false000180369600018036962023-11-032023-11-03

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): November 3, 2023

 

ADEIA INC.

(Exact name of Registrant as Specified in its Charter)

 

Delaware

001-39304

84-4734590

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

3025 Orchard Parkway

San Jose, California 95134

(Address of Principal Executive Offices, including Zip Code)

(408) 473-2500

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock (par value $0.001 per share)

ADEA

Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On November 6, 2023, Adeia Inc. (the “Company” or “Adeia”) announced its financial results for the third quarter ended September 30, 2023. A copy of the Company’s press release announcing these financial results and other information regarding its financial condition is attached hereto as Exhibit 99.1 to this Form 8-K.

The information in Item 2.02 of this report, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.

Item 5.02 Election of Directors.

Board of Directors

On November 3, 2023, the Board approved effective immediately to increase the size of the Board from six (6) directors to seven (7) directors and to appoint Phyllis Turner-Brim to the Board as an independent director. Ms. Turner-Brim is currently Senior Vice President and Deputy General Counsel for Products, Services and Brand Security at HP Inc. (“HP”) where she leads legal for HP’s Personal Systems, Print, Workforce Solutions, 3D Print and Incubation business units. Ms. Turner-Brim previously served as HP’s Senior Vice President and Deputy General Counsel for Innovation and Brand Protection where she led HP’s global intellectual property function, including IP sales and licensing, patent development, strategy, enforcement and anti-counterfeiting. Prior to HP, Ms. Turner-Brim was the Vice President, Assistant General Counsel for Starbucks, where she was the legal executive at the intersection of IP and technology. Prior to Starbucks, she was Vice President, Chief IP Counsel for Intellectual Ventures where she led legal teams responsible for outbound licensing, strategic patent prosecution, patent acquisitions/divestitures and IP policy initiatives. She has held similar roles with Intermec Technologies Corp. (now Honeywell), Walmart Stores Inc. and Cabot Microelectronics Corp. Ms. Turner-Brim graduated from the University of Cincinnati with a Juris Doctor degree and the Illinois Institute of Technology with a Bachelor of Science degree in chemical engineering.

Director Compensation

In connection with her appointment to the Board, Ms. Turner-Brim will participate in Adeia’s non-employee director compensation program. Pursuant to the program, Adeia will pay Ms. Turner-Brim, as a non-employee director, the pro rata portion of an annual retainer of $50,000, payable in equal quarterly installments over the course of each year of her service on the Board. Adeia will also reimburse Ms. Turner-Brim for reasonable expenses related to Board or committee meetings. Ms. Turner-Brim will receive restricted stock units covering shares of Adeia’s common stock under its stockholder-approved equity plan. The number of shares of common stock subject to the restricted stock unit award will be determined by dividing (1) $105,902 by (2) the fair market value per share of Adeia’s common stock on the date of grant, which will be November 8, 2023. This amount represents the pro-rated amount of the annual grant made to non-employee directors under the Company’s non-employee director compensation program. Ms. Turner-Brim’s grant will vest on the earlier to occur of the first anniversary of the date of grant or the next annual meeting of the stockholders.

A copy of the Company’s press release announcing the appointment to the Board of Ms. Turner-Brim is attached hereto as Exhibit 99.2 to this Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit

No.

 

Description

 

 

 

99.1

 

Press Release dated November 6, 2023

 

 

 

99.2

 

Press Release dated November 6, 2023

 

 

 

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 6, 2023

 

ADEIA INC.

 

 

 

 

 

 

 

 

By:

/s/ Keith A. Jones

 

 

Name:

Keith A. Jones

 

 

 

 

 

 

 

 

Title:

Chief Financial Officer

 


Exhibit 99.1

 

FOR IMMEDIATE RELEASE

img89383942_0.jpg 

 

ADEIA ANNOUNCES THIRD QUARTER 2023 FINANCIAL RESULTS

 

Closed important renewals with consumer electronics and OTT customers

Strong financial results highlighted by over $100 million in revenue

SAN JOSE, Calif. - November 6, 2023 – Adeia Inc. (Nasdaq: ADEA) (the “Company” or “Adeia”) today announced financial results for the third quarter ended September 30, 2023.

