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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Accelrys, Inc. (MM) | NASDAQ:ACCL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 12.51 | 0 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
33-0557266
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
10188 Telesis Court, Suite 100, San Diego, California
|
|
92121-4779
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
o
|
|
Accelerated filer
|
x
|
Non-accelerated filer
|
o
|
(Do not check if smaller reporting company)
|
Smaller reporting company
|
o
|
|
||
|
|
|
Item 1.
|
||
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||
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Item 2.
|
||
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Item 3.
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||
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Item 4.
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||
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PART II — OTHER INFORMATION
|
|
|
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|
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Item 1.
|
||
|
|
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Item 1A
|
||
|
|
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Item 2.
|
||
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Item 6.
|
||
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Signature
|
Item 1.
|
Condensed Consolidated Financial Statements
|
|
September 30,
2012 |
|
December 31, 2011
|
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
92,653
|
|
|
$
|
69,610
|
|
Marketable securities
|
48,292
|
|
|
52,976
|
|
||
Trade receivables, net of allowance for doubtful accounts of $143 as of September 30, 2012 and December 31, 2011
|
16,694
|
|
|
40,706
|
|
||
Promissory note receivable
|
930
|
|
|
921
|
|
||
Prepaid expenses, deferred tax assets and other current assets
|
10,251
|
|
|
11,090
|
|
||
Total current assets
|
168,820
|
|
|
175,303
|
|
||
Marketable securities, net of current portion
|
15,670
|
|
|
17,224
|
|
||
Restricted cash
|
3,499
|
|
|
3,814
|
|
||
Property and equipment, net
|
8,735
|
|
|
12,108
|
|
||
Goodwill
|
104,711
|
|
|
100,429
|
|
||
Purchased intangible assets, net
|
47,095
|
|
|
60,361
|
|
||
Promissory notes receivable, net of current portion
|
33,906
|
|
|
33,799
|
|
||
Other assets
|
4,596
|
|
|
4,848
|
|
||
Total assets
|
$
|
387,032
|
|
|
$
|
407,886
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,176
|
|
|
$
|
3,527
|
|
Accrued liabilities
|
10,391
|
|
|
19,361
|
|
||
Accrued compensation and benefits
|
10,881
|
|
|
12,372
|
|
||
Current portion of accrued restructuring charges
|
487
|
|
|
1,322
|
|
||
Current portion of deferred gain on sale of intellectual property
|
930
|
|
|
921
|
|
||
Current portion of deferred revenue
|
77,026
|
|
|
81,151
|
|
||
Total current liabilities
|
100,891
|
|
|
118,654
|
|
||
Deferred revenue, net of current portion
|
2,760
|
|
|
4,861
|
|
||
Accrued income tax
|
8,892
|
|
|
8,095
|
|
||
Deferred gain on sale of intellectual property, net of current portion
|
25,044
|
|
|
25,053
|
|
||
Accrued restructuring charges, net of current portion
|
373
|
|
|
388
|
|
||
Lease-related liabilities, net of current portion
|
1,465
|
|
|
2,151
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $.0001 par value; 2,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.0001 par value; 100,000 shares authorized; 55,711 and 57,588 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively
|
6
|
|
|
6
|
|
||
Additional paid-in capital
|
475,517
|
|
|
465,701
|
|
||
Lease guarantee
|
(226
|
)
|
|
(273
|
)
|
||
Treasury stock; zero and 1,875 shares at September 30, 2012 and December 31, 2011, respectively
|
—
|
|
|
(18,340
|
)
|
||
Accumulated deficit
|
(228,005
|
)
|
|
(198,208
|
)
|
||
Accumulated other comprehensive income (loss)
|
315
|
|
|
(202
|
)
|
||
Total stockholders’ equity
|
247,607
|
|
|
248,684
|
|
||
Total liabilities and stockholders’ equity
|
$
|
387,032
|
|
|
$
|
407,886
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
License and subscription revenue
|
$
|
23,195
|
|
|
$
|
20,127
|
|
|
$
|
66,291
|
|
|
$
|
58,194
|
|
Maintenance on perpetual licenses
|
9,600
|
|
|
9,166
|
|
|
28,219
|
|
|
25,561
|
|
||||
Content
|
2,919
|
|
|
4,248
|
|
|
9,494
|
|
|
12,568
|
|
||||
Professional services and other
|
4,785
|
|
|
2,710
|
|
|
14,328
|
|
|
8,254
|
|
||||
Total revenue
|
40,499
|
|
|
36,251
|
|
|
118,332
|
|
|
104,577
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
9,839
|
|
|
8,349
|
|
|
29,734
|
|
|
26,564
|
|
||||
Amortization of completed technology
|
2,108
|
|
|
2,184
|
|
|
6,263
|
|
|
6,258
|
|
||||
Total cost of revenue
|
11,947
|
|
|
10,533
|
|
|
35,997
|
|
|
32,822
|
|
||||
Gross profit
