Acacia(US:ACTG)2022-08-11 22:24Financial Data and Key Metrics Changes - GAAP book value at June 30, 2022, was $268.2 million or $6.60 per basic share, down from $345.5 million or $7.42 per basic share at March 31, and $430.5 million or $8.80 per share as of December 31, 2021 [9] - Pro forma book value assuming full exercise of all issued derivatives was $911.3 million or $5.87 per share, down from $952.2 million or $5.91 per share as of March 31, 2022, and $1.1 billion or $6.51 per share as of December 31, 2021 [10] - Revenues for Q2 2022 were $16.7 million compared to $17.4 million a year ago [11] - GAAP net loss was $61.5 million or $1.44 per diluted share compared to net income of $19.7 million or $0.23 per diluted share in Q2 last year [13] Business Line Data and Key Metrics Changes - Printronix contributed $8.7 million in revenue in the quarter, with no contribution in the comparable period last year [11] - Intellectual Property Business generated $8.1 million of revenue related to patent assertion, down from $17.4 million in the second quarter last year [11] - Operating loss was $5.7 million in the quarter compared to operating income of $1.6 million a year ago, with Printronix contributing $1.1 million in operating loss [12] Market Data and Key Metrics Changes - Cash and securities at fair value totaled $390.3 million at June 30, down from $670.7 million at December 31, 2021 [15] - Debt was $115.8 million in senior secured notes issued to Starboard Value, down from $181.2 million at December 31 [15] Company Strategy and Development Direction - The company is actively expanding its M&A program and pipeline of potential opportunities, focusing on transactions that can unlock value [7] - The partnership with Starboard has been strategic, and the company is working on simplifying the ownership structure to better position for future development [5][6] - The company aims to direct its investment strategy towards opportunities with embedded value realization potential [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the decline in share prices of security holdings as a primary reason for the decrease in book value year-to-date [11] - The company is optimistic about the potential for significant transactions in the near future, particularly in light of reduced valuations in the market [23] - Management emphasized the importance of the Starboard relationship and the potential for future developments [20] Other Important Information - The company repurchased 6.1 million shares at an average price of $4.64 per share, completing a $40 million buyback program [8] - The company has generated $408 million of cash proceeds from the monetization of the Life Sciences portfolio [7] Q&A Session Summary Question: Update on Starboard relationship and capital access - Management clarified that the Starboard relationship remains strategic and that they are working on simplifying the capital structure while maintaining access to significant capital [19][21] Question: Opportunities in WiFi patent portfolio and transaction speed - Management noted that they are looking at larger portfolios and believe there are attractive opportunities available, with a focus on completing significant transactions soon [22][23] Question: Balance between public and private market opportunities - Management indicated that they are competitive in both markets, with a preference for public situations where they are not in auction scenarios [26] Question: Buyback plans and restructuring of Starboard financing - Management stated that there are currently no plans for additional buybacks and emphasized the complexity of restructuring the Starboard financing [27][30] Question: Pending litigation and potential licensing strategies - Management confirmed ongoing litigations in various jurisdictions and discussed the potential for future licensing agreements [34][36]