“Our strong third quarter results were driven by significant renewals with both Samsung for mobile devices and with Starz in OTT, further validating the value of our growing media portfolio,” said Paul E. Davis, chief executive officer of Adeia. “On October 1st, we celebrated our one-year anniversary as an independent public company. We have made tremendous progress in our first year, closing over 30 deals with an aggregate total contract value in excess of $500 million, significantly deleveraging the Company by paying down $129 million of debt, strengthening and expanding our deal pipeline, and growing our patent portfolio by nearly 10%. I’m very encouraged with our progress as our strategic vision remains on track.”

Third Quarter Financial Highlights

Revenue was $101.4 million as compared to $83.2 million in the second quarter of 2023
GAAP diluted earnings per share (EPS) was $0.21 and non-GAAP diluted EPS was $0.38
GAAP net income was $24.2 million and adjusted EBITDA was $70.7 million
Cash flows from operations was $21.2 million
Paid down $15.1 million on our term loan

Business Highlights

Samsung, a global leader in the electronics industry, signed a long-term renewal for access to our media portfolio for their mobile devices
Starz, a leading media and entertainment company offering a premium OTT streaming service, signed a multi-year renewal for access to our media portfolio
Signed renewals with three domestic Pay-TV providers and a domestic consumer electronics manufacturer for access to our media portfolio
Settled all existing litigation with NVIDIA, a leading semiconductor company, related to certain legacy IP
Further strengthened and diversified our Board with the addition of Phyllis Turner-Brim, a well-respected business leader with 30 years of broad IP experience at both Fortune 500 multi-nationals such as HP Inc. and Starbucks and IP development and licensing entities such as Intellectual Ventures

Capital Allocation

During the quarter, the Company made $15.1 million in principal payments towards its term loan B, bringing the outstanding balance to $630.4 million as of September 30, 2023.

On September 18, 2023, the Company distributed $5.3 million to stockholders of record on August 28, 2023, for a quarterly cash dividend of $0.05 per share of common stock.

The Board of Directors declared a dividend of $0.05 per share, payable on December 18, 2023, to stockholders of record on November 27, 2023.

 

 

1


Financial Outlook

The Company is narrowing and adjusting its full-year 2023 outlook.

 

Category
(in millions, except for tax rate)

 

2023
GAAP Outlook

 

2023
Non-GAAP Outlook

Revenue

 

$385.0 - 395.0

 

$385.0 - 395.0

Operating expenses(1)

 

$253.0 - 257.0

 

$130.0 - 133.0

Interest expense

 

$63.0 - 63.5

 

$63.0 - 63.5

Other income

 

$5.0 - 6.0

 

$5.0 - 6.0

Tax rate

 

25% - 30%

 

23%

Net income(2)

 

$54.7 - 56.7

 

$152.0 - 158.0

Adjusted EBITDA(2)

 

N/A

 

$256.7 - 263.7

Cash from operations

 

$150.0 - 155.0

 

$150.0 - 155.0

Diluted shares outstanding

 

114.0

 

114.0

(1) See tables for reconciliation of GAAP to non-GAAP operating expenses

(2) See tables for reconciliation of GAAP net income to (i) non-GAAP net income and (ii) adjusted earnings before interest expense, income taxes, depreciation and amortization (adjusted EBITDA)

Conference Call Information

The Company will hold its third quarter 2023 earnings conference call at 2:00 PM Pacific Time (5:00 PM Eastern Time) on Monday, November 6, 2023. To access the call in the U.S., please dial +1 (888) 660-6411, and for international callers, dial +1 (929) 203-0849. All participants should dial in 15 minutes prior to the start of the conference call. The Company also suggests utilizing the webcast link to access the live call and the replay at Q3 2023 Earnings Call Webcast.

