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Business Wire
06-08-2025
- Business
- Business Wire
Acacia Research Corporation Reports Second Quarter 2025 Financial Results
NEW YORK--(BUSINESS WIRE)--Acacia Research Corporation (Nasdaq: ACTG) (' Acacia ' or the ' Company '), which acquires and operates businesses across the industrial, energy and technology sectors, today reported financial results for the three and six months ended June 30, 2025. The Company also posted its second quarter 2025 earnings presentation on its website at under Events & Presentations. Martin ('MJ') D. McNulty, Jr., Chief Executive Officer, stated, 'While we have been presented with a unique operating environment in both the U.S. and global economies, our diversified set of businesses and risk management approach has enabled us to manage and protect against some of these challenges. Our strategy remains focused on acquiring fundamentally strong businesses where our management processes can drive incremental value. In this economic environment, our teams have been highly focused on improving efficiencies, strengthening market positioning, and upgrading operational capabilities so that we are best positioned when markets normalize. In the second quarter, we continued to execute our strategy of building businesses with stable cash flow generation and scalability. We believe the opportunities we are identifying within our existing businesses and our strong balance sheet will ensure Acacia continues to deliver long-term shareholder value. As of the end of the second quarter, cash, cash equivalents, and equity securities was approximately $338.2 million, or $3.51 per share. Our strong cash position and balance sheet provides us with substantial dry powder to grow our businesses and positions us to pursue accretive acquisition opportunities that become available. Finally, we are excited to announce a partnership with Unchained Capital and Build Asset Management for a Bitcoin-backed commercial loan strategy. More information about this partnership can be found in a press release issued earlier today and posted to our website.' Second Quarter 2025 Highlights Total revenue of $51.2 million for the quarter, up 98% compared to $25.8 million for the prior-year quarter, primarily driven by $29.0 million in revenue from our second full quarter of Manufacturing Operations. GAAP Net Loss of ($3.3) million, or ($0.03) GAAP Diluted EPS, for the three months ended June 30, 2025. Adjusted Net Loss of ($5.9) million, or ($0.06) Adjusted Diluted EPS, for the three months ended June 30, 2025. Operated Segment Adjusted EBITDA of $6.8 million for the three months ended June 30, 2025. Total Company Adjusted EBITDA of $1.9 million for the three months ended June 30, 2025. At quarter end, cash, cash equivalents, and equity securities was approximately $338.2 million, or $3.51 per share. Revenue The following table provides a breakdown of the Company's total revenue for the three and six months ended June 30, 2025 and June 30, 2024. For the purposes of financial reporting, Acacia's operations are broken out as follows: Energy Operations (Benchmark), Industrial Operations (Printronix), Manufacturing Operations (Deflecto), and Intellectual Property Operations (Acacia Research Group). Adjusted EBITDA The following table provides a reconciliation of consolidated Net Income (Loss), the most directly comparable GAAP measure, to Total Company Adjusted EBITDA for the three and six months ended June 30, 2025 and June 30, 2024. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (In thousands, unaudited) GAAP Net Income (Loss) $ (3,293 ) $ (8,446 ) $ 20,994 $ (8,632 ) Net (Income) Loss Attributable to Noncontrolling Interests 1,856 (383 ) 1,097 (386 ) Income Tax Expense (Benefit) 547 (7,061 ) 6,628 (8,170 ) Interest Expense 2,329 1,814 4,780 2,140 Interest (Income) (2,936 ) (4,991 ) (5,446 ) (10,033 ) (Gain) Loss on Foreign Currency Exchange (280 ) 134 (435 ) 202 Net Realized and Unrealized (Gain) Loss on Derivatives (6,635 ) 2,659 (1,614 ) 2,488 Net Realized and Unrealized (Gain) Loss on Investments (4,126 ) 4,744 (954 ) 2,584 Non-recurring Legacy Legal Expense — 6,614 — 12,857 Other (Income) Expense, net 153 158 870 105 GAAP Operating Income (Loss) $ (12,385 ) $ (4,758 ) $ 25,920 $ (6,845 ) Depreciation, Depletion & Amortization 11,445 7,405 22,055 11,973 Stock-Based Compensation 954 891 1,876 1,749 Realized Hedge Gain (Loss) 869 113 826 913 Transaction-Related Costs 237 222 791 222 Legacy Matter Costs 1 216 9 2,409 Severance Costs 752 — 1,095 — Total Company Adjusted EBITDA $ 1,873 $ 4,089 $ 52,572 $ 10,421 Expand The following table provides the Adjusted EBITDA for each of the Company's operating segments for the three and six months ended June 30, 2025 and June 30, 2024. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (In thousands, unaudited) Energy Operations Adjusted EBITDA 2 $ 6,951 $ 7,039 $ 14,887 $ 8,417 Industrial Operations Adjusted EBITDA 2 620 449 1,641 2,346 Manufacturing Operations Adjusted EBITDA 2 1,274 — 3,713 — Operated Segment Adjusted EBITDA (excluding Intellectual Property Operations) $ 8,845 $ 7,488 20,241 10,763 Intellectual Property Operations Adjusted EBITDA 2 (2,061 ) 1,309 41,204 8,469 Operated Segment Adjusted EBITDA $ 6,784 $ 8,797 61,445 19,232 Parent Costs 2 (4,911 ) (4,708 ) (8,873 ) (8,811 ) Total Company Adjusted EBITDA $ 1,873 $ 4,089 $ 52,572 $ 10,421 Expand Adjusted Net Income (Loss) and Adjusted Diluted EPS The following table provides a reconciliation of Net Income (Loss), the most directly comparable GAAP measure, to Adjusted Net Income (Loss) and Adjusted Diluted EPS for the three months ended June 30, 2025 and June 30, 2024. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (In thousands, except share and per share data, unaudited) GAAP Net Income (Loss) $ (3,293 ) $ (8,446 ) $ 20,994 $ (8,632 ) Non-recurring Legacy Legal Expense — 6,614 — 12,857 Legacy Matter Costs 3 1 216 259 2,409 Stock-Based Compensation 954 891 1,876 1,749 Transaction-Related Costs 237 163 791 163 Severance Costs 752 — 1,095 — Amortization of Acquired Intangibles 860 433 1,767 866 Unrealized Loss (Gain) on Securities (2,219 ) 4,744 2,558 31,445 Unrealized Loss (Gain) on Hedges (4,241 ) 2,038 (580 ) 2,355 Tax Effect of Adjustments 1,004 (8,024 ) (1,625 ) (16,124 ) Adjusted Net Income (Loss) $ (5,945 ) $ (1,371 ) 27,135 27,088 GAAP Diluted EPS $ (0.03 ) $ (0.08 ) $ 0.22 $ (0.09 ) GAAP weighted average diluted shares 96,244,590 100,079,803 96,964,308 99,912,854 Adjusted Diluted EPS $ (0.06 ) $ (0.01 ) $ 0.28 $ 0.27 Adjusted diluted weighted average shares 96,244,590 100,079,803 96,964,308 100,745,538 Expand Free Cash Flow 4 The following table provides a reconciliation of Free Cash Flow (FCF) for the three and six months ended June 30, 2025. Balance Sheet and Capital Structure Cash, cash equivalents, and equity securities measured at fair value totaled $338.2 million at June 30, 2025 compared to $297.0 million at December 31, 2024, an increase of $41.2 million. The increase in cash was primarily due to cash generated from operating activities across all Operated Segments of $58.8 million, plus $2.6 million in net proceeds from the purchase and sale of equity securities. Cash was reduced by Parent Costs of $6.3 million and further by $3.9 million and $0.4 million of capital expenditures at Benchmark and Deflecto, respectively. Additionally, cash used in financing activities reduced cash by $10.3 million, primarily from $8.5 million of debt repayment on the Benchmark revolving credit facility and $1.2 million of principal repayment on the Deflecto Term Loan. Equity securities without readily determinable fair value totaled $5.8 million at June 30, 2025, unchanged from December 31, 2024. Investment securities representing equity method investments totaled $19.9 million at June 30, 2025 (net of noncontrolling interests), unchanged from December 31, 2024. Acacia owns 64% of MalinJ1, which results in a 26% indirect ownership stake in Viamet Pharmaceuticals, Inc. for Acacia. The Parent company's total indebtedness was zero at June 30, 2025. On a consolidated basis, Acacia's total indebtedness was $104.4 million, consisting of $58.0 million in non-recourse debt at Benchmark and $46.4 million in non-recourse debt at Deflecto as of June 30, 2025. Book Value as of June 30, 2025 At June 30, 2025, Acacia's book value (which includes noncontrolling interests) was $577.5 million and there were 96.4 million shares of common stock outstanding, for a book value per share of $5.99. This value is impacted by one-time expenses and other adjustments detailed in the above reconciliation from GAAP Net Income (Loss) to Adjusted Net Income (Loss). Investor Conference Call The Company will host a conference call today, August 6, 2025 at 8:00 a.m. Eastern Time (5:00 a.m. Pacific Time). To access the live call, please dial 877-545-0523 (U.S. and Canada) or 973-528-0016 (international) and if requested, reference the access code '395103.' The conference call will also be simultaneously webcast at and on the investor relations section of the Company's website at under Events & Presentations. 