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Acacia Research Reports First Quarter Financial Results
28 April 2005
Acacia Research Corporation (Nasdaq:ACTG - News; Nasdaq:CBMX - News) today reported results for the three months ended March 31, 2005. Acacia Research Corporation comprises two operating groups, the Acacia Technologies group and the CombiMatrix group.
"Acacia Technologies group revenues for the first quarter of 2005 were $1,863,000, consisting of licensing revenues from our Digital Media Transmission (DMT®), credit card fraud protection, digital video production, and interactive television technologies. We also received payments of $527,000 from licensees that we recorded as deferred revenues," commented Paul Ryan, Acacia Research Corporation Chairman & CEO.
"Since the end of the first quarter we completed our first license for the multi-dimensional bar code technology and have now begun generating revenues from 5 patent portfolios. Acacia is also pursuing 10 additional licensing and enforcement programs covering recently acquired technologies. We plan to continue acquiring new patent portfolios as we move toward our goal of becoming the leader in technology licensing," concluded Mr. Ryan.
"The CombiMatrix group's revenues for the first quarter ending March 31, 2005 were $1,069,000. This represents a gain of 105% over revenues from the fourth quarter of 2004. Product and service revenues related to CustomArrays(TM) were $338,000, which represents an increase of 156% relative to such revenues earned in the fourth quarter of 2004. Excluding the $17,302,000 of deferred revenues related to our strategic alliance with Roche that were recognized in early 2004, this quarter was CombiMatrix's first million dollar quarter. This achievement signals continued growth of our business and acceptance of our products and services in the marketplace. During the quarter we made progress in all facets of our business including sales growth, advancement of our drug development programs, advances in programs with our existing alliance partners, establishment of additional strategic alliances, continued progress with our government contract work, and other general business initiatives," commented Dr. Amit Kumar, President and CEO of CombiMatrix Corporation.
Acacia Research Corporation Consolidated
Financial Results
Consolidated revenues for the first quarter of 2005 were $2,932,000 versus $18,215,000 in the comparable 2004 period. First quarter 2005 revenues recognized by the CombiMatrix group were comprised of $731,000 in government contract revenues and $338,000 in CustomArray(TM) product and service revenues. First quarter 2005 revenues recognized by the Acacia Technologies group included $788,000 in license fee revenues recognized from licensees that make recurring quarterly or annual license fee payments under their respective license agreements and $1,075,000 in license fee revenues recognized from licensees that made nonrecurring, one-time, fully paid up license fee payments for past infringement and future use of certain of our patented technologies. License fee revenues included fees from the licensing of our Digital Media Transmission ("DMT®") technology and from our recently acquired credit card fraud protection, digital video production, and interactive television technologies.
In addition, during the first quarter of 2005, the Acacia Technologies group received license fee payments totaling $527,000 which have been recorded as deferred revenues at March 31, 2005. Certain of these payments will be recognized as license fee revenues on a straight-line basis over the respective future license term and other payments will be recognized in a future period when all revenue recognition criteria have been met in accordance with the Acacia Technologies group's revenue recognition policies.
In March 2004, the CombiMatrix group completed all phases of its research and development agreement with Roche and as a result recognized all previously deferred Roche-related contract revenues, totaling $17,302,000 in the first quarter of 2004.
The first quarter 2005 consolidated net loss was $4,950,000 versus consolidated net income of $10,903,000 in the comparable 2004 period. The first quarter 2005 results include net non-cash charges totaling $1,356,000, comprised primarily of patent amortization charges of $1,190,000 and asset depreciation charges of $292,000. Non-cash stock compensation amortization charges, patent amortization charges and asset depreciation charges totaled $403,000, $399,000, and $312,000, respectively, in the comparable 2004 period. Patent amortization charges increased in the first quarter of 2005 due to the amortization of patent-related intangibles acquired in connection with Acacia Global Acquisition Corporation's acquisition of 100% of the ownership interests in 11 patent licensing companies which own patent rights for 27 patent portfolios, from Global Patent Holdings, LLC on January 28, 2005 (the "GPH Acquisition"). Approximately $25,000,000 of the purchase consideration paid in the GPH Acquisition was allocated to amortizable patents and related patent rights acquired. Patent amortization charges will continue to be significant in future periods as the Acacia Technologies group continues to amortize the acquired patent-related costs over a weighted average economic useful life of approximately 6 years. The first quarter 2005 results also included a non-cash credit of $179,000 versus a non-cash charge of $1,257,000 in the comparable 2004 period, related to changes in the fair value of AR-CombiMatrix common stock issuable in connection with certain anti-dilution provisions of the September 2002 settlement agreement with Nanogen, Inc. The anti-dilution provisions expire in September 2005.
