engineer to test “3G Wireless WAN in a detailed, timely manner.” Hmmmm. [Apple via PCWorld]
Read more:
Gizmodo - Apple's Looking for MacBook 3G Testers: Hmmmm - Macbook 3g
Plane Circling Lower Manhattan Is A "Photo Op," FAA Says UPDATED VIDEO
http://www.huffingtonpost.com/2009/04/27/plane-circling-lower-manh_n_191736.html
Plane Circling Lower Manhattan Is A "Photo Op," FAA Says UPDATED VIDEO
http://www.huffingtonpost.com/2009/04/27/plane-circling-lower-manh_n_191736.html
Plane Circling Lower Manhattan Is A "Photo Op," FAA Says UPDATED VIDEO
http://www.huffingtonpost.com/2009/04/27/plane-circling-lower-manh_n_191736.html
Mickey,
Stay away from this board and don't ignore your lady...hold her and whisper sweet words in her ear. She'll make your heart smile.
DOWJONESInterDigital Sees 'Strong' Free Cash Flow From Licensing
Business In 2009, Future Years
InterDigital Sees 'Strong' Free Cash Flow From Licensing Business In 2009, Future
Years
Last Update: 3/11/2009 2:01:31 PM
(MORE TO FOLLOW) Dow Jones Newswires (201-938-5400)
March 11, 2009 14:01 ET (18:01 GMT)
Damn margin calls, another 2-3 days for this to clear up.
Lol...he's so fat he can't even see his own ^ick.
DOWJONESInterDigital 'Moving Quickly' On Decision For Modem Pdt Ops
InterDigital 'Moving Quickly' On Decision For Modem Pdt Ops
Last Update: 3/3/2009 11:07:40 AM
By Aja Carmichael
Of DOW JONES NEWSWIRES
New York (Dow Jones)--Shares of InterDigital Inc. (IDCC) fell 11% after the
company's fourth-quarter earnings missed Wall Street expectations and the company
reported weakness in its patent license royalties amid a soft Japanese market.
In a conference call Tuesday, Chief Financial Officer Scott A. McQuilkin said the
company's royalties from its Japanese licensees have declined due to "worldwide
economic weakness, inventory adjustments and a shift away from subsidization of
retail handset prices by operators."
McQuilkin added that for the near-term the company expects that its Japanese
licensees, which include Sony Ericsson, LG Electronics and NEC Corp., will
continue to face a challenging environment.
In recent trading, shares of the wireless technology company fell 11% to $25.50.
The stock, which has a market capitalization of $1.14 million as of Tuesday,
declined 12% and hit an intraday low of $25.25 earlier in the trading session.
For the quarter ended Dec. 31, InterDigital reported net income of $3.83 million,
or 9 cents a share, compared with a loss of $1.97 million, or 4 cents a share, a
year earlier.
Revenue rose 6.9% to $58.7 million, helped in part by a $4.1 million increase in
technology solutions revenue and a $3.8 million increase in past infringement.
These increases were partially offset by a $4 million decline in recurring patent
license royalties.
The company said recurring revenue from existing licensing agreements was $51.4
million.
Analysts polled by Thomson Reuters were expecting earnings of 16 cents a share
and $57 million in total revenue.
Looking forward, the company said in the first quarter it expects recurring
revenue from its existing pacts of $69 million to $71 million. The company also
said it is moving quickly to make a final decision on its modem products
operations.
InterDigital holds patents on technologies which it licenses to manufacturers of
second-generation wireless telephone technology - better known as 2G - 2.5G and
3G.
Earlier this year, Samsung Electronics Co. (005930.SE) said it would pay $400
million in royalties to InterDigital to license the company's 2G mobile
technology with no time limit and its 3G products through 2012. The two companies
had been in litigation for almost two years to settle the long-running patent
disputes.
-By Aja Carmichael, Dow Jones Newswires; 201-938-5218;
aja.carmichael@dowjones.com;
(END) Dow Jones Newswires
March 03, 2009 11:07 ET (16:07 GMT)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): March 2, 2009
InterDigital, Inc.
(Exact name of registrant as specified in its charter)
Pennsylvania 1-11152 23-1882087
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
781 Third Avenue, King of Prussia, Pennsylvania 19406-1409
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: 610-878-7800
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On March 2, 2009, InterDigital, Inc. issued a press release announcing its results of operations and financial condition for the fiscal quarter and year ended December 31, 2008. A copy of the press release is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 InterDigital, Inc. press release dated March 2, 2009.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
INTERDIGITAL, INC.
By: /s/ Jannie K. Lau
Jannie K. Lau
Associate General Counsel, SEC
Dated: March 2, 2009
EXHIBIT INDEX
Exhibit No. Description
99.1
InterDigital, Inc. press release dated March 2, 2009
Exhibit 99.1
FOR IMMEDIATE RELEASE
INTERDIGITAL ANNOUNCES FOURTH QUARTER
AND FULL YEAR 2008 FINANCIAL RESULTS
Company Projects First Quarter 2009 Recurring Revenue of $69 million to $71 million
KING OF PRUSSIA, PA — March 2, 2009 — InterDigital, Inc. (NASDAQ: IDCC) today announced results for the fourth quarter and twelve months ended December 31, 2008.
Fourth Quarter 2008 Highlights:
• Revenue of $58.7 million, including $51.4 million of recurring revenue
• Net income of $3.8 million, or $0.09 per share
Full Year 2008 Highlights:
• Revenue of $228.5 million, including $219.1 million of recurring revenue
• Net income of $26.2 million, or $0.57 per diluted share
• Free cash flow 1 of $45.0 million
• Repurchase of 3.8 million shares of common stock for $81.5 million
• Ending cash and short-term investments totaling $141.7 million, or $3.08 per diluted share
William J. Merritt, President and Chief Executive Officer, stated, “During 2008, we delivered solid financial results and achieved a number of important milestones. We closed four new patent license agreements including a significant 2G and 3G license agreement with Samsung, one of the world’s leading brands, which will deliver $400 million in cash over the next 18 months. As of the end of 2008, nearly 50% of all 3G handsets shipped worldwide are under license with InterDigital.”
“In addition, we made excellent progress on our technology development, both in support of our SlimChip™ family of mobile broadband modem solutions and in the generation of new innovative wireless solutions that help shape the wireless industry of the future. With regard to the latter, at the Mobile World Congress in Barcelona, we demonstrated our Media Independent Handover technology with support of British Telecom, showing seamless handover between live 3G and WiFi networks for both data and voice using commercially available handsets and servers adapted with our MIH solutions.”
“In 2008 we delivered on our promise of securing a high return on our investments that we have made over the past few years. As a result, we entered 2009 in the strongest financial position in our company’s history. We intend to leverage that strength by making additional investments both organically and through external acquisitions in technology development and future products that will drive additional shareholder value,” concluded Mr. Merritt.
1 InterDigital defines “free cash flow” as operating cash flow less purchases of property equipment and technology licenses, and patent additions. A detailed reconciliation of free cash flow to GAAP results is provided at the end of this press release.
-more-
Fourth Quarter Summary
The company’s net income of $3.8 million, or $0.09 per fully diluted share, in fourth quarter 2008 posted an increase compared to fourth quarter 2007’s net loss of $2.0 million or $0.04 per share.
Total revenue in fourth quarter 2008 increased to $58.7 million from $54.9 million in fourth quarter 2007. This increase resulted from a $4.1 million increase in technology solutions revenue and a $3.8 million increase in past infringement. These increases were partly offset by a $4.0 million decrease in recurring patent license royalties, which was driven by declining royalties from the company’s Japanese licensees. Fourth quarter 2008 revenue included $46.3 million of recurring patent license royalties, $5.1 million of technology solution sales and $7.3 million primarily associated with a non-refundable prepayment made in a prior period by a licensee that subsequently exited the handset business. Licensees that accounted for 10 percent or more of the $51.4 million of recurring patent license royalties and technology solution sales were LG (28%), Sharp Corporation of Japan (14%) and NEC Corporation of Japan (10%).
Fourth quarter 2008 operating expenses of $53.9 million decreased from $57.6 million in fourth quarter 2007. Fourth quarter 2007 included $7.8 million accrued expense associated with arbitration and litigation contingencies. Patent administration and licensing expenses declined $8.2 million year over year due to a lower level of arbitration and litigation activity. Development expenses increased $8.0 million, most of which related to a companywide charge of $9.4 million in fourth quarter 2008 to adjust the accrual rate on a long-term performance based cash incentive.
Net interest and investment income was $0.6 million in fourth quarter 2008, a decrease of $1.3 million from fourth quarter 2007 due to both lower investment balances and lower investment yields.
The company’s fourth quarter 2008 tax expense consisted of the statutory federal tax rate plus an adjustment to record a research and development credit for 2008 following the U.S. government’s renewal of this credit. The company’s fourth quarter 2007 tax expense consisted of the statutory federal tax rate plus an adjustment to increase the estimated value of 2007 research and development tax credits. The adjustments to the company’s 2008 and 2007 research and development credits are based on the preliminary results of related tax studies and the 2007 amount updates a prior estimate for the credit.
Twelve Months Summary
Net income for the full year 2008 was $26.2 million, or $0.57 per diluted share. For the full year 2007, net income was $20.0 million, or $0.40 per diluted share.
For full year 2008, total revenues were $228.5 million compared to $234.2 million in 2007. Recurring patent licensing revenues decreased $9.0 million to $207.1 million due to the absence of recurring 2G revenue from Sony Ericsson, along with the softening market in Japan. These decreases were partly offset by a $14.2 million increase from all other new and existing licenses. Technology solutions revenue increased to $12.0 million from $3.4 million in 2007 due to increased royalties and license fees from the company’s SlimChip modem IP.
Operating expenses were $191.9 million in 2008, a decrease of $19.3 million over 2007. This decrease is primarily related to a $28.3 million decrease in litigation and arbitration contingencies that were first accrued in 2007. Other operating expenses increased $9.0 million, driven by a companywide charge of $9.4 million in fourth quarter 2008 to adjust the accrual rate on a long-term performance based cash incentive.
-more-
Net interest and investment income was $3.4 million in 2008, a decrease of $5.5 million from 2007, due to both lower investment balances and lower investment yields.
The company’s full year tax expense for both 2008 and 2007 consisted of the statutory federal tax rate plus book-tax permanent differences related to the company’s research and development credits.
In 2008, the company generated $45.0 million of free cash flow. This free cash flow was driven by $85.8 million cash flows from operations, which includes patent license receipts from LG, net of source withholding taxes, totaling $79.3 million, partially offset by estimated federal tax payments and investments in product and patent related initiatives. During 2008, the company utilized free cash flow and existing cash balances to repurchase 3.8 million common shares at a cost of $81.5 million.
First Quarter 2009 Outlook
Scott McQuilkin, Chief Financial Officer, commented, “In first quarter 2009, we expect to report recurring revenues from existing agreements in the range of $69 million to $71 million. The expected increase of nearly $20 million over fourth quarter 2008 levels reflects the recognition of 2 1 / 2 months of revenue under a new patent license agreement with Samsung signed in January 2009, partly offset by the loss of $1.1 million of fixed revenue amortization from a licensee who exited the handset business. This range does not include any potential impact from additional new agreements that may be signed during first quarter 2009 or additional royalties identified in audits regularly conducted by us.”
“In addition, in late 2008, we noted that while we were pleased with the progress of our modem product solutions, we understood the need to evaluate a number of strategic options for that business given the rapidly evolving landscape in the baseband market,” added Mr. McQuilkin. “We have had substantive discussions with a number of companies with respect to building scale as well as selling the business. While we have not made a determination, we are moving quickly to reach a final decision.”
About InterDigital
InterDigital designs, develops and provides advanced wireless technologies and products that drive voice and data communications. InterDigital is a leading contributor to the global wireless standards and holds a strong portfolio of patented technologies which it licenses to manufacturers of 2G, 2.5G, 3G, and 802 products worldwide. Additionally, the company offers a family of SlimChip™ high performance mobile broadband modem solutions, consisting of Baseband ICs, Embedded Modules, Modem IP and Reference Platforms. InterDigital’s differentiated technology and product solutions deliver time to market, performance and cost benefits.