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 the Company Acacia (Nasdaq: ACTG) is a publicly traded company that is focused on acquiring and operating attractive businesses across the mature technology, energy and industrial/manufacturing sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management. Additional information about Acacia and its subsidiaries is available at Safe Harbor Statement 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 the Company's current expectations and speak only as of the date hereof. All statements other than statements of historical fact are forward-looking statements and include statements related to estimates and projections with respect to, among other things, the Company's anticipated financial condition, operating performance, the value of the Company's assets, general economic and market conditions and other future circumstances and events. This news release attempts to identify forward-looking statements by using words such as 'anticipate,' 'believe,' 'continue,' 'could,' 'estimate,' 'expect,' 'forecast,' 'future,' 'guidance,' 'intend,' 'may,' 'outlook,' 'plan,' 'potential,' 'predict,' 'project,' 'seek,' 'should,' 'target' and 'will,' and similar words and expressions; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially and adversely from those expressed or implied in any forward-looking statements, including, but not limited to: the Company's ability to successfully identify, diligence, complete, and integrate strategic acquisitions of businesses, divisions, and/or assets, the performance of the Company's businesses, divisions, and/or assets, disruptions or uncertainty caused by an ability to retain or changes to the employees or management teams of the Company's businesses, changes to the Company's relationship and arrangements with Starboard Value LP, any inability of the Company's operating businesses to execute on their business and, with respect to Benchmark, hedging strategy, risks related to price and other fluctuations in the oil and gas market, inflationary pressures, supply chain disruptions or labor shortages, the impact of tariffs and trade policy, non-performance by third parties of contractual or legal obligations, changes in the Company's credit ratings or the credit ratings of the Company's businesses, security threats, including cybersecurity threats and disruptions to the Company's business and operations from breaches of information technology systems, or breaches of information technology systems, facilities and infrastructure of third parties with which the Company transacts business, oil or natural gas production becoming uneconomic, causing write downs or adversely affecting Benchmark's ability to borrow, Benchmark's ability to replace reserves and efficiently develop current reserves, risks, operational hazards, unforeseen interruptions and other difficulties involved in the production of oil and natural gas, the impact of any seismic events, environmental liability risk, regulatory changes related to the oil and gas industry, 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, the decrease in demand for Printronix' products, changes in safety, health, environmental, tax and other regulations, requirements or initiatives, hazards such as weather conditions, a health pandemic (similar to COVID-19), acts of war or terrorist acts and the government or military response thereto, general economic conditions, and the success of the Company's investments. For further discussions of risks and uncertainties, you should refer to the Company's filings with the Securities and Exchange Commission, including the 'Risk Factors' section of the Company's most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. In addition, actual results may differ materially as a result of additional risks and uncertainties of which the Company is currently unaware or which the Company does not currently view as material. Except as otherwise required by applicable law, the Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason. December 31, 2024 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 316,721 $ 273,880 Equity securities 21,467 23,135 Equity securities without readily determinable fair value 5,816 5,816 Equity method investments 30,934 30,934 Accounts receivable, net 23,370 26,909 Inventories 25,724 27,485 Prepaid expenses and other current assets 19,958 31,987 Total current assets 443,990 420,146 Property, plant and equipment, net 22,751 23,865 Oil and natural gas properties, net 187,095 191,680 Goodwill 25,782 29,339 Other intangible assets, net 61,643 55,429 Operating lease, right-of-use assets 10,397 9,287 Deferred income tax assets, net 16,998 20,233 Other non-current assets 6,890 6,415 Total assets $ 775,546 $ 756,394 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 10,972 $ 12,074 Accrued expenses and other current liabilities 22,677 20,575 Accrued compensation 6,394 6,277 Current asset retirement obligation 1,585 1,546 Royalties and contingent legal fees payable 5,681 5,448 Deferred revenue 731 1,319 Current portion of long-term debt 2,400 2,400 Total current liabilities 50,440 49,639 Asset retirement obligation 31,814 31,070 Long-term lease liabilities 7,551 6,778 Deferred income tax liabilities, net 2,697 2,609 Benchmark revolving credit facility 58,000 66,500 Deflecto facility 43,983 45,088 Other long-term liabilities 3,590 2,091 Total liabilities 198,075 203,775 Commitments and contingencies 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; 300,000,000 shares authorized; 96,444,993 and 96,048,999 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively 96 96 Treasury stock, at cost, 20,542,064 as of June 30, 2025 and December 31, 2024, respectively (118,542 ) (118,542 ) Accumulated other comprehensive income (loss) 345 (1,180 ) Additional paid-in capital 911,473 910,237 Accumulated deficit (254,792 ) (275,786 ) Total Acacia Research Corporation stockholders' equity 538,580 514,825 Noncontrolling interests 38,891 37,794 Total stockholders' equity 577,471 552,619 Total liabilities and stockholders' equity $ 775,546 $ 756,394 Expand ACACIA RESEARCH CORPORATION AND COMPREHENSIVE INCOME (LOSS) (In thousands, except share and per share data) Three Months Ended June 30, Six Months Ended June 30, Revenues: Intellectual property operations $ 329 $ 5,333 $ 70,234 $ 18,956 Industrial operations 6,590 6,335 14,266 15,176 Energy operations 15,317 14,170 33,623 16,026 Manufacturing operations 29,001 — 57,536 — Total revenues 51,237 25,838 175,659 50,158 Costs and expenses: Cost of revenues - intellectual property operations 6,558 5,765 34,470 12,766 Cost of revenues - industrial operations 3,406 3,277 7,470 7,326 Cost of production - energy operations 12,309 10,038 25,007 11,353 Cost of revenues - manufacturing operations 22,422 — 43,233 — Sales and marketing expenses - industrial and manufacturing operations 3,381 1,387 6,693 2,942 General and administrative expenses 15,546 10,129 32,866 22,616 Total costs and expenses 63,622 30,596 149,739 57,003 Operating (loss) income (12,385 ) (4,758 ) 25,920 (6,845 ) Other income (expense): Equity securities investments: Change in fair value of equity securities 2,219 (4,744 ) (2,558 ) (31,445 ) Gain on sale of equity securities 1,907 — 3,512 28,861 Net realized and unrealized gain (loss) 4,126 (4,744 ) 954 (2,584 ) Non-recurring legacy legal expense — (6,613 ) — (12,856 ) Gain (loss) on derivatives - energy operations 6,635 (2,659 ) 1,614 (2,488 ) Gain (loss) on foreign currency exchange 280 (134 ) 435 (202 ) Interest expense (2,329 ) (1,814 ) (4,780 ) (2,140 ) Interest income 2,936 4,991 5,446 10,033 Other expense, net (153 ) (159 ) (870 ) (106 ) Total other income (expense) 11,495 (11,132 ) 2,799 (10,343 ) Income (loss) before income taxes (890 ) (15,890 ) 28,719 (17,188 ) Income tax (expense) benefit (547 ) 7,061 (6,628 ) 8,170 Net income (loss) attributable to Acacia Research Corporation $ (3,293 ) $ (8,446 ) $ 20,994 $ (8,632 ) Income (loss) per share: Net income (loss) attributable to common stockholders - Basic $ (3,293 ) $ (8,446 ) $ 20,994 $ (8,632 ) Weighted average number of shares outstanding - Basic 96,244,590 100,079,803 96,131,624 99,912,854 Basic net income (loss) per common share $ (0.03 ) $ (0.08 ) $ 0.22 $ (0.09 ) Net income (loss) attributable to common stockholders - Diluted $ (3,293 ) $ (8,446 ) $ 20,994 $ (8,632 ) Weighted average number of shares outstanding - Diluted 96,244,590 100,079,803 96,964,308 99,912,854 Diluted net income (loss) per common share $ (0.03 ) $ (0.08 ) $ 0.22 $ (0.09 ) Other comprehensive income (loss): Foreign currency translation $ 863 $ — $ 1,525 $ — Total other comprehensive income, net 863 — 1,525 — Total comprehensive income (loss) (574 ) (8,829 ) 23,616 (9,018 ) Comprehensive loss (income) attributable to noncontrolling interests (1,856 ) 383 (1,097 ) 386 Comprehensive income (loss) attributable to Acacia Research Corporation (2,430 ) (8,446 ) 22,519 (8,632 ) Expand ACACIA RESEARCH CORPORATION - SUPPLEMENTAL INFORMATION NON-GAAP FINANCIAL MEASURE This earnings release includes Adjusted EBITDA on a consolidated basis and for each of the Company's segments. Total Company Adjusted EBITDA, Operated Segment Adjusted EBITDA and Adjusted EBITDA and Free Cash Flow (FCF) for each of the Company's segments are supplemental non-GAAP financial measures used by management and external users of the Company's consolidated financial statements. This earnings release also includes the Company's Adjusted Net Income (Loss) and Adjusted Diluted Earnings Per Share (EPS), which are non-GAAP financial measures. GAAP refers to generally accepted accounting principles in the United States. A non-GAAP financial measure is a numerical measure of historical or future performance, financial position or cash flow that includes or excludes amounts that are excluded or included, respectively, in the most directly comparable measure calculated and presented in accordance with GAAP in the Company's financial statements. Total Company Adjusted EBITDA is defined as net income / (loss) before net income / (loss) attributable to noncontrolling interests, income tax (benefit) / expense, interest expense, interest income, and other expense, net and loss / (gain) on foreign currency exchange, net realized and unrealized (gain) / loss on derivatives, net realized and unrealized loss / (gain) on investments, non-recurring legacy legal expenses, depreciation, depletion and amortization, stock-based compensation, realized hedge gain / (loss), transaction-related costs, and costs related to the legacy items. Operated Segment Adjusted EBITDA is the aggregate of Energy Operations Adjusted EBITDA, Manufacturing Operations Adjusted EBITDA, Industrial Operations Adjusted EBITDA, and Intellectual Property Operations Adjusted EBITDA. See below for the definition of each of those measures. The Company is providing Total Company