|
28,552
|
|
|
25,718
|
|
|
82,335
|
|
|
71,755
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Product development
|
9,658
|
|
|
8,261
|
|
|
28,957
|
|
|
25,198
|
|
||||
Sales and marketing
|
12,765
|
|
|
11,516
|
|
|
40,443
|
|
|
37,344
|
|
||||
General and administrative
|
4,358
|
|
|
4,079
|
|
|
13,251
|
|
|
12,420
|
|
||||
Business consolidation, transaction and restructuring costs
|
606
|
|
|
2,205
|
|
|
1,215
|
|
|
6,225
|
|
||||
Purchased intangible asset amortization
|
2,107
|
|
|
2,555
|
|
|
6,320
|
|
|
7,343
|
|
||||
Total operating expenses
|
29,494
|
|
|
28,616
|
|
|
90,186
|
|
|
88,530
|
|
||||
Operating loss
|
(942
|
)
|
|
(2,898
|
)
|
|
(7,851
|
)
|
|
(16,775
|
)
|
||||
Royalty and other income, net
|
1,863
|
|
|
882
|
|
|
7,107
|
|
|
4,999
|
|
||||
Income (loss) before income taxes
|
921
|
|
|
(2,016
|
)
|
|
(744
|
)
|
|
(11,776
|
)
|
||||
Income tax expense
|
320
|
|
|
190
|
|
|
1,429
|
|
|
664
|
|
||||
Net income (loss)
|
$
|
601
|
|
|
$
|
(2,206
|
)
|
|
$
|
(2,173
|
)
|
|
$
|
(12,440
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share amounts:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.01
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.22
|
)
|
Diluted
|
$
|
0.01
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.22
|
)
|
Weighted average shares used to compute net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
55,690
|
|
|
55,373
|
|
|
55,767
|
|
|
55,420
|
|
||||
Diluted
|
56,396
|
|
|
55,373
|
|
|
55,767
|
|
|
55,420
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net income (loss)
|
$
|
601
|
|
|
$
|
(2,206
|
)
|
|
$
|
(2,173
|
)
|
|
$
|
(12,440
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
295
|
|
|
(1,159
|
)
|
|
502
|
|
|
(1,879
|
)
|
||||
Unrealized gain (loss) on marketable securities, net of tax
|
19
|
|
|
(98
|
)
|
|
15
|
|
|
67
|
|
||||
Total other comprehensive income (loss)
|
314
|
|
|
(1,257
|
)
|
|
517
|
|
|
(1,812
|
)
|
||||
Comprehensive income (loss)
|
$
|
915
|
|
|
$
|
(3,463
|
)
|
|
$
|
(1,656
|
)
|
|
$
|
(14,252
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2012
|
|
2011
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(2,173
|
)
|
|
$
|
(12,440
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
2,453
|
|
|
2,877
|
|
||
Amortization
|
14,162
|
|
|
15,679
|
|
||
Gain on sale of real estate
|
(2,744
|
)
|
|
—
|
|
||
Share-based compensation
|
5,610
|
|
|
4,148
|
|
||
Prepaid contingent compensation amortization
|
730
|
|
|
637
|
|
||
Amortization of premium on marketable debt securities
|
1,011
|
|
|
1,325
|
|
||
Amortization of discount on promissory notes receivable
|
(701
|
)
|
|
(117
|
)
|
||
Deferred income taxes
|
718
|
|
|
270
|
|
||
Other
|
(451
|
)
|
|
(189
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Trade receivables
|
24,145
|
|
|
18,025
|
|
||
Prepaid expense and other current assets
|
(67
|
)
|
|
525
|
|
||
Other assets
|
(61
|
)
|
|
(174
|
)
|
||
Accounts payable
|
(2,359
|
)
|
|
(1,473
|
)
|
||
Accrued liabilities, compensation and benefits
|
(10,680
|
)
|
|
(10,353
|
)
|
||
Deferred revenue
|
(6,804
|
)
|
|
7,511
|
|
||
Net cash provided by operating activities
|
22,789
|
|
|
26,251
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Cash paid for acquisitions, net of cash acquired
|
(4,500
|
)
|
|
(9,863
|
)
|
||
Acquisition-related prepaid contingent compensation
|
—
|
|
|
(2,000
|
)
|
||
Purchases of property and equipment, net
|
(3,289
|
)
|
|
(2,974
|
)
|
||
Net proceeds from sale of real estate
|
6,800
|
|
|
—
|
|
||
Purchases of marketable securities
|
(51,033
|
)
|
|
(94,289
|
)
|
||
Proceeds from maturities and sales of marketable securities
|
56,319
|
|
|
61,315
|
|
||
Proceeds from promissory notes receivable
|
585
|
|
|
—
|
|
||
Net decrease in restricted cash
|
329
|
|
|
414
|
|
||
Net cash provided by (used) in investing activities
|
5,211
|
|
|
(47,397
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Payment of contingent consideration liabilities
|
(250
|
)
|
|
—
|
|
||
Proceeds from issuance of common stock
|
5,153
|
|
|
2,048
|
|
||
Common stock tendered for payment of withholding taxes
|
(948
|
)
|
|
(893
|
)
|
||
Repurchases of common stock
|
(9,284
|
)
|
|
(7,000
|
)
|
||
Net cash used in financing activities
|
(5,329
|
)
|
|
(5,845
|
)
|
||
Effect of changes in exchange rates on cash and cash equivalents
|
372
|
|
|
50
|
|
||
Increase (decrease) in cash and cash equivalents
|
23,043
|
|
|
(26,941
|
)
|
||
Cash and cash equivalents at beginning of period
|
69,610
|
|
|
86,316
|
|
||
Cash and cash equivalents at end of period
|
$
|
92,653
|
|
|
$
|
59,375
|
|
•
|
software licenses,
|
•
|
post-contract customer support and maintenance services on licensed software (collectively referred to as “PCS”),
|
•
|
content, and
|
•
|
professional services.