For more information, visit the InterDigital website: www.interdigital.com .
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include the information under the heading “First Quarter 2009 Outlook” and other information regarding our current beliefs, plans and expectations, including, but not limited to, statements with respect to: (i) first quarter 2009 revenue guidance and (ii) the financial impact of the Samsung agreement, (iii) investments by the company in internal resources and external acquisitions, (iv)
-more-
the effect of further commoditization of the baseband market and (v) the timing of a final decision with respect to the strategic direction of our product business. Words such as “projects,” “could,” “expect,” “potential,” and “may” or similar expressions are intended to identify such forward-looking statements.
These forward-looking statements are based on management’s current expectations, estimates, forecasts and projections about the company and are subject to risks and uncertainties that could cause actual results and events to differ materially from those stated in the forward-looking statements. These risks and uncertainties include, but are not limited to, those identified in this press release, as well as the following: (i) changes in the market share and sales performance of our primary licensees, delays in product shipments of our licensees, and timely receipt and final reviews of quarterly royalty reports from our licensees and related matters, (ii) the failure of either the company or Samsung to observe the covenants under their license agreement for any reason, (iii) the failure of Samsung to make any agreed upon payment in the time and manner specified in their license agreement (iv) unexpected deterioration of the company’s financial position, (v) unanticipated developments in the baseband market and (vi) unanticipated delays, difficulties or other developments in our discussions with potential counterparties or other factors affecting our final decision with respect to our product business. Risks and uncertainties that could cause the company’s actual results to differ from those set forth in any forward-looking statement are discussed in more detail under “Risk Factors,” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K for the year ended December 31, 2007, as well as similar disclosures in the company’s subsequent Securities and Exchange Commission filings. Forward-looking statements contained in this press release are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.
-more-
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
For the Periods Ended December 31
(Dollars in thousands except per share data)
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
REVENUES
$ 58,677 $ 54,860 $ 228,469 $ 234,232
OPERATING EXPENSES:
Sales and marketing
2,869 2,045 9,161 7,828
General and administrative
9,698 6,144 26,576 24,210
Patents administration and licensing
10,088 18,310 58,885 67,587
Development
31,287 23,323 101,254 87,141
Arbitration and litigation contingencies
— 7,800 (3,940 ) 24,412
53,942 57,622 191,936 211,178
Income (Loss) from operations
4,735 (2,762 ) 36,533 23,054
NET INTEREST & OTHER INVESTMENT INCOME
643 1,949 3,429 8,949
Income (Loss) before income taxes
5,378 (813 ) 39,962 32,003
INCOME TAX PROVISION
(1,549 ) (1,163 ) (13,755 ) (11,999 )
NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS
$ 3,829 $ (1,976 ) $ 26,207 $ 20,004
NET INCOME (LOSS) PER COMMON SHARE — BASIC
$ 0.09 $ (0.04 ) $ 0.58 $ 0.42
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC
43,243 47,206 44,928 47,766
NET INCOME (LOSS) PER COMMON SHARE — DILUTED
$ 0.09 $ (0.04 ) $ 0.57 $ 0.40
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED
44,341 47,206 45,964 49,489
-more-
SUMMARY CASH FLOW
For the Periods Ended December 31
(Dollars in thousands)
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Net income (loss) before income taxes
$ 5,378 $ (813 ) $ 39,962 $ 32,003
Taxes paid
(7,436 ) — (23,125 ) (16,099 )
Depreciation, amortization, share-based compensation and investment write-down
8,577 9,247 34,697 31,810
Increase in deferred revenue
(944 ) 33,833 84,207 191,436
Deferred revenue recognized
(35,793 ) (31,348 ) (127,949 ) (119,596 )
Increase (decrease) in operating working capital, deferred charges and other
10,234 8,192 78,019 33,173
Capital spending, technology licensing & patent additions
(12,248 ) (13,944 ) (40,825 ) (62,118 )
FREE CASH FLOW
(32,232 ) 5,167 44,986 90,609
Long-term investments
— — (651 ) (5,000 )
Tax benefit from stock options
510 80 1,502 5,123
Debt decrease
(67 ) (94 ) (1,589 ) (1,247 )
Repurchase of common stock
(15,098 ) (17,762 ) (82,331 ) (183,118 )
Proceeds from exercise of stock options
482 105 2,182 6,472
Unrealized gain on short-term investments
399 147 94 663
NET (DECREASE) INCREASE IN CASH AND SHORT-TERM INVESTMENTS
$ (46,006 ) $ (12,357 ) $ (35,807 ) $ (86,498 )
-more-
CONDENSED BALANCE SHEET
(Dollars in thousands)
December 31, 2008 December 31, 2007
Assets
Cash & short-term investments
$ 141,660 $ 177,467
Accounts receivable
33,892 130,880
Current deferred tax assets
49,002 43,734
Other current assets
16,467 19,332
Property & equipment and Patents (net)
123,782 111,686
Long-term deferred tax assets and non-current assets
40,965 51,786
TOTAL ASSETS
$ 405,768 $ 534,885
Liabilities and Shareholders’ Equity
Current portion of long-term debt
$ 1,608 $ 1,311
Accounts payable & accrued liabilities
46,283 76,974
Current deferred revenue
78,646 78,899
Long-term deferred revenue
181,056 224,545
Long-term debt & long-term liabilities
10,515 16,089
TOTAL LIABILITIES
318,108 397,818
SHAREHOLDERS’ EQUITY
87,660 137,067
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY
$ 405,768 $ 534,885
-more-
The company’s short-term investments are comprised of high quality credit instruments including U.S. government agency instruments and corporate bonds. Management views these instruments to be near equivalents to cash and believes that investors may share this viewpoint.
This release includes a summary cash flow statement that results in the change in both the company’s cash and short-term investment balances. One of the subtotals in the summary cash flow statement is free cash flow. The table below presents a reconciliation of this non-GAAP line item to net cash provided by operating activities.
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Net cash (used) provided by operating activities
$ (19,984 ) $ 19,111 $ 85,811 $ 152,727
Purchases of property, equipment, & technology licenses
(4,777 ) (5,945 ) (12,608 ) (38,266 )
Patent additions
(7,471 ) (7,999 ) (28,217 ) (23,852 )
Free cash flow
$ (32,232 ) $ 5,167 $ 44,986 $ 90,609
# # #
Media Contact:
Investor Contact:
Jack Indekeu
Janet Point
Email: jack.indekeu@interdigital.com
Email: janet.point@interdigital.com
+1 (610) 878-7800
+1 (610) 878-7800
InterDigital is a registered trademark and SlimChip is a trademark of InterDigital, Inc.
InterDigital swings to profit in Q4 - Quick facts
3/2/2009 6:23 PM ET
TOP MARKET NEWS
(RTTNews) - InterDigital, Inc. (IDCC) reported net income for the fourth quarter of $3.8 million or $0.09 per share, compared to a net loss of $2.0 million or $0.04 per share for the year-ago quarter.
Total revenue for the fourth quarter increased to $58.7 million from $54.9 million in the prior year quarter.
Analysts polled by Thomson Reuters expected the company to earn $0.16 per share on revenue of $57.36 million for the fourth quarter.
Click here to receive FREE breaking news email alerts for InterDigital Inc. and others in your portfolio
by RTT Staff Writer
For comments and feedback: contact editorial@rttnews.com
InterDigital Announces Fourth Quarter and Full Year 2008 Financial Results
Company Projects First Quarter 2009 Recurring Revenue of $69 million to $71 million
KING OF PRUSSIA, Pa., Mar 02, 2009 (BUSINESS WIRE) -- InterDigital, Inc. (NASDAQ:IDCC) today announced results for the fourth quarter and twelve months ended December 31, 2008.
Fourth Quarter 2008 Highlights:
Revenue of $58.7 million, including $51.4 million of recurring revenue
Net income of $3.8 million, or $0.09 per share
Full Year 2008 Highlights:
Revenue of $228.5 million, including $219.1 million of recurring revenue
Net income of $26.2 million, or $0.57 per diluted share
Free cash flow1 of $45.0 million
Repurchase of 3.8 million shares of common stock for $81.5 million
Ending cash and short-term investments totaling $141.7 million, or $3.08 per diluted share
William J. Merritt, President and Chief Executive Officer, stated, "During 2008, we delivered solid financial results and achieved a number of important milestones. We closed four new patent license agreements including a significant 2G and 3G license agreement with Samsung, one of the world's leading brands, which will deliver $400 million in cash over the next 18 months. As of the end of 2008, nearly 50% of all 3G handsets shipped worldwide are under license with InterDigital."
"In addition, we made excellent progress on our technology development, both in support of our SlimChip(TM) family of mobile broadband modem solutions and in the generation of new innovative wireless solutions that help shape the wireless industry of the future. With regard to the latter, at the Mobile World Congress in Barcelona, we demonstrated our Media Independent Handover technology with support of British Telecom, showing seamless handover between live 3G and WiFi networks for both data and voice using commercially available handsets and servers adapted with our MIH solutions."
"In 2008 we delivered on our promise of securing a high return on our investments that we have made over the past few years. As a result, we entered 2009 in the strongest financial position in our company's history. We intend to leverage that strength by making additional investments both organically and through external acquisitions in technology development and future products that will drive additional shareholder value," concluded Mr. Merritt.
Fourth Quarter Summary
The company's net income of $3.8 million, or $0.09 per fully diluted share, in fourth quarter 2008 posted an increase compared to fourth quarter 2007's net loss of $2.0 million or $0.04 per share.
Total revenue in fourth quarter 2008 increased to $58.7 million from $54.9 million in fourth quarter 2007. This increase resulted from a $4.1 million increase in technology solutions revenue and a $3.8 million increase in past infringement. These increases were partly offset by a $4.0 million decrease in recurring patent license royalties, which was driven by declining royalties from the company's Japanese licensees. Fourth quarter 2008 revenue included $46.3 million of recurring patent license royalties, $5.1 million of technology solution sales and $7.3 million primarily associated with a non-refundable prepayment made in a prior period by a licensee that subsequently exited the handset business. Licensees that accounted for 10 percent or more of the $51.4 million of recurring patent license royalties and technology solution sales were LG (28%), Sharp Corporation of Japan (14%) and NEC Corporation of Japan (10%).
Fourth quarter 2008 operating expenses of $53.9 million decreased from $57.6 million in fourth quarter 2007. Fourth quarter 2007 included $7.8 million accrued expense associated with arbitration and litigation contingencies. Patent administration and licensing expenses declined $8.2 million year over year due to a lower level of arbitration and litigation activity. Development expenses increased $8.0 million, most of which related to a companywide charge of $9.4 million in fourth quarter 2008 to adjust the accrual rate on a long-term performance based cash incentive.
Net interest and investment income was $0.6 million in fourth quarter 2008, a decrease of $1.3 million from fourth quarter 2007 due to both lower investment balances and lower investment yields.
The company's fourth quarter 2008 tax expense consisted of the statutory federal tax rate plus an adjustment to record a research and development credit for 2008 following the U.S. government's renewal of this credit. The company's fourth quarter 2007 tax expense consisted of the statutory federal tax rate plus an adjustment to increase the estimated value of 2007 research and development tax credits. The adjustments to the company's 2008 and 2007 research and development credits are based on the preliminary results of related tax studies and the 2007 amount updates a prior estimate for the credit.
Twelve Months Summary
Net income for the full year 2008 was $26.2 million, or $0.57 per diluted share. For the full year 2007, net income was $20.0 million, or $0.40 per diluted share.
For full year 2008, total revenues were $228.5 million compared to $234.2 million in 2007. Recurring patent licensing revenues decreased $9.0 million to $207.1 million due to the absence of recurring 2G revenue from Sony Ericsson, along with the softening market in Japan. These decreases were partly offset by a $14.2 million increase from all other new and existing licenses. Technology solutions revenue increased to $12.0 million from $3.4 million in 2007 due to increased royalties and license fees from the company's SlimChip modem IP.