Safe Harbor Statement

This press release contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on information available to the Company as of the date hereof, as well as the Company’s current expectations, assumptions, estimates and projections that involve risks and uncertainties. In this context, forward-looking statements often address expected future business, financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,” “would,” “might,” “potentially,” “estimate,” “continue,” “expect,” “target,” similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond the Company’s control, and are not guarantees of future results. These and other forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: the Company’s ability to implement its business strategy; the Company’s ability to enter into new and renewal license agreements with customers on favorable terms; the Company’s ability to retain and hire key personnel; uncertainty as to the long-term value of the Company’s common stock; legislative, regulatory and economic developments affecting the Company’s business; general economic and market developments and conditions; the Company’s ability to grow and expand its patent portfolios; changes in technology and development of competing technology in the industries in which in which the Company operates; the evolving legal, regulatory and tax regimes under which the Company operates; unforeseen liabilities and expenses; risks associated with the Company’s indebtedness; the Company’s ability to achieve the intended benefits of, and its ability to recognize the anticipated tax treatment of, the recent spin-off of its product business; unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, and natural disasters; and the extent to which the COVID-19 pandemic continues to have an adverse impact on the Company’s business, results of operations, and financial condition will depend on future developments, including measures taken in response to the pandemic, which are highly uncertain and cannot be predicted. These risks, as well as other risks associated with the business, are more fully discussed in the Company’s filings with the U.S. Securities and Exchange Commission (“SEC”), including the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. While the list of factors presented here is, and the list of factors presented in the Company’s filings with the SEC are, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements.

Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on the Company’s consolidated financial condition, results of operations, liquidity or trading price of common stock. The Company does not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.

 

 

2


About Adeia Inc.

Adeia is a leading R&D and intellectual property (IP) licensing company that accelerates the adoption of innovative technologies in the media and semiconductor industries. Adeia’s fundamental innovations underpin technology solutions that are shaping and elevating the future of digital entertainment and electronics. Adeia’s IP portfolios power the connected devices that touch the lives of millions of people around the world every day as they live, work and play. For more, please visit www.adeia.com.

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Company’s earnings release contains non-GAAP financial measures adjusted, where applicable, for either one-time or ongoing non-cash acquired intangibles amortization charges, costs related to actual or planned business combinations including transaction fees, integration costs, severance, facility closures, and retention bonuses, separation costs, all forms of stock-based compensation, loss on debt extinguishment, expensed debt refinancing costs, impairment of intangible assets, impact of certain foreign currency adjustments, discontinued operations and related tax effects. In addition, adjusted EBITDA adjusts for recurring charges of interest expense, income taxes, depreciation and amortization. Management believes that the non-GAAP measures used in this release provide investors with important perspectives into the Company’s ongoing business and financial performance and provide a better understanding of our core operating results reflecting our normal business operations. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. Our use of non-GAAP financial measures has certain limitations in that the non-GAAP financial measures we use may not be directly comparable to those reported by other companies. For example, the terms used in this press release, such as adjusted EBITDA, non-GAAP operating expenses, non-GAAP net income and non-GAAP diluted earnings per share (EPS) do not have a standardized meaning. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. We seek to compensate for the limitation of our non-GAAP presentation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in the tables attached hereto. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. All financial data is presented on a GAAP basis except where the Company indicates its presentation is on a non-GAAP basis.

Set forth below are reconciliations of the Company’s reported and forecasted GAAP to non-GAAP financial metrics.

Investor Contact:

Chris Chaney

Vice President, Investor Relations

IR@adeia.com

– Tables Follow –

SOURCE: ADEIA INC.

ADEA

 

 

 

 

3


 

 

 

ADEIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,
2023

 

 

September 30,
2022

 

 

September 30,
2023

 

 

September 30,
2022

 

Revenue

 

$

101,397

 

 

$

89,297

 

 

$

301,921

 

 

$

335,644

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

13,768

 

 

 

11,534

 

 

 

39,895

 

 

 

32,194

 

Selling, general and administrative

 

 

21,921

 

 

 

34,770

 

 

 

71,177

 

 

 

103,430

 

Amortization expense

 

 

23,386

 

 

 

24,195

 

 

 

70,725

 

 

 

73,127

 

Litigation expense

 

 

2,205

 

 

 

3,156

 

 

 

7,161

 

 

 

7,076

 

Total operating expenses

 

 

61,280

 

 

 

73,655

 

 

 

188,958

 

 

 

215,827

 

Operating income from continuing operations

 

 

40,117

 

 

 

15,642

 

 

 

112,963

 

 

 

119,817

 

Interest expense

 

 

(15,659

)

 

 

(12,444

)

 

 

(47,137

)

 

 

(30,313

)

Other income and expense, net

 

 

1,486

 

 

 

860

 

 

 

4,723

 

 

 

1,628

 

Income from continuing operations before income taxes

 

 

25,944

 

 

 

4,058

 

 

 

70,549

 

 

 

91,132

 

Provision for income taxes

 

 

1,712

 

 

 

10,401

 

 

 

15,877

 

 

 

26,470

 

Net income from continuing operations

 