|
•
|
a fully executed written contract or purchase order has been obtained from the customer (i.e., persuasive evidence of an arrangement exists),
|
•
|
the contractual price of the product or services has been defined and agreed to in the contract or purchase order (i.e., price is fixed or determinable),
|
•
|
delivery of the product or service has occurred and no material uncertainties regarding customer acceptance of the delivered product or service exist, and
|
•
|
collection of the purchase price from the customer is considered probable.
|
|
(in thousands)
|
||
Fair Value of Consideration Transferred
|
$
|
35,000
|
|
Less: Recognized amounts of identifiable assets acquired and liabilities assumed:
|
|
||
Cash and cash equivalents
|
299
|
|
|
Accounts receivable
|
4,336
|
|
|
Other assets
|
23
|
|
|
Property, plant and equipment
|
14
|
|
|
Intangible assets
|
10,880
|
|
|
Other current liabilities
|
(1,087
|
)
|
|
Deferred revenue
|
(3,515
|
)
|
|
Goodwill
|
$
|
24,050
|
|
|
(in thousands)
|
||
Fair Value of Consideration Transferred
|
$
|
10,959
|
|
Less: Recognized amounts of identifiable assets acquired and liabilities assumed:
|
|
||
Cash and cash equivalents
|
761
|
|
|
Accounts receivable
|
641
|
|
|
Other current assets
|
240
|
|
|
Property, plant and equipment
|
51
|
|
|
Intangible assets
|
4,410
|
|
|
Other current liabilities
|
(698
|
)
|
|
Deferred tax liabilities
|
(1,582
|
)
|
|
Deferred revenue
|
(353
|
)
|
|
Goodwill
|
$
|
7,489
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
601
|
|
|
(2,206
|
)
|
|
(2,173
|
)
|
|
(12,440
|
)
|
||||
Denominator for basic and diluted net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding for basic
|
55,690
|
|
|
55,373
|
|
|
55,767
|
|
|
55,420
|
|
||||
Dilutive potential common stock outstanding:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
492
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Restricted stock
|
214
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average common shares outstanding for diluted
|
56,396
|
|
|
55,373
|
|
|
55,767
|
|
|
55,420
|
|
||||
Basic net income (loss) per share
|
$
|
0.01
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.22
|
)
|
Diluted net income (loss) per share
|
$
|
0.01
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.22
|
)
|
|
Number of
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value
|
|
Weighted
Average
Remaining
Contractual
Life
|
||||||
|
(In thousands, except per share amounts)
|
||||||||||||
Outstanding at December 31, 2011
|
6,021
|
|
|
$
|
7.64
|
|
|
|
|
|
|||
Granted
|
1,446
|
|
|
8.04
|
|
|
|
|
|
||||
Exercised
|
(769
|
)
|
|
5.96
|
|
|
|
|
|
||||
Expired/Forfeited
|
(894
|
)
|
|
13.34
|
|
|
|
|
|
||||
Outstanding at September 30, 2012
|
5,804
|
|
|
$
|
7.08
|
|
|
$
|
10,461
|
|
|
7.28
|
|
Exercisable at September 30, 2012
|
2,666
|
|
|
$
|
6.84
|
|
|
$
|
6,155
|
|
|
5.39
|
|
|
Number of
Shares
|
|
Weighted
Average
Grant Date
Fair Value Per Share
|
|||
|
(In thousands, except per share amounts)
|
|||||
Unvested at December 31, 2011
|
1,432
|
|
|
$
|
6.82
|
|
Granted
|
662
|
|
|
8.01
|
|
|
Vested
|
(398
|
)
|
|
6.55
|
|
|
Forfeited
|
(150
|
)
|
|
6.98
|
|
|
Unvested at September 30, 2012
|
1,546
|
|
|
$
|
7.32
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
(in thousands)
|
||||||||||||||
Cost of revenue
|
$
|
204
|
|
|
$
|
79
|
|
|
$
|
493
|
|
|
$
|
216
|
|
Product development
|
490
|
|
|
356
|
|
|
1,246
|
|
|
823
|
|
||||
Sales and marketing
|
438
|
|
|
425
|
|
|
1,692
|