Operating expenses were $191.9 million in 2008, a decrease of $19.3 million over 2007. This decrease is primarily related to a $28.3 million decrease in litigation and arbitration contingencies that were first accrued in 2007. Other operating expenses increased $9.0 million, driven by a companywide charge of $9.4 million in fourth quarter 2008 to adjust the accrual rate on a long-term performance based cash incentive.
Net interest and investment income was $3.4 million in 2008, a decrease of $5.5 million from 2007, due to both lower investment balances and lower investment yields.
The company's full year tax expense for both 2008 and 2007 consisted of the statutory federal tax rate plus book-tax permanent differences related to the company's research and development credits.
In 2008, the company generated $45.0 million of free cash flow. This free cash flow was driven by $85.8 million cash flows from operations, which includes patent license receipts from LG, net of source withholding taxes, totaling $79.3 million, partially offset by estimated federal tax payments and investments in product and patent related initiatives. During 2008, the company utilized free cash flow and existing cash balances to repurchase 3.8 million common shares at a cost of $81.5 million.
First Quarter 2009 Outlook
Scott McQuilkin, Chief Financial Officer, commented, "In first quarter 2009, we expect to report recurring revenues from existing agreements in the range of $69 million to $71 million. The expected increase of nearly $20 million over fourth quarter 2008 levels reflects the recognition of 2 1/2 months of revenue under a new patent license agreement with Samsung signed in January 2009, partly offset by the loss of $1.1 million of fixed revenue amortization from a licensee who exited the handset business. This range does not include any potential impact from additional new agreements that may be signed during first quarter 2009 or additional royalties identified in audits regularly conducted by us."
"In addition, in late 2008, we noted that while we were pleased with the progress of our modem product solutions, we understood the need to evaluate a number of strategic options for that business given the rapidly evolving landscape in the baseband market," added Mr. McQuilkin. "We have had substantive discussions with a number of companies with respect to building scale as well as selling the business. While we have not made a determination, we are moving quickly to reach a final decision."
About InterDigital
InterDigital designs, develops and provides advanced wireless technologies and products that drive voice and data communications. InterDigital is a leading contributor to the global wireless standards and holds a strong portfolio of patented technologies which it licenses to manufacturers of 2G, 2.5G, 3G, and 802 products worldwide. Additionally, the company offers a family of SlimChip(TM) high performance mobile broadband modem solutions, consisting of Baseband ICs, Embedded Modules, Modem IP and Reference Platforms. InterDigital's differentiated technology and product solutions deliver time to market, performance and cost benefits.
For more information, visit the InterDigital website: www.interdigital.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include the information under the heading "First Quarter 2009 Outlook" and other information regarding our current beliefs, plans and expectations, including, but not limited to, statements with respect to: (i) first quarter 2009 revenue guidance and (ii) the financial impact of the Samsung agreement, (iii) investments by the company in internal resources and external acquisitions, (iv) the effect of further commoditization of the baseband market and (v) the timing of a final decision with respect to the strategic direction of our product business. Words such as "projects," "could," "expect," "potential," and "may" or similar expressions are intended to identify such forward-looking statements.
These forward-looking statements are based on management's current expectations, estimates, forecasts and projections about the company and are subject to risks and uncertainties that could cause actual results and events to differ materially from those stated in the forward-looking statements. These risks and uncertainties include, but are not limited to, those identified in this press release, as well as the following: (i) changes in the market share and sales performance of our primary licensees, delays in product shipments of our licensees, and timely receipt and final reviews of quarterly royalty reports from our licensees and related matters, (ii) the failure of either the company or Samsung to observe the covenants under their license agreement for any reason, (iii) the failure of Samsung to make any agreed upon payment in the time and manner specified in their license agreement, (iv) unexpected deterioration of the company's financial position, (v) unanticipated developments in the baseband market and (vi) unanticipated delays, difficulties or other developments in our discussions with potential counterparties or other factors affecting our final decision with respect to our product business. Risks and uncertainties that could cause the company's actual results to differ from those set forth in any forward-looking statement are discussed in more detail under "Risk Factors," "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K for the year ended December 31, 2007, as well as similar disclosures in the company's subsequent Securities and Exchange Commission filings. Forward-looking statements contained in this press release are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.
1 InterDigital defines "free cash flow" as operating cash flow less purchases of property equipment and technology licenses, and patent additions. A detailed reconciliation of free cash flow to GAAP results is provided at the end of this press release.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
For the Periods Ended December 31
(Dollars in thousands except per share data)
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
REVENUES $ 58,677 $ 54,860 $ 228,469 $ 234,232
OPERATING EXPENSES:
Sales and marketing 2,869 2,045 9,161 7,828
General and administrative 9,698 6,144 26,576 24,210
Patents administration and licensing 10,088 18,310 58,885 67,587
Development 31,287 23,323 101,254 87,141
Arbitration and litigation contingencies - 7,800 (3,940 ) 24,412
53,942 57,622 191,936 211,178
Income (Loss) from operations 4,735 (2,762 ) 36,533 23,054
NET INTEREST & OTHER INVESTMENT INCOME 643 1,949 3,429 8,949
Income (Loss) before income taxes 5,378 (813 ) 39,962 32,003
INCOME TAX PROVISION (1,549 ) (1,163 ) (13,755 ) (11,999 )
NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS
$ 3,829 $ (1,976 ) $ 26,207 $ 20,004
NET INCOME (LOSS) PER COMMON SHARE - BASIC $ 0.09 $ (0.04 ) $ 0.58 $ 0.42
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC
43,243 47,206 44,928 47,766
NET INCOME (LOSS) PER COMMON SHARE - DILUTED $ 0.09 $ (0.04 ) $ 0.57 $ 0.40
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED
44,341 47,206 45,964 49,489
SUMMARY CASH FLOW
For the Periods Ended December 31
(Dollars in thousands)
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Net income (loss) before income taxes $ 5,378 $ (813 ) $ 39,962 $ 32,003
Taxes paid (7,436 ) - (23,125 ) (16,099 )
Depreciation, amortization, share-based compensation and investment write-down 8,577 9,247 34,697 31,810
Increase in deferred revenue (944 ) 33,833 84,207 191,436
Deferred revenue recognized (35,793 ) (31,348 ) (127,949 ) (119,596 )
Increase (decrease) in operating working capital, deferred charges and other
10,234 8,192 78,019 33,173
Capital spending, technology licensing & patent additions
(12,248 ) (13,944 ) (40,825 ) (62,118 )
FREE CASH FLOW (32,232 ) 5,167 44,986 90,609
Long-term investments - - (651 ) (5,000 )
Tax benefit from stock options 510 80 1,502 5,123
Debt decrease (67 ) (94 ) (1,589 ) (1,247 )
Repurchase of common stock (15,098 ) (17,762 ) (82,331 ) (183,118 )
Proceeds from exercise of stock options 482 105 2,182 6,472
Unrealized gain on short-term investments 399 147 94 663
NET (DECREASE) INCREASE IN CASH AND SHORT-TERM INVESTMENTS
$ (46,006 ) $ (12,357 ) $ (35,807 ) $ (86,498 )
CONDENSED BALANCE SHEET
(Dollars in thousands)
December 31, 2008 December 31, 2007
Assets
Cash & short-term investments $ 141,660 $ 177,467
Accounts receivable 33,892 130,880
Current deferred tax assets 49,002 43,734
Other current assets 16,467 19,332
Property & equipment and Patents (net) 123,782 111,686
Long-term deferred tax assets and non-current assets 40,965 51,786
TOTAL ASSETS
$ 405,768 $ 534,885
Liabilities and Shareholders' Equity
Current portion of long-term debt $ 1,608 $ 1,311
Accounts payable & accrued liabilities 46,283 76,974
Current deferred revenue 78,646 78,899
Long-term deferred revenue 181,056 224,545
Long-term debt & long-term liabilities 10,515 16,089
TOTAL LIABILITIES 318,108 397,818
SHAREHOLDERS' EQUITY 87,660 137,067
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 405,768 $ 534,885
The company's short-term investments are comprised of high quality credit instruments including U.S. government agency instruments and corporate bonds. Management views these instruments to be near equivalents to cash and believes that investors may share this viewpoint.
This release includes a summary cash flow statement that results in the change in both the company's cash and short-term investment balances. One of the subtotals in the summary cash flow statement is free cash flow. The table below presents a reconciliation of this non-GAAP line item to net cash provided by operating activities.
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Net cash (used) provided by operating activities $ (19,984 ) $ 19,111 $ 85,811 $ 152,727
Purchases of property, equipment, & technology licenses (4,777 ) (5,945 ) (12,608 ) (38,266 )
Patent additions (7,471 ) (7,999 ) (28,217 ) (23,852 )
Free cash flow $ (32,232 ) $ 5,167 $ 44,986 $ 90,609
InterDigital is a registered trademark and SlimChip is a trademark of InterDigital, Inc.
SOURCE: InterDigital, Inc.
InterDigital, Inc.
Media Contact:
Jack Indekeu, +1 610-878-7800
jack.indekeu@interdigital.com
or
Investor Contact:
Janet Point, +1 610-878-7800
janet.point@interdigital.com
DOWJONESInterDigital 'Moving Quickly' On Decision For Modem Pdt Ops
InterDigital 'Moving Quickly' On Decision For Modem Pdt Ops
Last Update: 3/2/2009 6:16:29 PM
(MORE TO FOLLOW) Dow Jones Newswires (201-938-5400)
March 02, 2009 18:16 ET (23:16 GMT)
DOWJONESInterDigital Sees 1Q Recurring Rev From Existing Pacts
$69M-$71M
InterDigital Sees 1Q Recurring Rev From Existing Pacts $69M-$71M
Last Update: 3/2/2009 6:14:55 PM
(MORE TO FOLLOW) Dow Jones Newswires (201-938-5400)
March 02, 2009 18:14 ET (23:14 GMT)
DOWJONESInterDigital 4Q EPS 9c >IDCC
InterDigital 4Q EPS 9c >IDCC
Last Update: 3/2/2009 6:14:06 PM
(MORE TO FOLLOW) Dow Jones Newswires (201-938-5400)
March 02, 2009 18:14 ET (23:14 GMT)
InterDigital Announces Date for Fourth Quarter and Full Year 2008 Financial Results Release and Conference Call
KING OF PRUSSIA, Pa., Feb 25, 2009 (BUSINESS WIRE) -- InterDigital, Inc. (NASDAQ:IDCC) announced today that it will release its fourth quarter and full year 2008 financial results after the market closes on Monday, March 2, 2009.
InterDigital(R) will host a conference call on Tuesday, March 3, 2009 at 10:00 a.m. Eastern Standard Time (EST) to discuss its fourth quarter and full year 2008 performance and other company matters. For a live Internet webcast visit www.interdigital.com and click on the link to the Live Webcast on the homepage. The company encourages participants to take advantage of the Internet option.
For telephone access, call (888) 802-2225 within the U.S. or (913) 312-1254 from outside the U.S. Please call by 9:50 a.m. EST on March 3 and ask the operator for the InterDigital Financial Call.
An Internet replay of the conference call will be available for 30 days on InterDigital's web site in the Investor Relations section. In addition, a telephone replay will be available from 1:00 p.m. EST March 3 through 1:00 p.m. EST March 8. To access the recorded replay, dial (888) 203-1112 or (719) 457-0820 and use the replay passcode 4640007.
About InterDigital
InterDigital designs, develops and provides advanced wireless technologies and products that drive voice and data communications. InterDigital is a leading contributor to the global wireless standards and holds a strong portfolio of patented technologies which it licenses to manufacturers of 2G, 2.5G, 3G, and 802 products worldwide. Additionally, the company offers a family of SlimChip(TM) high performance mobile broadband modem solutions, consisting of Baseband ICs, Embedded Modules, Modem IP and Reference Platforms. InterDigital's differentiated technology and product solutions deliver time-to-market, performance and cost benefits.