 

24,232

 

 

 

(6,343

)

 

 

54,672

 

 

 

64,662

 

Net loss from discontinued operations, net of tax

 

 

 

 

 

(383,476

)

 

 

 

 

 

(436,978

)

Net income (loss)

 

 

24,232

 

 

 

(389,819

)

 

 

54,672

 

 

 

(372,316

)

Less: Net loss attributable to non-controlling interest in discontinued operations

 

 

 

 

 

(890

)

 

 

 

 

 

(2,706

)

Net income (loss) attributable to the Company

 

$

24,232

 

 

$

(388,929

)

 

$

54,672

 

 

$

(369,610

)

Income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.23

 

 

$

(0.06

)

 

$

0.51

 

 

$

0.62

 

Discontinued operations

 

 

 

 

 

(3.66

)

 

 

 

 

 

(4.17

)

Net income (loss)

 

$

0.23

 

 

$

(3.72

)

 

$

0.51

 

 

$

(3.55

)

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.21

 

 

$

(3.72

)

 

$

0.48

 

 

$

0.61

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(4.11

)

Net income (loss)

 

$

0.21

 

 

$

(3.72

)

 

$

0.48

 

 

$

(3.50

)

Weighted average number of shares used in per share calculations-basic

 

 

106,902

 

 

 

104,510

 

 

 

106,322

 

 

 

104,066

 

Weighted average number of shares used in per share calculations-diluted

 

 

112,929

 

 

 

104,510

 

 

 

112,765

 

 

 

105,620

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4


ADEIA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

51,855

 

 

$

114,555

 

Marketable securities

 

 

30,245

 

 

 

Accounts receivable, net

 

 

44,191

 

 

 

58,480

 

Unbilled contracts receivable, net

 

 

83,343

 

 

 

73,754

 

Other current assets

 

 

10,150

 

 

 

11,924

 

Total current assets

 

 

219,784

 

 

 

258,713

 

Long-term unbilled contracts receivable

 

 

65,531

 

 

 

40,705

 

Property and equipment, net

 

 

5,437

 

 

 

4,550

 

Operating lease right-of-use assets

 

 

4,564

 

 

 

5,993

 

Intangible assets, net

 

 

367,146

 

 

 

432,476

 

Goodwill

 

 

313,660

 

 

 

313,660

 

Long-term income tax receivable

 

 

107,923

 

 

 

113,679

 

Other long-term assets

 

 

40,026

 

 

 

40,750

 

Total assets

 

$

1,124,071

 

 

$

1,210,526

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

10,136

 

 

$

8,546

 

Accrued liabilities

 

 

18,509

 

 

 

31,277

 

Current portion of long-term debt

 

 

36,988

 

 

 

109,813

 

Deferred revenue

 

 

16,279

 

 

 

17,076

 

Total current liabilities

 

 

81,912

 

 

 

166,712

 

Deferred revenue, less current portion

 

 

11,161

 

 

 

10,683

 

Long-term debt, net

 

 

576,781

 

 

 

619,580

 

Noncurrent operating lease liabilities

 

 

3,072

 

 

 

4,794

 

Long-term income tax payable

 

 

89,248

 

 

 

87,302

 

Other long-term liabilities

 

 

18,072

 

 

 

20,043

 

Total liabilities

 

 

780,246

 

 

 

909,114

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

Common stock

 

 

120

 

 

 

117

 

Additional paid-in capital

 

 

634,526

 

 

 

636,266

 

Treasury stock at cost

 

 

(221,727

)

 

 

(211,223

)

Accumulated other comprehensive loss

 

 

(69

)

 

 

(51

)

Accumulated deficit

 

 

(69,025

)

 

 

(123,697

)

Total stockholders’ equity

 

 

343,825

 

 

 

301,412

 

Total liabilities and equity

 

$

1,124,071

 

 

$

1,210,526

 

 

 

 

 

 

5


 

ADEIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Nine Months Ended

 

 

 

September 30,
2023

 

 

September 30,
2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

54,672

 

 

$

(372,316

)

Adjustments to reconcile net income to net cash from operating activities:

 

 

 

 

 

 

Depreciation of property and equipment

 

 

1,151

 

 

 

16,759

 

Amortization of intangible assets

 

 

70,725

 

 

 

119,293

 

Goodwill impairment

 

 

 

 

 

354,000

 