|
|
1,310
|
|
||||
General and administrative
|
891
|
|
|
665
|
|
|
2,226
|
|
|
1,808
|
|
||||
Business consolidation, transaction and restructuring costs
|
(52
|
)
|
|
(61
|
)
|
|
(47
|
)
|
|
(9
|
)
|
||||
Total stock-based compensation expense
|
$
|
1,971
|
|
|
$
|
1,464
|
|
|
$
|
5,610
|
|
|
$
|
4,148
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
|
(In thousands)
|
||||||||||||||
September 30, 2012:
|
|
|
|
|
|
|
|
||||||||
Short-Term Marketable Securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
3,101
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
3,109
|
|
U.S. government and agency securities
|
5,402
|
|
|
2
|
|
|
—
|
|
|
5,404
|
|
||||
Commercial paper and certificates of deposit
|
11,046
|
|
|
3
|
|
|
—
|
|
|
11,049
|
|
||||
Corporate debt securities
|
28,708
|
|
|
24
|
|
|
(2
|
)
|
|
28,730
|
|
||||
Municipal debt securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Short-Term Marketable Securities
|
$
|
48,257
|
|
|
$
|
37
|
|
|
$
|
(2
|
)
|
|
$
|
48,292
|
|
Long-Term Marketable Securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
1,503
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
1,525
|
|
U.S. government and agency securities
|
679
|
|
|
6
|
|
|
—
|
|
|
685
|
|
||||
Corporate debt securities
|
13,410
|
|
|
50
|
|
|
—
|
|
|
13,460
|
|
||||
Total Long-Term Marketable Securities
|
$
|
15,592
|
|
|
$
|
78
|
|
|
$
|
—
|
|
|
$
|
15,670
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
|
(In thousands)
|
||||||||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
||||||||
Short-Term Marketable Securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
2,505
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
2,513
|
|
U.S. government and agency securities
|
9,516
|
|
|
10
|
|
|
—
|
|
|
9,526
|
|
||||
Commercial paper and certificates of deposit
|
3,449
|
|
|
—
|
|
|
—
|
|
|
3,449
|
|
||||
Corporate debt securities
|
33,780
|
|
|
35
|
|
|
(22
|
)
|
|
33,793
|
|
||||
Municipal debt securities
|
3,695
|
|
|
—
|
|
|
—
|
|
|
3,695
|
|
||||
Total Short-Term Marketable Securities
|
$
|
52,945
|
|
|
$
|
53
|
|
|
$
|
(22
|
)
|
|
$
|
52,976
|
|
Long-Term Marketable Securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
3,307
|
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
3,356
|
|
U.S. government and agency securities
|
1,759
|
|
|
25
|
|
|
—
|
|
|
1,784
|
|
||||
Corporate debt securities
|
12,100
|
|
|
13
|
|
|
(29
|
)
|
|
12,084
|
|
||||
Total Long-Term Marketable Securities
|
$
|
17,166
|
|
|
$
|
87
|
|
|
$
|
(29
|
)
|
|
$
|
17,224
|
|
|
Carrying
Value at September 30, 2012 |
|
Quoted
Market
Prices for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
(In thousands)
|
||||||||||||||
September 30, 2012:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents (1)
|
$
|
42,242
|
|
|
$
|
42,223
|
|
|
$
|
19
|
|
|
$
|
—
|
|
Short-Term Marketable Securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
3,109
|
|
|
3,109
|
|
|
—
|
|
|
—
|
|
||||
U.S. government and agency securities
|
5,404
|
|
|
—
|
|
|
5,404
|
|
|
—
|
|
||||
Commercial paper and certificates of deposit
|
11,049
|
|
|
—
|
|
|
11,049
|
|
|
—
|
|
||||
Corporate debt securities
|
28,730
|
|
|
—
|
|
|
28,730
|
|
|
—
|
|
||||
Municipal debt securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Long-Term Marketable Securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
1,525
|
|
|
1,525
|
|
|
—
|
|
|
—
|
|
||||
U.S. government and agency securities
|
685
|
|
|
—
|
|
|
685
|
|
|
—
|
|
||||
Corporate debt securities