InterDigital is a registered trademark and SlimChip is a trademark of InterDigital, Inc.
For more information, visit: www.interdigital.com
AT&T's 3G MicroCell to patch iPhone dead zones
By Prince McLean
Published: 08:00 AM EST
iPhone 3G users stuck in an AT&T dead zone at home or at work will soon be able to plug in a device that provides a strong local signal for up to 10 phones and four simultaneous voice or data connections via a connection to broadband Internet.
Price and availability haven't yet been set for the appliance, which AT&T calls the 3G MicroCell. The CDMA industry usually refers to local area, consumer cellular base stations as a "femtocell," suggesting a smaller version of the "picocell," an industry term for a cellular base station installed to extend the signal of standard "Node B" antennas of cellular networks. Apple has installed commercial GSM picocells with 3G base stations within its retail stores that work in parallel with WiFi base stations to give the locations both WiFi and 3G cellular signals.
Just as with picocells and full scale cellular antennas, a femtocell automatically passes a mobile user's phone connection to the next nearest existing cellular towers as they leave the local signal area provided by the base station. AT&T's "MicroCell" branding suggests a device a thousand times more significant than a femtocell, but it's really the same thing. In the world of UMTS, a femtocell is usually called a Home Node B.
Sprint and Verizon ahead with CDMA Femtocells
In the US, both Sprint and Verizon Wireless have already begun selling femtocells that provide a local extension voice and data service, with Sprint charging $99 for its Samsung-built Airave box (first introduced in limited testing in the third quarter of 2007, and nationwide last October) and then charging a $4.99 monthly fee. Verizon charges $249 for its box, but does not charge any additional monthly fees.
Both Sprint and Verizon are CDMA carriers. Sprint's femtocell is limited to extending relatively slow 2G CDMA2000 data service but not 3G EDVO; AT&T's box will provide full 3G UMTS voice and data service. The company has not yet stated if it will charge a one time fee for the appliance like Verizon, or whether it will bill a monthly fee as Sprint does.
AT's 3G UMTS Femtocell
Installing the new 3G MicroCell box will require both an uplink to the Internet (by plugging into an Internet router via Ethernet) as well as GPS reception. AT&T's website notes that "a GPS link is needed to verify the device location during the initial startup." That would typically require installation near a window, as GPS signals are not usually strong enough to penetrate indoors. The device's location must be registered with AT&T to verify that it lies within the company's authorized service area, so it won't work overseas or in states where AT&T isn't licensed to supply mobile phone service.
Once configured, the device creates a 5,000 square foot hot spot for 3G voice and data service. Use of the signal is identical to AT&T's existing 3G network, with minutes and long distance billed just as if the user were not contributing their private Internet connection to relay AT&T's signal. Still, the appliance will be popular among users who frequently work in an area where a reliable 3G or even GSM is impossible or difficult to receive, such as in a basement office or anywhere else 3G service hasn't yet reached, or can't reach effectively. Walls and windows absorb a large amount of the high energy signals
Last week, the Boy Genius Report published screen shots of AT&T's 3G MicroCell being listed as an option on both the company's internal service center systems and on its retail point of sale screens. Since then, AT&T itself has published information on setting up the device on its public website (below), but has subsequently removed some of the details on the page under the banner "maintenance in progress."
That brings to mind the on-again, off-again clown antics the company pulled when advertising, then removing, the details of a program to provide iPhone users with free WiFi access at AT&T's hot spot locations at Starbucks, bookstores, and certain airports. It took awhile for that plan to finally become available, and AT&T is similarly not providing any answers as to when users can expect to be able to patch up the company's dead zone holes with the new femtocell appliance, nor how much extra it will cost them.
Last spring, a report by ThinkPanmure stated that AT&T had inked a deal with small UK UMTS femtocell leader ip.access worth $500 million, giving AT&T 7 million femocell devices that it planed to sell to consumers for about $100. AT&T's 3G MicroCell product is built by Cisco however.
Femtocell vs UMA
T-Mobile, the other significant GSM/UMTS service provider in the US, has pursued a different strategy in extending its own UMTS network, which is considerably smaller and more limited than AT&T's. T-Mobile relies upon UMA (Unlicensed Mobile Access), a technology which bridges mobile calls over WiFi.
Called "Unlimited HotSpot Calling," the program enables mobile phones to place calls anywhere on T-Mobile's WiFi hotspot network or from home WiFi base stations T-Mobile provides its customers, but also requires UMA support on the phone itself. It also carries an extra $10 monthly fee, and the process of monitoring both WiFi and GSM/UMTS signals for proper handoff strips significant battery life from the phone.
Certain newer BlackBerry and Nokia models support UMA, but T-Mobile's high profile Android G1 currently does not. Supporting UMA "only" requires software on the phone set that knows how to place calls over WiFi. Delivering flawless support for UMA is tricky however, and users frequently complain of dropped calls and compatibility problems between UMA devices and specific models of WiFi routers.
Current models of the iPhone should be capable of supporting UMA, if only AT&T were to allow it. The deal breaker for AT&T is that if it were to allow UMA service over WiFi, it wouldn't be able to bill users per minute or for long distance, as AT&T wouldn't even be carrying the call or aware it was being made. T-Mobile's considerably more limited US cellular network (and its finite options to potentially improve it outside of leveraging its WiFi hot spot network) give that company a stronger impetus to offer UMA.
Apple committed to supporting third party iPhone apps providing VoIP using WiFi, but those apps (which already exist) can't place or receive calls to the users' regular phone number or pass calls to 3G or GSM when it becomes available. They require a separate account with another VoIP service provider. UMA promises to handle both problems.
Apple would have to provide its own native UMA support in the iPhone's firmware in order for it to seamlessly place and receive calls over WiFi. With AT&T's 3G MicroCell on the horizon, the likelihood of that happening anytime soon is very small. The upside is that the new femtocell box from AT&T should provide users with fewer problems due to the technology being more mature and straightforward than the still experimental UMA. It also requires no updates to work with the iPhone 3G or any other 3G AT&T phone, and won't demand more from the phone's battery than 3G already does.
http://www.appleinsider.com/articles/09/02/06/atts_3g_microcell_to_patch_iphone_dead_zones.html
Filed under : iPhone [ 14 Comments ]
Story topics: iPhone 3G, AT&T [ Print ] [ Story Link ]
Another 8K
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): January 30, 2009
InterDigital, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)
Pennsylvania 1-11152 23-1882087
_____________________
(State or other jurisdiction _____________
(Commission ______________
(I.R.S. Employer
of incorporation) File Number) Identification No.)
781 Third Avenue, King of Prussia, Pennsylvania 19406
_________________________________
(Address of principal executive offices) ___________
(Zip Code)
Registrant’s telephone number, including area code: 610-878-7800
Not Applicable
______________________________________________
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Top of the Form
Item 1.02 Termination of a Material Definitive Agreement.
The Patent License Agreement by and between InterDigital Technology Corporation and Samsung Electronics Co., Ltd. ("Samsung") dated January 22, 1996 (the "1996 agreement") granted Samsung a non-exclusive, worldwide, royalty-bearing, perpetual patent license covering Samsung’s sale of 2G single-mode TDMA-based products. The 1996 agreement contained a most favored licensee clause, which generally provided that, in the event a third party obtains the right to a prospectively lower royalty payment under a license covering the sale of 2G single-mode TDMA-based products, Samsung’s royalty obligations under the 1996 agreement would be reduced by an appropriate amount, as further provided by the 1996 agreement. On January 30, 2009, pursuant to the terms of the patent license agreement effective November 24, 2008 and entered into on January 14, 2009 by InterDigital, Inc.’s wholly-owned subsidiary InterDigital Communications, LLC and patent licensing subsidiaries with Samsung, the 1996 agreement was terminated.
Top of the Form
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
InterDigital, Inc.
February 5, 2009 By: /s/ Jannie K. Lau
Name: Jannie K. Lau
Title: Associate General Counsel, SEC
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): February 5, 2009
InterDigital, Inc.
(Exact name of registrant as specified in its charter)
Pennsylvania 1-11152 23-1882087
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
781 Third Avenue, King of Prussia, Pennsylvania 19406-1409
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: 610-878-7800
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01. Regulation FD Disclosure.
The slide presentation attached hereto as Exhibit 99.1 will be presented by InterDigital, Inc. at the 16th Annual Emerald Groundhog Day Investment Forum at the Radisson Plaza – Warwick Hotel in Philadelphia on February 5, 2009. This presentation may be used by the company at future investor conferences or meetings.
The information in this report, including Exhibit 99.1, is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Investor presentation of InterDigital, Inc. dated February 2009
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
INTERDIGITAL, INC.
By: /s/ Jannie K. Lau
Jannie K. Lau
Associate General Counsel, SEC
Dated: February 5, 2009
EXHIBIT INDEX
Exhibit No. Description
99.1
Investor presentation of InterDigital, Inc. dated February 2009
Exhibit 99.1
February 2009 Positioned to Capitalize on Growth in 3G Market
2 (c) 2009 InterDigital, Inc. All rights reserved. This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding InterDigital, Inc.'s current beliefs, plans and expectations as to: (i) future results, projections and trends; (ii) our strategy; (iii) our 3G revenue growth potential and the growth potential of our 3G patent licensing program; (iv) future global mobile device sales and market opportunities; (v) our SlimChip(tm) mobile broadband modem solutions and the competitive advantages of such solutions; and (vi) selective acquisitions and investment opportunities. Such statements are subject to the "safe harbor" created by those sections. Words such as "believe," "continue to," "develop," "driving," "emerging," "enabling," "estimate," "exceeds," "expect," "future," "goal," "growth," "increase," "initiative," "intend," "invent," "may," "opportunity," "position," "potential," "projected," "recurring," variations of any such words and similar expressions, and graphical charts and timelines representing future estimates or events are intended to identify such forward-looking statements. Actual results and events may differ materially from those described in any forward-looking statement as a result of certain risks and uncertainties, including, without limitation: (i) the market relevance of our technologies; (ii) changes in the needs, availability, pricing and features of competitive technologies and product offerings as well as those of strategic partners or consumers; (iii) unanticipated technical or resource difficulties or delays related to further development of our technologies and products; (iv) our ability to leverage or enter into new customer agreements, strategic relationships or complimentary investment opportunities on acceptable terms; (v) our ability to enter into additional patent license agreements; (vi) changes in expenses related to our technology offerings and operations; (vii) potential difficulties in the production of our SlimChip family of offerings; (viii) whether we have the appropriate financial assets and/or cash flows; (ix) unfavorable outcomes in patent disputes and the expense of defending our intellectual property rights; (x) changes in the market share and sales performance of our primary licensees, and any delay in receipt of quarterly royalty reports from our licensees; and (xi) changes or inaccuracies in market projections, as well as other risks and uncertainties, including those detailed from time to time in our Securities and Exchange Commission filings. We undertake no obligation to update any forward-looking statement contained herein. This presentation includes various "non-GAAP financial measures," as that term is defined in Regulation G promulgated by the Securities and Exchange Commission, which are reconciled to GAAP financial measures at the end of this presentation.
