Jim
I'll bury it....but Dr Don in 1992 held 10.32 percent of International (IMMC), the equivalent of 2,351,000 common shares for the buyout of his company. I kinda think he was on the right track (business wise) in this 1994 article.
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New CEO mends fences at InterDigital
Philadelphia Business Journal
April 29, 1994
Jessica Davis
KING OF PRUSSIA--American Telephone & Telegraph Co. paid InterDigital Communications Corp. $ 2.4 million in upfront royalties to use patented technology that the telephone equipment manufacturer has sued other giants for infringing upon.
The agreement, announced Monday, marks the first time InterDigital has been paid for use of its technology without resorting to litigation.
And it reflects a turning point in how the maker of the Ultraphone digital radiotelephone system plans to deal with lawsuits and negotiations with other big players in the cellular telecommunications industry, according to its newly appointed chief executive officer, Donald Schilling.
"We are in discussions with all the companies, including the ones we have sued," Schilling said. "I would rather negotiate than go to court. I anticipate all the lawsuits settling before they go to trial. If they do not, then the business people on each side are making serious errors."
The negotiation-based approach won't be the only change under Schilling, who assumed the post of CEO on April 21, replacing William W. Erdman, who resigned Feb. 10.
Since the beginning of the year, InterDigital has laid off about 20 percent of its work force--about 40 people--in across-the-board cuts, most at the company's King of Prussia facilities.
"Some of these are really good people, but we have to operate very lean," said Schilling, who was faced with explaining the company's $ 34.7 million loss in 1993 to the financial community in a teleconference three weeks ago. InterDigital has posted losses since its start-up as International Mobile Machines Corp. more than 20 years ago.
"While we really regret doing it, someone had to do it and I got stuck with it," he said.
InterDigital operates two other facilities in New York that were acquired from Schilling in an October 1992 stock transaction that made the engineer and entrepreneur InterDigital's largest shareholder. Schilling now owns about 1.6 million of InterDigital's approximately 35 million outstanding shares.
Most of the work force cuts were made at King of Prussia, Schilling said, because the company's New York operations are primarily engineering with almost no secretarial or administrative support, leaving little room for reductions there.
The layoffs make up one part of Schilling's cost-cutting strategy, which he said would shave $ 3 million to $ 5 million from the company's expenses in 1994.
Another part of the plan would consolidate the company's Philadelphia-area facilities--three working buildings and two storage sites--into one location by the end of this year.
These cost-cutting measures, which Schilling said would be announced by today, may seem like the same old thing to longtime shareholders who have heard this tune before.
InterDigital projected profits for 1992, 1991 and 1989, and never delivered. And the company has gone through management shake-ups and cost-cutting layoffs before.
But Schilling said he had received 40 to 50 phone calls from shareholders in the last week thanking him for taking the helm of the struggling company.
Although Schilling could not project profits for 1994, he said that InterDigital would reach the black in 1995.
One analyst agreed that this time the company appears headed for success. Last November, Ernest Widmann, president of Widmann, Siff & Co. Inc., projected InterDigital profits of $ 162.4 million on revenues of $ 265.2 million would be reached in 1995. Most of that revenue is expected to come from royalties on its patent technology.
"The tax loss carry-forward will be worth $ 1.25 to $ 1.50 a share," said Widmann of the Bryn Mawr financial firm.
And new management at InterDigital should help, too.
"I like Schilling as a CEO, and I think he's the guy to lead the company because he certainly understands the technology," Widmann said. "Under Schilling you will see a new policy. He's exerted a fair amount of influence in the company and was instrumental in the management change."
Schilling's negotiation-based approach to defending InterDigital's patents is a complete turnaround from the company's recent strategy pitting the $ 16.4 million David against industry Goliaths such as Motorola Inc. and Ericsson GE Mobile Communications inc. in federal lawsuits, the first of which is scheduled to go to trial this year.
InterDigital amassed a $ 5.2 million war chest in early 1993 specifically to protect its patents--either by pursuing licenses with other companies or suing them over patent infringement.
And AT&T's agreement with InterDigital counts as a vote for the validity of InterDigital's patents, according to Widmann.
"I think you will see the other companies such as Motorola and Ericsson come into line and settle with them here," Widmann said. "It can't be used in court, but what it shows is that the very formidable patent legal department at AT&T has looked at these patents and said they are strong patents. It's logical to think that the court would think the same way."
The AT&T-InterDigital agreement stipulates that neither company talk about the deal publicly.
But AT&T spokeswoman Barbara Meirisch said the broad agreement, which covers all of InterDigital's wireless technology patents, provides AT&T and its customers with patent-infringement protection in a cost-effective way.
The deal had been under negotiation for over a year, Schilling said. InterDigital is close to licensing technology to another company, but Schilling could not say how soon the deal might go through.
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