The first quarter 2004 consolidated net income of $10,903,000 was driven primarily by the recognition of the previously deferred Roche-related contract revenues as discussed above.
First quarter 2005 research and development expenses (including government contract costs), comprised solely of costs incurred by the CombiMatrix group, increased to $1,831,000 from $1,588,000 in the comparable 2004 period. The change was due to increased costs recognized in connection with the CombiMatrix group's commitments under its biological threat detection contract with the Department of Defense which was executed in March 2004. The increase was partially offset by a decrease in the CombiMatrix group's internal research and development efforts due to the commercial launch of the CombiMatrix group's CustomArray(TM) DNA array platform beginning in March 2004.
Marketing, general and administrative expenses for the first quarter of 2005 increased to $3,889,000 from $3,284,000 in the comparable 2004 period, due primarily to the addition of licensing and business development personnel for the Acacia Technologies group, an increase in the Acacia Technologies group's consulting expenses related to a consulting agreement executed with the former CEO of Global Patent Holdings, LLC and an increase in marketing and sales costs related to the continued commercialization of the CombiMatrix group's CustomArray(TM) DNA array platform, which was initially launched in March of 2004. The increase was partially offset by a decrease in the CombiMatrix group's general and administrative expenses related to ongoing operations.
First quarter 2005 patent-related legal expenses, comprised solely of costs incurred by the Acacia Technologies group, were $561,000 versus $602,000 in the comparable 2004 period. First quarter 2005 patent-related legal expenses included $151,000 in patent-related prosecution and enforcement costs incurred by certain of the companies acquired in the GPH Acquisition transaction. Excluding the impact of the GPH Acquisition, patent-related legal expenses decreased to $410,000 in the first quarter of 2005 due to a decrease in costs incurred in connection with the Acacia Technologies group's ongoing DMT patent commercialization and enforcement programs, including decreased legal costs related to new patent claims and a decrease in patent enforcement costs related to ongoing DMT patent-related litigation.
In the first quarter of 2005, the Acacia Technologies group recognized contingent legal fee expenses totaling $365,000 and royalty expenses totaling $282,000 in connection with the recognition of license fee revenues from our recently acquired credit card fraud protection, digital video production, and interactive television technologies.
Financial Condition
Total consolidated assets were $123,217,000 as of March 31, 2005 compared to $88,327,000 as of December 31, 2004. Cash and cash equivalents and short-term investments on a consolidated basis totaled $61,573,000 as of March 31, 2005 compared to $52,358,000 as of December 31, 2004.
On January 28, 2005, Acacia Global Acquisition Corporation, a wholly owned subsidiary of Acacia Research Corporation, acquired substantially all of the assets from Global Patent Holdings, LLC, a privately held patent holding company based in Northbrook, Illinois. The purchase price included $5.0 million in cash and the issuance of approximately 3.9 million shares of Acacia Research-Acacia Technologies common stock valued at approximately $19,505,000. Net tangible assets acquired were not material. The assets acquired and liabilities assumed in the transaction were attributed to the Acacia Technologies group. The acquisition provides the Acacia Technologies group with 100% ownership of companies that control 27 patent portfolios, which include 120 U.S. patents and certain foreign counterparts, and cover technologies used in a wide variety of industries.
In February 2005, Acacia Research Corporation raised gross proceeds of $19,600,000 through the sale of 3,500,000 shares of Acacia Research-Acacia Technologies common stock at a price of $5.60 per share in a registered direct offering. Net proceeds raised of approximately $19,530,000, which are net of related issuance costs, were attributed to the Acacia Technologies group. The shares of Acacia Research-Acacia Technologies common stock were offered pursuant to an effective registration statement previously filed with the Securities and Exchange Commission.