3 (c) 2009 InterDigital, Inc. All rights reserved. Shaping the Future of Digital Wireless Technologies Contribute to Standards License Patents Develop Wireless Products 35 Year Digital Cellular Technology Pioneer Thousands of patents worldwide Inventions used in every mobile device Key Contributor to Standards 2G, 3G, and the future - 4G and beyond Wireless LAN & Mobility/Convergence Mobile Broadband Modem Solutions High performance baseband ICs, modem IP, and complete reference platforms Highly Successful Licensor Patents have generated ~ $2.0 billion in cash Licensing leading manufacturers
4 (c) 2009 InterDigital, Inc. All rights reserved. The Mobile Device Market Opportunity Over 1.3 Billion Handsets Expected to Ship by 2012 70% to be 3G Sixty Percent of 3G Handsets Expected to be HSxPA by 2012 Our Goal - Secure Cash Flow On Every 3G Mobile Device Millions of units Source: Strategy Analytics, July 2007
5 (c) 2009 InterDigital, Inc. All rights reserved. A History of Innovation... Starting in the early 1980s, developed key inventions used in 2G systems today: Fundamental system architecture Roaming and handoff techniques Distributed base station technologies In the early 1990s, continued pioneering work with 3G systems and developed key inventions relating to, among other things: Power control Handoff Pilot codes Multi-channel arrangements Today, driving technology evolution in LTE and advanced 802 technologies Over a quarter century of advanced R&D, amassed a large patent portfolio worldwide covering 2G/3G cellular and emerging technologies 3,000+ Patents Issued Worldwide and growing Ranked 141 among companies worldwide with patents issued from USPTO in 2007
6 (c) 2009 InterDigital, Inc. All rights reserved. ..Drives Solid Financial Results Solid Financial Performance - First Nine Months 2008 Net income of $22.4 million, or $0.48 per share $77 million free cash flow* Repurchased $73 million of common stock Recent Samsung Announcement $400 million Agreement Resolves 2G dispute and establishes new license 3G agreement for sales through 2012 Positioned for growth 50% of 3G devices sold under license from InterDigital Majority of revenue driven by growing 3G market Operating leverage in business model SlimChip(tm) Modem Opportunities InterDigital defines "free cash flow" as operating cash flow less purchases of property, equipment, technology licenses, and investments in patents.
7 (c) 2009 InterDigital, Inc. All rights reserved. Global Reach These trademarks are the sole property of their respective owners. Sampling of customers, licensees, and strategic relationships
8 (c) 2009 InterDigital, Inc. All rights reserved. Solid Recurring Licensing Royalty Revenue ** ** Excludes revenues for past sales $ in Millions * Due to a transition in revenue recognition, includes only 3 quarters of per unit royalties
9 (c) 2009 InterDigital, Inc. All rights reserved. Strong Free Cash Flow* Drives Shareholder Value Solid Balance Sheet $ in Millions $ in Millions Returning Value to Shareholders & Investing in the Business * InterDigital defines "free cash flow" as operating cash flow less purchases of property and equipment, technology licenses, and investments in patents.
10 (c) 2009 InterDigital, Inc. All rights reserved. 2G 3G / Mobile Broadband Basic Mobile Phones Feature/Smart Phones Data-Centric Devices Projected Annual Mobile Device Shipments (M units) Emerging mobile broadband segment exceeds 400M units in 2012 Feature phones exceed 1B units and smart phones reach 250M units in 2012 Plays to our strengths in high- performance modem technology Source: Strategy Analytics, July 2007 Flexible Solutions for Distinct Market Segments Modem IP Reference Platforms Baseband ICs InterDigital SlimChip(tm) Family of Offerings
11 (c) 2009 InterDigital, Inc. All rights reserved. Enabling Mobile Broadband Devices 2006 2007 2008 High Performance Baseband ICs Reference Platforms 2G/3G dual mode baseband modem with HSDPA/HSUPA Mobile Broadband IP NXP (formerly Philips): 3G HSDPA IC design Infineon: WCDMA/HSDPA protocol stack General Dynamics: 3G WCDMA modem Spreadtrum: 3G modem Enabling high-volume semiconductor suppliers Enabling mobile device manufacturers 2005 Pre-certified chipsets, software, and reference designs InterDigital SlimChip(tm) Mobile Broadband Modem Solutions
12 (c) 2009 InterDigital, Inc. All rights reserved. Key InterDigital Takeaways Leading Developer of Digital Wireless Technology Consistent track record of successful innovation and licensing programs with top tier OEMs Advanced family of SlimChip modem solutions Influential member of multiple standards bodies Large, diversified and high value patent portfolio: 3,000+ patents issued and nearly 9,000 pending Strong 3G patent portfolio and established licensing programs Multiple Opportunities to Drive Growth 3G royalties from new and existing licensees Significant operating leverage Product initiative a substantial longer-term growth opportunity Selective acquisition and investment opportunities
13 (c) 2009 InterDigital, Inc. All rights reserved. 3G Revenue Growth Potential $950 $700 $475 $240 $1.00 $1,425 $1,050 $700 $350 $1.50 $1,900 $1,425 $950 $475 $2.00 Potential Annual Revenue per 3G device in 2012 ($ millions) 25% 50% 75% 100% Patent position drives market penetration Product drives value per device Today, we have 50% of 3G mobile devices sold under license
February 2009 Positioned to Capitalize on Growth in 3G Market
Appendix
16 (c) 2009 InterDigital, Inc. All rights reserved. Licensees as of February 2009 Alcatel Espana American Telephone and Telegraph Company (AT&T) Apple Inc. Arima Communications Corporation ASUSTeK Computer Danger Inc. Denso Corporation Giant Electronics, Ltd. High Tech Computer (HTC) Hitachi Ltd. Hop-On Wireless, Inc. Hughes Network Systems Inc. Infineon Technologies AG Iwatsu America Inc. iWOW Connections Pte Ltd Japan Radio Kokusai Electric Co. Ltd. Kyocera Corporation LG Electronics Inc. Lucent Technologies Inc. Matsushita Communication Industrial Co. Ltd. (Panasonic) Mitsubishi Electric Corporation ModeLabs Group Nakayo Telecommunications, Inc. NEC Corporation Nokia Corporation Oki Electric Industry Co. Ltd. Option NV Pacific Communication Sciences, Inc. Pegatron Corporation Qualcomm Incorporated Quanta Computer Inc. Research In Motion Limited Robert Bosch GmbH Samsung Electronics Co. Ltd. Sanyo Electric Co. Ltd. Sharp Corporation Shintom Company Ltd. Siemens Aktiengesellschaft Sierra Wireless, Inc. Sony Ericsson Mobile Communications AB Telefonaktiebolaget LM Ericsson Toshiba Corporation UbiNetics Ltd. Windshift Holdings, Inc.
17 (c) 2009 InterDigital, Inc. All rights reserved. Cash Flow Reconciliation This presentation includes free cash flow, a non-GAAP financial item. The table above presents a reconciliation of this non-GAAP line item to net cash provided by operating activities. Management believes that investors may find this non-GAAP financial measure useful in understanding the company's operating results. This information is intended to provide more meaningful comparisons of the company's results. InterDigital, Inc. Reconciliation of Pro Forma Free Cash Flows to InterDigital (GAAP) Net Cash Provided by Operating Activities (In thousands) (Unaudited)
AT&T talking with Apple about 3G-ready MacBooks?
By Aidan Malley
Published: 07:15 PM EST
AT&T is hoping to make 3G-enabled notebooks a staple of its cellular business, and in an executive interview hints that it may be chatting with Apple to extend its reach into MacBooks or other non-iPhone devices.
Sitting down with Fortune, AT&T's Emerging Devices group president Glenn Lurie says he would like his company's deals with Apple to extend beyond the iPhone, though he takes care to avoid implying any immediate collaboration on other hardware and portrays Apple as one of many device builders AT&T speaks with regarding future plans.
"We're having conversations with lots of folks," he says. "[But] I would very much like to do more business with Apple, and hope that we do."
The subject surfaces in a conversation where Lurie acknowledges that the carrier is making an increasing push into non-phone devices that could use cellular broadband. Recent netbooks such as Acer's Aspire One and Dell's Inspiron Mini 9 have or are now being offered in bundles that, like with cellphones, heavily subsidize the up front cost of the system in exchange for agreeing to a contract -- in this case for AT&T data service.
Such plans have worked "extremely well" with a holiday promotion for the Aspire One that dropped its price temporarily to $99 with the deal, according to Lurie. He also expresses hope that 3G and other forms of wireless data from the company will get into as many products as possible, including larger portables.
Whether or not Apple will take to such a strategy is less than certain. Sources have suggested to AppleInsider as early as 2007 that the Mac maker was looking into integrating 3G with its notebooks, but no such product has surfaced since.
Apple's co-founder Steve Jobs has acknowledged his company's investigations into the technology but, as of a year ago, has also said he doesn't want MacBooks to be tied to a carrier for enhanced wireless. In the US, Apple would likely need to follow a similar approach to the iPhone and use the HSPA standard for 3G, which would limit it to AT&T for wide-area broadband if the electronics firm also wants the technology to work in Europe and most other parts of the world. T-Mobile USA has 3G but only in a small number of markets and using a mostly incompatible frequency.
It's nonetheless evident that AT&T is exploring its options. In discussing AT&T's ventures into non-phone territory, Lurie acknowledges that he had just minutes before talked with Apple's COO Tim Cook, hinting that both companies are discussing more than just traditional handsets.
Apple seeks HSUPA engineers; Intel preps budget ultraportable CPU
By Aidan Malley
Published: 07:20 PM EST
Apple is searching for lab engineers familiar with a more advanced version of 3G than in current iPhones. Also, Intel is reportedly crafting a processor that would straddle the line between netbooks and costly ultraportables, and Orange France is reporting gangbuster iPhone sales over the holidays.
Apple looking for HSUPA-aware engineers
With less than a year of iPhone 3G being on the market, Apple is hiring staff it hopes will have experience with more advanced standards.
The company is looking for performance engineers for both analysis and pure testing that will both ideally be aware of High Speed Uplink Packet Access, or HSUPA. The standard improves current 3G networks, most of which operate on slower HSDPA (Downlink) technology, by significantly improving the maximum upload bandwidth available to each user.
In current form, upstream speeds reach up to 5.76 megabits per second in peak conditions and simplify tasks such as video conferencing or posting media on the road. Download speeds are also usually faster on these networks and top out at roughly 7.2 megabits in the best circumstances.
It's uncertain if the request for experience in HSUPA is an indication of any immediate plans to introduce HSUPA to future iPhone incarnations; Apple lists the standard as an optional requirement and says only HSDPA is necessary for the job. The faster cellular data is only known to have appeared once before in Apple's recruitment pages, however, in an October posting looking for a firmware engineer knowledgeable in this technology as well as other 3G and even 4G standards.
Intel gearing up economy ultraportable processor?
If loose-lipped Intel staff at CES this past week are accurate, the semiconductor company will have a new ultraportable CPU due sometime in 2009, according to CNET.
The mystery chip is characterized as a compromise between netbook processors like the Atom, which is very low power but also very slow, and the relatively fast but expensive full-featured chips used by ultraportable notebooks.
While not providing much detail, the Intel tipsters do say the chips would be very small with a package measuring just 22mm square and would have most of the same architecture as Intel's ultra-low voltage processors, which today use the Core 2 Duo platform.
By building the new design, Intel would have a way of making whole notebooks under one inch thick but without either driving the cost up or neutering performance, according to the report.
Orange France's iPhone holiday sales triple in 2008
Apple enjoyed a banner holiday season for iPhone sales in France, says a new claim by the French newspaper La Tribune.
Although it doesn't identify its sources for the claim, the publication says that Orange alone sold about three times more iPhones over the Christmas season than its underwhelming 2007, when just 70,000 original iPhones traded hands.
The number is also potentially higher for France as a whole following a mid-December ruling this year that forced non-exclusive sales of the Apple handset in the country, allowing Bouygues Telecom, SFR and other local carriers to offer the device themselves.
None of the involved companies have commented on the claims.
Remember the markets closes @ 1pm today.
Mrs.Mschere, God bless you.
I miss your hubby so much.
mickeybritt!!! Welcome home, son.
Revlis:
From yesterday:DOWJONESInterDigital: Samsung Has 45 Days To Choose Payment Option
InterDigital: Samsung Has 45 Days To Choose Payment Option
Last Update: 11/24/2008 5:38:48 PM
(MORE TO FOLLOW) Dow Jones Newswires (201-938-5400)
November 24, 2008 17:38 ET (22:38 GMT)
Let the games begin. :)
DOWJONESInterDigital: Samsung Has 45 Days To Choose Payment Option
InterDigital: Samsung Has 45 Days To Choose Payment Option
Last Update: 11/24/2008 5:38:48 PM
(MORE TO FOLLOW) Dow Jones Newswires (201-938-5400)
November 24, 2008 17:38 ET (22:38 GMT)
Interdigital: Samsung Has 45 Days To Choose Payment Option.
