Accelrys Announces Second Quarter Results
SAN DIEGO — Accelrys, Inc. (NASDAQ: ACCL) today reported financial results for the fiscal quarter ended June 30, 2012, including a 13% year-over-year increase in Non-GAAP revenue. The Company’s results demonstrate its continuing progress in executing on its strategy to help R&D organizations optimize their lab to market value chain. In addition, the Company enhanced its market leading position with a key product release, an important strategic partnership and a technology acquisition that aligns with the significant trend in the market to externalize scientific research.
Non-GAAP revenue for the quarter ended June 30, 2012 increased $4.9 million to $41.6 million from $36.7 million for the same quarter of the previous year, or an increase of 13%. Non-GAAP revenue for the six months ended June 30, 2012 increased $7.2 million to $83.3 million from $76.2 million for the same period of the previous year, or an increase of 9%.
Non-GAAP net income was $4.1 million, or $0.07 per diluted share, for the quarter ended June 30, 2012 compared to non-GAAP net income of $4.4 million, or $0.08 per diluted share, for the same quarter of the previous year. Non-GAAP net income was $8.7 million, or $0.15 per diluted share, for the six months ended June 30, 2012 compared to non-GAAP net income of $9.1 million, or $0.16 per diluted share, for the same period of the previous year.
GAAP revenue for the quarter ended June 30, 2012 increased $4.7 million to $38.4 million from $33.7 million for the same quarter of the previous year, or an increase of 14%. GAAP revenue for the six months ended June 30, 2012 increased $9.5 million to $77.8 million from $68.3 million for the same period of the previous year, or an increase of 14%.
GAAP net loss was $(0.5) million or $(0.01) per diluted share, for the current quarter compared to GAAP net loss of $(4.5) million, or $(0.08) per diluted share, for the same quarter of the previous year. GAAP net loss was $(2.8) million or $(0.05) per diluted share, for the six months ended June 30, 2012 compared to GAAP net loss of $(10.2) million, or $(0.18) per diluted share, for the same period of the previous year.
“I am pleased with our financial and operating results, as both non-GAAP revenue and operating income have again increased year-over-year, thereby continuing to demonstrate our delivery on our growth and profit objectives,” said Max Carnecchia, President and Chief Executive Officer of Accelrys. “These results reinforce our position as the leading provider of scientific innovation lifecycle management software.”
Recent Business Highlights:
• Released Discovery Studio 3.5, delivering new science and simulation capabilities in the small-molecule design and fast-growing biotherapeutics domains. In addition, the solution takes advantage of the latest scientific capabilities accessible via the Accelrys Enterprise Platform, which is particularly important to information-driven R&D environments.
• Signed a strategic partnership with Thomson Reuters, providing real-time access to curated life sciences content from Thompson Reuters’ Cortellis® for Informatics via a Component Collection built on the Accelrys Enterprise Platform and allowing scientists in pharmaceutical and biotech organizations to gain access to expert content and analysis tools through a single, user-friendly source.
• Announced the asset purchase of Cloud-based HEOS drug discovery information management technology from SCYNEXIS, completing the final phase of a strategic agreement that began in 2011.
• Furthered traction within academia announcing two key agreements that support key research trends by completing a tailored academic license agreement with Gulf Coast Consortia for multi-center collaborative research and cloud-based data sharing leveraging multiple Accelrys solutions and signing a 16 university-wide trial of Contur ELN, the largest trial of academic electronic lab notebooks in the UK.
