RPX Announces First Quarter 2013 Financial Results

RPX Announces First Quarter 2013 Financial Results

SAN FRANCISCO, April 30, 2013 (GLOBE NEWSWIRE) -- RPX Corporation
(Nasdaq:RPXC), a leading provider of patent risk management solutions, today
announced its financial results for the first quarter ended March 31, 2013.

Financial Highlights

  *Revenue for the first quarter of fiscal 2013 totaled $61.2 million, up 40%
    from the prior year period
  *GAAP net income for the first quarter of fiscal 2013 was $14.7 million, or
    $0.28 per pro forma diluted share^[1], up 82% or 87%, respectively, from
    the prior year period
  *Non-GAAP net income for the first quarter of fiscal 2013 was $17.5 million
    or $0.33 per pro forma diluted share^[1], up 75% or 74%, respectively,
    from the prior year period

"We are pleased with the solid start to the year," said John Amster, CEO of
RPX. "We made progress across the board, including client additions, renewals
and new initiatives like insurance and our fee-based business."

Summary Results

Revenue for the first quarter increased 40% to $61.2 million, compared to
$43.8 million in the first quarter of 2012.

Net acquisition spend during the quarter totaled $29.4 million, and included
11 new acquisitions of patent assets, in addition to the exercise of
previously negotiated options to acquire licenses for new clients.

GAAP net income for the quarter was $14.7 million or $0.28 per diluted share,
compared to $8.1 million or $0.15 per diluted share in the first quarter of
2012. Net income was $0.28 per pro forma diluted share^[1] in the first
quarter, compared to $0.15 per pro forma diluted share^[1] in the first
quarter of 2012.

Non-GAAP net income for the quarter, which excludes stock-based compensation
and the amortization of acquired intangibles (in each case, net of tax), was
$17.5 million or $0.33 per pro forma diluted share^[1], compared to $10.0
million or $0.19 per pro forma diluted share^[1] in the first quarter of 2012.

As of March 31, 2013, RPX had cash, cash equivalents and short-term
investments of $283.4 million.

Business Outlook

This outlook reflects the Company's current and preliminary view and may be
subject to change. Please see the paragraph regarding "Forward-Looking
Statements" at the end of this news release.

The Company provided the following business outlook for the second quarter of
fiscal 2013:

Subscription revenue^[2]                              $54.3 - $54.8 million
Other revenue                                         $2.5 million
Total revenue                                         $56.8 - $57.3 million
Net income (non-GAAP)                                 $12.1 - $12.6 million
Effective tax rate (non-GAAP)                         37%
Pro forma weighted-average diluted shares outstanding 53.2 million

The Company provided the following business outlook for the full year 2013:

Subscription revenue^[2]                              $215 - $225 million
Other revenue                                         $8 - $10 million
Total revenue                                         $223 - $235 million
Cost of revenue (non-GAAP)                            $96 - $101 million
SG&A (non-GAAP)                                       $48 - $52 million
Net income (non-GAAP)                                 $47 - $52 million
Effective tax rate (non-GAAP)                         37%
Pro forma weighted-average diluted shares outstanding 53.3 million
Net acquisition spend                                 $115 - $125 million

The above outlook is forward-looking. Actual results may differ materially.
Please refer to the information under the caption "Use of Non-GAAP Financial
Information" below.

^[1] Pro forma diluted shares computed to give effect to the shares of
restricted stock outstanding as of the original date of issuance.

^[2] Subscription revenue is comprised of revenue generated from membership
subscription services and premiums earned from insurance policies.

Conference Call

RPX management will host a conference call and live webcast for analysts and
investors at 2:00 p.m. PDT/5:00 p.m. EDT on April 30, 2013. Parties in the
United States and Canada can access the call by dialing 1-877-941-0844, using
conference code 4611899. International parties can access the call by dialing
1-480-629-9835, using conference code 4611899.