|
13,460
|
|
|
—
|
|
|
13,460
|
|
|
—
|
|
||||
Foreign currency forward contracts not designated as hedges
|
54
|
|
|
—
|
|
|
54
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
106,258
|
|
|
$
|
46,857
|
|
|
$
|
59,401
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Acquisition-related contingent consideration
|
$
|
180
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
180
|
|
Total liabilities at fair value
|
$
|
180
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
180
|
|
(1)
|
Cash equivalents are included in the Cash and cash equivalents line in the consolidated balance sheet
|
|
Carrying
Value at December 31, 2011 |
|
Quoted
Market
Prices for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
(In thousands)
|
||||||||||||||
December 31, 2011:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents (1)
|
$
|
30,541
|
|
|
$
|
27,440
|
|
|
$
|
3,101
|
|
|
$
|
—
|
|
Short-Term Marketable Securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
2,513
|
|
|
2,513
|
|
|
—
|
|
|
—
|
|
||||
U.S. government and agency securities
|
9,526
|
|
|
—
|
|
|
9,526
|
|
|
—
|
|
||||
Commercial paper and certificates of deposit
|
3,449
|
|
|
—
|
|
|
3,449
|
|
|
—
|
|
||||
Corporate debt securities
|
33,793
|
|
|
—
|
|
|
33,793
|
|
|
—
|
|
||||
Municipal debt securities
|
3,695
|
|
|
—
|
|
|
3,695
|
|
|
—
|
|
||||
Long-Term Marketable Securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
3,356
|
|
|
3,356
|
|
|
—
|
|
|
—
|
|
||||
U.S. government and agency securities
|
1,784
|
|
|
—
|
|
|
1,784
|
|
|
—
|
|
||||
Corporate debt securities
|
12,084
|
|
|
—
|
|
|
12,084
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
100,741
|
|
|
$
|
33,309
|
|
|
$
|
67,432
|
|
|
—
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Acquisition-related contingent consideration
|
$
|
413
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
413
|
|
Foreign currency forward contracts not designated as hedges
|
117
|
|
|
—
|
|
|
117
|
|
|
—
|
|
||||
Total liabilities at fair value
|
$
|
530
|
|
|
$
|
—
|
|
|
$
|
117
|
|
|
$
|
413
|
|
(1)
|
Cash equivalents are included in the Cash and cash equivalents line in the consolidated balance sheet
|
Balance at December 31, 2011
|
$
|
413
|
|
Expenses recorded due to changes in fair value
|
17
|
|
|
Payments
|
(250
|
)
|
|
Balance at September 30, 2012
|
$
|
180
|
|
|
September 30, 2012
|
|
December 31, 2011
|
||||||||||||||||
|
Weighted
Average
Life
(yrs)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Weighted
Average
Life
(yrs)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
|
|
|
(In thousands)
|
|
|
|
(In thousands)
|
||||||||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Purchased technology
|
8
|
|
$
|
54,341
|
|
|
$
|
29,597
|
|
|
8
|
|
$
|
53,509
|
|
|
$
|
22,160
|
|
Purchased customer relationships
|
7
|
|
26,000
|
|
|
12,182
|
|
|
7
|
|
25,906
|
|
|
8,158
|
|
||||
Purchased backlog
|
3
|
|
7,740
|
|
|
5,854
|
|
|
3
|
|
7,740
|
|
|
4,390
|
|
||||
Purchased contract base
|
5
|
|
50
|
|
|
50
|
|
|
5
|
|
50
|
|
|
50
|
|
||||
Purchased intellectual property
|
5
|
|
1,998
|
|
|
1,756
|
|
|
5
|
|
1,998
|
|
|
1,448
|
|
||||
Purchased trademark/tradename
|
5
|
|
6,737
|
|
|
2,832
|
|
|
5
|
|
6,712
|
|
|
1,848
|
|
||||
|
|
|
$
|
96,866
|
|
|
$
|
52,271
|
|
|
|
|
$
|
95,915
|
|
|
$
|
38,054
|
|
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Purchased trademark/tradename
|
|
|
$
|
2,500
|
|
|
|
|
|
|
$
|
2,500
|
|
|
|
2012 (remaining three months)
|
$
|
4,755
|