Adjusted EBITDA and Operated Segment Adjusted EBITDA, non-GAAP financial measures, because management believes these metrics provide investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. These measures are not intended to replace the presentation of financial results in accordance with GAAP and may be different from or otherwise inconsistent with similar non-GAAP financial measures used by other companies. The presentation of these non-GAAP financial measures supplements other metrics the Company uses to internally evaluate its subsidiary businesses and facilitate the comparison of past and present operating performance. These measures should not be considered in isolation or as a substitute for measures calculated and presented in accordance with GAAP. Energy Operations Energy Operations Adjusted EBITDA is defined as operating income / (loss) for Acacia's Energy Operations before depreciation, depletion and amortization expense and transaction-related costs, and including realized hedge gain / (loss). The Company is providing its Energy Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Industrial Operations Industrial Operations Adjusted EBITDA is defined as operating income / (loss) for Acacia's Industrial Operations before amortization of acquired intangibles and depreciation and amortization expense. The Company is providing its Industrial Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Intellectual Property Operations Intellectual Property Operations Adjusted EBITDA is defined as operating income / (loss) for Acacia's Intellectual Property Operations before patent amortization, depreciation expense and stock-based compensation. The Company is providing Intellectual Property Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Manufacturing Operations Manufacturing Operations Adjusted EBITDA is defined as operating income / loss for Acacia's Manufacturing Operations before depreciation and amortization expense, severance, and transaction-related costs. The Company is providing its Manufacturing Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Parent Costs are defined as operating income / (loss) attributable to Parent before depreciation and amortization expense, stock-based compensation, transaction-related costs, and costs related to certain legacy matters attributable to the Parent organization. The Company is providing Parent Costs, a non-GAAP financial measure, because it believes it gives investors a clear picture of normalized Parent-level expenses. Free Cash Flow is defined as net cash provided by (used in) operating activities, less net purchases of property and equipment, oil and gas properties, and patent acquisitions ('Capital Expenditures'). The Company is providing Free Cash Flow, a non-GAAP financial measure, because it believes free cash flow gives investors a good sense of how much cash flows are available to be used for de-levering, making acquisitions, repurchasing shares or similar uses of cash. Adjusted Net Income (Loss) Adjusted Net Income (Loss) is defined as Acacia's GAAP Net Income (Loss) excluding costs related to certain legacy matters, stock-based compensation, transaction-related costs, amortization of acquired intangibles, any unrealized (gain) / loss on securities, any unrealized (gain) / loss on hedges, and any (gain) / loss on non-cash derivatives and taking into account the tax effect(s) of those adjustments. The Company is providing Adjusted Net Income (Loss), a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Adjusted Diluted Earnings Per Share (EPS) Adjusted Diluted EPS is defined as Adjusted Net Income (Loss) divided by the Company's weighted average diluted share count as of the relative period end date. The Company is providing its Adjusted Diluted EPS, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. The following tables reconcile Operating Income (Loss), the most directly comparable GAAP financial measure, to Adjusted EBITDA for each of the Company's operating segments and for Parent Costs for the three and six months ended June 30, 2025 and June 30, 2024. Three Months Ended June 30, 2024 (In thousands, unaudited) GAAP Operating Income (Loss) $ 3,249 $ (234 ) $ — $ (2,253 ) $ (5,520 ) $ (4,758 ) Depreciation, Depletion & Amortization 3,455 683 — 3,241 26 7,405 Stock-Based Compensation — — — 321 570 891 Realized Hedge Gain (Loss) 113 — — — — 113 Transaction-Related Costs 222 — — — — 222 Legacy Matter Costs — — — — 216 216 Severance Costs — — — — — — Adjusted EBITDA $ 7,039 $ 449 $ — $ 1,309 $ (4,708 ) $ 4,089 Parent Interest Income $ 5,028 Expand Six Months Ended June 30, 2025 (In thousands, unaudited) GAAP Operating Income (Loss) $ 6,094 $ 376 $ (355 ) $ 30,895 $ (11,090 ) $ 25,920 Depreciation, Depletion & Amortization 7,967 1,098 3,026 9,935 29 22,055 Stock-Based Compensation — — — 374 1,502 1,876 Realized Hedge Gain (Loss) 826 — — — — 826 Transaction-Related Costs — — 114 — 677 791 Legacy Matter Costs — — — — 9 9 Severance Costs — 167 928 — — 1,095 Adjusted EBITDA $ 14,887 $ 1,641 $ 3,713 $ 41,204 $ (8,873 ) $ 52,572 Parent Interest Income $ 5,209 Expand Six Months Ended June 30, 2024 (In thousands, unaudited) GAAP Operating Income (Loss) $ 3,405 $ 978 $ — $ 1,029 $ (12,257 ) $ (6,845 ) Depreciation, Depletion & Amortization 3,877 1,368 — 6,676 52 11,973 Stock-Based Compensation — — — 764 985 1,749 Realized Hedge Gain (Loss) 913 — — — — 913 Transaction-Related Costs 222 — — — — 222 Legacy Matter Costs — — — — 2,409 2,409 Severance Costs — — — — — — Adjusted EBITDA $ 8,417 $ 2,346 $ — $ 8,469 $ (8,811 ) $ 10,421 Parent Interest Income $ 10,107 Expand 1 Adjusted Net Income (Loss), Adjusted Diluted Earnings Per Share (EPS), Total Company Adjusted EBITDA and Operated Segment Adjusted EBITDA are non-GAAP financial measures. See below for reconciliations of Adjusted Net Income (Loss), Adjusted Diluted EPS, and Total Company Adjusted EBITDA to their most directly comparable GAAP financial measure. For the definition of these measures and a reconciliation of the components of Operated Segment Adjusted EBITDA to their most directly comparable GAAP financial measures, see the accompanying supplemental information section. 2 Energy Operations Adjusted EBITDA, Industrial Operations Adjusted EBITDA, Manufacturing Operations Adjusted EBITDA, Intellectual Property Operations Adjusted EBITDA, and Parent Costs are non-GAAP financial measures. For the definitions of these measures and reconciliations of these measures to the most directly comparable GAAP financial measures, see the accompanying supplemental information section. 3 Legacy Matter Costs for the six months ended June 30, 2025 includes $250,000 related to a one-time legacy tax matter at Printronix that has been settled, which amount is included within Other Expense, Net in Acacia's condensed consolidated statement of operations. 4 Free Cash Flow (FCF) is a non-GAAP financial measure. For a definition of this measure, see the accompanying supplemental information section.
Business Wire
08-05-2025
- Business
- Business Wire
Acacia Research Corporation Reports First Quarter 2025 Financial Results
NEW YORK--(BUSINESS WIRE)--Acacia Research Corporation (Nasdaq: ACTG) (' Acacia ' or the ' Company '), which acquires and operates businesses across the industrial, energy and technology sectors, today reported financial results for the three months ended March 31, 2025. The Company also posted its first quarter 2025 earnings presentation on its website at under Events & Presentations. Martin ('MJ') D. McNulty, Jr., Chief Executive Officer, stated, 'Acacia had a very strong start to the year, generating first quarter revenue of $124.4 million and Total Company Adjusted EBITDA of $50.7 million. These results were driven by $69.9 million in revenue from our Intellectual Property operations primarily relating to our WiFi-6 portfolio, the first full quarter of performance from Deflecto, and continued execution at Benchmark and Printronix. Against the backdrop of macro-economic uncertainty, we continued to execute our strategy of building businesses with stable cash flow generation and scalability and believe the combination of our existing businesses and strong balance sheet will ensure Acacia continues to deliver long-term shareholder value. Including the net proceeds from the Intellectual Property settlement recorded in the first quarter, and received after quarter end, current cash, cash equivalents and equity securities is approximately $338.2 million, or $3.52 per share. Our strong cash position provides us with substantial dry powder to grow our business and positions us well to opportunistically pursue accretive investment opportunities that may become available.' First Quarter 2025 Highlights Total revenue of $124.4 million for the quarter, up 412% compared to $24.3 million for the prior-year quarter, primarily driven by $69.9 million in license fee revenue from our Intellectual Property Operations, $18.3 million in revenue from Energy Operations, which is the largest Energy Operations quarterly revenue under Acacia ownership, and $28.5 million in revenue from our first full quarter of Manufacturing Operations. GAAP Net Income of $24.3 million, or $0.25 GAAP Diluted EPS, for the three months ended March 31, 2025. Adjusted Net Income of $33.1 million, or $0.34 Adjusted Diluted EPS, for the three months ended March 31, 2025. Operated Segment Adjusted EBITDA of $54.7 million for the three months ended March 31, 2025. Total Company Adjusted EBITDA of $50.7 million for the three months ended March 31, 2025. Including the net proceeds received from our Intellectual Property Operations after quarter end, cash, cash equivalents, and equity securities is approximately $338.2 million, or $3.52 per share. Revenue The following table provides a breakdown of the Company's total revenue for the three months ended March 31, 2025 and March 31, 2024. For the purposes of financial reporting, Acacia's operations are broken out as follows: Energy Operations (Benchmark), Industrial Operations (Printronix), Manufacturing Operations (Deflecto), and Intellectual Property Operations (Acacia Research Group). Adjusted EBITDA The following table provides a reconciliation of consolidated Net Income (Loss), the most directly comparable GAAP measure, to Total Company Adjusted EBITDA for the three months ended March 31, 2025 and March 31,2024. Three Months Ended March 31, 2025 2024 (In thousands, unaudited) GAAP Net Income (Loss) $ 24,287 $ (186 ) Net (Income) Loss Attributable to Noncontrolling Interests (759 ) (3 ) Income Tax Expense (Benefit) 6,081 (1,109 ) Interest Expense 2,451 326 Interest (Income) and Other, Net (1,793 ) (5,095 ) (Gain) Loss on Foreign Currency Exchange (155 ) 68 Net Realized and Unrealized (Gain) Loss on Derivatives 5,021 (171 ) Net Realized and Unrealized (Gain) Loss on Investments 3,172 (2,160 ) Non-recurring Legacy Legal Expense — 6,243 GAAP Operating Income (Loss) $ 38,305 $ (2,087 ) Depreciation, Depletion & Amortization 10,610 4,568 Stock-Based Compensation 922 858 Realized Hedge Gain (Loss) (43 ) 800 Transaction-Related Costs 554 — Legacy Matter Costs 8 2,193 Severance Costs 343 — Total Company Adjusted EBITDA $ 50,699 $ 6,332 Expand The following table provides the Adjusted EBITDA for each of the Company's operating segments for the three months ended March 31, 2025 and March 31, 2024. Adjusted Net Income and Adjusted Diluted EPS The following table provides a reconciliation of Net Income (Loss), the most directly comparable GAAP measure, to Adjusted Net Income (Loss) and Adjusted Diluted EPS for the three months ended March 31, 2025 and March 31, 2024. Three Months Ended March 31, 2025 2024 GAAP Net Income (Loss) $ 24,287 $ (186 ) Non-recurring Legacy Legal Expense — 6,243 Legacy Matter Costs 3 258 2,193 Stock-Based Compensation 922 858 Transaction-Related Costs 554 — Severance Costs 343 — Amortization of Acquired Intangibles 907 433 Unrealized Loss (Gain) on Securities 4,777 26,701 Unrealized Loss (Gain) on Hedges 3,661 317 Tax Effect of Adjustments (2,629 ) (8,100 ) Adjusted Net Income (Loss) $ 33,080 $ 28,459 GAAP Diluted EPS $ 0.25 $ — GAAP weighted average diluted shares 96,981,413 99,745,905 Adjusted Diluted EPS $ 0.34 $ 0.28 Adjusted diluted weighted average shares 96,981,413 100,390,881 Expand ____________________ 2 Energy Operations Adjusted EBITDA, Industrial Operations Adjusted EBITDA, Manufacturing Operations Adjusted EBITDA, Intellectual Property Operations Adjusted EBITDA, and Parent Costs are non-GAAP financial measures. For the definitions of these measures and reconciliations of these measures to the most directly comparable GAAP financial measures, see the accompanying supplemental information section. 3 Legacy Matter Costs for the three months ended March 31, 2025 includes $250,000 related to a one-time legacy tax matter at Printronix that has been settled, which amount is included within Interest Income and Other, Net in Acacia's condensed consolidated statement of operations Expand Free Cash Flow 4 The following table provides a reconciliation of Free Cash Flow (FCF) for the three months ended March 31, 2025. ____________________ 4 Free Cash Flow (FCF) is a non-GAAP financial measure. For a definition of this measure, see the accompanying supplemental information section. Expand Balance Sheet and Capital Structure Cash, cash equivalents, and equity investments measured at fair value totaled $290.0 million at March 31, 2025 compared to $297.0 million at December 31, 2024. The decrease in cash was primarily due to $1.9 million of capital expenditures at Benchmark, $0.2 million of capital expenditures at Deflecto, $5.0 million of debt repayment on the Benchmark revolving credit facility, and $0.6 million of principal repayment on the Deflecto Term Loan, offset by $1.2 million of working capital benefit from the Deflecto transaction, $1.9 million of net proceeds from the purchase and sale of equity securities and cash provided by operating activities from our business segments. Equity securities without readily determinable fair value totaled $5.8 million at March 31, 2025, unchanged from December 31, 2024. Investment securities representing equity method investments totaled $19.9 million at March 31, 2025 (net of noncontrolling interests), unchanged from December 31, 2024. Acacia owns 64% of MalinJ1, which results in a 26% indirect ownership stake in Viamet Pharmaceuticals, Inc. for Acacia. The Parent company's total indebtedness was zero at March 31, 2025. On a consolidated basis, Acacia's total indebtedness was $108.4 million, consisting of $61.5 million in non-recourse debt at Benchmark and $46.9 million in non-recourse debt at Deflecto as of March 31, 2025. Book Value as of March 31, 2025 At March 31, 2025, Acacia's book value (which includes noncontrolling interests) was $577.3 million and there were 96.2 million shares of common stock outstanding, for a book value per share of $6.00. This value is impacted by one-time expenses and other adjustments detailed in the above reconciliation from GAAP Net Income (Loss) to Adjusted Net Income (Loss). Investor Conference Call The Company will host a conference call today, May 8, 2025 at 8:00 a.m. Eastern Time (5:00 a.m. Pacific Time). To access the live call, please dial 877-545-0523 (U.S. and Canada) or 973-528-0016 (international) and if requested, reference the access code '476097.' The conference call will also be simultaneously webcast at and on the investor relations section of the Company's website at under Events & Presentations. 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 the Company Acacia (Nasdaq: ACTG) is a publicly traded company that is focused on acquiring and operating attractive businesses across the mature technology, energy and industrial/manufacturing sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management. Additional information about Acacia and its subsidiaries is available at Safe Harbor Statement 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 the Company's current expectations and speak only as of the date hereof. All statements other than statements of historical fact are forward-looking statements and include statements related to estimates and projections with respect to, among other things, the Company's anticipated financial condition, operating performance, the value of the Company's assets, general economic and market conditions and other future circumstances and events. This news release attempts to identify forward-looking statements by using words such as 'anticipate,' 'believe,' 'continue,' 'could,' 'estimate,' 'expect,' 'forecast,' 'future,' 'guidance,' 'intend,' 'may,' 'outlook,' 'plan,' 'potential,' 'predict,' 'project,' 'seek,' 'should,' 'target' and 'will,' and similar words and expressions; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially and adversely from those expressed or implied in any forward-looking statements, including, but not limited to: the Company's ability to successfully identify, diligence, complete, and integrate strategic acquisitions of businesses, divisions, and/or assets, the performance of the Company's businesses, divisions, and/or assets, disruptions or uncertainty caused by an ability to retain or changes to the employees or management teams of the Company's businesses, changes to the Company's relationship and arrangements with Starboard Value LP, any inability of the Company's operating businesses to execute on their business and, with respect to Benchmark, hedging strategy, risks related to price and other fluctuations in the oil and gas market, inflationary pressures, supply chain disruptions or labor shortages, the impact of tariffs and trade policy, non-performance by third parties of contractual or legal obligations, changes in the Company's credit ratings or the credit ratings of the Company's businesses, security threats, including cybersecurity threats and disruptions to the Company's business and operations from breaches of information technology systems, or breaches of information technology systems, facilities and infrastructure of third parties with which the Company transacts business, oil or natural gas production becoming uneconomic, causing write downs or adversely affecting Benchmark's ability to borrow, Benchmark's ability to replace reserves and efficiently develop current reserves, risks, operational hazards, unforeseen interruptions and other difficulties involved in the production of oil and natural gas, the impact of any seismic events, environmental liability risk, regulatory changes related to the oil and gas industry, 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, the decrease in demand for Printronix' products, changes in safety, health, environmental, tax and other regulations, requirements or initiatives, hazards such as weather conditions, a health pandemic (similar to COVID-19), acts of war or terrorist acts and the government or military response thereto, general economic conditions, and the success of the Company's investments. For further discussions of risks and uncertainties, you should refer to the Company's filings with the Securities and Exchange Commission, including the 'Risk Factors' section of the Company's most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. In addition, actual results may differ materially as a result of additional risks and uncertainties of which the Company is currently unaware or which the Company does not currently view as material. Except as otherwise required by applicable law, the Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason. December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 271,964 $ 273,880 Equity securities 18,064 23,135 Equity securities without readily determinable fair value 5,816 5,816 Equity method investments 30,934 30,934 Accounts receivable, net 95,725 26,909 Inventories 26,264 27,485 Prepaid expenses and other current assets 15,866 31,987 Total current assets 464,633 420,146 Property, plant and equipment, net 23,354 23,865 Oil and natural gas properties, net 189,104 191,680 Goodwill 