Trading @ 30.00!
Bid 28.01 Ask 30.96
IDCC is in play!
IDCC announced that InterDigital Communications, LLC and IDCC's patent licensing subsidiaries have entered into a binding term sheet with Samsung Electronics Co., and its affiliates, including Samsung Electronics America, Inc., that resolves the outstanding arbitration issues involving Samsung's sale of 2G products, as well as the 3G patent licensing disputes for Samsung's sales of products through 2012. Under the terms of the term sheet, IDCC agreed to grant Samsung a royalty-bearing license covering Samsung's sale of all 3G products (including products built under both the WCDMA and cdma2000 standards and their related extensions) through 2012. The agreement also ended the payment disputes regarding Samsung's royalty obligations for sales of 2G products.
Trading over 27.00!!
InterDigital Announces Settlement of Samsung Patent Licensing Disputes
Settlement Resolves 2G Arbitration and 3G Patent Licensing
Disputes for Sales Through 2012
KING OF PRUSSIA, Pa., Nov 24, 2008 (BUSINESS WIRE) --
InterDigital, Inc. (NASDAQ:IDCC) today announced that InterDigital Communications, LLC and InterDigital's patent licensing subsidiaries have entered into a binding term sheet with Samsung Electronics Co., Ltd. and its affiliates, including Samsung Electronics America, Inc., that resolves the outstanding arbitration issues involving Samsung's sale of 2G products, as well as the 3G patent licensing disputes for Samsung's sales of products through 2012.
Under the terms of the term sheet, InterDigital agreed to grant Samsung a royalty-bearing license covering Samsung's sale of all 3G products (including products built under both the WCDMA and cdma2000 standards and their related extensions) through 2012. The agreement also ended the payment disputes regarding Samsung's royalty obligations for sales of 2G products.
Under the terms of the term sheet, Samsung has approximately 45 days to elect between two defined payment options, and the term sheet contemplates the parties will enter into agreements incorporating the terms of the term sheet. Subject to Samsung's selection of a payment option and payment of the first installment of payments due in early 2009, the parties will move to end all litigations and arbitration proceedings ongoing between them.
"I am extremely pleased that we have reached a favorable agreement with Samsung to end this longstanding dispute," commented William J. Merritt, President and Chief Executive Officer of InterDigital. "The agreement is consistent with our long term strategic plan, and reflects well on the strength of our patent portfolio and our ability to design flexible deal structures," continued Mr. Merritt.
About InterDigital
InterDigital designs, develops and provides advanced wireless technologies and products that drive voice and data communications. InterDigital is a leading contributor to the global wireless standards and holds a strong portfolio of patented technologies which it licenses to manufacturers of 2G, 2.5G, 3G and 802 products worldwide. Additionally, the company offers baseband product solutions and protocol software for 3G multimode terminals and converged devices. InterDigital's differentiated technology and product solutions deliver time-to-market, performance and cost benefits. For more information, please visit InterDigital's web site: www.interdigital.com.
InterDigital is a registered trademark and SlimChip a trademark of InterDigital, Inc.
SOURCE: InterDigital, Inc.
InterDigital, Inc.
Media Contact:
Jack Indekeu,+1 610-878-7800
jack.indekeu@interdigital.com
or
Investor Contact:
Janet Point,+1 610-878-7800
janet.point@interdigital.com
InterDigital Announces Settlement of Samsung Patent Licensing Disputes
Monday November 24, 5:36 pm ET
KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--InterDigital, Inc. (NASDAQ:IDCC - News) today announced that InterDigital Communications, LLC and InterDigital’s patent licensing subsidiaries have entered into a binding term sheet with Samsung Electronics Co., Ltd. and its affiliates, including Samsung Electronics America, Inc., that resolves the outstanding arbitration issues involving Samsung’s sale of 2G products, as well as the 3G patent licensing disputes for Samsung’s sales of products through 2012.
ADVERTISEMENT
Under the terms of the term sheet, InterDigital agreed to grant Samsung a royalty-bearing license covering Samsung’s sale of all 3G products (including products built under both the WCDMA and cdma2000 standards and their related extensions) through 2012. The agreement also ended the payment disputes regarding Samsung’s royalty obligations for sales of 2G products.
Under the terms of the term sheet, Samsung has approximately 45 days to elect between two defined payment options, and the term sheet contemplates the parties will enter into agreements incorporating the terms of the term sheet. Subject to Samsung’s selection of a payment option and payment of the first installment of payments due in early 2009, the parties will move to end all litigations and arbitration proceedings ongoing between them.
“I am extremely pleased that we have reached a favorable agreement with Samsung to end this longstanding dispute,” commented William J. Merritt, President and Chief Executive Officer of InterDigital. “The agreement is consistent with our long term strategic plan, and reflects well on the strength of our patent portfolio and our ability to design flexible deal structures,” continued Mr. Merritt.
About InterDigital
InterDigital designs, develops and provides advanced wireless technologies and products that drive voice and data communications. InterDigital is a leading contributor to the global wireless standards and holds a strong portfolio of patented technologies which it licenses to manufacturers of 2G, 2.5G, 3G and 802 products worldwide. Additionally, the company offers baseband product solutions and protocol software for 3G multimode terminals and converged devices. InterDigital’s differentiated technology and product solutions deliver time-to-market, performance and cost benefits. For more information, please visit InterDigital’s web site: www.interdigital.com.
InterDigital is a registered trademark and SlimChip a trademark of InterDigital, Inc.
Contact:
InterDigital, Inc.
Media Contact:
Jack Indekeu, +1 610-878-7800
jack.indekeu@interdigital.com
or
Investor Contact:
Janet Point, +1 610-878-7800
janet.point@interdigital.com
Source: InterDigital, Inc.
It's DONE!!!
Let them come.:)
8K UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): November 17, 2008
InterDigital, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)
Pennsylvania 1-11152 23-1882087
_____________________
(State or other jurisdiction _____________
(Commission ______________
(I.R.S. Employer
of incorporation) File Number) Identification No.)
781 Third Avenue, King of Prussia, Pennsylvania 19406
_________________________________
(Address of principal executive offices) ___________
(Zip Code)
Registrant’s telephone number, including area code: 610-878-7800
Not Applicable
______________________________________________
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Top of the Form
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Effective as of November 17, 2008, each of the following named executive officers of InterDigital, Inc. (the "Company") entered into an amendment to his employment agreement with the Company in order to clarify certain provisions’ exemption from or compliance with final regulations issued under Section 409A of the Internal Revenue Code of 1986, as amended ("409A"): (i) William J. Merritt, president and chief executive officer; (ii) Scott A. McQuilkin, chief financial officer; (iii) Mark A. Lemmo, Sr., executive vice president, business development and product management; and (iv) Lawrence F. Shay, executive vice president of intellectual property and chief intellectual property counsel. Each such amendment provides that:
(A) all amounts payable as a tax gross-up under the employment agreement shall be paid as soon as practicable, but in no event later than the end of the calendar year following the calendar year in which the named executive officer pays the taxes subject to the gross-up provision;
(B) in the event any amounts payable to the named executive officer by reason of his termination of employment are determined to constitute payments of "nonqualified deferred compensation," as that term is used for purposes of 409A, and such amounts would be payable before the six-month anniversary of his termination of employment, then payment of such amounts shall be delayed until the first business day following such six-month anniversary of the named executive officer’s termination of employment; and
(C) the named executive officer shall not be considered to have terminated employment for "good reason," as that term is defined in the employment agreement, unless: (1) the named executive officer provides notice to the Company within ninety days of the initial existence of the basis for his claim to have Good Reason to terminate his employment, (2) the Company must have failed to remedy the condition that is claimed to constitute Good Reason within thirty days of receiving such notice, and (3) the named executive officer’s subsequent termination of employment must actually occur no more than two years following the initial existence of the basis for his claim to have "good reason" to terminate his employment.
Top of the Form
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
InterDigital, Inc.
November 17, 2008 By: Steven W. Sprecher
Name: Steven W. Sprecher
Title: General Counsel, Secretary and Government Affairs Officer
The monster years
Last night wasn’t just a victory for tolerance; it wasn’t just a mandate for progressive change; it was also, I hope, the end of the monster years.
What I mean by that is that for the past 14 years America’s political life has been largely dominated by, well, monsters. Monsters like Tom DeLay, who suggested that the shootings at Columbine happened because schools teach students the theory of evolution. Monsters like Karl Rove, who declared that liberals wanted to offer “therapy and understanding” to terrorists. Monsters like Dick Cheney, who saw 9/11 as an opportunity to start torturing people.
And in our national discourse, we pretended that these monsters were reasonable, respectable people. To point out that the monsters were, in fact, monsters, was “shrill.”
Four years ago it seemed as if the monsters would dominate American politics for a long time to come. But for now, at least, they’ve been banished to the wilderness.
http://krugman.blogs.nytimes.com/2008/11/05/the-monster-years/
InterDigital, Inc. Q3 2008 Earnings Call Transcript
Page 1 out of 10|October 31, 2008 | about stocks: IDCC
InterDigital, Inc. (IDCC)
Q3 2008 Earnings Call
October 31, 2008 9:00 am ET
Executives
Janet Point - Executive Vice President, Communications and Investor Relations
Scott McQuilkin - Chief Financial Officer
William Merritt - President and Chief Executive Officer
Analysts
Tom Carpenter - Hilliard Lyons
Bennett Notman - Davenport
[Andy Shafik - Novac Security].
Kevin Sharbatoni - Boenning & Scattergood
Bill Nasgovitz - Heartland Advisors
Presentation
Operator
Good day everyone. Welcome to today's InterDigital Financial Call. As a reminder, today's call is being recorded. At this time, I would like to turn the call over to Janet Point. Please go ahead.
Janet Point – Executive Vice President, Communications and Investor Relations
All right. Thank you, Dana. Good morning everyone and welcome to InterDigital’s Third Quarter 2008 Financial Conference Call. With me this morning are Bill Merritt, our President and CEO, and Scott McQuilkin, our Chief Financial Officer. Consistent with last quarter’s call, we will offer some highlights about the quarter and the company and then open up the call for questions.
But before we begin our remarks, I need to remind you that in this call we will be making forward-looking statements regarding our current beliefs, plans, and expectations, which are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results and events to differ materially from both results and events contemplated such as the forward-looking statements. These risks and uncertainties include those set forth in our earnings release published yesterday and those detailed from time to time in our other filings with the SEC.
These forward-looking statements are made only as of the date today hereof and except as required by law, we undertake no obligation to update or revise any of them whether as a result of new information, future events, or otherwise.
So with that, I will turn the call over to Scott.
Scott McQuilkin - Chief Financial Officer
Thank you, Janet and good morning to everyone. I am pleased to report strong profitability this quarter with net income of 9.2 million or $0.20 per diluted share. This earnings performance is driven by a combination of combination of solid revenue generation, strong expense control, and significantly lower litigation and arbitration costs.
Total revenue was $55.1 million in the third quarter 2008 compared to 56.5 million in the third quarter 2007. This revenue reflects solid growth for a number of our licensees, good results from our royalty auditing program and a significant increase in technology solutions revenue. However, these results offset were decline in royalties for some of the Japanese licensees. Some of this decline can be explained by normal ups and downs that are due to a variety of factors including new product introductions, competitive activity, market seasonality and changes in retail inventories. In fact, royalties for several of our Japanese licensees increased year-over-year. Part of the decline can also be attributed to a relatively strong third quarter in 2007 posted by a few of our licensees.
Nonetheless, we think that our Japanese licensees will continue to face the challenging market and economic environment. While the current economic environment is not a pretty picture, we believe that our royalty stream is somewhat insulated from market swings. Our per unit royalties accounted for 57% of our recurring patent license royalties in third quarter 2008, with the remainder being fixed fee and amortized royalties. While our per unit royalty revenue provides ample opportunity for growth in revenue from our existing licensees as the 3G market volume expands over time. The fixed and amortizing component of our royalty revenue provides stability in our revenues, which is particularly helpful in the current economic environment.