Acacia Technologies Group
(A Division of Acacia Research Corporation)
Financial Results
License fee revenues for the first quarter of 2005 were $1,863,000 versus $599,000 in the comparable 2004 period. First quarter 2005 revenues recognized by the Acacia Technologies group included $788,000 in license fee revenues recognized from licensees that make recurring quarterly or annual license fee payments under their respective license agreements and $1,075,000 in license fee revenues recognized from licensees that made nonrecurring, one-time, fully paid up license fee payments for past infringement and future use of certain of our patented technologies. License fee revenues included fees from the licensing of our Digital Media Transmission ("DMT®") technology and from our recently acquired credit card fraud protection, digital video production, and interactive television technologies.
In addition, during the first quarter of 2005, the Acacia Technologies group received license fee payments totaling $527,000 which have been recorded as deferred revenues at March 31, 2005. Certain of these payments will be recognized as license fee revenues on a straight-line basis over the respective future license term and other payments will be recognized in a future period when all revenue recognition criteria have been met in accordance with the Acacia Technologies group's revenue recognition policies.
The first quarter 2005 division net loss was $1,874,000 versus $989,000 in the comparable 2004 period. Included in the first quarter 2005 divisional results are non-cash patent amortization charges totaling $916,000 versus $125,000 in the comparable 2004 period. Patent amortization charges increased in the first quarter of 2005 due to the amortization of patent-related intangibles acquired in connection with the GPH Acquisition. Approximately $25,000,000 of the purchase consideration paid in the GPH Acquisition was allocated to amortizable patents and related patent rights acquired. Patent amortization charges will continue to be significant in future periods as we continue to amortize the acquired patent-related costs over a weighted average economic useful life of approximately 6 years.
First quarter 2005 marketing, general and administrative expenses increased to $1,610,000 from $1,006,000 in the comparable 2004 period, due primarily to the addition of licensing and business development personnel for the Acacia Technologies group, an increase in consulting expenses related to a consulting agreement executed with the former CEO of Global Patent Holdings and an increase in general and administrative expenses related to ongoing operations.
First quarter 2005 patent-related legal expenses were $561,000 versus $602,000 in the comparable 2004 period. First quarter 2005 patent-related legal expenses included $151,000 in patent-related prosecution and enforcement costs incurred by certain of the companies acquired in the GPH Acquisition transaction. Excluding the impact of the GPH Acquisition, patent-related legal expenses decreased to $410,000 in the first quarter of 2005 due to a decrease in costs incurred in connection with the Acacia Technologies group's ongoing DMT patent commercialization and enforcement programs, including decreased legal costs related to new patent claims and a decrease in patent enforcement costs related to ongoing DMT patent-related litigation. DMT-related legal fees paid to outside attorneys are incurred based on actual time and out-of-pocket expenses incurred by external counsel and fluctuate from period to period based on patent enforcement and prosecution activities in each period.
In the first quarter of 2005, the Acacia Technologies group recognized contingent legal fee expenses totaling $365,000 and royalty expenses totaling $282,000 in connection with the recognition of license fee revenues from our recently acquired credit card fraud protection, digital video production, and interactive television patented technologies.
It is anticipated that the majority of litigation expenses associated with the recently acquired patent portfolios will be incurred on a contingency basis where patent attorney fees are paid out of license fee revenues collected based on a contractual percentage. In connection with the GPH Acquisition, we expect that other legal expenses associated with the maintenance, licensing, and enforcement of our patented technologies will increase in future periods as we continue to roll out our licensing programs for our recently acquired patented technologies.
The first quarter 2005 results also include a $210,000 charge, net of minority interests, related to estimated additional costs to be incurred in connection with the discontinued operations of Soundbreak.com, related primarily to certain noncancellable lease obligations and a reduction in estimated amounts recoverable from existing sublease arrangements.
Financial Condition
Total assets for the Acacia Technologies group were $71,000,000 as of March 31, 2005 compared to $33,058,000 as of December 31, 2004. Cash and cash equivalents and short-term investments totaled $41,182,000 as of March 31, 2005 compared to $28,646,000 as of December 31, 2004.
On January 28, 2005, Acacia Global Acquisition Corporation, a wholly owned subsidiary of Acacia Research Corporation, acquired substantially all of the assets from Global Patent Holdings, LLC, a privately held patent holding company based in Northbrook, Illinois. The purchase price included $5.0 million in cash and the issuance of approximately 3.9 million shares of Acacia Research-Acacia Technologies common stock valued at approximately $19,505,000. Net tangible assets acquired were not material. The assets acquired and liabilities assumed in the transaction were attributed to the Acacia Technologies group. The acquisition provides the Acacia Technologies group with 100% ownership of companies that control 27 patent portfolios, which include 120 U.S. patents and certain foreign counterparts, and cover technologies used in a wide variety of industries.