Stock-based compensation expense

 

 

13,070

 

 

 

49,283

 

Deferred income tax

 

 

2

 

 

 

(1,761

)

Amortization of debt issuance costs

 

 

3,251

 

 

 

3,325

 

Other

 

 

107

 

 

 

987

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

13,728

 

 

 

40,075

 

Unbilled contracts receivable

 

 

(34,415

)

 

 

(89,636

)

Other assets

 

 

9,993

 

 

 

7,264

 

Accounts payable

 

 

265

 

 

 

16,606

 

Accrued and other liabilities

 

 

(14,515

)

 

 

2,508

 

Deferred revenue

 

 

(4,719

)

 

 

(4,345

)

Net cash from operating activities

 

 

113,315

 

 

 

142,042

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,936

)

 

 

(12,576

)

Proceeds from sale of property and equipment

 

 

 

 

 

86

 

Cash paid for acquisitions, net of cash acquired

 

 

 

 

 

(50,473

)

Purchases of intangible assets

 

 

(95

)

 

 

(290

)

Purchases of short-term investments

 

 

(33,598

)

 

 

(4,490

)

Proceeds from sales of investments

 

 

 

 

 

28,254

 

Proceeds from maturities of investments

 

 

3,800

 

 

 

35,176

 

Net cash from investing activities

 

 

(31,829

)

 

 

(4,313

)

Cash flows from financing activities:

 

 

 

 

 

 

Dividends paid

 

 

(15,979

)

 

 

(15,631

)

Repayment of debt

 

 

(118,875

)

 

 

(30,375

)

Proceeds from employee stock purchase program and exercise of stock options

 

 

1,172

 

 

 

14,252

 

Repurchases of common stock

 

 

 

 

 

(17,260

)

Repurchases of common stock for tax withholdings on equity awards

 

 

(10,504

)

 

 

(15,325

)

Net cash from financing activities

 

 

(144,186

)

 

 

(64,339

)

Effect of exchange rate changes on cash and cash equivalents

 

 

 

 

 

(3,419

)

Net increase (decrease) in cash and cash equivalents

 

 

(62,700

)

 

 

69,971

 

Cash and cash equivalents at beginning of period

 

 

114,555

 

 

 

201,121

 

Cash and cash equivalents at end of period

 

$

51,855

 

 

$

271,092

 

 

 

Cash flows above are presented on a consolidated basis and therefore also include $182.9 million of cash and cash equivalents included in current assets of discontinued operations in the condensed consolidated balance sheet as of September 30, 2022.

 

 

 

 

 

 

 

 

 

 

 

6


ADEIA INC.

GAAP TO NON-GAAP RECONCILIATIONS

(in thousands, except per share amounts)

(unaudited)

 

 

Net income

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,
2023

 

 

September 30,
2023

 

GAAP net income

 

$

24,232

 

 

$

54,672

 

 

 

 

 

 

 

 

Adjustments to GAAP net income:

 

 

 

 

 

 

Stock-based compensation expense:

 

 

 

 

 

 

Research and development

 

 

767

 

 

 

2,097

 

Selling, general and administrative

 

 

4,107

 

 

 

10,973

 

Amortization expense

 

 

23,386

 

 

 

70,725

 

Separation and other related costs recorded in selling, general and administrative (1)

 

 

1,915

 

 

 

10,223

 

Severance and retention costs recorded in selling, general and administrative

 

 

 

 

 

78

 

Total operating expenses adjustments

 

 

30,175

 

 

 

94,096

 

Other income and expense, net

 

 

 

 

 

(302

)

Non-GAAP tax adjustment (2)

 

 

(11,195

)

 

 

(21,921

)

Non-GAAP net income

 

$

43,212

 

 

$

126,545

 

 

 

 

 

 

 

 

Diluted income per share

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,
2023

 

 

September 30,
2023

 

GAAP diluted income per share

 

$

0.21

 

 

$

0.48

 

 

 

 

 

 

 

 

Adjustments to GAAP diluted income per share:

 

 

 

 

 

 

Stock-based compensation expense:

 

 

 

 

 

 

Research and development

 

 

0.01

 

 

 

0.02

 

Selling, general and administrative

 

 

0.04

 

 

 

0.10

 

Amortization expense

 

 

0.21

 

 

 

0.63

 

Separation and other related costs recorded in selling, general and administrative (1)

 