25,566 29,339 Other intangible assets, net 67,739 55,429 Operating lease, right-of-use assets 8,001 9,287 Deferred income tax assets, net 17,231 20,233 Other non-current assets 5,978 6,415 Total assets $ 801,606 $ 756,394 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 12,457 $ 12,074 Accrued expenses and other current liabilities 24,084 20,575 Accrued compensation 6,879 6,277 Current asset retirement obligation 1,565 1,546 Royalties and contingent legal fees payable 26,699 5,448 Deferred revenue 1,403 1,319 Current portion of long-term debt, net 2,400 2,400 Total current liabilities 75,487 49,639 Asset retirement obligation 31,401 31,070 Long-term lease liabilities 5,872 6,778 Deferred income tax liabilities, net 2,697 2,609 Revolving credit facility 61,500 66,500 Term loan and revolving credit facility 44,488 45,088 Other long-term liabilities 2,901 2,091 Total liabilities 224,346 203,775 Commitments and contingencies 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; 300,000,000 shares authorized; 96,171,702 and 96,048,999 shares issued and outstanding as of March 31, 2025 and 2024, respectively 96 96 Treasury stock, at cost, 20,542,064 and 20,542,064 shares as of March 31, 2025 and 2024, respectively (118,542 ) (118,542 ) Accumulated other comprehensive income (518 ) (1,180 ) Additional paid-in capital 910,688 910,237 Accumulated deficit (251,499 ) (275,786 ) Total Acacia Research Corporation stockholders' equity 540,225 514,825 Noncontrolling interests 37,035 37,794 Total stockholders' equity 577,260 552,619 Total liabilities and stockholders' equity $ 801,606 $ 756,394 Expand ACACIA RESEARCH CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (In thousands, except share and per share data) Three Months Ended March 31, 2025 2024 Revenues: Intellectual property operations $ 69,905 $ 13,623 Industrial operations 7,676 8,841 Energy operations 18,306 1,856 Manufacturing operations 28,535 — Total revenues 124,422 24,320 Costs and expenses: Cost of revenues - intellectual property operations 27,912 7,001 Cost of revenues - industrial operations 4,064 4,049 Cost of production - energy operations 12,698 1,315 Cost of revenues - manufacturing operations 20,811 — Sales and marketing expenses - industrial and manufacturing operations 3,312 1,555 General and administrative expenses 17,320 12,487 Total costs and expenses 86,117 26,407 Operating income (loss) 38,305 (2,087 ) Other (expense) income: Equity securities investments: Change in fair value of equity securities (4,777 ) (26,701 ) Gain on sale of equity securities 1,605 28,861 Net realized and unrealized (loss) gain (3,172 ) 2,160 Non-recurring legacy legal expense — (6,243 ) Loss on derivatives - energy operations (5,021 ) 171 Gain (loss) on foreign currency exchange 155 (68 ) Interest expense (2,451 ) (326 ) Interest income and other, net 1,793 5,095 Total other (expense) income (8,696 ) 789 Income (loss) before income taxes 29,609 (1,298 ) Income tax (expense) benefit (6,081 ) 1,109 Net income (loss) including noncontrolling interests in subsidiaries 23,528 (189 ) Net loss (income) attributable to noncontrolling interests in subsidiaries 759 3 Net income (loss) attributable to Acacia Research Corporation $ 24,287 $ (186 ) Income (loss) per share: Net income (loss) attributable to common stockholders - Basic $ 24,287 $ (186 ) Weighted average number of shares outstanding - Basic 96,018,047 99,745,905 Basic net income per common share $ 0.25 $ — Net income (loss) attributable to common stockholders - Diluted $ 24,287 $ (186 ) Weighted average number of shares outstanding - Diluted 96,981,413 99,745,905 Diluted net income per common share $ 0.25 $ — Other comprehensive income (loss): Foreign currency translation $ 662 $ — Total other comprehensive income, net 662 — Total comprehensive income (loss) 24,190 (189 ) Comprehensive loss (income) attributable to noncontrolling interests 759 3 Comprehensive income (loss) attributable to Acacia Research Corporation 24,949 (186 ) Expand ACACIA RESEARCH CORPORATION - SUPPLEMENTAL INFORMATION NON-GAAP FINANCIAL MEASURE This earnings release includes Adjusted EBITDA on a consolidated basis and for each of the Company's segments. Total Company Adjusted EBITDA, Operated Segment Adjusted EBITDA and Adjusted EBITDA and Free Cash Flow (FCF) for each of the Company's segments are supplemental non-GAAP financial measures used by management and external users of the Company's consolidated financial statements. This earnings release also includes the Company's Adjusted Net Income (Loss) and Adjusted Diluted Earnings Per Share (EPS), which are non-GAAP financial measures. GAAP refers to generally accepted accounting principles in the United States. A non-GAAP financial measure is a numerical measure of historical or future performance, financial position or cash flow that includes or excludes amounts that are excluded or included, respectively, in the most directly comparable measure calculated and presented in accordance with GAAP in the Company's financial statements. Total Company Adjusted EBITDA is defined as net income / (loss) before net income / (loss) attributable to noncontrolling interests, income tax (benefit) / expense, interest expense, interest income and other, net, loss / (gain) on foreign currency exchange, net realized and unrealized (gain) / loss on derivatives, net realized and unrealized loss / (gain) on investments, non-recurring legacy legal expenses, depreciation, depletion and amortization, stock-based compensation, realized hedge gain / (loss), transaction-related costs, and costs related to the legacy items. Operated Segment Adjusted EBITDA is the aggregate of Energy Operations Adjusted EBITDA, Manufacturing Operations Adjusted EBITDA, Industrial Operations Adjusted EBITDA, and Intellectual Property Operations Adjusted EBITDA. See below for the definition of each of those measures. The Company is providing Total Company Adjusted EBITDA and Operated Segment Adjusted EBITDA, non-GAAP financial measures, because management believes these metrics provide investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. These measures are not intended to replace the presentation of financial results in accordance with GAAP and may be different from or otherwise inconsistent with similar non-GAAP financial measures used by other companies. The presentation of these non-GAAP financial measures supplements other metrics the Company uses to internally evaluate its subsidiary businesses and facilitate the comparison of past and present operating performance. These measures should not be considered in isolation or as a substitute for measures calculated and presented in accordance with GAAP. Energy Operations Energy Operations Adjusted EBITDA is defined as operating income / (loss) for Acacia's Energy Operations before depreciation, depletion and amortization expense and transaction-related costs, and including realized hedge gain / (loss). The Company is providing its Energy Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Industrial Operations Industrial Operations Adjusted EBITDA is defined as operating income / (loss) for Acacia's Industrial Operations before amortization of acquired intangibles and depreciation and amortization expense. The Company is providing its Industrial Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Intellectual Property Operations Intellectual Property Operations Adjusted EBITDA is defined as operating income / (loss) for Acacia's Intellectual Property Operations before patent amortization, depreciation and amortization expense and stock-based compensation. The Company is providing Intellectual Property Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Manufacturing Operations Manufacturing Operations Adjusted EBITDA is defined as operating income / loss for Acacia's Manufacturing Operations before amortization of acquired intangibles, depreciation and amortization expense, and transaction-related costs. The Company is providing its Manufacturing Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Parent Costs are defined as operating income / (loss) attributable to Parent before depreciation and amortization expense, stock-based compensation, transaction-related costs, and costs related to certain legacy matters attributable to the Parent organization. The Company is providing Parent Costs, a non-GAAP financial measure, because it believes it gives investors a clear picture of normalized Parent-level expenses. Free Cash Flow is defined as net cash provided by (used in) operating activities, less net purchases of property and equipment, oil and gas properties, and patent acquisitions ('Capital Expenditures'). The Company is providing Free Cash Flow, a non-GAAP financial measure, because it believes free cash flow gives investors a good sense of how much cash flows are available to be used for de-levering, making acquisitions, repurchasing shares or similar uses of cash. Adjusted Net Income (Loss) Adjusted Net Income (Loss) is defined as Acacia's GAAP Net Income (Loss) excluding costs related to certain legacy matters, stock-based compensation, transaction-related costs, amortization of acquired intangibles, any unrealized (gain) / loss on securities, any unrealized (gain) / loss on hedges, and any (gain) / loss on non-cash derivatives and taking into account the tax effect(s) of those adjustments. The Company is providing Adjusted Net Income (Loss), a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Adjusted Diluted Earnings Per Share (EPS) Adjusted Diluted EPS is defined as Adjusted Net Income (Loss) divided by the Company's weighted average diluted share count as of the relative period end date. The Company is providing its Adjusted Diluted EPS, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. The following tables reconcile Operating Income (Loss), the most directly comparable GAAP financial measure, to Adjusted EBITDA for each of the Company's operating segments and for Parent Costs for the three months ended March 31, 2025 and March 31, 2024.
