For the Quarter Ended January 31, 2011
The attached consolidated financial statements have been prepared by Management of MOSAID Technologies Incorporated and have not been reviewed by an auditor.
MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(In thousands of Canadian Dollars, except per share amounts)
(Unaudited)
Quarter Ended Nine Months Ended
January 31 January 31
2011 2010 2011 2010
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Revenues $20,211 $17,688 $58,661 $51,224
Operating expenses
Patent portfolio
management 2,136 1,670 6,570 5,203
Patent licensing and
litigation 2,338 3,066 7,326 6,666
Research and development 827 621 1,988 2,137
General and administration 1,768 1,615 4,509 4,365
Foreign exchange (gain) (553) (310) (190) (2,818)
Stock-based compensation
(Note 6) 572 331 1,415 789
Special committee - - - 719
Patent amortization and
imputed interest 4,129 3,631 12,382 11,327
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11,217 10,624 34,000 28,388
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Income from operations 8,994 7,064 24,661 22,836
Investment income 337 96 954 311
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Income before income tax
expense and discontinued 9,331 7,160 25,615 23,147
Income tax expense 2,034 5,132 6,662 10,078
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Income before discontinued
operations 7,297 2,028 18,953 13,069
Discontinued operations
income
(net of tax) (Note 5) 78 196 194 630
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Net income 7,375 2,224 19,147 13,699
Dividends 2,968 2,581 8,855 7,714
Retained earnings, beginning
of period 28,587 17,949 22,702 11,607
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Retained earnings, end of
period $32,994 $17,592 $32,994 $17,592
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Earnings per share (Note 4)
Basic - before
discontinued operations $0.61 $0.20 $1.61 $1.27
Diluted - before
discontinued operations $0.61 $0.20 $1.59 $1.27
Basic - net earnings $0.62 $0.22 $1.62 $1.33
Diluted - net earnings $0.61 $0.21 $1.61 $1.33
Weighted average number of
shares
Basic 11,865,305 10,307,569 11,807,801 10,267,187
Diluted 12,046,946 10,367,317 11,929,406 10,324,734
See accompanying Notes to the Consolidated Financial Statements
MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In thousands of Canadian Dollars)
As at As at
January 31, 2011 April 30, 2010
(unaudited) (audited)
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Current Assets
Cash and cash equivalents $89,205 $70,732
Marketable securities 29,646 30,096
Accounts receivable 7,104 4,880
Prepaid expenses 759 698
Other asset 627 2,053
Future income tax asset 9,797 10,930
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137,138 119,389
Property and equipment 268 257
Acquired intangible assets 71,919 80,685
Investment tax credits
receivable 15,861 15,748
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$225,186 $216,079
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Current Liabilities
Accounts payable and
accrued liabilities $8,046 $7,734
Deferred revenue 243 4,611
Other liability 1,085 992
Current portion of other
long-term liabilities 11,357 8,294
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20,731 21,631
Deferred gain on sale-
leaseback 669 828
Other long-term liabilities 31,858 33,132
Future income tax liability 6,909 6,147
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60,167 61,738
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Shareholders' Equity (Note
3)
Share capital 128,379 126,573
Contributed surplus 3,131 3,452
Retained earnings 32,994 22,702
Accumulated other
comprehensive income 515 1,614
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165,019 154,341
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$225,186 $216,079
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See accompanying Notes to the Consolidated Financial Statements
MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of Canadian Dollars)
(Unaudited)
Quarter Ended Nine Months Ended
January 31 January 31
2011 2010 2011 2010
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Operating
Income before discontinued
operations $7,297 $2,028 $18,953 $13,069
Items not affecting cash
Amortization 3,426 3,039 10,254 9,087
Stock-based compensation 572 276 1,415 734
Unrealized foreign
exchange (gain) on other
long-term liabilities (628) (282) (400) (3,212)
Future income taxes and
investment tax credits 831 4,654 2,155 6,081
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11,498 9,715 32,377 25,759
Change in non-cash working
capital items from
continuing operations (342) 8,086 (6,339) 10,399
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11,156 17,801 26,038 36,158
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Investing
Acquisition of property
and equipment and
acquired intangibles (1,359) (5) (1,500) (640)
Acquisition of marketable
securities (11,254) - (38,759) (3,316)
Proceeds on disposal and
maturity of arketable
securities 14,507 (5) 39,209 18,487
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1,894 (10) (1,050) 14,531
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Financing
Increase (decrease) in other
long-term liabilities 742 642 2,236 (9,057)
Dividends paid (2,968) (2,581) (8,855) (7,714)
Funding of restricted share
unit plan (17) (880) (2,085) (880)
Issuance of common shares 652 306 2,156 1,295
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(1,591) (2,513) (6,548) (16,356)
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Net cash inflow from
continuing operations 11,459 15,278 18,440 34,333
Net cash inflow (outflow)
inflow from discontinued
operations 20 (231) 33 (693)
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Net cash inflow 11,479 15,047 18,473 33,640
Cash and cash equivalents,
beginning of period 77,726 51,492 70,732 32,899
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Cash and cash equivalents,
end of period $89,205 $66,539 $89,205 $66,539
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Supplementary Information:
Cash on hand and bank
balances $89,205 $62,181 $89,205 $62,181
Short-term investments - 4,358 - 4,358
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Total cash and cash
equivalents $89,205 $66,539 $89,205 $66,539
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See accompanying Notes to the Consolidated Financial Statements
MOSAID TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands of Canadian Dollars)
(Unaudited)
Quarter Ended Nine Months Ended
January 31 January 31
2011 2010 2011 2010
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Net income $7,375 $2,224 $19,147 $13,699
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Other comprehensive income,
net of tax:
Gains (losses) on
derivatives designated as
cash flow hedges 324 134 197 1,479
Gains (losses) on
derivatives designated as
cash flow hedges in prior
periods transferred to
earnings in the current
period (487) (982) (1,296) (2,291)
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Other comprehensive income
(loss) (163) (848) (1,099) (812)
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Comprehensive income $7,212 $1,376 $18,048 $12,887
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See accompanying Notes to the Consolidated Financial Statements
MOSAID TECHNOLOGIES INCORPORATED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Quarters ended January 31, 2011 and 2010
(tabular dollar amounts in thousands of Canadian Dollars, except per share
amounts)
(unaudited)
1. Basis of Presentation