|
2013
|
14,860
|
|
|
2014
|
10,365
|
|
|
2015
|
6,157
|
|
|
2016
|
3,452
|
|
|
Thereafter
|
5,006
|
|
|
Total
|
$
|
44,595
|
|
Balance at December 31, 2011
|
$
|
100,429
|
|
|
Goodwill acquired in the HEOS Acquisition
|
3,750
|
|
|
|
Goodwill measurement period adjustments
|
220
|
|
(1)
|
|
Effect of foreign exchange
|
312
|
|
|
|
Balance at September 30, 2012
|
$
|
104,711
|
|
|
|
Severance and
Related Costs
|
|
Lease
Obligation Exit
and Facility
Closure Costs
|
|
Total
|
||||||
|
(In thousands)
|
||||||||||
Balance at March 31, 2011
|
$
|
2,866
|
|
|
$
|
1,241
|
|
|
$
|
4,107
|
|
Additional severance and lease abandonment charges
|
1,765
|
|
|
187
|
|
|
1,952
|
|
|||
Adjustments to liability
|
(36
|
)
|
|
(155
|
)
|
|
(191
|
)
|
|||
Cash payments
|
(3,563
|
)
|
|
(600
|
)
|
|
(4,163
|
)
|
|||
Effect of foreign exchange
|
5
|
|
|
—
|
|
|
5
|
|
|||
Balance at December 31, 2011
|
$
|
1,037
|
|
|
$
|
673
|
|
|
$
|
1,710
|
|
Additional severance and lease abandonment charges
|
22
|
|
|
—
|
|
|
22
|
|
|||
Adjustments to liability
|
—
|
|
|
117
|
|
|
117
|
|
|||
Cash payments
|
(836
|
)
|
|
(176
|
)
|
|
(1,012
|
)
|
|||
Effect of foreign exchange
|
(2
|
)
|
|
25
|
|
|
23
|
|
|||
Balance at September 30, 2012
|
$
|
221
|
|
|
$
|
639
|
|
|
$
|
860
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30
2012 |
|
September 30,
2011 |
|
September 30
2012 |
|
September 30,
2011 |
||||||||
|
(In thousands)
|
||||||||||||||
Royalty income, net
|
$
|
1,199
|
|
|
$
|
1,183
|
|
|
$
|
3,962
|
|
|
$
|
4,638
|
|
Net interest income
|
601
|
|
|
237
|
|
|
1,767
|
|
|
908
|
|
||||
Amortization of discount on promissory notes receivable
|
274
|
|
|
38
|
|
|
701
|
|
|
114
|
|
||||
Foreign currency transaction gain (loss)
|
157
|
|
|
(128
|
)
|
|
(449
|
)
|
|
900
|
|
||||
Purchased intangible assets amortization
|
(424
|
)
|
|
(591
|
)
|
|
(1,272
|
)
|
|
(1,773
|
)
|
||||
Net gain on sale of real estate
|
—
|
|
|
—
|
|
|
2,744
|
|
|
—
|
|
||||
Net income (loss) from rental activities
|
—
|
|
|
158
|
|
|
(338
|
)
|
|
158
|
|
||||
Other
|
56
|
|
|
(15
|
)
|
|
(8
|
)
|
|
54
|
|
||||
Total royalty and other income, net
|
$
|
1,863
|
|
|
$
|
882
|
|
|
$
|
7,107
|
|
|
$
|
4,999
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three Months Ended September 30,
|
||||
|
2012
|
|
2011
|
||
Revenue:
|
|
|
|
||
License and subscription revenue
|
57
|
%
|
|
56
|
%
|
Maintenance on perpetual licenses
|
24
|
%
|
|
25
|
%
|
Content
|
7
|
%
|
|
12
|
%
|
Professional services and other
|
12
|
%
|
|
7
|
%
|
Total revenue
|
100
|
%
|
|
100
|
%
|
Cost of revenue:
|
|
|
|
||
Cost of revenue
|
24
|
%
|
|
23
|
%
|
Amortization of completed technology
|
5
|
%
|
|
6
|
%
|
Total cost of revenue
|
29
|
%
|
|
29
|
%
|
Gross profit
|
71
|
%
|
|
71
|
%
|
Operating expenses:
|
|
|
|
||
Product development
|
24
|
%
|
|
23
|
%
|
Sales and marketing
|
32
|
%
|
|
32
|
%
|
General and administrative
|
11
|
%
|
|
11
|
%
|
Business consolidation, transaction and restructuring costs
|
1
|
%
|
|
6
|
%
|
Purchased intangible asset amortization
|
5
|
%
|
|
7
|
%
|
Total operating expenses
|
73
|
%
|
|
79
|
%
|
Operating loss
|
(2
|
)%
|
|
(8
|
)%
|
Royalty and other income, net
|
5
|
%
|
|
2
|
%
|
Income (loss) before income taxes
|
2
|
%
|
|
(6
|
)%
|
Income tax expense
|
1
|
%
|
|
1
|
%
|
Net income (loss)
|
1
|
%
|
|
(6
|
)%
|
|
Nine Months Ended September 30,
|
||||
|
2012
|
|
2011
|
||
Revenue:
|
|
|
|
||
License and subscription revenue
|
56
|
%
|
|
56
|
%
|
Maintenance on perpetual licenses