RPX will offer a live webcast of the conference call which can be accessed
from the "Investor Relations" section of the Company's website at
http://ir.rpxcorp.com. An audio replay of the conference call will also be
available approximately two hours after the call and will be available for 30
days. To hear the replay, parties in the United States and Canada should call
1-800-406-7325 and enter conference code 4611899. International parties should
call 1-303-590-3030 and enter conference code 4611899.

About RPX Corporation

RPX Corporation (Nasdaq:RPXC) is a leading provider of patent risk solutions,
offering defensive buying, acquisition syndication, patent intelligence and
advisory services. Since its founding in 2008, RPX has introduced efficiency
to the patent market by providing a rational alternative to litigation. The
San Francisco-based company's pioneering approach combines principal capital,
deep patent expertise, and client contributions to generate enhanced patent
buying power. By acquiring patents, RPX helps to mitigate and manage patent
risk for its growing client network.

Use of Non-GAAP Financial Information

This news release dated April 30, 2013 contains non-GAAP financial measures.
Tables are provided in this news release that reconcile the non-GAAP financial
measures to the most directly comparable financial measures prepared in
accordance with Generally Accepted Accounting Principles (GAAP). These
non-GAAP financial measures include non-GAAP cost of revenue, non-GAAP
selling, general and administrative expenses, non-GAAP net income, and
non-GAAP net income per share.

To supplement the Company's condensed consolidated financial statements
presented on a GAAP basis, management believes that these non-GAAP measures
provide useful information about the Company's core operating results and thus
are appropriate to enhance the overall understanding of the Company's past
financial performance and its prospects for the future. Management is
excluding from its non-GAAP operating results stock-based compensation
expenses (inclusive of related employer payroll taxes) and the amortization of
acquired intangible assets. Management uses these non-GAAP measures to
evaluate the Company's financial results, and believes investors wish to
exclude the effects of such items in comparing our financial performance with
that of other companies. The adjustments to the Company's GAAP results are
made with the intent of providing both management and investors a more
complete understanding of the Company's underlying operational results, trends
and performance. The presentation of additional information is not meant to be
considered in isolation or as a substitute for or superior to financial
results determined in accordance with GAAP.

Forward-Looking Statements

This news release and its attachments contain forward-looking statements
within the meaning of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements include
statements regarding RPX's future financial performance as well as any
statements regarding the Company's strategic and operational plans.The
Company's actual results may differ materially from those anticipated in these
forward-looking statements.Factors that may contribute to such differences
include, among others, the Company's ability to maintain an adequate rate of
growth, the impact of the current economic climate on the Company's business,
the Company's ability to effectively manage its growth and changes in its
executive team, and the Company's ability to attract new clients and retain
existing clients.Forward-looking statements are often identified by the use
of words such as, but not limited to, "anticipate," "believe," "can,"
"continue," "could," "estimate," "expect," "intend," "may," "plan," "project,"
"seek," "should," "target," "will," "would," and similar expressions or
variations intended to identify forward-looking statements.More information
about potential factors that could affect the Company's business and financial
results is contained in the Company's most recent annual report on Form 10-K,
its quarterly reports on Form 10-Q, and the Company's other filings with the
SEC.The Company does not intend, and undertakes no duty, to update any
forward-looking statements to reflect future events or circumstances.


RPX Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
                                                                    
                                                           Three Months Ended
                                                           March 31,
                                                           2013      2012
Revenue                                                     $ 61,194  $ 43,849
Cost of revenue                                             23,670    18,017
Selling, general and administrative expenses                14,473    13,223
Gain on sale of patent assets, net                          —         (177)
Operating income                                            23,051    12,786
Other income (expense), net                                 51        (20)
Income before provision for income taxes                    23,102    12,766
Provision for income taxes                                  8,407     4,685
Net income                                                  $ 14,695  $ 8,081
Net income available to common stockholders:                         
Basic                                                       $ 14,678  $ 7,840
Diluted                                                     $ 14,678  $ 7,853
Net income per common share:                                         
Basic                                                       $ 0.29    $ 0.16
Diluted                                                     $ 0.28    $ 0.15
Weighted-average shares used in computing net income per             
common share:
Basic                                                       51,201    48,308
Diluted                                                     52,653    51,226



