MOSAID assumes no obligation to update or revise any forward-looking statements. Additional information identifying risks and uncertainties affecting MOSAID's business and other factors that could cause MOSAID's financial results to fluctuate are contained in MOSAID's Annual Information Form, under the section entitled "Risk Factors," and in MOSAID's other public filings available online at
www.sedar.com.
MOSAID TECHNOLOGIES INCORPORATED
(Subject to the Canada Business Corporations Act)
CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
(In thousands of Canadian Dollars, except per share amounts)
(Unaudited)
Quarter Ended Year Ended
April 30, April 30,
2008 2007 2008 2007
------------------------------------------------------------------------
Revenues $16,959 $12,204 $55,072 $59,981
Operating expenses
Patent portfolio management 1,246 1,136 4,834 4,243
Patent licensing and litigation 5,261 2,071 13,643 7,768
Research and development 603 336 2,351 1,182
General and administration 870 1,891 4,146 7,043
Foreign exchange loss 91 590 606 461
Special committee - 848 147 2,812
------------------------------------------------------------------------
8,071 6,872 25,727 23,509
------------------------------------------------------------------------
Pro forma income from
operations 8,888 5,332 29,345 36,472
Net interest income 562 559 2,130 2,399
------------------------------------------------------------------------
Pro forma income before
income tax 9,450 5,891 31,475 38,871
Income tax expense (Note 3) 3,362 2,055 11,242 13,558
------------------------------------------------------------------------
Pro forma income (Note 6) $6,088 $3,836 $20,233 $25,313
------------------------------------------------------------------------
------------------------------------------------------------------------
Pro forma earnings per share
Basic $0.57 $0.35 $1.85 $2.28
Diluted $0.57 $0.34 $1.83 $2.24
Weighted average number of
shares
Basic 10,721,721 11,023,860 10,962,648 11,103,185
Diluted 10,770,415 11,216,133 11,057,861 11,321,298
See accompanying Notes to the Consolidated Financial Statements
MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(In thousands of Canadian Dollars, except per share amounts)
(Unaudited)
Quarter Ended Year Ended
April 30, April 30,
2008 2007 2008 2007
------------------------------------------------------------------------
Revenues $16,959 $12,204 $55,072 $59,981
Operating expenses
Patent portfolio management 1,246 1,136 4,834 4,243
Patent licensing and litigation 5,261 2,071 13,643 7,768
Research and development 603 336 2,351 1,182
General and administration 870 1,891 4,146 7,043
Foreign exchange loss (gain) 367 (1,040) (3,393) (1,169)
Restructuring - 2,284 19 2,284
Special committee - 848 147 2,812
Stock-based compensation 153 653 550 1,140
Patent amortization and
imputed interest 3,254 2,312 13,223 3,363
------------------------------------------------------------------------
11,754 10,491 35,520 28,666
------------------------------------------------------------------------
Income from operations 5,205 1,713 19,552 31,315
Net interest income (Note 3) 562 559 2,130 2,399
------------------------------------------------------------------------
Income before income tax
expense and discontinued
operations 5,767 2,272 21,682 33,714
Income tax expense 1,854 1,001 10,827 13,189
------------------------------------------------------------------------
Income before discontinued
operations 3,913 1,271 10,855 20,525
Discontinued operations income
(net of tax) (Note 5) 1,512 7,772 7,619 4,184
------------------------------------------------------------------------
Net income 5,425 9,043 18,474 24,709
Dividends 2,680 2,757 10,958 11,102
Normal course issuer bid 173 - 5,120 6,582
Retained earnings, beginning
of period 16,725 10,615 16,901 9,876
------------------------------------------------------------------------
Retained earnings, end of
period $19,297 $16,901 $19,297 $16,901
------------------------------------------------------------------------
Earnings per share (Note 4)
Basic - before discontinued
operations $0.36 $0.12 $0.99 $1.85
Diluted - before discontinued
operations $0.36 $0.11 $0.98 $1.81
Basic - net earnings $0.51 $0.82 $1.69 $2.23
Diluted - net earnings $0.50 $0.81 $1.67 $2.18
Weighted average number of
shares
Basic 10,721,721 11,023,860 10,962,648 11,103,185
Diluted 10,770,415 11,216,133 11,057,861 11,321,298
See accompanying Notes to the Consolidated Financial Statements
MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands of Canadian Dollars)
(Unaudited)
As at As at
April 30, 2008 April 30, 2007
-------------------------------------------------------------------------
Current Assets
Cash and cash equivalents $22,133 $23,396
Marketable securities 36,246 26,876
Accounts receivable 12,304 12,626
Prepaid expenses 486 618
Future income taxes recoverable 11,015 10,278