In February 2005, Acacia Research Corporation raised gross proceeds of $19,600,000 through the sale of 3,500,000 shares of Acacia Research-Acacia Technologies common stock at a price of $5.60 per share in a registered direct offering. Net proceeds raised of approximately $19,530,000, which are net of related issuance costs, were attributed to the Acacia Technologies group. The shares of Acacia Research-Acacia Technologies common stock were offered pursuant to an effective registration statement previously filed with the Securities and Exchange Commission.
CombiMatrix Group
(A Division of Acacia Research Corporation)
Financial Results
Revenues for the first quarter of 2005 were $1,069,000 versus $17,616,000 in the comparable 2004 period. First quarter 2005 revenues were comprised of $731,000 of government contract revenues and $338,000 of CustomArray(TM) product and service revenues.
Government contract revenues relate to the CombiMatrix group's development of biological threat detection technology under its $5.9 million Department of Defense contract originally awarded in March 2004.
In March 2004, the CombiMatrix group completed all phases of its research and development agreement with Roche and as a result recognized all previously deferred Roche-related contract revenues, totaling $17,302,000 in the first quarter of 2004.
The first quarter 2005 division net loss was $3,076,000 versus division net income of $11,892,000 in the comparable 2004 period. The first quarter 2005 results include net non-cash patent amortization, asset depreciation and stock compensation charges totaling $427,000 as compared to $979,000 in the comparable 2004 period. The first quarter 2005 results also included a non-cash credit totaling $179,000 versus a non-cash charge totaling $1,257,000 in the comparable 2004 period, related to changes in the fair value of AR-CombiMatrix common stock issuable in connection with certain anti-dilution provisions of the September 2002 settlement agreement with Nanogen, Inc. The anti-dilution provisions expire in September 2005.
The first quarter 2004 division net income of $11,892,000 was driven primarily by the recognition of the Roche contract revenues discussed above.
First quarter 2005 research and development expenses (including government contract costs) increased to $1,831,000 from $1,588,000 in the comparable 2004 period. The change was due to increased costs recognized in connection with the CombiMatrix group's commitments under its biological threat detection contract with the Department of Defense which was executed in March 2004. The increase was partially offset by a decrease in the CombiMatrix group's internal research and development efforts due to the commercial launch of CustomArray(TM) in March 2004.
First quarter 2005 marketing, general and administrative expenses were $2,279,000 versus $2,278,000 in the comparable 2004 period. During the first quarter of 2005, marketing and sales costs increased in connection with the continued commercialization of the CombiMatrix group's CustomArray(TM) DNA array platform, which was initially launched in March of 2004. The increase was partially offset by a decrease in the CombiMatrix group's general and administrative expenses related to ongoing operations.
Financial Condition
Total assets for the CombiMatrix group were $52,366,000 as of March 31, 2005 compared to $55,388,000 as of December 31, 2004. Cash and cash equivalents and short-term investments totaled $20,391,000 as of March 31, 2005 compared to $23,712,000 as of December 31, 2004.
Business Highlights and Recent Developments
Business highlights of the first quarter and recent developments include:
Acacia Technologies group:
-- In February 2005, KY Data Systems, LLC, a wholly owned
subsidiary that is part of the Acacia Technologies group,
entered into a non-exclusive, paid-up license with Thomson SA
covering a portfolio of patents that apply to interactive
television. The patents cover receivers such as set-top boxes
and certain televisions used in digital satellite and digital
cable systems that permit television viewers to access
interactive television features supplied by their satellite
and cable providers as part of their digital programming
packages.
-- In March 2005, TechSearch LLC, a wholly owned subsidiary that
is part of the Acacia Technologies group, entered into a
non-exclusive license covering a portfolio of patents that
apply to digital video production with Leitch Technology
Corporation, which designs and distributes high performance
video systems for the professional television industry. The
patents relate to features that can be found in production
video processing equipment and cover, among other things,
improved methods of equipment interconnection, aspects of
graphical user interface displays, and automation of video
processing.