RPX Corporation
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
                                                      
                                             March 31, December 31,
                                             2013      2012
Assets                                                 
Current assets:                                        
Cash and cash equivalents                     $ 135,745 $ 73,638
Short-term investments                        147,677   126,092
Accounts receivable                           13,166    25,144
Other receivables                             —         33,775
Prepaid expenses and other current assets     2,004     5,237
Deferred tax assets                           8,039     7,658
Total current assets                          306,631   271,544
Patent assets, net                            206,195   199,314
Property and equipment, net                   3,230     3,144
Intangible assets, net                        2,847     3,226
Goodwill                                      16,460    16,460
Other assets                                  476       279
Total assets                                  $ 535,839 $ 493,967
Liabilities and stockholders' equity                   
Current liabilities:                                   
Accounts payable                              $ 500     $ 568
Accrued liabilities                           5,122     7,206
Deferred revenue                              114,291   101,249
Deferred payment obligations                  500       500
Other current liabilities                     12,265    1,813
Total current liabilities                     132,678   111,336
Deferredrevenue, less current portion        3,886     3,122
Deferred tax liabilities                      17,746    18,108
Other liabilities                             1,133     1,142
Total liabilities                             155,443   133,708
Common stock                                  5         5
Additional paid-in capital                    286,872   281,530
Retained earnings                             93,439    78,744
Accumulated other comprehensive income (loss) 80        (20)
Total stockholders' equity                    380,396   360,259
Total liabilities and stockholders' equity    $ 535,839 $ 493,967



RPX Corporation
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
                                                               
                                                 Three Months Ended March 31,
                                                 2013           2012
Cash flows from operating activities                            
Net income                                        $ 14,695       $ 8,081
Adjustments to reconcile net income to net cash                 
provided by operating activities:
Depreciation and amortization                     23,325         18,125
Stock-based compensation                          3,708          2,491
Excess tax benefit from stock-based compensation  (968)          (4,494)
Imputed interest on deferred payment obligations  —              63
Gain on sale of patent assets                     —              (177)
Amortization of premium on investments            1,270          1,020
Deferred taxes                                    (1,153)        —
Other                                             6              (13)
Changes in assets and liabilities:                              
Accounts receivable                               11,978         9,663
Other receivables                                 33,775         —
Prepaid expenses and other assets                 1,801          (1,208)
Accounts payable                                  (68)           (38)
Accrued and other liabilities                     (1,978)        (5,049)
Deferred revenue                                  13,806         (2,474)
Net cash provided by operating activities         100,197        25,990
Cash flows from investing activities                            
Purchases of investments classified as            (58,030)       (75,255)
available-for-sale
Maturities and sale of investments classified as  37,811         53,844
available-for-sale
Decrease in restricted cash                       —              500
Purchases of intangible assets                    —              (33)
Purchases of property and equipment               (421)          (882)
Acquisitions of patent assets                     (19,437)       (12,515)
Proceeds from sale of patent assets               —              200
Net cash used in investing activities             (40,077)       (34,141)
Cash flows from financing activities                            
Repayments of principal on deferred payment       —              (3,250)
obligations
Proceeds from exercise of stock options and other 1,019          1,727
common stock issuances
Excess tax benefit from stock-based compensation  968            4,494
Net cash provided by financing activities         1,987          2,971
Net increase (decrease) in cash and cash          62,107         (5,180)
equivalents
Cash and cash equivalents at beginning of period  73,638         106,749
Cash and cash equivalents at end of period        $ 135,745      $ 101,569



RPX Corporation
Reconciliation of Pro Forma Net Income Per Share
(in thousands, except per share data)
(unaudited)
                                                                    
