Acacia Research Corporation, through its subsidiaries, acquires, develops, licenses, and enforces patented technologies in the United States. It assists patent owners with the prosecution and development of their patent portfolios, the protection of their patented technologies from unauthorized use, the generation of licensing revenue from users of their patented technologies, and the enforcement against unauthorized users of their patented technologies. The company owns or controls the rights to 140 patent portfolios, which include primarily the United State’s patents, covering technologies used in various industries. It serves individual inventors, and small and large companies. The company was founded in 1992 and is headquartered in Newport Beach, California..

Acacia Research reports record first-quarter license fee revenues of $39.77M

23. April 2010 00:21

Acacia Research Corporation (Nasdaq:ACTG) today reported results for the three months ended March 31, 2010.

“Acacia accelerated its growth in the first quarter with a record 13 new licensing programs generating revenues and a record 11 new patent portfolios for future licensing, as we build our leadership position in patent licensing. Quarterly revenues will continue to be uneven”

Acacia Research reported record quarterly license fee revenues of $39,772,000 during the first quarter of 2010, as compared to $16,957,000 in the comparable prior year quarter.

Trailing twelve-month revenues totaled $90.2 million as of March 31, 2010, as compared to $67.3 million as of December 31, 2009, $65.7 million at September 30, 2009, $63.4 million as of June 30, 2009 and $56.1 million as of March 31, 2009.

Acacia Research reported first quarter 2010 net income of $18,512,000, or $0.55 per diluted share, as compared to a quarterly net loss of $268,000, or $.01 per diluted share for the comparable prior year quarter. Included in first quarter 2010 net results are non-cash stock compensation and patent amortization charges totaling $3,598,000, as compared to $2,985,000 of non-cash charges in the comparable prior year quarter.

First quarter 2010 revenues included license fees from 40 new licensing agreements covering 29 of our technology licensing programs, as compared to 28 new licensing agreements covering 16 of our technology licensing programs in the comparable prior year quarter. First quarter 2010 revenues included initial license fee revenues for 13 of our technology licensing programs, as compared to initial license fees for 4 of our technology licensing programs in the comparable prior year quarter.

First quarter 2010 inventor royalties, including net income attributable to noncontrolling interests in operating subsidiary totaled $4,448,000, as compared to $5,377,000 in the comparable prior year quarter. First quarter 2010 contingent legal fees expenses were $4,407,000, as compared to $3,532,000 in the comparable prior year quarter. On a combined basis, inventor royalties, including net income attributable to noncontrolling interests in operating subsidiary, and contingent legal fees, as a percentage of total license fee revenues decreased to 22%, as compared to 53% in the comparable prior year quarter. The economic terms of the inventor agreements, operating agreements and contingent legal fee arrangements, if any, including royalty rates, contingent fee rates and other terms, vary across the patent portfolios owned or controlled by our operating subsidiaries. Inventor royalties, payments to noncontrolling interests in operating subsidiaries and contingent legal fees expenses fluctuate period to period, based on the amount of revenues recognized each period, the terms and conditions of license agreements executed each period and the mix of specific patent portfolios with varying economic terms generating revenues each period. Inventor royalties and contingent legal fees expenses will continue to vary significantly quarter to quarter based on the mix of license agreements and the terms and conditions of license agreements executed each period.

First quarter 2010 marketing, general and administrative expenses increased 18% to $6,332,000 (including non-cash stock compensation charges of $1,895,000) from $5,378,000 (including non-cash stock compensation charges of $1,920,000) in the comparable prior year quarter, primarily due to an increase in variable performance-based compensation costs.

First quarter 2010 litigation and licensing expenses-patents increased to $3,696,000 versus $1,708,000 in the comparable prior year quarter, due to an increase in litigation and licensing support related out of pocket expenses, third party technical consulting expenses, professional expert expenses and other litigation support and administrative costs incurred in connection with our investment in certain of our licensing and enforcement programs with trial dates scheduled for 2010, and a net increase in costs related to new licensing and enforcement programs commenced since the end of the prior year quarter. First quarter 2010 litigation and licensing expenses-patents decreased 34%, versus the $5.6 million of licensing expenses-patents recorded in the fourth quarter of 2009.

"Acacia accelerated its growth in the first quarter with a record 13 new licensing programs generating revenues and a record 11 new patent portfolios for future licensing, as we build our leadership position in patent licensing. Quarterly revenues will continue to be uneven," commented Acacia Chairman and CEO, Paul Ryan.

"Acacia's success in completing over 770 licensing agreements covering 73 different technologies is generating new agreements with technology companies, universities, research centers, and large multinational companies based in the US, Europe, and Asia wanting to partner with us for the licensing of their patented technologies," concluded Mr. Ryan.

Financial Condition

Cash and cash equivalents and investments totaled $69,677,000 as of March 31, 2010 compared to $53,887,000 as of December 31, 2009. Total assets were $90,778,000 as of March 31, 2010 compared to $78,256,000 as of December 31, 2009.

First quarter 2010 cash inflows from operations totaled $19,104,000, as compared to cash inflows from operations of $2,618,000 during the comparable prior year quarter.

During the first quarter of 2010 we acquired 11 new patent portfolios as described below. First quarter 2010 patent acquisition costs totaled $1,320,000, as compared to $162,000 in the comparable prior year quarter.

Refer to the section below entitled "Summary Financial Information" for summary consolidated balance sheet, income statement and cash flow information as of and for the three months ended March 31, 2010.