InterDigital, Inc. Q3 2008 Earnings Call Transcript
Page 2 out of 10|October 31, 2008 | about stocks: IDCC
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Revenue from our royalty auditing program of our licensees contributed 1.3 million of the revenue in third quarter of 2008. This is an important and relatively consistent source of revenue that we work hard to generate. In fact, we have generated audit-related revenue totaling $19 million over the last two years.
The technology solutions revenue remained strong at 2.2 million in the third quarter of 2008, up significantly from 0.8 million in third quarter of 2007. Importantly, third quarter 2008 technology solutions revenue incurred a significant increase in per unit base recurring revenue, driven by sales of our customers’ products continuous SlimChip modem IP.
While weak global economic conditions may put pressure on royalties near-term, we remain optimistic about the fundamental growth prospects for the 3G handset market, which will drive revenue growth over time. More importantly, we remain confident in our ability to successfully add major re-licensees, which can significantly increase our royalty revenues.
Consistent with past practice, we will provide revenue guidance for fourth quarter of 2008 following the receipt and review of royalty reports from our patent and products licensees. At this time, we are very encouraged by strong sales of our licensees products, continuous SlimChip Modem IP.
On the expense side, third quarter 2008 operating expenses totaled 42 million. This represents an 8.9 million decrease from second quarter 2008 and a 4 million decrease from third quarter 2007. Excluding a 2.7 million reduction related to the resolution of our UK mandates with Nokia, third quarter 2008 operating expenses totaled 44.7 million, representing a 6.1 million from second quarter 2008 and a 1.3 million decrease from third quarter 2007.
To better understand the trends in our operating expenses, we focus on two basic components. Operating expenses other than patent litigation and arbitration costs and patent litigation and arbitration cost.
Let me address the fundamental trends for each of these components in more detail. First, our operating expenses other than patent litigation and arbitration costs were 39 million in third quarter 2008. This represents a modest 0.7 million or 1.7% increase from comparable second quarter 2008 expenses. The modest increase is due to the development cost associated with our product development program.
Importantly, our SG&A, and other cost actually declined by 0.7 million or about 5% from second quarter of 2008 and increased a modest 0.4 million or 2.6% from third quarter 2007. These trends reflect our focus in actively managing expenses during a period of significant investment in our business.
Looking forward, we will maintain our focus on controlling discretionary spending and aggressively managing our investment initiatives. The level of operating expenses other than litigation and arbitration costs in fourth quarter 2008 will reflect this focus. Given the number of options that we are evaluating to create value for the product business, we cannot provide any meaningful guidance for the fourth quarter.
The second major component of our operating expenses is patent litigation and arbitration costs. These costs totaled 5.8 million in third quarter 2008 excluding the reduction related to the resolution of our UK mandates with Nokia. This is 6.8 million less than the second quarter 2008 and 4.9 million less than third quarter 2007. The significant in patent litigation and arbitration cost is due primarily to the elimination of ongoing expenses following the resolution of our UK mandates with Nokia as well as a reduction in cost associated with our ITC proceedings with Samsung and Nokia.
We are pleased by the significant decrease in our patent litigation and arbitration expense and believe that our investment today help positions us very well with respect to a number of important actions, currently resolution of Samsung’s 2G obligation for 150 million and our ITC proceedings with Samsung and Nokia.
Going forward, we will continue to invest when necessary to vigorously defend our strong and a well diversified patent portfolio. Therefore, we expect that these activities will continue to be in the execution of our business and that these expenses will vary from quarter to quarter depending on the level of activity.
Turning to the balance sheet. Our cash position remains very strong. We ended third quarter 2008 with 188 million in cash and short-term investments, representing $4.12 per diluted share. Our cash position has remained strong even in this period of significant investment in our business. Free cash flow was 77 million for the first nine months of 2008.
InterDigital, Inc. Q3 2008 Earnings Call Transcript
Page 3 out of 10|October 31, 2008 | about stocks: IDCC
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Importantly, our cash position remains strong even during the period of significant investment in the business and stock repurchases. In the first nine months, we purchased 73.1 million or 3.4 million shares of our common stock. In the fourth quarter, we completed our $100 million stock repurchase program, having purchased a total of 4.7 million or about 10% of our common shares. This reduced our common shares outstanding to 43.2 million at the end of October.
In summary, our third quarter represents solid performance in terms revenue generation and expense control and we are well positioned to aggressively pursue our objectives in securing revenue from every 3G device sold. Maintaining a strong financial position and building value for our shareholders.
Now I will turn the call over to Bill.
William J. Merritt - President and Chief Executive Officer
Thanks Scott and good morning to everyone. As Scott already mentioned, while the overall financial markets are very turbulent, we delivered another very good quarter from a financial perspective. We also has a equally good quarter from the standpoint of strategic positioning, both with regard to our progress on signing 3G licensees, as well as brining our family of SlimChip products to market.
Let me discuss both of those with particular emphasis on our SlimChip product business. After adding new 3G licensees we are reaching an important point in time for the company. As many of you know, in our action against Samsung involving 3G products at the International Trade Commission the ALJ is scheduled to render his initial determination on or before November 25, 2008, less than one month from now.
The Second Circuit Court in New York has scheduled argument for this December on our $150 million 2G case against Samsung and which we believe Samsung has no meaningful defense. Lastly the Nokia ITC case involving its 3G products is now moving forward again at the ITC. And while the ITC trial with Nokia is scheduled for May of next year I think it’s clear to say that even before the trial gets started, the Nokia case could be affected at least in some ways by the ALJ's determination next month in the Samsung case. Since Nokia case involves many of the same patterns as the Samsung case.
In this kind of environment, company is due tend to discuss options for settlement and those discussion tend to be at senior levels, straight forward and purposeful. That holds to here as well. And while we cannot predict whether the cases will settle, we can say if they do so, the economic results will be substantially positive for InterDigital.
Indeed as I mentioned at other conference calls, we have had the opportunity to except financial terms that may have been okay for us a long time ago. However, today we are stronger as a company both in terms of our portfolio of technological inventions and solutions as well as our balance sheet and cash flow. We believe that this position supports higher levels of payments. So that is what we are driving for and what we believe we deserve for what we have contributed.
As for our SlimChip product business, we are happy with the success in producing a market leading baseband solution. InterDigital has always been a leader in identifying the future needs of the wireless market in creating solutions for those markets. In this case two years ago we saw an opportunity to build an advanced slimed and high data rate modem product targeted at the emerging data centric market. We successfully built that product and has met with a very favorable response for potential customers, partners and industry analyst.
For example, in an independent analysis conducted by Signal's Research Group earlier this year, our mobile broadband modem turned in market leading performances and we were one of only three companies to submit a Category 8 HSDPA Solution for evaluation. Moreover the advance technology used in our ASA Solution is also finding very good success in the market to our relationship with Infineon and their success with the I.
So we successfully delivered on what we were the key part of our plan to build a market relevant data centric modem solution. With that being said, we also know that the cellular market is very dynamic and that we would need to react with the current. For one, the market consolidation and many predicted years ago was now happening in a big way and fast. Just in the last three months NXP, STMicro, Ericsson, TI, Freescale, Renesas, and others have all announced significant changes in how they would approach this market or whether they would participate at all.
The data centric market itself is also evolving. We targeted the data centric market, because it was an attractive niche where we could enter the market, establish the presence and grow overtime as the market grew. However, that market grew at a much faster pace attracting very large players, before we could firmly establish presence.
InterDigital, Inc. Q3 2008 Earnings Call Transcript
Page 4 out of 10|October 31, 2008 | about stocks: IDCC
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Further the rate of technology changes also accelerating with operators increasing their demands for the next technology releases that customer begin to use more and more data on the go. All of these changes point in the same direction. That the profitable niches in cellular are quickly disappearing and as a result to participate long-term in the cellular baseband market requires significant scale in terms of development, customer support, marketing and sales resources.
On that front InterDigital did develop a level of scale needed to produce a world class modem solution for the market. We did long-term and comprehensive development relationship with Infineon, as well as other offshore partners. However, we have recognized the need for even greater scale.
So as we indicated in the press release yesterday, we like many others in this space are considering options that would allow us to gain even greater scale to push the product into the market more rapidly and grow share. And since gaining scale at the right prices by no means of certainty we are in parallel evaluating other options for the modem portion of our business. The path we chose is the one that will deliver the highest shareholder value.
Now I don’t this announcement should come as a surprise to anyone, our goal is to find the highest value strategy for our business in which we have made a significant, meaningful investment. Fortunately, our product and technology roadmap, strong patent portfolio, and financial strength gives us more options than others in the market. We intend to leverage those strengths.
Equally important I think the market dictates that we move quickly to determine whether we can participate profitably in the market and get about doing so or decide we cannot and exit that business preferably through a sale and if not through a repositioning. That should have been an exit, we are also different from others in this space and that the 3G modem business was just one of our future growth drivers.
Certainly, our main value driver remains our ability to develop advance wireless technology relevant to future markets. In that regard our LTE development continues to move forward as does the market introduction of the mobility solutions that we talked about on our last call. These technologies and others we are developing within our R&D groups will give access to new and future markets. So irrespective of the path we chose on the modem business we will continue to have good opportunities for expansion and value creation.
In view of all that and despite the current economic conditions and the challenges in the 3G baseband market, we remain very confident in the value that we can create for shareholders. As evidence of that we have repurchased $450 million in our common stock over the past two years with nearly $75 million of that investment coming this year. I believe there is no better indicator of confidence than where management and deficits money and here the investment is in the company and its future.
Thank you for listening this morning and let me open up the call for questions.
Question-and-Answer Session
Operator
Thank you, sir. (Operator Instructions). And we will take our first question from Tom Carpenter with Hilliard Lyons.
Tom Carpenter
Good morning Jane and Bill and Scott.
William Merritt
Good morning.
Janet Point
Good morning.
Scott McQuilkin
Good morning.
Tom Carpenter
I will keep my comments brief. I hear there might be [pride in town if you keep one attempt]?
William Merritt
That’s true.
Tom Carpenter
With the news on the SlimChip, I can understand some of the factors you are considering the markets changing rapidly, with some new entrants. One of things you guys have talked in the past is how having product solutions help wise your discussion here, not just due to the tax collector, can you discuss that if one of the options the sale when you do accomplish that or achieve that, how do you see that impacting licensing discussions going forward if at all Samsung and Nokia may not matter to the big players like them or it might matter to some second to your folks?
InterDigital, Inc. Q3 2008 Earnings Call Transcript
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William Merritt
Sure, I think that that thesis is still correct that I think with respect to the patent licensing program the patent licensing program benefits from a complimentary product program. And even if we aggregate the modem chip business we would continue to have other product opportunities as I discussed on the call. So for example the modem, the mobility product is one that we are now moving into the market and I think that is complimentary to the patent licensing program, because its targeted at the same space, it’s the handset space.
Tom Carpenter
Is that the thing you are working on with SK Telecom?
William Merritt
That’s correct.
Tom Carpenter
Okay. Thank you.
William Merritt
And similarly, I think the LTE development is the same. You know, LTE and LTE Advance will provide us an opportunity to create solutions there that, one, the first part of that development process drives the patent creation. The second part of that drives the creation of IP that could again be useful to the handset folks. So I think that we will continue to have complementary asset, it’s just the one we have maybe a little different than the once we have today. All that being said, I think the other thing is we expected the modem program is I think the option for buildings scale with that and retaining that business is real live option for us. And I think that’s there because of our financial strength. We are pushing down all three paths pretty hard here. I think the key thing for us is just to come to a decision on this in near-term so that we can push hard in the right direction.
Tom Carpenter
Got it. Switching gears to of a topic of lot of people. I want to know about the ITC and Samsung. I known through out the process there is formal settlement meetings. Are there any more meetings between now and the ruling any scheduled meetings that the Judge is holding?
William Merritt
I am not aware of anything that Judge is scheduled.
Tom Carpenter
Okay. Well are there any that the Judge has not scheduled?