                                                           Three Months Ended
                                                           March 31,
                                                           2013      2012
Net income                                                  $ 14,695  $ 8,081
Pro forma net income per share:                                      
Basic                                                       $ 0.29    $ 0.16
Diluted                                                     $ 0.28    $ 0.15
Shares used in computing pro forma net income per share:             
Basic:                                                               
Basic weighted-average common shares                        51,201    48,308
Add: Restricted stock                                       59        1,483
Shares used in computing pro forma basic net income per     51,260    49,791
share
Diluted:                                                             
Diluted weighted-average common shares                      52,653    51,226
Add: Restricted stock                                       59        1,483
Shares used in computing pro forma diluted net income per   52,712    52,709
share



RPX Corporation
Reconciliation of GAAP to Pro Forma Non-GAAP Net Income Per Share
(in thousands, except per share data)
(unaudited)
                                                       
                                              Three Months Ended
                                              March 31,
                                              2013      2012
Net income                                     $ 14,695  $ 8,081
Stock-based compensation^[1]                   3,778     2,673
Amortization of acquired intangible assets^[2] 360       150
Income tax adjustments^[3]                     (1,285)   (888)
Non-GAAP net income                            $ 17,548  $ 10,016
Pro forma non-GAAP net income per share:                
Basic                                          $ 0.34    $ 0.20
Diluted                                        $ 0.33    $ 0.19
Pro forma weighted-average shares:                      
Basic                                          51,260    49,791
Diluted                                        52,712    52,709



RPX Corporation
Reconciliation of GAAP to Non-GAAP Cost of Revenue
(in thousands)
(unaudited)
                                              
                                              Three Months Ended
                                              March 31,
                                              2013      2012
Cost of revenue                                $ 23,670  $ 18,017
Amortization of acquired intangible assets^[2] (56)      (56)
Non-GAAP cost of revenue                       $ 23,614  $ 17,961

                                                             
                                                             
RPX Corporation                                               
Reconciliation of GAAP to Non-GAAP Selling,                   
General and Administrative Expenses
(in thousands)                                                
(unaudited)                                                   
                                                             
                                            Three Months Ended
                                            March 31,
                                            2013              2012
Selling, general and administrative expenses $ 14,473          $ 13,223
Stock-based compensation^[1]                 (3,778)           (2,673)
Amortization of acquired intangible          (304)             (94)
assets^[2]
Non-GAAP selling, general and administrative $ 10,391          $ 10,456
expenses

^[1] RPX excludes stock-based compensation and related employer payroll taxes
from its non-GAAP financial measures.
^[2]RPX excludes amortization expense related to intangible assets (other
than patents) acquired in conjunction with the acquisition of businesses from
its non-GAAP financial measures.
^[3] Amount reflects income taxes associated with the above noted non-GAAP
exclusions.



RPX Corporation
Additional Metrics
($ in thousands)
(unaudited)
                                                         
                                      As of and for the Three Months
                                       Ended March 31,
Operating Metrics                      2013                2012
Number of clients                      146                 116
Net additions                          6                   4
Trailing four quarters                 30                  35
Gross acquisition spend                $ 29,437            $ 13,380
Trailing four quarters                 $ 267,857           $ 97,746
Net acquisition spend                  $ 29,437            $ 13,380
Trailing four quarters                 $ 132,427           $ 93,121
Full time equivalent headcount         125                 125
                                      
                                      As of and for the Three Months
                                       Ended March 31,
Financial Metrics                      2013                2012
Subscription revenue^[1]               $ 54,024            $ 43,839
Advisory fees                          3,570               —
Other revenue                          3,600               10
Revenue                                $ 61,194            $ 43,849
Cash, cash equivalents and short-term  $ 283,422           $ 252,104
investments
Deferred revenue, current and          $ 118,177           $ 105,801
noncurrent

^[1] Subscription revenue is comprised of revenue generated from membership
subscription services and premiums earned from insurance policies.

CONTACT: Investor Relations
         JoAnn Horne
         Market Street Partners
         +1-415-445-3233
         ir@rpxcorp.com
        
         Media Relations
         Kaustuva Das
         RPX Corporation
         +1-415-529-3105
         media@rpxcorp.com

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