Company Further Rationalizes Expense Structure,
Positioning Acacia to Leverage Strategic Partnership with Starboard
Value to Pursue Investment Opportunities
Acacia Research Corporation (“we”, "Acacia" or "the Company")
(Nasdaq: ACTG) today reported results for the three and 12-month
periods ended December 31, 2019.
Clifford Press, Chief Executive Officer, stated, “We finished
2019 with a substantially expanded capital base, leaner cost
structure, and the opportunity to build an exceptional platform for
investing in unique transactions. We are gratified that our
shareholders strongly endorsed our strategic partnership with
Starboard Value, an ideal partner for Acacia as we work to leverage
our substantial net tax assets and implement our absolute return
investment strategy. We continue to build out our investment team
and the opportunity to put this exceptional platform to work is
only enhanced by current market conditions.”
Al Tobia, President and Chief Investment Officer, added, “Our
next area of focus is to leverage the Starboard partnership to
pursue investment opportunities with greater scale and flexibility
that can systematically grow Acacia’s book value. As we actively
explore a wide range of investment opportunities that include new
revenue streams, royalty streams, intellectual property and other
undervalued assets, we are prudently managing our cash. Acacia
maintains a unique position, with strong capitalization and
significant expertise to identify, evaluate, and monetize a wide
range of asset classes. We expect 2020 will be a year of growth as
we take concrete steps to turn this position, and our
relationships, into tangible value.”
Full-Year 2019 Financial Summary:
- Cash and short-term investments totaled $168.3 million as of
December 31, 2019, an increase from $165.5 million as of December
31, 2018.
- Gross revenues were $11.2 million.
- General and administrative expenses declined 12.6% as new
management rationalized the company’s cost structure, including
reducing rent and duplicative salaries.
- Operating loss was $23.4 million.
- GAAP net loss to common shareholders was $17.4 million or
$(0.35) per basic share.
Fourth Quarter Financial Summary:
- Gross revenues were $688,000.
- Operating loss was $7.4 million.
- GAAP net income to common shareholders was $327,000 or $0.01
per basic share.
Investor Conference Call:
The Company will host a conference call today, Thursday, March
12, 2020, to discuss these results and provide a business update at
11 a.m. ET/ 8 a.m. PT.
To access the live call, please dial (800) 367-2403 (U.S. and
Canada) or (334) 777-6978 (international) and reference conference
ID 5163391. The conference call will also be simultaneously
webcasted on the investor relations section of the Company’s
website at http://acaciaresearch.com under the events and
presentations tab. Following the conclusion of the live call, a
replay of the webcast will be available on the Company's website
for at least 30 days.
About Acacia Research Corporation
Founded in 1993, Acacia Research Corporation (ACTG) invests in
Intellectual Property Assets and partners with inventors and patent
owners to realize the financial value in their patented inventions.
Acacia bridges the gap between invention and application,
facilitating efficiency and delivering monetary rewards to the
patent owner.
Information about Acacia Research Corporation and its
subsidiaries is available at www.acaciaresearch.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
This news release contains forward-looking statements within the
meaning of the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. These statements are based upon our
current expectations and speak only as of the date hereof. Our
actual results may differ materially and adversely from those
expressed in any forward-looking statements as a result of various
factors and uncertainties, including the ability to successfully
implement our strategic plan, the ability to successfully build out
a new leadership team within a certain timeframe, the ability to
streamline financial reporting, the ability to successfully develop
licensing programs and attract new business, changes in demand for
current and future intellectual property rights, legislative,
regulatory and competitive developments addressing licensing and
enforcement of patents and/or intellectual property in general,
general economic conditions and the success of our investments. Our
Annual Report on Form 10-K, recent and forthcoming Quarterly
Reports on Form 10-Q, recent Current Reports on Form 8-K, and any
amendments to the forgoing, and other SEC filings discuss some of
the important risk factors that may affect our business, results of
operations and financial condition. We undertake no obligation to
revise or update publicly any forward-looking statements for any
reason.
The results achieved in the most recent quarter are not
necessarily indicative of the results to be achieved by us in any
subsequent quarters, as it is currently anticipated that Acacia
Research Corporation’s financial results will vary, and may vary
significantly, from quarter to quarter. This variance is expected
to result from a number of factors, including risk factors
affecting our results of operations and financial condition
referenced above, and the particular structure of our licensing
transactions, which may impact the amount of inventor royalties and
contingent legal fees expenses we incur from period to period.
