gejebr3: It might be a while before Hillcrest adds to IDCC's bottom line.
Based on available information I would say that Hillcrest is probably adding around $10 million to IDCC’s annual revenues. However, it also looks like Hillcrest was/is operating at a loss, rather than adding to earnings.
The following are two comments from the 2017 3rd quarter 10-Q results of nine months operations:
“Current technology solutions revenue increased by $8.9 million primarily due to increased shipments by one of our technology solutions customers and the inclusion of revenue from Hillcrest.”
“The $7.6 million increase in costs associated with commercial initiatives and the $3.7 million increase in depreciation and amortization were primarily related to the acquisition of Hillcrest during fourth quarter 2016.”
As described, revenues increased $8.9 million because of the inclusion of Hillcrest revenues and increased revenues from other tech solutions customers; therefore, the Hillcrest revenues were probably a few million under the $8.9 million amount. On the other hand, increased costs of $11.3 million were primarily attributable to Hillcrest, thus indicating that the Hillcrest operation was operating at a loss.
The foregoing amounts and conclusion are in general agreement with an analysis of the Hillcrest acquisition that was included in the recent 10-K. In commenting on the Hillcrest acquisition IDCC made a pro forma analysis of what their revenues and earnings would have been in 2015 and 2016 if Hillcrest had been acquired effective January 1, 2015. The analysis found that revenues would have increased by $10.5 million in 2015, and $6.8 million in 2016; and, the earnings would have decreased by $9.4* million in 2015, and decreased by $3.8 million in 2016.
* The 2015 earnings calculation included $7.7 million in transaction costs, which should be considered as non recurring costs.