Associated Press
13-03-2025
- Business
- Associated Press
Acacia Research Corporation Reports Fourth Quarter and Year End 2024 Financial Results
Acacia Research Corporation (Nasdaq: ACTG) (' Acacia ' or the ' Company '), which acquires and operates businesses across the industrial, energy, and technology sectors, today reported financial results for the three months and full year ended December 31, 2024. The Company also posted its fourth quarter 2024 earnings presentation on its website at under Events & Presentations. Martin ('MJ') D. McNulty, Jr., Chief Executive Officer, stated, '2024 was a transformational year for Acacia. We continued executing our strategy of acquiring and building businesses with stable cash flow generation and scalability, specifically with two opportunistic acquisitions that we believe present attractive risk-adjusted return characteristics and that should create value for shareholders. We accomplished this while continuing to enhance our existing businesses and investments, and with a close eye on capital allocation. In April, our majority-owned oil and gas subsidiary, Benchmark, completed the acquisition of the upstream production Revolution assets in Texas and Oklahoma. These assets present the attractive characteristics we look for in oil and gas acquisitions, including shallow decline, long-life production profiles, a balanced hydrocarbon stream, rich in valuable natural gas liquids, and an opportunity to operationally improve production. Since closing the acquisition, the Benchmark team has fully integrated the acquired assets and has completed over 40 capital workover projects which have replenished our reserve base in an amount offsetting our production since we acquired the assets. Benchmark also established a robust, internally managed energy services business to more efficiently and cost-effectively service its assets and those of our working interest partners. The team is actively working to enhance the value of our assets, including those already producing oil and gas as well as upside potential in the Cherokee play and the Cleveland formation, which came with our most recent acquisition. In October, we announced the acquisition of Deflecto, a leading specialty manufacturer of essential products serving the commercial transportation, HVAC and office markets. We have been working closely with the Deflecto management team and our Operating Partner, Clay Kiefaber, to integrate the business and implement our initial 100-day plan. We are enthusiastic about the optionality within this platform, including opportunities to accelerate organic growth, margin improvement, working capital efficiency, and strategic M&A. Since closing these two acquisitions, we have been diligently and methodically integrating the businesses into our portfolio, driving operational improvements, capturing synergies, and successfully managing our rapidly growing enterprise. We're beginning to benefit from the positive impact of these two acquisitions and our long-term strategy in our fourth quarter and full-year results. Following the completion of the Benchmark and Deflecto acquisitions, we have a healthy cash balance of $273.9 million at year end for future transactions. Finally, as part of our strategy to deploy excess cash to shareholders, and increase total shareholder returns over time while protecting our valuable tax attributes, we repurchased $20.0 million in Acacia shares during the year, the maximum authorized under our stock repurchase program.' Key Highlights Revenue of $48.8 million and $122.3 million for the three months and year ended December 31, 2024, respectively. GAAP Net Income (Loss) of $(13.4) million, or $(0.14) GAAP Diluted EPS, for the fourth quarter and a GAAP Net Income (Loss) of $(36.1) million, or $(0.36) GAAP Diluted EPS, for the year ended December 31, 2024. Adjusted Net Income (Loss) of $(6.8) million, or $(0.07) Adjusted Diluted EPS, for the fourth quarter and an Adjusted Net Income (Loss) of $14.2 million, or $0.14 Adjusted Diluted EPS, for the year ended December 31, 2024. Operated Segment Adjusted EBITDA of $9.6 million and $35.7 million for the three months and year ended December 31, 2024, respectively. Total Company Adjusted EBITDA of $4.9 million and $17.0 million for the three months and year ended December 31, 2024, respectively. Completed $20.0 million share repurchase program as of December 31, 2024. Benchmark acquired certain upstream production assets from Revolution (the 'Revolution Assets') and related facilities on April 17, 2024, for $145.0 million. Acquired Deflecto Acquisition, Inc. ('Deflecto') on October 18, 2024, for $103.7 million. The following table provides a breakdown of the Company's total revenue for the three months and year ended December 31, 2024. For the purposes of financial reporting, Acacia's operations are broken out as follows: Energy Operations (Benchmark), Industrial Operations (Printronix), Intellectual Property Operations (Acacia Research Group), and Manufacturing Operations (Deflecto). Three Months Ended March 31, Three Months Ended June 30, Three Months Ended September 30, Three Months Ended December 31, Year Ended December 31, 2024 2024 2024 2024 2024 (In millions) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Energy Operations $ 1.9 $ 14.2 $ 15.8 $ 17.3 $ 49.2 Industrial Operations 8.8 6.3 7.0 8.2 30.4 Manufacturing Operations — — — 23.2 23.2 Intellectual Property Operations 13.6 5.3 0.5 0.1 19.5 Total Revenues $ 24.3 $ 25.8 $ 23.3 $ 48.8 $ 122.3 The following table provides a reconciliation of Net Income (Loss), the most directly comparable GAAP measure, to Total Company Adjusted EBITDA for the three months ended March 31, June 30, September 30, and December 31, 2024, and the year ended December 31, 2024. Three Months Ended March 31, Three Months Ended June 30, Three Months Ended September 30, Three Months Ended December 31, Year Ended December 31, 2024 2024 2024 2024 2024 (In thousands) (Unaudited) GAAP Net Loss $ (186 ) $ (8,446 ) $ (13,996 ) $ (13,429 ) $ (36,057 ) Net (Loss) Income Attributable to Noncontrolling Interests (3 ) (383 ) 2,339 (594 ) 1,359 Income Tax (Benefit) Expense (1,109 ) (7,061 ) 5,497 (776 ) (3,449 ) Interest Expense 326 1,814 1,945 2,354 6,439 Interest Income and Other, Net (5,095 ) (4,833 ) (3,967 ) (3,085 ) (16,980 ) Loss (Gain) on Foreign Currency Exchange 68 134 (130 ) 298 370 Net Realized and Unrealized (Gain) / Loss on Derivatives (171 ) 2,659 (8,034 ) 3,530 (2,016 ) Net Realized and Unrealized (Gain) / Loss on Investments (2,160 ) 4,744 4,074 (4,107 ) 2,551 Non-recurring Legacy Legal Expense 6,243 6,614 2,000 — 14,857 GAAP Operating Loss $ (2,087 ) $ (4,758 ) $ (10,272 ) $ (15,809 ) $ (32,926 ) Depreciation, Depletion & Amortization 4,568 7,405 9,762 11,838 33,574 Stock-Based Compensation 858 891 781 2,265 4,795 Realized Hedge Gain 800 113 715 998 2,626 Transaction-Related Costs — 222 320 5,512 6,054 Legacy Matter Costs 2,193 216 368 52 2,829 Total Company Adjusted EBITDA $ 6,332 $ 4,089 $ 1,674 $ 4,856 $ 16,952 The following table provides the Adjusted EBITDA for each of the Company's operating segments for the three months ended March 31, June 30, September 30, and December 31, 2024, and the year ended December 31, 2024. Three Months Ended March 31, Three Months Ended June 30, Three Months Ended September 30, Three Months Ended December 31, Year Ended December 31, 2024 2024 2024 2024 2024 (In thousands) (Unaudited) Energy Operations Adjusted EBITDA 2 $ 1,378 $ 7,039 $ 8,442 $ 8,380 $ 25,239 Industrial Operations Adjusted EBITDA 2 1,897 449 579 1,604 4,529 Manufacturing Operations Adjusted EBITDA — — — 2,396 2,396 Operated Segment Adjusted EBITDA (excluding Intellectual Property Operations) 3,275 7,488 9,021 12,380 32,164 Intellectual Property Operations Adjusted EBITDA 2 7,160 1,309 (2,139 ) (2,749 ) 3,581 Operated Segment Adjusted EBITDA 10,435 8,797 6,882 9,631 35,745 Parent Costs 2 (4,103 ) (4,708 ) (5,208 ) (4,774 ) (18,793 ) Total Company Adjusted EBITDA $ 6,332 $ 4,089 $ 1,674 $ 4,857 $ 16,952 The following table provides a reconciliation of Net Income (Loss), the most directly comparable GAAP measure, to Adjusted Net Income (Loss) and Adjusted Diluted EPS for the three months ended March 31, June 30, September 30, and December 31, 2024 and the year ended December 31, 2024. Three Months Ended March 31, Three Months Ended June 30, Three Months Ended September 30, Three Months Ended December 31, Year Ended December 31, 2024 2024 2024 2024 2024 (In thousands) (Unaudited) GAAP Net Loss $ (186 ) $ (8,446 ) $ (13,996 ) $ (13,429 ) $ (36,057 ) Non-recurring Legacy Legal Expense 6,243 6,614 2,000 — 14,857 Legacy Matter Costs 2,193 216 368 52 2,829 Stock-Based Compensation 858 891 781 2,265 4,795 Transaction-Related Costs — 163 235 5,509 5,907 Amortization of Acquired Intangibles 433 433 433 1,044 2,343 Unrealized Loss (Gain) on Securities 26,701 4,744 4,074 (4,107 ) 31,412 Unrealized Loss (Gain) on Hedges 317 2,038 (5,382 ) 3,329 302 Tax Effect of Adjustments (8,100 ) (8,024 ) 5,412 (1,509 ) (12,221 ) Adjusted Net Income (Loss) 28,459 (1,371 ) (6,075 ) (6,846 ) 14,167 GAAP Diluted EPS $ — $ (0.08 ) $ (0.14 ) $ (0.14 ) $ (0.36 ) GAAP weighted average diluted shares 99,745,905 100,079,803 99,854,723 97,190,102 99,213,835 Adjusted Diluted EPS $ 0.28 $ (0.01 ) $ (0.06 ) $ (0.07 ) $ 0.14 Adjusted diluted weighted average shares 100,390,881 100,079,803 99,854,723 97,190,102 100,042,279 Fourth Quarter 2024 Financial Summary: Total revenue of $48.8 million for the quarter. Energy Operations revenue of $17.3 million, driven by the addition of the Revolution Assets acquired on April 17, 2024, as well as strong operational performance from the existing Benchmark assets. Manufacturing Operations revenue of $23.2 million following the completion of the acquisition of Deflecto on October 18, 2024. Industrial Operations revenue of $8.2 million, up $1.2 million from the prior quarter. Intellectual Property Operations revenue of $0.1 million, driven by lower licensing and settlement agreements during the quarter. GAAP Net Income (Loss) of $(13.4) million, or $(0.14) GAAP Diluted EPS. Adjusted Net Income (Loss) of $(6.8) million, or $(0.07) Adjusted Diluted EPS. Total Company Adjusted EBITDA of $4.9 million. Operated Segment Adjusted EBITDA of $9.6 million. Energy Operations Adjusted EBITDA of $8.4 million, driven by the addition of the Revolution Assets acquired on April 17, 2024, as well as strong operational performance from the existing Benchmark assets. Manufacturing Operations Adjusted EBITDA of $2.4 million following the completion of the acquisition of Deflecto on October 18, 2024. Industrial Operations Adjusted EBITDA of $1.6 million, driven by operational improvements and cost rationalization efforts at Printronix. Intellectual