The GAAP results for the three and six months ended June 30, 2012 were impacted by the business combination accounting associated with the acquisitions of Contur Industry Holding AB and Contur Software AB (collectively, “Contur”) and VelQuest Corporation (“VelQuest”), both in 2011, and the merger with Symyx Technologies, Inc. (“Symyx”) in 2010, and by other nonrecurring items. GAAP revenue, GAAP operating loss, and GAAP net loss for the three and six months ended June 30, 2012 were affected by fair value adjustments to deferred revenue ($3.2 million and $5.5 million, respectively). GAAP operating loss for such three and six-month periods was additionally affected by stock-based compensation expense ($1.8 million and $3.6 million, respectively), business consolidation, transaction and restructuring recoveries of $35,000 and costs of $0.6 million, respectively and purchased intangible asset amortization ($4.2 million and $8.4 million, respectively), offset by an adjustment to include acquisition-related cost of revenue related to VelQuest non-GAAP revenue recognized during such periods ($0.5 million and $0.7 million, respectively). In addition to the aforementioned items, GAAP net loss for the same periods was also impacted by additional purchased intangible asset amortization ($0.4 million and $0.8 million, respectively) and fair value adjustments to deferred royalty income ($0.2 million and $0.4 million, respectively), offset by removing the impact ($0.3 million and $0.4 million, respectively) of the amortization of note receivable discount related to our promissory note receivable from Intermolecular, Inc. (“Intermolecular”) and the impact of our real estate related activities during the quarter ($2.1 million).
Calendar Year 2012 Outlook
For the year ending December 31, 2012, the Company expects non-GAAP revenue to be between $166 and $170 million, and non-GAAP diluted earnings per share to be between $0.32 and $0.34 per diluted share on fully diluted weighted average shares outstanding of 56 million and using an effective tax rate of 40%.
Non-GAAP Financial Measures:
This press release describes financial measures for revenue, operating income, net income, net income per diluted share and free cash flow that exclude deferred revenue fair value adjustments, acquisition-related cost of revenue, business consolidation, transaction and restructuring costs (recoveries), stock-based compensation expense, purchased intangible asset amortization, royalty income fair value adjustments, amortization of note receivable discount, gain on sale of real estate, write-off of lease related assets and income tax adjustments. These financial measures are not calculated in accordance with generally accepted accounting principles (GAAP) and are not based on any comprehensive set of accounting rules or principles.
Management believes these non-GAAP financial measures provide a useful measure of the Company’s operating results, a meaningful comparison with historical results and with the results of other companies, and insight into the Company’s ongoing operating performance. Further, management and the Board of Directors utilize these measures, in addition to GAAP measures, when evaluating and comparing the Company’s operating performance against internal financial forecasts and budgets. These non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.
Conference Call Details:
At 5:00 p.m. ET, August 2, 2012, Accelrys will conduct a conference call to discuss its financial results. To participate, please dial (866) 309-0459 (+ (937) 999-3232 outside the United States) and enter the access code, 14304981, approximately 15 minutes before the scheduled start of the call. The conference call will also be accessible live on the Investor Relations section of the Accelrys website at www.accelrys.com.
A replay of the conference call will be available online at www.accelrys.com and via telephone by dialing (855) 859-2056 (+1 (404) 537-3406 outside the United States) and entering access code, 14304981, beginning 8:00 p.m. ET on August 2, 2012 through 11:59 p.m. ET on October 2, 2012.
About Accelrys:
Accelrys (NASDAQ:ACCL), a leading scientific enterprise R&D software and services company, supports industries and organizations that rely on scientific innovation to differentiate themselves. The industry-leading Accelrys Enterprise Platform provides a broad, flexible scientific solution optimized to integrate the diversity of science, experimental processes and information requirements across the research, analytical, development, and quality phases of product development. By incorporating capabilities in applications for modeling and simulation, enterprise lab management, and workflow and automation, Accelrys enables scientific innovators to access, organize, analyze and share data in unprecedented ways, ultimately enhancing innovation, improving productivity and compliance, reducing costs and speeding time from lab to market.
Headquartered in San Diego, Calif., Accelrys solutions are used by more than 1,300 customers in the pharmaceutical, biotechnology, energy, chemicals, aerospace, consumer packaged goods and industrial products industries and employs more than 200 full-time Ph.D. scientists. For more information about Accelrys, visit www.accelrys.com.