-- In March 2005, Financial Systems Innovation LLC, a wholly
owned subsidiary that is part of the Acacia Technologies
group, entered into non-exclusive licenses and settled patent
infringement litigation covering a portfolio of patents that
apply to credit card fraud protection technology with
Albertsons, The Bombay Company, Inc. and HEB Grocery Company.
The patented technology generally relates to a computerized
system for protecting retailers and consumers engaged in
credit card, check card, and debit transactions.
-- In April 2005, Financial Systems Innovation LLC, a wholly
owned subsidiary that is part of the Acacia Technologies
group, entered into a non-exclusive license and settled patent
infringement litigation covering the Acacia Technologies
group's credit card fraud protection technology with Petco
Animal Supplies, Inc.
-- In April 2005, VData, LLC, a wholly owned subsidiary that is
part of the Acacia Technologies group, entered into a license
with Nokia Corporation covering a portfolio of patents that
apply to certain multi-dimensional bar codes. The
multi-dimensional bar code technology generally relates to
encoding and reading a data matrix consisting of an array of
data cells with a border. The data matrix can contain a
variety, amount, and depth of information that would not fit
onto an ordinary bar code. This patented technology can have
many applications in the manufacturing, distribution,
operations, accounting, and security industries such as
tracking the movement of products, collection of data,
improved production capabilities and anti-counterfeiting.
-- As of April 2005, the Acacia Technologies group is pursuing 15
licensing and enforcement programs which now include its
audio/video enhancement and synchronization, broadcast data
retrieval, computer memory cache coherency, data encryption
and product activation, dynamic manufacturing modeling, image
resolution enhancement, interstitial Internet advertising,
microprocessor enhancement, spreadsheet automation, and
resource scheduling technologies.
-- In April 2005, Microprocessor Enhancement Corporation, a
wholly owned subsidiary that is part of the Acacia
Technologies group, filed a patent infringement lawsuit in the
District Court for the Central District of California against
Intel Corporation and Texas Instruments Corporation. The
lawsuit alleges patent infringement by Intel's Itanium(R) line
of microprocessors, and certain series of digital signal
processors sold by Texas Instruments.
-- In April 2005, Acacia Patent Acquisition Corporation, a wholly
owned subsidiary that is part of the Acacia Technologies
group, acquired a patent relating to a commonly used
technology to connect laptop computers to peripheral devices
via docking stations. The patented technology is used to
connect a laptop or other portable computer to multiple
external devices such as a keyboard, monitor, printer, or
mouse, through a single connector from the laptop to the
docking station.
CombiMatrix group:
-- In January 2005, the CombiMatrix group entered into a
distribution agreement with InBio to distribute the
CombiMatrix group's CustomArray(TM) products for the
Australian and New Zealand marketplaces. InBio's sales and
marketing organization will market, sell, and service the
CustomArray products in these regions.
-- In February 2005, the CombiMatrix group entered into a broad
cross-licensing and collaboration agreement with Benitec, Ltd.
("Benitec"), a leading RNAi therapeutics company. The
CombiMatrix group has non-exclusively licensed to Benitec
intellectual property related to the use of cocktails, or
pools of siRNAs, as therapeutic agents against viral diseases.
In addition, Benitec will also receive a co-exclusive
sublicense to two specific sequences targeting key genes of
HIV that the CombiMatrix group previously exclusively licensed
from its partner irsiCaixa.
In return, Benitec has non-exclusively licensed its portfolio
of 10 issued and 60 pending patents to the CombiMatrix group
for the development of RNAi therapeutics for the treatment or
prevention of injuries or diseases in humans resulting from
the exposure to biological, chemical, radioactive and other
weapons.
In addition to this cross-license agreement, the CombiMatrix
group and Benitec plan to collaborate in a number of other
areas including the use of CustomArrays(TM) to study possible
off-target effects of RNAi therapeutics.
-- In February 2005, the CombiMatrix group announced the movement
of KM-668, the lead compound in its KM family of therapeutics,
into pre-clinical development and animal testing. The KM
family of compounds is part of the CombiMatrix group's new
internal program to develop therapeutics for exposure to
terror weapons. As a subset of that program, KM-668 is
designed as a treatment for exposure to radiological weapons,
including nuclear weapons (and associated fallout) as well as
dirty bombs, which use conventional explosions to disperse
radioactive material in a wide area.