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82,184 73,794
Capital assets 957 1,067
Acquired intangibles 70,130 76,823
Long-term receivables - 1,734
Goodwill - 1,786
Long-term assets held for sale - 7,028
Future income taxes recoverable 16,988 24,468
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$170,259 $186,700
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Current Liabilities
Accounts payable and accrued liabilities $7,723 $16,091
Income tax payable 356 -
Deferred revenue 1,146 542
Mortgage payable - 4,346
Other asset 318 -
Current portion of other long-term
liabilities 5,345 5,239
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14,888 26,218
Deferred gain on sale-leaseback 1,797 -
Other long-term liabilities 31,195 38,313
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47,880 64,531
-------------------------------------------------------------------------
Shareholders' Equity (Note 2)
Share capital 100,403 102,276
Contributed surplus 2,997 2,992
Retained earnings 19,297 16,901
Accumulated other comprehensive income (318) -
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122,379 122,169
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$170,259 $186,700
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying Notes to the Consolidated Financial Statements
MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of Canadian Dollars)
(Unaudited)
Quarter Ended Year Ended
April 30, April 30,
2008 2007 2008 2007------------------------------------------------------------------------
Operating
Income before discontinued
operations $3,913 $1,271 $10,855 $20,525
Items not affecting cash
Amortization 2,472 1,772 9,653 3,025
Stock-based compensation 153 765 550 1,831
Loss on disposal of capital
assets 95 1,652 95 1,794
Unrealized foreign exchange
gain on other long-term
investments (3,999) - (3,999) -
Future income tax recoverable 1,691 474 6,743 4,603
------------------------------------------------------------------------
4,325 5,934 23,897 31,778
Change in non-cash working
capital items from continuing
operations (3,083) 13,434 (9,341) (1,837)
------------------------------------------------------------------------
1,242 19,368 14,556 29,941
------------------------------------------------------------------------
Investing
Acquisition of capital assets
and acquired intangibles 1,036 (18,976) (1,708) (36,175)
Acquisition of short-term
marketable securities (2,906) (10,048) (119,460) (88,638)
Proceeds on disposal/maturity
of short-term marketable
securities 77 35,876 110,090 117,550
------------------------------------------------------------------------
(1,793) 6,244 (11,078) (7,263)
------------------------------------------------------------------------
Financing
Repayment of mortgage - (62) (4,346) (244)
Long-term liabilities (1,632) (11,678) (4,081) -
Repurchase of shares (364) - (10,324) (9,996)
Dividends (2,680) (2,757) (10,958) (11,102)
Issue of common shares 63 575 2,702 1,745
------------------------------------------------------------------------
(4,613) (13,922) (27,007) (19,597)
------------------------------------------------------------------------
Net cash (outflow) inflow
from continuing operations (5,164) 11,690 (23,529) 3,081
Net cash inflow from
discontinued operations 9,885 235 22,266 4,773
------------------------------------------------------------------------
Net cash inflow (outflow) 4,721 11,925 (1,263) 7,854
Cash and cash equivalents,
beginning of period 17,412 11,471 23,396 15,542
------------------------------------------------------------------------
Cash and cash equivalents,
end of period $22,133 $23,396 $22,133 $23,396
------------------------------------------------------------------------
------------------------------------------------------------------------
See accompanying Notes to the Consolidated Financial Statements
MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands of Canadian Dollars)
(Unaudited)
Quarter Ended Year Ended
April 30, April 30,
2008 2007 2008 2007
------------------------------------------------------------------------
Net income $5,425 $9,043 $18,474 $24,709
------------------------------------------------------------------------
Other comprehensive income,
net of tax:
Gains and losses on
derivatives designated as
cash flow hedges (54) - 846 -
Gains and losses on
derivatives designated as
cash flow hedges in prior
periods transferred to net
income in the current period (302) - (1,164) -
------------------------------------------------------------------------
Other comprehensive income (356) - (318) -
------------------------------------------------------------------------
Comprehensive income $5,069 $9,043 $18,156 $24,709
------------------------------------------------------------------------
------------------------------------------------------------------------
See accompanying Notes to the Consolidated Financial Statements
MOSAID TECHNOLOGIES INCORPORATED