Property Operations Adjusted EBITDA loss of $(2.7) million, driven by lower licensing and settlement revenue. Full-Year 2024 Financial Summary: Total revenue of $122.3 million for the year. Energy Operations revenue of $49.2 million, driven by the addition of the Revolution Assets acquired on April 17, 2024, as well as a full year of strong operational performance from the existing Benchmark assets. Manufacturing Operations revenue of $23.2 million following the completion of the acquisition of Deflecto on October 18, 2024. Industrial Operations revenue of $30.4 million. Intellectual Property Operations revenue of $19.5 million. GAAP Net Income (Loss) of $(36.1) million, or $(0.36) GAAP Diluted EPS. Adjusted Net Income (Loss) of $14.2 million, or $0.14 Adjusted Diluted EPS. Total Company Adjusted EBITDA of $17.0 million. Operated Segment Adjusted EBITDA of $35.7 million. Energy Operations Adjusted EBITDA of $25.2 million, driven by the addition of the Revolution Assets acquired on April 17, 2024, as well as a full year of strong operational performance from the existing Benchmark assets. Manufacturing Operations Adjusted EBITDA of $2.4 million following the completion of the acquisition of Deflecto on October 18, 2024. Industrial Operations Adjusted EBITDA of $4.5 million, driven by operational improvements and cost rationalization efforts at Printronix. Intellectual Property Operations Adjusted EBITDA of $3.6 million. Life Sciences Portfolio Acacia has generated $564.1 million in proceeds from sales and royalties of its Life Sciences Portfolio, which was purchased for an aggregate price of $301.4 million in 2020. At December 31, 2024 Acacia's remaining positions in its Life Sciences Portfolio represented $25.7 million in book value: Acacia holds interests in three private companies, valued at an aggregate of $25.7 million, net of non-controlling interests, including an approximately 26% interest in Viamet Pharmaceuticals, Inc., an approximately 18% interest in AMO Pharma, Ltd., and an approximately 4% interest in NovaBiotics Ltd. Values are based on cost or equity accounting. Balance Sheet and Capital Structure Cash, cash equivalents, and equity investments measured at fair value totaled $297.0 million at December 31, 2024 compared to $403.2 million at December 31, 2023. The decrease in cash was primarily due to $60.0 million paid to acquire the Revolution Assets, $60.0 million paid to acquire Deflecto (net of cash acquired), $15.5 million of debt repayment on the Benchmark revolving credit facility since the acquisition of the Revolution assets, and approximately $20.0 million in repurchases of common stock during the year, offset by cash provided by operating activities. Equity securities without readily determinable fair value totaled $5.8 million at December 31, 2024, unchanged from December 31, 2023. Investment securities representing equity method investments totaled $19.9 million at December 31, 2024 (net of noncontrolling interests), unchanged from December 31, 2023. Acacia owns 64% of MalinJ1, which results in a 26% indirect ownership stake in Viamet Pharmaceuticals, Inc. for Acacia. The Parent company's total indebtedness was zero at December 31, 2024. On a consolidated basis, Acacia's total indebtedness was $114.0 million, consisting of $66.5 million in non-recourse debt at Benchmark and $47.5 million in non-recourse debt at Deflecto as of December 31, 2024. Book Value as of December 31, 2024 At December 31, 2024, Acacia's book value (which includes noncontrolling interests) was $552.6 million and there were 96.0 million shares of common stock outstanding, for a book value per share of $5.75. This value is impacted by one-time expenses and other adjustments detailed in the above reconciliation from Net Loss to Adjusted Net Income (Loss). Share Repurchase Program On November 9, 2023, Acacia's Board of Directors approved a stock repurchase program (the ' Repurchase Program ') for up to $20.0 million. As of December 31, 2024, the Repurchase Program was fully completed. Investor Conference Call The Company will host a conference call today, March 13, 2025 at 8:00 a.m. Eastern Time (5:00 a.m. Pacific Time). To access the live call, please dial 888-506-0062 (U.S. and Canada) or 973-528-0011 (international) and if requested, reference the access code '847853.' The conference call will also be simultaneously webcast at and on the investor relations section of the Company's website at under Events & Presentations. 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 the Company Acacia (Nasdaq: ACTG) is a publicly traded company that is focused on acquiring and operating attractive businesses across the mature technology, energy, and industrial/manufacturing sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management. Additional information about Acacia and its subsidiaries is available at Safe Harbor Statement 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 the Company's current expectations and speak only as of the date hereof. All statements other than statements of historical fact are forward-looking statements and include statements related to estimates and projections with respect to, among other things, the Company's anticipated financial condition, operating performance, the value of the Company's assets, general economic and market conditions and other future circumstances and events. This news release attempts to identify forward-looking statements by using words such as 'anticipate,' 'believe,' 'continue,' 'could,' 'estimate,' 'expect,' 'forecast,' 'future,' 'guidance,' 'intend,' 'may,' 'outlook,' 'plan,' 'potential,' 'predict,' 'project,' 'seek,' 'should,' 'target' and 'will,' and similar words and expressions; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially and adversely from those expressed or implied in any forward-looking statements, including, but not limited to: the Company's ability to successfully identify, diligence, complete, and integrate strategic acquisitions of businesses, divisions, and/or assets, the performance of the Company's businesses, divisions, and/or assets, disruptions or uncertainty caused by an ability to retain or changes to the employees or management teams of the Company's businesses, changes to the Company's relationship and arrangements with Starboard Value LP, any inability of the Company's operating businesses to execute on their business and, with respect to Benchmark, hedging strategy, risks related to price and other fluctuations in the oil and gas market, inflationary pressures, supply chain disruptions or labor shortages, non-performance by third parties of contractual or legal obligations, changes in the Company's credit ratings or the credit ratings of the Company's businesses, security threats, including cybersecurity threats and disruptions to the Company's business and operations from breaches of information technology systems, or breaches of information technology systems, facilities and infrastructure of third parties with which the Company transacts business, oil or natural gas production becoming uneconomic, causing write downs or adversely affecting Benchmark's ability to borrow, Benchmark's ability to replace reserves and efficiently develop current reserves, risks, operational hazards, unforeseen interruptions and other difficulties involved in the production of oil and natural gas, the impact of any seismic events, environmental liability risk, regulatory changes related to the oil and gas industry, 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, the decrease in demand for Printronix' products, changes in safety, health, environmental, tax and other regulations, requirements or initiatives, hazards such as weather conditions, a health pandemic (similar to COVID-19), acts of war or terrorist acts and the government or military response thereto, general economic conditions, and the success of the Company's investments. For further discussions of risks and uncertainties, you should refer to the Company's filings with the Securities and Exchange Commission, including the 'Risk Factors' section of the Company's most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. In addition, actual results may differ materially as a result of additional risks and uncertainties of which the Company is currently unaware or which the Company does not currently view as material. Except as otherwise required by applicable law, the Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason. ACACIA RESEARCH CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (In thousands, except share and per share data) Three Months Ended December 31, Years Ended December 31, 2024 2023 2024 2023 Revenues: Intellectual property operations $ 83 $ 82,826 $ 19,525 $ 89,156 Industrial operations 8,238 8,637 30,421 35,098 Energy operations 17,340 848 49,183 848 Manufacturing operations 23,183 — 23,183 — Total revenues 48,844 92,311 122,312 125,102 Costs and expenses: Cost of revenues - intellectual property operations 6,078 18,946 24,551 34,164 Cost of revenues - industrial operations 4,063 4,479 14,912 18,009 Cost of production - energy operations 13,209 656 36,291 656 Cost of revenues - manufacturing operations 16,904 — 16,904 — Sales and marketing expenses - industrial and manufacturing operations 2,884 1,523 7,217 6,908 General and administrative expenses 21,515 10,765 55,363 44,429 Total costs and expenses 64,653 36,369 155,238 104,166 Operating (loss) income (15,809 ) 55,942 (32,926 ) 20,936 Other (expense) income: Equity securities investments: Change in fair value of equity securities 4,107 12,640 (31,412 ) 31,423 Gain (loss) on sale of equity securities — (1,570 ) 28,861 (10,930 ) Earnings on equity investment in joint venture — 792 — 4,167 Net realized and unrealized (loss) gain 4,107 11,862 (2,551 ) 24,660 Non-recurring legacy legal expense — — (14,857 ) — Change in fair value of the Series B warrants and embedded derivatives — — — 8,241 Gain on derivatives - energy operations (3,530 ) 1,177 2,016 1,177 (Loss) gain on foreign currency exchange (298 ) 28 (370 ) 53 Interest expense (2,354 ) (133 ) (6,439 ) (2,063 ) Interest income and other, net 3,085 4,479 16,980 14,422 Total other (expense) income 1,010 17,413 (5,221 ) 46,490 (Loss) income before income taxes (14,799 ) 73,355 (38,147 ) 67,426 Income tax benefit 776 2,145 3,449 1,504 Net (loss) income including noncontrolling interests in subsidiaries (14,023 ) 75,500 (34,698 ) 68,930 Net loss (income) attributable to noncontrolling interests in subsidiaries 594 (744 ) (1,359 ) (1,870 ) Net (loss) income attributable to Acacia Research Corporation $ (13,429 ) $ 74,756 $ (36,057 ) $ 67,060 (Loss) income per share: Net (loss) income attributable to common stockholders - Basic $ (13,429 ) $ 74,611 $ (36,057 ) $ 55,140 Weighted average