A conference call is scheduled for today. The Acacia Technologies Group presentation and Q&A will start at 1:15 p.m. Pacific Time (4:15 p.m. Eastern). The CombiMatrix Group presentation and Q&A session will start at 1:45 p.m. Pacific Time (4:45 p.m. Eastern).
To listen to the presentation by phone, dial (800) 946-0785 for domestic callers and (719) 457-2661 for international callers, both of whom will need to provide the operator with the confirmation code 4457273. A replay of the audio presentation will be available for 30 days at (888) 203-1112 for domestic callers and (719) 457-0820 for international callers, both of whom will need to enter the code 4457273 when prompted.
The call is being webcast by CCBN and can be accessed at Acacia's website at www.acaciaresearch.com.
ABOUT ACACIA RESEARCH CORPORATION
Acacia Research Corporation comprises two operating groups, Acacia Technologies group and CombiMatrix group.
The Acacia Technologies group develops, acquires, and licenses patented technologies. Acacia controls 30 patent portfolios, which include 128 U.S. patents, and certain foreign counterparts, covering technologies used in a wide variety of industries including audio/video enhancement & synchronization, broadcast data retrieval, computer memory cache coherency, credit card fraud protection, database management, data encryption & product activation, digital media transmission ("DMT®"), digital video production, dynamic manufacturing modeling, enhanced Internet navigation, image resolution enhancement, interactive data sharing, interactive television, Internet access redirection, interstitial Internet advertising, laptop connectivity, microprocessor enhancement, multi-dimensional bar codes, network data storage, resource scheduling, rotational video imaging and spreadsheet automation.
The CombiMatrix group is developing a platform technology to rapidly produce customizable arrays, which are semiconductor-based tools for use in identifying and determining the roles of genes, gene mutations and proteins. The CombiMatrix's group's technology has a wide range of potential applications in the areas of genomics, proteomics, biosensors, drug discovery, drug development, diagnostics, combinatorial chemistry, material sciences and nanotechnology.
Acacia Research-Acacia Technologies (Nasdaq:ACTG - News) and Acacia Research-CombiMatrix (Nasdaq:CBMX - News) are both classes of common stock issued by Acacia Research Corporation and are intended to reflect the performance of the respective operating groups and are not issued by the operating groups.
Information about the Acacia Technologies group and the CombiMatrix group 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 recent economic slowdown affecting technology companies, our ability to successfully develop products, rapid technological change in our markets, changes in demand for our future products, legislative, regulatory and competitive developments and general economic conditions. Our Annual Report on Form 10-K, recent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports on Forms 8-K and 8-K/A, 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.
ACACIA RESEARCH CORPORATION
SUMMARY FINANCIAL INFORMATION
(In thousands, except share and per share information)
(Unaudited)
CONSOLIDATED BALANCE SHEET INFORMATION
March 31, December 31,
2005 2004
-------- --------
Total Assets $123,217 $ 88,327
======== ========
Total Liabilities $ 13,225 $ 11,913
======== ========
Minority Interests $ 482 $ 778
======== ========
Total Stockholders' Equity $109,510 $ 75,636
======== ========
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended
--------------------------------
March 31, 2005 March 31, 2004
--------------- ---------------
Revenues:
Research and development contract $- $17,302
License fees 1,863 599
Government contract 731 217
Products 278 16
Service contracts 60 81
--------------- ---------------
Total revenues 2,932 18,215
--------------- ---------------
Operating expenses:
Cost of government contract revenues 691 205
Cost of product sales 163 4
Research and development expenses 1,140 1,383
Non-cash stock compensation
amortization - research and
development - 69
Marketing, general and
administrative expenses 3,889 3,284
Legal expense - patents 561 602
Contingent legal fees and royalties
expense - patents 647 -
Non-cash stock compensation
amortization - marketing, general
and administrative (126) 334
Amortization of patents 1,190 399
Legal settlement charges (credits) (179) 1,257
--------------- ---------------
Total operating expenses 7,976 7,537
--------------- ---------------
Operating income (loss) (5,044) 10,678
--------------- ---------------
Other income 234 158