ACACIA RESEARCH CORPORATION UNAUDITED CONSOLIDATED
BALANCE SHEETS (In thousands, except share and per share
data)
December 31,
December 31,
2019
2018
ASSETS
Current assets:
Cash and cash equivalents
$
57,359
$
128,809
Trading securities - debt
93,843
33,642
Trading securities - equity
17,140
3,012
Accounts receivable
511
32,884
Prepaid expenses and other
current assets
2,912
3,125
Total current assets
171,765
201,472
Long-term restricted cash
35,000
-
Investment at fair value
1,500
7,459
Other investments
-
8,195
Patents, net of accumulated
amortization
7,814
6,587
Leased right-of-use assets
1,264
-
Other non-current assets
818
236
Total assets
$
218,161
$
223,949
LIABILITIES, REDEEMABLE
CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
1,765
$
3,698
Accrued expenses and other
current liabilities
7,265
4,299
Accrued compensation
507
350
Royalties and contingent legal
fees payable
2,178
22,688
Total current liabilities
11,715
31,035
Series A warrant liabilities
3,568
-
Series A embedded derivative
liabilities
17,974
-
Long-term lease liabilities
1,264
-
Other long-term liabilities
593
1,674
Total liabilities
35,114
32,709
Series A redeemable convertible
preferred stock, par value $100 per share; 350,000 shares
authorized, issued and outstanding as of December 31, 2019; no
shares authorized, issued or outstanding as of December 31,
2018
8,089
-
Stockholders' equity:
Preferred stock, par value $0.001
per share; 10,000,000 shares authorized; no shares issued or
outstanding
-
-
Common stock, par value $0.001
per share; 100,000,000 shares authorized; 50,370,987 and 49,639,319
shares issued and outstanding as of December 31, 2019 and December
31, 2018, respectively
50
50
Treasury stock, at cost,
2,919,828 shares as of December 31, 2019 and December 31, 2018
(39,272
)
(39,272
)
Additional paid-in capital
652,003
651,156
Accumulated deficit
(439,656
)
(422,541
)
Total Acacia Research Corporation
stockholders' equity
173,125
189,393
Noncontrolling interests
1,833
1,847
Total stockholders' equity
174,958
191,240
Total liabilities, redeemable
convertible preferred stock, and stockholders' equity
$
218,161
$
223,949
ACACIA RESEARCH CORPORATION UNAUDITED CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands, except share and per
share data)
Three Months Ended
Years Ended
December 31,
December 31,
2019
2018
2019
2018
Revenues
$
688
$
49,203
$
11,246
$
131,506
Portfolio operations:
Inventor royalties
192
11,002
4,944
35,168
Contingent legal fees
4
11,756
591
31,501
Patent acquisition expenses
-
-
-
4,000
Litigation and licensing expenses
- patents
1,160
1,689
7,803
8,866
Amortization of patents
857
11,560
3,194
27,120
Other portfolio expenses
1,581
400
1,756
2,602
Total portfolio operations
3,794
36,407
18,288
109,257
Net portfolio income (loss)
(3,106
)
12,796
(7,042
)
22,249
General and administrative
expenses
4,328
2,754
16,376
18,728
Impairment of patent-related
intangible assets
-
-
-
28,210
Operating income (loss)
(7,434
)
10,042
(23,418
)
(24,689
)
Other income (expense):
Change in fair value of
investment, net
277
(5,142
)
9,899
(59,103
)
Loss on sale of investment
(1,083
)
(15,390
)
(9,230
)
(19,095
)
Impairment of other
investment
-
-
(8,195
)
(1,000
)
Gain on disposal of other
investment
-
-
2,000
-
Other expense
(32
)
(629
)
(32
)
(629
)
Change in fair value of the
Series A warrant and embedded derivative
4,518
-
4,518
-
Interest income and other
2,241
149
5,505
847
Total other income (expense)
5,921
(21,012
)
4,465
(78,980
)
Loss before income taxes
(1,513
)
(10,970
)
(18,953
)
(103,669
)
Income tax benefit (expense)
2,147
(397
)
1,824
(1,179
)
Net income (loss) including
noncontrolling interests in subsidiaries
634
(11,367
)
(17,129
)
(104,848
)
Net (income) loss attributable to
noncontrolling interests in subsidiaries
-
(2
)
14
(181
)
Net income (loss) attributable to
Acacia Research Corporation
$
634
$
(11,369
)
$
(17,115
)
$
(105,029
)
Less: Accretion of redeemable
preferred stock
(307
)
-
(307
)
-
Net income (loss) attributable to common
stockholders - basic
$
327
$
(11,369
)
$
(17,422
)
$
(105,029
)
Basic net income (loss) per
common share
$
0.01
$
(0.23
)
$
(0.35
)
$
(2.10
)
Weighted average number of shares
outstanding - basic
49,875,750
49,639,172
49,764,002
49,969,062
Add: Accretion of redeemable
preferred stock
307
-
307
-
Less: Mark-to-market adjustment
for preferred stock embedded derivative
(3,258
)
-
(3,258
)
-
Net loss attributable to common
stockholders - diluted
$
(2,624
)
$
(11,369
)
$
(20,373
)
$
(105,029
)
Diluted net income (loss) per
common share
$
(0.05
)
$
(0.23
)
$
(0.40
)
$
(2.10
)
Weighted average number of shares
outstanding - diluted
54,406,835
49,639,172
50,896,773
49,969,062
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200312005240/en/
Acacia Research Investor Contact: FNK IR Rob Fink,
646-809-4048 rob@fnkir.com
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