|
24
|
%
|
|
24
|
%
|
Content
|
8
|
%
|
|
12
|
%
|
Professional services and other
|
12
|
%
|
|
8
|
%
|
Total revenue
|
100
|
%
|
|
100
|
%
|
Cost of revenue:
|
|
|
|
||
Cost of revenue
|
25
|
%
|
|
25
|
%
|
Amortization of completed technology
|
5
|
%
|
|
6
|
%
|
Total cost of revenue
|
30
|
%
|
|
31
|
%
|
Gross profit
|
70
|
%
|
|
69
|
%
|
Operating expenses:
|
|
|
|
||
Product development
|
24
|
%
|
|
24
|
%
|
Sales and marketing
|
34
|
%
|
|
36
|
%
|
General and administrative
|
11
|
%
|
|
12
|
%
|
Business consolidation, transaction and restructuring costs
|
1
|
%
|
|
6
|
%
|
Purchased intangible asset amortization
|
5
|
%
|
|
7
|
%
|
Total operating expenses
|
76
|
%
|
|
85
|
%
|
Operating loss
|
(7
|
)%
|
|
(16
|
)%
|
Royalty and other income, net
|
6
|
%
|
|
5
|
%
|
Loss before income taxes
|
(1
|
)%
|
|
(11
|
)%
|
Income tax expense
|
1
|
%
|
|
1
|
%
|
Net loss
|
(2
|
)%
|
|
(12
|
)%
|
|
Nine Months Ended September 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(Unaudited)
|
||||||
Net cash provided by operating activities
|
$
|
22,789
|
|
|
$
|
26,251
|
|
Net cash provided by (used) in investing activities
|
5,211
|
|
|
(47,397
|
)
|
||
Net cash used in financing activities
|
(5,329
|
)
|
|
(5,845
|
)
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
|
Item 1A.
|
Risk Factors
|
|
Year Ended
|
|
Nine Months
Ended
|
|
Years Ended
|
||||||
Region
|
December 31,
2011 |
|
December 31,
2010 |
|
March 31,
2010 |
|
March 31,
2009 |
||||
U.S.
|
47
|
%
|
|
49
|
%
|
|
46
|
%
|
|
48
|
%
|
Europe
|
29
|
%
|
|
28
|
%
|
|
30
|
%
|
|
28
|
%
|
Asia-Pacific
|
24
|
%
|
|
23
|
%
|
|
24
|
%
|
|
24
|
%
|
•
|
unexpected changes in regulatory requirements;
|
•
|
longer payment cycles;
|
•
|
currency exchange rate fluctuations;
|
•
|
import and export license requirements;
|
•
|
tariffs and other barriers;
|
•
|
political unrest, terrorism and economic instability;
|
•
|
disruption of our operations due to local labor conditions;
|
•
|
limited intellectual property protection;
|
•
|
difficulties in collecting trade receivables;
|
•
|
difficulties in managing distributors or representatives;
|
•
|
difficulties in managing an organization spread over various countries;
|
•
|
difficulties in staffing foreign subsidiary or joint venture operations; and
|
•
|
potentially adverse tax consequences.
|
•
|
our inability to achieve the operating synergies anticipated in the acquisitions;
|
•
|
lost sales and customers as a result of our customers or customers of any acquired company deciding not to do business us;
|
•
|
complexities associated with managing the larger, more complex, combined business;
|
•
|
integrating personnel from acquired companies while maintaining focus on providing consistent, high quality products;
|
•
|
potential unknown liabilities and unforeseen expenses, delays or regulatory conditions associated with acquisitions; and
|
•
|
diversion of management attention from ongoing business concerns to integration matters.
|
•
|
changes in the demand for our products and services;
|
•
|
the introduction of competitive software;
|
•
|
our ability to license desirable technologies;
|
•
|
changes in the research and development budgets of our customers and potential customers;
|
•
|
our ability to successfully, cost effectively and timely develop, introduce and market new products, services and product enhancements; and
|
•
|
the acquisition of any new entities or businesses which may have a dilutive effect upon our earnings.
