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SEGMENT REPORTING
3 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
SEGMENT REPORTING SEGMENT REPORTING
As of March 31, 2022, the Company operates and reports its results in two reportable segments: Intellectual Property Operations and Industrial Operations. Historically, the Company has managed and reported under a single reporting segment. In October 2021, the Company acquired Printronix, which comprises all of the operations of the Company’s Industrial Operations reportable segment and led to the identification of the additional reporting segment. The Company reports segment information based on the management approach and organizes its businesses based on products and services. The management approach designates the internal reporting used by the chief operating decision maker for decision making and performance assessment as the basis for determining the Company’s reportable segments. The performance measure of the Company’s reportable segments is primarily income or (loss) from operations. Income or (loss) from operations for each segment includes all revenues, cost of revenues, gross profit and other operating expenses directly attributable to the segment. Other than Acacia's equity securities investments, specific asset information is not included in managements review at this time.
The Company’s Intellectual Property Operations segment invests in IP and related absolute return assets, and engages in the licensing and enforcement of patented technologies. Through our Patent Licensing, Enforcement and Technologies Business we are a principal in the licensing and enforcement of patent portfolios, with our operating subsidiaries obtaining the rights in the patent portfolio or purchasing the patent portfolio outright. We assume all responsibility for advancing operational expenses while pursuing a patent licensing and enforcement program, and when applicable, share net licensing revenue with our patent partners as that program matures, on a prearranged and negotiated basis. We may also provide upfront capital to patent owners as an advance against future licensing revenue.
Currently, on a consolidated basis, our operating subsidiaries own or control the rights to multiple patent portfolios, which include U.S. patents and certain foreign counterparts, covering technologies used in a variety of industries. We generate revenues and related cash flows from the granting of IP rights for the use of patented technologies that our operating subsidiaries control or own.
The Company’s Industrial Operations segment generates operating income by designing and manufacturing printers and consumable products for various industrial printing applications. Printers consist of hardware and embedded software and may be sold with maintenance service agreements. Consumable products include inked ribbons which are used in Printronix’s printers. Printronix’s products are primarily sold through channel partners, such as dealers and distributors, to end-users. The Industrial Operations reporting segment did not exist prior to the acquisition of Printronix in October 2021. Therefore, for the three months ended March 31, 2021, the consolidated results represented the results of the Company’s single reporting segment.
The Company's segment information is as follows:
Three Months Ended March 31, 2022
Intellectual Property OperationsIndustrial OperationsTotal
(In thousands)
Revenues:
License fees$2,615 $— $2,615 
Printers and parts— 4,254 4,254 
Consumable products— 5,384 5,384 
Services— 1,254 1,254 
Total revenues2,615 10,892 13,507 
Cost of revenues:
Inventor royalties170 — 170 
Contingent legal fees549 — 549 
Litigation and licensing expenses1,244 — 1,244 
Amortization of patents2,601 — 2,601 
Cost of sales— 4,192 4,192 
Total cost of revenues4,564 4,192 8,756 
Segment gross (loss) profit(1,949)6,700 4,751 
Other operating expenses:
Engineering and development expenses— 190 190 
Sales and marketing expenses— 2,016 2,016 
Amortization of intangible assets— 433 433 
General and administrative expenses1,716 2,422 4,138 
Total other operating expenses1,716 5,061 6,777 
Segment operating (loss) income$(3,665)$1,639 (2,026)
Parent general and administrative expenses6,482 
Operating loss(8,508)
Total other expense(79,636)
Loss before income taxes$(88,144)
For comparability purposes, Acacia's three months ended March 31, 2021 general and administrative expenses, as reported in the consolidated statement of operations, were $6.2 million and included parent general and administrative expenses of $5.2 million, which derives a comparative Intellectual Property Operations general and administrative expense amount of approximately $1.0 million.
March 31, 2022December 31, 2021
(In thousands)
Equity securities investments:
Equity securities at fair value$246,484 $361,778 
Equity securities without readily determinable fair value5,816 5,816 
Investment securities - equity method investments30,934 30,934 
Total parent equity securities investments283,234 398,528 
Other parent assets152,283 172,726 
Segment total assets:
Intellectual property operations171,647 $175,286 
Industrial operations54,276 52,316 
Total assets$661,440 $798,856 
The Company's revenues and long-lived tangible assets by geographic area are presented below. Acacia's revenues are attributed to licensees domiciled in foreign jurisdictions. Printronix's net sales to external customers are attributed to geographic areas based upon the final destination of products shipped. The Company, primarily through its Printronix subsidiary, has identified three global regions for marketing its products and services: Americas, Europe, Middle East and Africa, and Asia-Pacific. Assets are summarized based on the location of held assets.
Three Months Ended March 31, 2022
Intellectual Property OperationsIndustrial OperationsTotal
(In thousands)
Revenues by geographic area:
United States$2,097 $3,849 $5,946 
Canada and Latin America372 378 
Total Americas2,103 4,221 6,324 
Europe, Middle East and Africa500 2,508 3,008 
China— 1,133 1,133 
India— 1,749 1,749 
Asia-Pacific, excluding China and India12 1,281 1,293 
Total Asia-Pacific12 4,163 4,175 
Total revenues$2,615 $10,892 $13,507 
March 31, 2022
Intellectual Property OperationsIndustrial OperationsTotal
(In thousands)
Long-lived tangible assets by geographic area:
United States$198 $423 $621 
Malaysia— 2,983 2,983 
Other foreign countries— 281 281 
Total$198 $3,687 $3,885 
December 31, 2021
Intellectual Property OperationsIndustrial OperationsTotal
(In thousands)
Long-lived tangible assets by geographic area:
United States$204 $473 $677 
Malaysia— 3,203 3,203 
Other foreign countries— 303 303 
Total$204 $3,979 $4,183