William Merritt
I think that as I indicated at this point in time, we would expect that the parties would be talking and that’s what happens at this point in time. So we are in conversations with these folks to see if we can arrive at a solution that that makes sense for everybody.
Tom Carpenter
Okay, I am very glad. In your prepared remarks, you are speaking of the third person, now you are speaking the first person about me, that’s good news. So if we look at the case of Qualcomm and Nokia had almost settled about it at the day of the ruling and the day before, and (inaudible) day before was going to start? I know its hard to handicap the stuff, but is this one that if you don’t quite get every thing you are looking for, are you willing to roll the dice on the 25th and await if ruling, Judge (inaudible) both parties want to settle this because the outcome is so divergent?
William Merritt
I can't speak for them, before I said, I think and I will speak for us. And certainly from our perspective we have a plan for licensing the market and we intend to hit that plan. And if you we can do that in advance of the decision by the Judge, then we will do that. If not and if the decision were to be adverse that’s not the only set of patents we have for this market. And so, I think I have been pretty clear that we are going to drive towards the economic results that we think we deserve. And we are not going to compromise those interests just because there is a decision coming out that could go one way or the other.
Tom Carpenter
Okay. Switching gears to Nokia, you had the scheduling order there. Back in March, you guys put on 8-K that you were in -- you had settlement discussion with Nokia that were apparently material enough provided in 8-K. There were some legal issues that might have side tracked those back in March, for Nokia hadn’t out. Now they are back at the ITC, is this mean some of the settlement terms that you guys had or at the table or you are going to comeback and revisit those between the Samsung ruling in their meeting?
InterDigital, Inc. Q3 2008 Earnings Call Transcript
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William Merritt
I think with the -- I might get into the specifics, but generally when you have a passage or time between a particular deal structure, you are working on and now you have to revisit things, right. Things like market size, market share, other things you know, the impact of whatever deals that parties may have done in between, you have got to evaluate that. So I think the positive thing with respect to both of these companies is that -- we have had an active dialogue and we know them well. And so we are not starting from scratch by any mean, but you also do you have – we have some work to do that kind of progressing other, but as I said I think the trial calendar help force timing here right. And so, I think that’s a good thing, we will see if it get works out now.
Tom Carpenter
Okay. A few quick questions and I will let you guys get onto the next person. Going back to the Samsung, Fuji saga last time you talked about you guys -- do you have now the track you know, had the 2006 sales figures for Samsung?
William Merritt
I think that there has been discovery on that and I think that’s an issues that the Trigano will have to weigh in on exactly where that process is as far as you know, are there still some issues between the parties on exactly what the royalty basis. I am not familiar with that detail, but it gets in the grant scheme of things. The other difference exists between us that there is one on 2006 royalties, it's rather, I would say it’s rather minor in the context of………
Tom Carpenter
Agreed it’s not worth the legal fees.
William Merritt
Yeah.
Tom Carpenter
And then one final question for Scott. In the next quarter, I know it’s early, but based on IFX's 3G, chip sales, should we start to see a noticeable uptick and licensing revenue in that area?
Scott McQuilkin
Yeah, I think the short answer to that Tom is yes. I mean, if you look at what's happening in the market place and read what's happening with Apple and such, you know, they are doing very well and as we have said before, when Infineon does well we are pleased, because we do well. So short answer is yes.
Tom Carpenter
Okay. Great, thank you enjoy the parade.
William Merritt
Thanks Tom.
Operator
And we will move on to Bennett Notman with Davenport.
Bennett Notman
Good morning. Just a question maybe I didn't quite understand exactly, but are you both looking at potentially buying things to flush out the product business as well as divesting it. Just exactly sort of what are the parameters of the potential outcomes that you are looking at in that business?
William Merritt
Sure, I agree, the answer to your question yes. And the three options on the table would be one, to build scale, to participate in the market and I think certainly where we are repositioned the assets we have and particularly the financial strength that have, I think makes that a viable option for us. The second option would be the sale of the assets to a third party and which of those two you pick would be religious driven by which one do you think is going to create the greater value. I think if those two don’t work then you move to the third option which would be the repositioning of the assets that will deliver the least value so we will focus on the first two. But I think both of those first were very viable options for us.
Bennett Notman
Okay. And then just to make sure I cut right, was there a $2.7 million benefit in this quarter that we are just reporting now from the Nokia settlement as well as the one from the previous quarter?
Scott McQuilkin
InterDigital, Inc. Q3 2008 Earnings Call Transcript
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That's correct.
Bennett Notman
Okay. And then finally given the amount of activity the November Samsung hearing and then the December litigation should we expect legal expense to maybe go back towards second quarter level from the fourth quarter?
Scott McQuilkin
We haven’t provided guidance on that. And at this point, I would say in terms of the work with Samsung is -- we are pretty much in a awaiting mode for that. And as I said in my prepared remarks, the UK litigation is really behind us.
Bennett Notman
Yeah, all right. Thank you.
William Merritt
Thank you.
Operator
And then we will move on to [Andy Shafik with Novac Security].
Andy Shafik
Thank you. Question, I would like to ask is whether or not you can simply tell us what percent of your current royalty -- stream of royalty from licensees is tied to per unit contract agreements. Have you ever released that type of detail?
Scott McQuilkin
Sure. Andy I think, I mentioned that its 57%.
Bennett Notman
I did not hear that.
Scott McQuilkin
Yeah.
Bennett Notman
Okay. And has that changed significantly over the past year or two?
Scott McQuilkin
No, not over the last year or two.
Bennett Notman
Is it expected to change in the mix going forward?
Scott McQuilkin
That really is going to depend on the nature of new deals. I don’t really see a material change outside of new deals. Obviously, the fix portion will remain fixed. And as the 3G market grows, you would expect that to represent a bigger percentage over time. But I think, the real issue there is in terms of material changes would be a function of significant new deals that we do and the structure of those deals.
Bennett Notman
Okay, thanks. Best of luck for all this litigation.
Scott McQuilkin
Thank you.
Operator
We will move on to Kevin Sharbatoni with Boenning & Scattergood.
Kevin Sharbatoni
Good morning Bill, Scott and Janet.
William Merritt
Good morning.
Janet Point
Good morning.
Scott McQuilkin
Good morning.
Kevin Sharbatoni
First off, on the SlimChip, just to be clear, was the reason from kind of looking at options for that basically just that the manufacturing capacity wasn't there. With the priority of issue at Infineon what was kind of the main driver there?
William Merritt
I think it's probably a couple of things, right. One, its not really a manufacturing capacity issue, because there we have access, our second chip is coming out of our (inaudible) and we got good relationship there. It really is being driven by the development scale right? We had sufficient scale to get it here, but I think everyone is looking at the development team and saying you have to move faster because the market is moving faster quickly to build that scale, because you do have some competitors with scale that our moving at there and you can't let the distance between us and them get greater you have to start closing that gap. I think second, the data centric market where we were targeting has moved from a niche kind of market with less price pressure to move in this market type situation with more price pressure and there you need volume scale. And so I think there you are looking at and trying to create situation were you are taking a solution into many markets and getting this economic to scale with that solution. So I think it’s kind of those two things. And given how quickly others are moving to consolidate even if you thought you had more time to get these things done. You may not, because ultimately, if you are going to build scale, you got to make sure that there is somebody left to dance with and never no if it’s pairing up, but we better do that too.
InterDigital, Inc. Q3 2008 Earnings Call Transcript
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Kevin Sharbatoni
Okay, that works. And on that same topic, can you give us some color as to were you see the development spending going on the SlimChip, because I know that’s been -- that has increased the R&D spending over the last few quarter. Is it still going to be at the same level of spending going forward even though you are looking at options for that?
William Merritt
As Scott mentioned today, depending upon which option we choose, I think that the development spend in the fourth quarter could be affected by that. And since, we intend to move very quickly on this analysis, I think we still have the -- there is still fair amount of time left in the fourth quarter. If we get to a decision quickly we can have affect -- this is going to affect on the spend rate in the fourth quarter. So, I think Scott was correct, we are trying to -- we will manage it appropriately, but that level will be highly dependent on the option that we pick.
Kevin Sharbatoni
Okay. I am looking out a little bit at the LTE development, would that be purely kind of a patent licensing thing or would there be possibly hardware solutions involved there?
William Merritt
That’s one of the option under discussion. Certainly there is the patent component there so that will for sure move forward. The opportunity -- there is two other opportunities with respect to LTE though, because I think with LTE you get renewed opportunities to license the IP. I think licensing the IP on the 3G side is largely impact us, right. So people have that now and so, but with LTE if the market is moving very quickly that could be an opportunity for licensing that IP and that would mean you take the development program a little bit further. And then there is possibly the opportunities as well for sort of a co-processor type chip, I think that we wouldn’t make decision today whether we are going do that. I think for sure you do the patentees, I think as you are doing the platforms build up for the patentees, you are starting to do what you need to do for IP, that option you could probably pick a little later in time. And then as you drive down that path you can then create the option to do a co-processor chip which you would pick at further time. Suddenly we need to make all those decision today, but I think they would be available to us if we want them to.
Kevin Sharbatoni
Okay. And just to clarify something I missed. So with the Samsung 2G case going through the Second Circuit, that you said was for December of this year, organized for beginning?
William Merritt
Yeah, that’s correct.
Kevin Sharbatoni
Okay. I think that’s all I have. Thanks.
William Merritt
Thank you.
Operator
(Operator Instructions). And we will move on to the Bill Nasgovitz with Heartland Advisors.
Bill Nasgovitz
Good morning all.
William Merritt
Good morning.
Scott McQuilkin
Hey Bill.
Janet Point
Good morning.
Bill Nasgovitz
Though the big shrink is down here, you are down to 43.2 million shares, fantastic, with the 4 million shares short position. Did I hear right, 450 million has been repurchased over the past how many years?
William Merritt
Yeah, its not where exactly when we started, but it was 2006.
InterDigital, Inc. Q3 2008 Earnings Call Transcript
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Bill Nasgovitz
2006.
William Merritt
Its relatively short period of time.
Bill Nasgovitz
And what was the average price, do you have that?
Scott McQuilkin
I can tell you the average price for the most recent $100 million program was about $21 a share.
Bill Nasgovitz
Yeah, I got that. Thank you. Okay, terrific, did you say that you are going to continue it, I might have misheard?
Scott McQuilkin
Yeah. We did not and obviously that’s an option we have and option we are always considering, but we haven’t announced a continuation of that program at this point.
Bill Nasgovitz
So you are waiting development at the end of the year here, perhaps?
William Merritt
Well, as I think, its always on table and I think we are not shy about it, right. And we have a good level of confidence in the future of the company. So you have to measure that against as for example the other things we are looking at as well as the scale building option on the product size. So it’s a question of – I think though we have done a pretty good job of trying to figure it out where is the best place to deploy our cash to deliver high value.
Bill Nasgovitz
Okay, fair enough. Well we stand in -- I think it's terrific you have done so. In the past, you have said several times that your corporate goal has been to receive royalties on every 3G devise sold in the world? And I didn’t hear that this time, or maybe I didn’t listen carefully, what's your opinion today.
William Merritt
Actually, I gave Scott the line to say this time (Multiple Speakers)
Bill Nasgovitz
You said, it’s Scott, I am sorry, I missed that.
William Merritt
Okay. That remains the goal of the company.
Bill Nasgovitz
And where do you think you share is today?
William Merritt
Maybe near 30, 35% in that range, it depends upon the share of our licensees, right, but….
Bill Nasgovitz
So it really hasn’t moved much this year?
William Merritt
That’s right. I mean I think that’s driven by the nature of the market. The market is highly consolidated within the first the top three players. And so I think that the -- those are the -- while we continue to have good success in discussion with the second and third tier licensees, they are not going to move the needle all that much, and if going to move the needle now is Nokia, Samsung and other folks.
Bill Nasgovitz
Okay. Thank you very much.
William Merritt
Thank you.
Operator
And there are no further questions at this time. Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. And have a wonderful day.
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InterDigital, Inc. Q3 2008 Earnings Call Transcript
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