 

0.02

 

 

 

0.09

 

Severance and retention costs recorded in selling, general and administrative

 

0.00

 

 

0.00

 

Total operating expenses adjustments

 

 

0.28

 

 

 

0.84

 

Other income and expense, net

 

0.00

 

 

0.00

 

Non-GAAP tax adjustment (2)

 

 

(0.11

)

 

 

(0.20

)

Non-GAAP diluted income per share

 

$

0.38

 

 

$

1.12

 

 

(1) Represents separation and related costs that were incurred subsequent to the separation on October 1, 2022, that are accounted for in continuing operations including fees for financial advisory and other professional services, and expenses incurred on a transitional basis under a contract shared with Xperi Inc.

(2) The provision for income taxes is adjusted to reflect the net direct and indirect income tax effects of the various non-GAAP pretax adjustments

 

7


ADEIA INC.

GAAP NET INCOME TO

ADJUSTED EBITDA RECONCILIATION

(in thousands)

(unaudited)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,
2023

 

 

September 30,
2023

 

GAAP net income

 

$

24,232

 

 

$

54,672

 

 

 

 

 

 

 

 

Adjustments to GAAP net income:

 

 

 

 

 

 

Stock-based compensation expense:

 

 

 

 

 

 

Research and development

 

 

767

 

 

 

2,097

 

Selling, general and administrative

 

 

4,107

 

 

 

10,973

 

Separation and other related costs recorded in selling, general and administrative (1)

 

 

1,915

 

 

 

10,223

 

Severance and retention costs recorded in selling, general and administrative

 

 

 

 

 

78

 

Amortization expense

 

 

23,386

 

 

 

70,725

 

Depreciation expense

 

 

382

 

 

 

1,151

 

Interest expense

 

 

15,659

 

 

 

47,137

 

Other income and expense, net

 

 

(1,486

)

 

 

(4,723

)

Provision for income taxes

 

 

1,712

 

 

 

15,877

 

Adjusted EBITDA

 

$

70,674

 

 

$

208,210

 

(1) Represents separation and related costs that were incurred subsequent to the separation on October 1, 2022, that are accounted for in continuing operations including expenses incurred on a transitional basis under a contract shared with Xperi Inc.

ADEIA INC.

RECONCILIATION FOR GUIDANCE

ON OPERATING EXPENSES

(in millions)

(unaudited)

 

Year Ended

 

 

December 31, 2023

 

 

Low

 

 

High

 

GAAP operating expenses

$

253.0

 

 

$

257.0

 

Amortization expense

 

95.0

 

 

 

95.0

 

Stock-based compensation expense

 

17.0

 

 

 

18.0

 

Separation and related costs (1)

 

11.0

 

 

 

11.0

 

Total of non-GAAP adjustments

 

123.0

 

 

 

124.0

 

Non-GAAP operating expenses

$

130.0

 

 

$

133.0

 

(1) Represents separation and related costs that were incurred subsequent to the separation on October 1, 2022, that are accounted for in continuing operations including expenses incurred on a transitional basis under a contract shared with Xperi Inc.

ADEIA INC.

RECONCILIATION FOR GUIDANCE

ON NET INCOME

(in millions)

(unaudited)

 

Year Ended

 

 

December 31, 2023

 

 

Low

 

 

High

 

GAAP net income

$

54.7

 

 

$

56.7

 

Amortization expense

 

95.0

 

 

 

95.0

 

Stock-based compensation expense

 

17.0

 

 

 

18.0

 

Separation and related costs (1)

 

11.0

 

 

 

11.0

 

Total of non-GAAP operating expenses

 

123.0

 

 

 

124.0

 

Non-GAAP tax adjustment

 

(25.7

)

 

 

(22.7

)

Non-GAAP net income

$

152.0

 

 

$

158.0

 

(1) Represents separation and related costs that were incurred subsequent to the separation on October 1, 2022, that are accounted for in continuing operations including expenses incurred on a transitional basis under a contract shared with Xperi Inc.

 

8


 

ADEIA INC.

