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InterDigital Announces Financial Results for Third Quarter 2021

WILMINGTON, Del., Nov. 04, 2021 (GLOBE NEWSWIRE) -- InterDigital, Inc. (NASDAQ:IDCC), a mobile and video technology research and development company, today announced results for the quarter ended September 30, 2021.

Third Quarter 2021 Financial Highlights

“In this quarter, we’ve continued to build on our business momentum by expanding our customer base in the mobile and consumer electronic spaces. The wireless connectivity and video technologies we develop have never been more important,” said CEO Liren Chen. “We believe we are well positioned for future growth and are prepared to ensure that the value of our patent portfolio is recognized by those who benefit from our innovations.”

Additional Highlights

Fourth Quarter Outlook

Conference Call Information

InterDigital will host a conference call on Thursday, November 4th, 2021 at 10:00 a.m. ET to discuss its third quarter 2021 financial performance and other company matters.

For a live Internet webcast of the conference call, visit www.interdigital.com and click on the link to the live webcast on the Investors page. The company encourages participants to take advantage of the Internet option.

For telephone access to the conference call, dial (800) 353-6461 within the United States or +1 (334) 323-0501 from outside the United States. Please call by 9:50 a.m. ET on November 4th and give the operator conference ID number 5681111.

An Internet replay of the conference call will be available on InterDigital’s website in the Investors section. In addition, a telephone replay will be available from 1:00 p.m. ET on November 4th through 1:00 p.m. ET on November 9th. To access the recorded replay, call (888) 203-1112 or +1 (719) 457-0820 and use the replay code 5681111.

About InterDigital®

InterDigital develops mobile and video technologies that are at the core of devices, networks, and services worldwide. We solve many of the industry’s most critical and complex technical challenges, inventing solutions for more efficient broadband networks, better video delivery, and richer multimedia experiences years ahead of market deployment. InterDigital has licenses and strategic relationships with many of the world’s leading technology companies. Founded in 1972, InterDigital is listed on NASDAQ.

InterDigital is a registered trademark of InterDigital, Inc.

For more information, visit the InterDigital website: www.interdigital.com

Forward-Looking Statements

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 information regarding our current beliefs, plans and expectations, including, without limitation, our belief that we will continue to be able to execute strongly on our business during the ongoing COVID-19 pandemic. Words such as “believe,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “forecast,” “goal,” “could,” "would," "should," "if," "may," "might," "future," "target," "trend," "seek to," "will continue," "predict," "likely," "in the event," and variations of any such words or similar expressions are intended to identify such forward-looking statements.

Forward-looking statements are made on the basis of management’s current views and assumptions and are not guarantees of future performance. Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results, and actual events that occur, to differ materially from results contemplated by the forward-looking statements. These risks and uncertainties include, but are not limited to: (i) unanticipated delays, difficulties or accelerations in the execution of patent license agreements; (ii) our ability to leverage our strategic relationships and secure new patent license agreements on acceptable terms; (iii) our ability to enter into sales and/or licensing partnering arrangements for certain of our patent assets; (iv) our ability to enter into partnerships with leading inventors and research organizations and identify and acquire technology and patent portfolios that align with our roadmap; (v) our ability to commercialize our technologies and enter into customer agreements; (vi) the failure of the markets for our current or new technologies and products to materialize to the extent or at the rate that we expect; (vii) unexpected delays or difficulties related to the development of our technologies and products; (viii) changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the 2017 Tax Cuts and Jobs Act, as well as further guidance that may be issued regarding such act; (ix) risks related to the potential impact of new accounting standards on our financial position, results of operations or cash flows; (x) failure to accurately forecast the impact of our restructuring activities on our financial statements and our business; (xi) the resolution of current legal proceedings, including any awards or judgments relating to such proceedings, additional legal or regulatory proceedings, changes in the schedules or costs associated with legal proceedings or adverse rulings in such proceedings; (xii) the timing and impact of potential administrative and legislative matters; (xiii) changes or inaccuracies in market projections; (xiv) our ability to obtain liquidity though debt and equity financings; (xv) the potential effects that the ongoing COVID-19 pandemic and/or corresponding macroeconomic uncertainty could have on our financial position, results of operations and cash flows; and (xvi) changes in our business strategy.

We undertake no duty to revise or update publicly any forward-looking statement for any reason, except as otherwise required by law.

Footnotes

1  Throughout this press release, net income and diluted earnings per share (“EPS”) are attributable to InterDigital, Inc. (e.g., after adjustments for non-controlling interests), unless otherwise stated.

2  Free cash flow is a supplemental non-GAAP financial measure that InterDigital believes is helpful in evaluating the company’s ability to invest in its business, make strategic acquisitions and fund share repurchases, among other things. A limitation of the utility of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in the company’s cash balance for the period. InterDigital defines “free cash flow” as net cash used in operating activities less purchases of property and equipment and capitalized patent costs. InterDigital’s computation of free cash flow might not be comparable to free cash flow reported by other companies. The presentation of free cash flow, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. A reconciliation of free cash flow to net cash used in operating activities, the most directly comparable GAAP financial measure, is provided at the end of this press release.


SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
(unaudited)

 FOR THE THREE MONTHS ENDED SEPTEMBER 30, FOR THE NINE MONTHS ENDED SEPTEMBER 30,
 2021 2020 2021 2020
REVENUES:       
Variable patent royalty revenue$8,346  $7,377  $22,765  $17,920 
Fixed-fee royalty revenue84,295  77,338  222,887  221,023 
Current patent royalties92,641  84,715  245,652  238,943 
Non-current patent royalties50,108  507  63,475  20,461 
Total patent royalties142,749  85,222  309,127  259,404 
Current technology solutions revenue747  2,271  4,467  8,797 
Total Revenue$143,496  $87,493  $313,594  $268,201 
        
OPERATING EXPENSES:       
Patent administration and licensing56,150  40,364  133,694  119,167 
Development22,546  20,845  66,999  61,755 
Selling, general and administrative20,978  10,854  46,994  35,251 
Restructuring activities7,045    20,290   
Total Operating expenses106,719  72,063  267,977  216,173 
        
Income from operations36,777  15,430  45,617  52,028 
        
INTEREST EXPENSE(5,773) (10,365) (19,429) (30,881)
OTHER (EXPENSE) INCOME, NET(1,537) 3,994  2,226  13,806 
Income before income taxes29,467  9,059  28,414  34,953 
INCOME TAX (PROVISION) BENEFIT(4,253) 12,843  (6,039) 5,879 
NET INCOME$25,214  $21,902  $22,375  $40,832 
Net loss attributable to noncontrolling interest(1,014) (1,882) (11,042) (5,319)
NET INCOME ATTRIBUTABLE TO INTERDIGITAL, INC.$26,228  $23,784  $33,417  $46,151 
NET INCOME PER COMMON SHARE — BASIC$0.85  $0.77  $1.09  $1.50 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC30,737  30,804  30,792  30,762 
NET INCOME PER COMMON SHARE — DILUTED$0.83  $0.76  $1.07  $1.49 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED31,431  31,119  31,272  31,029 
CASH DIVIDENDS DECLARED PER COMMON SHARE$0.35  $0.35  $1.05  $1.05 


SUMMARY CONSOLIDATED CASH FLOWS
(in thousands)
(unaudited)

 FOR THE THREE MONTHS ENDED SEPTEMBER 30, FOR THE NINE MONTHS ENDED SEPTEMBER 30,
 2021 2020 2021 2020
Income before income taxes$29,467  $9,059  $28,414  $34,953 
Taxes paid(5,042) (4,423) (9,835) (18,211)
Non-cash expenses35,882  26,481  95,272  76,627 
Change in deferred revenue150,703  75,749  64,044  53,066 
Increase in operating working capital, deferred charges and other(114,746) (5,524) (118,732) (2,223)
Purchases of property and equipment and capitalized patent costs(8,857) (15,981) (30,022) (33,601)
FREE CASH FLOW 287,407  85,361  29,141  110,611 
        
Long-term investments  4,260  (1,091) 4,260 
Non-controlling interest distribution    (1,109)  
Dividends paid(10,794) (10,781) (32,319) (32,290)
Taxes withheld upon restricted stock unit vestings(74) (55) (3,747) (1,535)
Payments on long-term debt      (94,909)
Repurchase of common stock(11,859)   (23,000) (349)
Net proceeds from exercise of stock options1,516    5,885  1,792 
Unrealized gain (loss) on short-term investments(734) (152) (1,409) 983 
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS$65,462  $78,633  $(27,649) $(11,437)


SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)

 SEPTEMBER 30, 2021 DECEMBER 31, 2020
ASSETS   
Cash, cash equivalents and short-term investments$900,806  $926,647 
Accounts receivable, net141,657  16,008 
Prepaid and other current assets80,304  59,894 
Property & equipment and patents, net386,039  434,973 
Other long-term assets, net191,806  178,753 
TOTAL ASSETS$1,700,612  $1,616,275 
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Accounts payable, accrued liabilities, taxes payable & dividends payable$92,654  $75,827 
Current deferred revenue325,375  219,935 
Long-term deferred revenue66,673  108,069 
Long-term debt & other long-term liabilities480,593  415,878 
TOTAL LIABILITIES965,295  819,709 
TOTAL INTERDIGITAL, INC. SHAREHOLDERS' EQUITY724,271  773,369 
Noncontrolling interest11,046  23,197 
TOTAL EQUITY735,317  796,566 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,700,612  $1,616,275 


RECONCILIATION OF FREE CASH FLOW TO NET CASH
PROVIDED BY OPERATING ACTIVITIES

In the summary consolidated cash flows and throughout this release, the company refers to free cash flow. The table below presents a reconciliation of this non-GAAP financial measure to net cash provided by operating activities, the most directly comparable GAAP financial measure (in thousands):

 FOR THE THREE MONTHS ENDED SEPTEMBER 30, FOR THE NINE MONTHS ENDED SEPTEMBER 30,
 2021 2020 2021 2020
Net cash provided by operating activities$96,264  $101,342  $59,163  $144,212 
Purchases of property and equipment(940) (6,104) (1,877) (9,875)
Capitalized patent costs(7,917) (9,877) (28,145) (23,726)
Free cash flow$87,407  $85,361  $29,141  $110,611 


CONTACT:InterDigital, Inc.
 Email: investor.relations@interdigital.com
 +1 (302) 300-1857
  

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