--------------- ---------------
Income (loss) from continuing
operations before income taxes (4,810) 10,836
Benefit for income taxes 70 67
--------------- ---------------
Income (loss) from continuing
operations (4,740) 10,903
--------------- ---------------
Discontinued operations:
Estimated loss on disposal of
discontinued operations (210) -
--------------- ---------------
Net income (loss) $(4,950) $10,903
=============== ===============
Earnings (loss) per common share:
Attributable to the Acacia
Technologies group:
Net loss $(1,874) $(989)
Basic and diluted loss per share (0.08) (0.05)
Attributable to the CombiMatrix
group:
Basic
Net income (loss) $(3,076) $11,892
Basic earnings (loss) per share (0.10) 0.44
Diluted
Net income (loss) $(3,076) $11,892
Diluted earnings (loss) per share (0.10) 0.41
Weighted average shares:
Acacia Research-Acacia Technologies
stock:
Basic and diluted 24,558,419 19,752,335
=============== ===============
Acacia Research-CombiMatrix stock:
Basic 31,200,496 27,274,627
=============== ===============
Diluted 31,200,496 29,233,817
=============== ===============
ACACIA TECHNOLOGIES GROUP
(A Division of Acacia Research Corporation)
SUMMARY FINANCIAL INFORMATION
(In thousands)
(Unaudited)
GROUP BALANCE SHEET INFORMATION
March 31, December 31,
2005 2004
-------- --------
Total Assets $ 71,000 $ 33,058
======== ========
Total Liabilities $ 4,696 $ 3,472
======== ========
Minority Interests $ 482 $ 778
======== ========
Total Stockholders' Equity $ 65,822 $ 28,808
======== ========
GROUP STATEMENTS OF OPERATIONS
For the Three Months Ended
--------------------------------
March 31, 2005 March 31, 2004
--------------- ---------------
Revenues:
License fees $1,863 $599
--------------- ---------------
Total revenues 1,863 599
--------------- ---------------
Operating expenses:
Marketing, general and
administrative expenses 1,610 1,006
Legal expenses - patents 561 602
Contingent legal fees and royalties
expenses - patents 647 -
Amortization of patents 916 125
--------------- ---------------
Total operating expenses 3,734 1,733
--------------- ---------------
Operating loss (1,871) (1,134)
--------------- ---------------
Other income 171 112
--------------- ---------------
Loss from continuing operations
before income taxes (1,700) (1,022)
Benefit for income taxes 36 33
--------------- ---------------
Loss from continuing operations (1,664) (989)
Discontinued operations:
Estimated loss on disposal of
discontinued operations (210) -
--------------- ---------------
Division net loss $(1,874) $(989)
=============== ===============
COMBIMATRIX GROUP
(A Division of Acacia Research Corporation)
SUMMARY FINANCIAL INFORMATION
(In thousands)
(Unaudited)
GROUP BALANCE SHEET INFORMATION
March 31, December 31,
2005 2004
-------- --------
Total Assets $ 52,366 $ 55,388
======== ========
Total Liabilities $ 8,678 $ 8,560
======== ========
Minority Interests $ - $ -
======== ========
Total Stockholders' Equity $ 43,688 $ 46,828
======== ========
GROUP STATEMENTS OF OPERATIONS
For the Three Months Ended
--------------------------------
March 31, 2005 March 31, 2004
--------------- ---------------
Revenues:
Research and development contract $- $17,302
Government contract 731 217
Products 278 16
Service contracts 60 81
--------------- ---------------
Total revenues 1,069 17,616
--------------- ---------------
Operating expenses:
Cost of government contract revenues 691 205
Cost of product sales 163 4
Research and development expenses 1,140 1,383
Non-cash stock compensation
amortization - research and
development - 69
Marketing, general and
administrative expenses 2,279 2,278
Non-cash stock compensation
amortization - marketing, general
and administrative (126) 334
Amortization of patents 274 274
Legal settlement charges (credits) (179) 1,257
--------------- ---------------
Total operating expenses 4,242 5,804
--------------- ---------------
Operating income (loss) (3,173) 11,812
--------------- ---------------
Other income 63 46
--------------- ---------------
Income (loss) from operations before
income taxes (3,110) 11,858
Benefit for income taxes 34 34
--------------- ---------------
Division net income (loss) $(3,076) $11,892
=============== ===============
--------------------------------------------------------------------------------
Contact:
Acacia Research Corporation
Rob Stewart, 949-480-8300
Fax, 949-480-8301
--------------------------------------------------------------------------------
Source: Acacia Research Corporation
Source: Business Wire
All trademarks and copyrighted information contained herein are the property of their respective owners.
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