RECONCILIATION FOR GUIDANCE ON

ADJUSTED EBITDA

(in millions)

(unaudited)

 

Year Ended

 

 

December 31, 2023

 

 

Low

 

 

High

 

GAAP net income

$

54.7

 

 

$

56.7

 

Stock-based compensation expense

 

17.0

 

 

 

18.0

 

Separation and related costs (1)

 

11.0

 

 

 

11.0

 

Amortization expense

 

95.0

 

 

 

95.0

 

Depreciation expense

 

1.7

 

 

 

1.7

 

Interest expense

 

63.0

 

 

 

63.5

 

Other income

 

(5.0

)

 

 

(6.0

)

Income tax expense

 

19.3

 

 

 

23.8

 

Total of non-GAAP adjustments

 

202.0

 

 

 

207.0

 

Adjusted EBITDA

$

256.7

 

 

$

263.7

 

(1) Represents separation and related costs that were incurred subsequent to the separation on October 1, 2022, that are accounted for in continuing operations including expenses incurred on a transitional basis under a contract shared with Xperi Inc.

 

9


Exhibit 99.2

 

img90307463_0.jpg 

 

San Jose, Calif.– November 6, 2023 – Adeia Inc. (Nasdaq: ADEA) today announced that veteran intellectual property (IP) attorney and advisor, Phyllis Turner-Brim, joined its board of directors on Friday, November 3, 2023.

“Phyllis possesses an IP and business acumen that can only be gained through extensive experience. Her work in the world of IP licensing, as well as her appointments as counsel for some of the largest and most respected corporations in the world, puts her in an ideal position to guide and advise Adeia’s leadership team toward its strategic objectives,” said Paul E. Davis, chief executive officer of Adeia. “Her impressive track record of achievement stems from a keen understanding of IP honed in senior executive roles with major enterprises, including Starbucks and HP, and IP licensing companies like Intellectual Ventures.”

Turner-Brim brings to Adeia a three-decade IP legal career with 15 years of executive experience advising C-suite executives and senior leaders -- including those in Fortune 500 companies -- on issues ranging from strategy and marketing to technology management and IP enforcement. She is widely recognized for elegantly bridging the disciplines of technology, business and law to realize value derived from investments in IP. Turner-Brim is also an astute student of -- and contributor to -- the discourse driving today’s innovation society.

Recently, Turner-Brim took on the role of senior vice president and deputy general counsel, Products, Services and Brand Security at HP Inc. (HP) where she leads legal for HP’s Personal Systems, Print, Workforce Solutions, 3D Print and Incubation business units. Immediately prior, she was HP’s senior vice president and deputy general counsel for Innovation and Brand Protection, where she had global responsibility for HP’s IP function, including strategy, patent development, IP sales and licensing, enforcement, anti-counterfeiting and fraud prevention.

An active and frequent advisor to HP’s C-suite, Turner-Brim is also a member of multiple working groups within the organization, including the Legal, Global Marketing, and the Strategy and Incubation Leadership teams. She also served as the vice president and assistant general counsel at Starbucks and was the legal executive at the intersection of IP and technology. Prior to Starbucks, Turner-Brim was the vice president, chief IP counsel at Intellectual Ventures where she led the teams responsible for outbound licensing, patent acquisitions and IP policy initiatives. She has held similar roles with Intermec Technologies Corp. (now Honeywell), Walmart Stores Inc. and Cabot Microelectronics Corp.

Turner-Brim holds a Bachelor of Science degree in chemical engineering from the Illinois Institute of Technology and a Juris Doctor degree from the University of Cincinnati.

###

About Adeia Inc.

Adeia is a leading R&D and intellectual property (IP) licensing company that accelerates the adoption of innovative technologies in the media and semiconductor industries. Adeia’s fundamental innovations underpin technology solutions that are shaping and elevating the future of digital entertainment and electronics. Adeia’s IP portfolios power the connected devices that touch the lives of millions of people around the world every day as they live, work and play. For more, please visit www.adeia.com.

For Information Contact:

Investor Relations

Chris Chaney

IR@adeia.com

Media Relations

Stephanie Stocker

Conveyor Marketing

marketing@adeia.com


v3.23.3
Document and Entity Information
Nov. 03, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 03, 2023
Entity Registrant Name ADEIA INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-39304
Entity Tax Identification Number 84-4734590
Entity Address, Address Line One 3025 Orchard Parkway
Entity Address, City or Town San Jose
Entity Address, State or Province CA
Entity Address, Postal Zip Code 95134
City Area Code 408
Local Phone Number 473-2500
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Security 12b Title Common Stock (par value $0.001 per share)
Trading Symbol ADEA
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001803696

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