number of shares outstanding - Basic 97,190,102 99,697,447 99,213,835 75,296,025 Basic net (loss) income per common share $ (0.14 ) $ 0.75 $ (0.36 ) $ 0.73 Net (loss) income attributable to common stockholders - Diluted $ (13,429 ) $ 74,611 $ (36,057 ) $ 53,208 Weighted average number of shares outstanding - Diluted 97,190,102 99,932,858 99,213,835 92,411,818 Diluted net (loss) income per common share $ (0.14 ) $ 0.75 $ (0.36 ) $ 0.58 Other comprehensive (loss) income: Foreign currency translation $ (1,180 ) $ — $ (1,180 ) $ — Total other comprehensive loss, net (1,180 ) — (1,180 ) — Total comprehensive (loss) income (15,203 ) 75,500 (35,878 ) 68,930 Comprehensive loss (income) attributable to noncontrolling interests 594 (744 ) (1,359 ) (1,870 ) Comprehensive (loss) income attributable to Acacia Research Corporation (14,609 ) 74,756 (37,237 ) 67,060 ACACIA RESEARCH CORPORATION - SUPPLEMENTAL INFORMATION NON-GAAP FINANCIAL MEASURE This earnings release includes Adjusted EBITDA on a consolidated basis and for each of the Company's segments. Total Company Adjusted EBITDA, Operated Segment Adjusted EBITDA and Adjusted EBITDA for each of the Company's segments are supplemental non-GAAP financial measures used by management and external users of the Company's consolidated financial statements. This earnings release also includes the Company's Adjusted Net Income (Loss) and Adjusted Diluted Earnings Per Share (EPS), which are non-GAAP financial measures. GAAP refers to generally accepted accounting principles in the United States. A non-GAAP financial measure is a numerical measure of historical or future performance, financial position or cash flow that includes or excludes amounts that are excluded or included, respectively, in the most directly comparable measure calculated and presented in accordance with GAAP in the Company's financial statements. Total Company Adjusted EBITDA is defined as net income / (loss) before net income / (loss) attributable to noncontrolling interests, income tax (benefit) / expense, interest expense, interest income and other, net, loss / (gain) on foreign currency exchange, net realized and unrealized (gain) / loss on derivatives, net realized and unrealized loss / (gain) on investments, non-recurring legacy legal expenses, depreciation, depletion and amortization, stock-based compensation, realized hedge gain / (loss), transaction-related costs, and costs related to the legacy items. Operated Segment Adjusted EBITDA is the aggregate of Energy Operations Adjusted EBITDA, Manufacturing Operations Adjusted EBITDA, Industrial Operations Adjusted EBITDA, and Intellectual Property Operations Adjusted EBITDA. See below for the definition of each of those measures. The Company is providing Total Company Adjusted EBITDA and Operated Segment Adjusted EBITDA, non-GAAP financial measures, because management believes these metrics provide investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. These measures are not intended to replace the presentation of financial results in accordance with GAAP and may be different from or otherwise inconsistent with similar non-GAAP financial measures used by other companies. The presentation of these non-GAAP financial measures supplements other metrics the Company uses to internally evaluate its subsidiary businesses and facilitate the comparison of past and present operating performance. These measures should not be considered in isolation or as a substitute for measures calculated and presented in accordance with GAAP. Energy Operations Energy Operations Adjusted EBITDA is defined as operating income / (loss) for Acacia's Energy Operations before depreciation, depletion and amortization expense and transaction-related costs, and including realized hedge gain / (loss). The Company is providing its Energy Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Industrial Operations Industrial Operations Adjusted EBITDA is defined as operating income / (loss) for Acacia's Industrial Operations before amortization of acquired intangibles and depreciation and amortization expense. The Company is providing its Industrial Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Intellectual Property Operations Intellectual Property Operations Adjusted EBITDA is defined as operating income / (loss) for Acacia's Intellectual Property Operations before patent amortization, depreciation and amortization expense and stock-based compensation. The Company is providing Intellectual Property Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Manufacturing Operations Manufacturing Operations Adjusted EBITDA is defined as operating income / loss for Acacia's Manufacturing Operations before amortization of acquired intangibles, depreciation and amortization expense, and transaction-related costs. The Company is providing its Manufacturing Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Parent Costs Parent Costs are defined as operating income / (loss) attributable to Parent before depreciation and amortization expense, stock-based compensation, transaction-related costs, and costs related to certain legacy matters attributable to the Parent organization. The Company is providing Parent Costs, a non-GAAP financial measure, because it believes it gives investors a clear picture of normalized Parent-level expenses. Adjusted Net Income (Loss) Adjusted Net Income (Loss) is defined as Acacia's GAAP Net Income (Loss) excluding costs related to certain legacy matters, stock-based compensation, transaction-related costs, amortization of acquired intangibles, any unrealized (gain) / loss on securities, any unrealized (gain) / loss on hedges, any (gain) / loss on non-cash derivatives, and any (gain) / loss on non-cash derivatives. The Company is providing Adjusted Net Income (Loss), a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Adjusted Diluted Earnings Per Share (EPS) Adjusted Diluted EPS is defined as Adjusted Net Income (Loss) divided by the Company's weighted average diluted share count as of the relative period end date. The Company is providing its Adjusted Diluted EPS, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. The following tables reconcile Operating (Loss) Income, the most directly comparable GAAP financial measure, to Adjusted EBITDA for each of the Company's operating segments and for Parent Costs for the three months ended March 31, June 30, September 30, December 31, 2024, and the year ended December 31, 2024. Three Months Ended March 31, 2024 Adjusted EBITDA Energy Operations Industrial Operations Intellectual Property Operations Parent Costs Consolidated Total (In thousands) (Unaudited) GAAP Operating (Loss) Income $ 156 $ 1,212 $ 3,282 $ (6,737 ) $ (2,087 ) Depreciation, Depletion & Amortization 422 685 3,435 26 4,568 Stock-Based Compensation — — 443 415 858 Realized Hedge Gain 800 — — — 800 Transaction-Related Costs — — — — — Legacy Matter Costs — — — 2,193 2,193 Adjusted EBITDA $ 1,378 $ 1,897 $ 7,160 $ (4,103 ) $ 6,332 Parent Interest Income $ 5,079 Three Months Ended June 30, 2024 Adjusted EBITDA Energy Operations Industrial Operations Intellectual Property Operations Parent Costs Consolidated Total (In thousands) (Unaudited) GAAP Operating (Loss) Income $ 3,249 $ (234 ) $ (2,253 ) $ (5,520 ) $ (4,758 ) Depreciation, Depletion & Amortization 3,455 683 3,241 26 7,405 Stock-Based Compensation — — 321 570 891 Realized Hedge Gain 113 — — — 113 Transaction-Related Costs 222 — — — 222 Legacy Matter Costs — — — 216 216 Adjusted EBITDA $ 7,039 $ 449 $ 1,309 $ (4,708 ) $ 4,089 Parent Interest Income $ 5,028 Three Months Ended September 30, 2024 Adjusted EBITDA Energy Operations Industrial Operations Intellectual Property Operations Parent Costs Consolidated Total (In thousands) (Unaudited) GAAP Operating (Loss) Income $ 3,064 $ (101 ) $ (7,138 ) $ (6,097 ) $ (10,272 ) Depreciation, Depletion & Amortization 4,343 680 4,714 25 9,762 Stock-Based Compensation — — 285 496 781 Realized Hedge Gain 715 — — — 715 Transaction-Related Costs 320 — — — 320 Legacy Matter Costs — — — 368 368 Adjusted EBITDA $ 8,442 $ 579 $ (2,139 ) $ (5,208 ) $ 1,674 Parent Interest Income $ 4,570 Three Months Ended December 31, 2024 Adjusted EBITDA Energy Operations Industrial Operations Manufacturing Operations Intellectual Property Operations Parent Costs Consolidated Total (In thousands) (Unaudited) GAAP Operating (Loss) Income $ 2,996 $ 927 $ (24 ) $ (7,743 ) $ (11,965 ) $ (15,809 ) Depreciation, Depletion & Amortization 4,375 677 2,061 4,713 12 11,838 Stock-Based Compensation — — — 281 1,984 2,265 Realized Hedge Gain 998 — — — — 998 Transaction-Related Costs 11 — 359 — 5,142 5,512 Legacy Matter Costs — — — — 53 53 Adjusted EBITDA $ 8,380 $ 1,604 $ 2,396 $ (2,749 ) $ (4,774 ) $ 4,857 Parent Interest Income $ 2,793 Years Ended December 31, 2024 Adjusted EBITDA Energy Operations Industrial Operations Manufacturing Operations Intellectual Property Operations Parent Costs Consolidated Total (In thousands) (Unaudited) GAAP Operating (Loss) Income $ 9,465 $ 1,804 $ (24 ) $ (13,852 ) $ (30,319 ) $ (32,926 ) Depreciation, Depletion & Amortization 12,595 2,725 2,061 16,104 89 33,574 Stock-Based Compensation — — — 1,329 3,465 4,794 Realized Hedge Gain 2,626 — — — — 2,626 Transaction-Related Costs 553 — 359 — 5,142 6,054 Legacy Matter Costs — — — — 2,830 2,830 Adjusted EBITDA $ 25,239 $ 4,529 $ 2,396 $ 3,581 $ (18,793 ) $ 16,952 Parent Interest Income $ 17,470 __________________________________ 1 Adjusted Net Income (Loss), Adjusted Diluted Earnings Per Share (EPS), Total Company Adjusted EBITDA and Operated Segment Adjusted EBITDA are non-GAAP financial measures. See below for reconciliations of Adjusted Net Income (Loss), Adjusted Diluted EPS, and Total Company Adjusted EBITDA to their most directly comparable GAAP financial measure. For the definition of these measures and a reconciliation of the components of Operated Segment Adjusted EBITDA to their most directly comparable GAAP financial measures, see the accompanying supplemental information section. 2 Energy Operations Adjusted EBITDA, Industrial Operations Adjusted EBITDA, Manufacturing Operations Adjusted EBITDA, Intellectual Property Operations Adjusted EBITDA, and Parent Costs are non-GAAP financial measures. For the definitions of these measures and reconciliations of these measures to the most directly comparable GAAP financial measures, see the accompanying supplemental information section. View source version on CONTACT: Investor Contact: Gagnier Communications [email protected] KEYWORD: UNITED STATES NORTH AMERICA NEW YORK INDUSTRY KEYWORD: TECHNOLOGY TRUCKING FINANCE TRANSPORT OTHER TECHNOLOGY OIL/GAS PROFESSIONAL SERVICES ENERGY HARDWARE SOURCE: Acacia Research Corporation Copyright Business Wire 2025. PUB: 03/13/2025 07:30 AM/DISC: 03/13/2025 07:30 AM