|
•
|
actual and anticipated fluctuations in our quarterly financial and operating results;
|
•
|
market conditions in the technology and software sectors;
|
•
|
issuance of new or changed securities analysts’ reports or recommendations;
|
•
|
developments or disputes concerning our intellectual property or other proprietary rights or other legal claims;
|
•
|
introduction of technological innovations or new commercial products by us or our competitors;
|
•
|
market acceptance of our products and services;
|
•
|
additions or departures of key personnel; and
|
•
|
the acquisition of new businesses or technologies
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
Total number of
shares purchased
|
|
Average price
paid per share
|
|
Total number of shares
purchased as part of
publicly announced
plans or programs
|
|
Approximate
dollar value of
shares that may
yet be purchased
under the plans
or programs
|
|||||
|
|
|
|
|
|
|
|
(In thousands)
|
|||||
7/1/2012- 7/31/2012
|
|
243,190
|
|
|
8.22
|
|
|
243,190
|
|
|
$
|
4,500
|
|
8/1/2012- 8/31/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
4,500
|
|
9/1/2012- 9/30/2012
|
|
151,735
|
|
|
8.24
|
|
|
151,735
|
|
|
$
|
3,250
|
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
|
Description
|
2.1
|
|
Agreement and Plan of Merger and Reorganization, dated April 5, 2010, by and among Accelrys, Inc., Alto Merger Sub, Inc. and Symyx Technologies, Inc. (incorporated by reference to Exhibit 2.1 of Accelrys, Inc.’s Current Report on Form 8-K filed on April 6, 2010).
|
|
|
|
2.2
|
|
Sale and Purchase Agreement Regarding All Shares in Contur Industry Holding AB and Warrants in Contur Software AB, dated 19 May 2011 (incorporated by reference to Exhibit 10.1 to Accelrys, Inc.’s Current Report on Form 8-K filed on May 24, 2011).
|
|
|
|
2.3
|
|
Asset Purchase Agreement, dated as of July 28, 2011, by and between Intermolecular, Inc. and Symyx Technologies, Inc. (incorporated by reference to Exhibit 10.1 to Accelrys, Inc.’s Current Report on Form 8-K filed on July 29, 2011).
|
|
|
|
2.4
|
|
Agreement and Plan of Merger, dated as of December 30, 2011, by and among Accelrys, Inc., Velocity Acquisition Corp., VelQuest Corporation and Laurel Services, LLC (incorporated by reference to Exhibit 2.1 to Accelrys, Inc.’s Current Report on Form 8-K filed on January 3, 2012).
|
|
|
|
3.1
|
|
Restated Certificate of Incorporation of Pharmacopeia, Inc., as amended (including a Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock) (incorporated by reference to Exhibit 3.2 to Accelrys, Inc.’s Annual Report on Form 10-K for the year ended March 31, 2005).
|
|
|
|
3.2
|
|
Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Accelrys, Inc. (incorporated by reference to Exhibit 3.4 to Accelrys, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007).
|
|
|
|
3.3
|
|
Certificate of Amendment of the Restated Certificate of Incorporation of Accelrys, Inc. (incorporated by reference to Exhibit 3.1 to Accelrys, Inc.’s Current Report on Form 8-K filed on July 2, 2010).
|
|
|
|
3.4
|
|
Amended and Restated Bylaws of Accelrys, Inc. (incorporated by reference to Exhibit 3.3 to Accelrys, Inc.’s Annual Report on Form 10-K for the year ended March 31, 2005).
|
|
|
|
4.1
|
|
Rights Agreement, dated as of September 6, 2002, between Pharmacopeia, Inc. and American Stock Transfer & Trust Company, as Rights Agent, which includes as Exhibit A thereto the Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock and Exhibit B thereto the Form of Right Certificate (incorporated by reference to Exhibit 4.1 to Accelrys, Inc.’s Current Report on Form 8-K filed on September 4, 2002).
|
|
|
|
4.2
|
|
First Amendment to Rights Agreement, dated as of April 5, 2010, by and between Accelrys, Inc. and American Stock Transfer & Trust Company, as Rights Agent (incorporated by reference to Exhibit 4.1 to Accelrys, Inc.'s.
|
|
|
|
31.1*
|
|
Section 302 Certification of the Principal Executive Officer
|
|
|
|
31.2*
|
|
Section 302 Certification of the Principal Financial Officer
|
|
|
|
32.1*
|
|
Section 906 Certification of the Chief Executive Officer and Chief Financial Officer
|
|
|
|
101.INS**
|
|
XBRL Instance Document.
|
|
|
|
101.SCH**
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.DEF**
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.CAL**
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.LAB**
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE**
|
|
XBRL Taxonomy Extension Presentation Linkbase Database.
|
|
|
|
|
|
*
|
Filed herewith
|
**
|
Pursuant to Rule 406T of Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
|
ACCELRYS, INC.
|
|||
|
|
|
|
By:
|
|
/s/ MICHAEL A. PIRAINO
|
|
|
|
Michael A. Piraino
|
|
|
|
Executive Vice President and Chief Financial
|
|
|
|
Officer (Duly Authorized Officer, Principal
|
|
|
|
Financial Officer and Principal Accounting
|
|
|
|
Officer)
|
|
|
|
Date:
|
October 31, 2012
|
1 Year Accelrys, Inc. (MM) Chart |
1 Month Accelrys, Inc. (MM) Chart |
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