Q4 2025 Acacia Research Corp Earnings Call

March 11, 2026

Operator 4: Good morning, everyone. Thank you for joining Acacia Research's Q4 and Full Year 2025 Earnings Conference Call. My name is Jenny, and I will be your conference facilitator today. All lines are currently muted to prevent any background noise. I would like to remind you today's conference call is being recorded and is also available through audio webcast on Acacia's website. Following the speaker's remark, there will be time for questions. Questions can also be directed at any time to Acacia at ir@acaciaresearch.com, that's ir@acaciaresearch.com. I would now like to turn the conference over to Elizabeth Chaconas of Gagnier Communications. Elizabeth, you may begin the conference.

Operator: Good morning, everyone. Thank you for joining Acacia Research's Q4 and Full Year 2025 Earnings Conference Call. My name is Jenny, and I will be your conference facilitator today. All lines are currently muted to prevent any background noise. I would like to remind you today's conference call is being recorded and is also available through audio webcast on Acacia's website.

Speaker #4: My name is

Speaker #4: All lines are currently muted to prevent any background noise. I would like to remind you that today's conference call is being recorded and is also available through audio webcast on Acacia's website.

Speaker #4: Following the speakers' remark, there will be time for questions. Questions can also be directed at any time to acacia@ir.acacia-res that's I-R at A-C-A-C-I-A-R-E-S dot com.

Operator: Following the speaker's remark, there will be time for questions. Questions can also be directed at any time to Acacia at ir@acaciaresearch.com, that's ir@acaciaresearch.com. I would now like to turn the conference over to Elizabeth Chaconas of Gagnier Communications. Elizabeth, you may begin the conference.

Speaker #4: I would now like to turn the conference over to Elizabeth Chaconez of Gagne Communications. Elizabeth, you may begin the conference.

Speaker #2: Thank you, operator. Leading today's call are MJ McNulty, Acacia's chief executive officer, and Michael Zambito, Acacia's chief financial officer. Before MJ and Mike begin their prepared remarks, please be reminded that certain information provided during this

Elizabeth Chaconas: Thank you, operator. Leading today's call are MJ McNulty, Acacia's Chief Executive Officer, and Michael Zambito, Acacia's Chief Financial Officer. Before MJ and Mike begin their prepared remarks, please be reminded that certain information provided during this call may contain forward-looking statements relating to current expectations, estimates, forecasts, and projections about future events that are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the company's plans, objectives, and expectations for future operations and are based on current estimates and projections, future results, and trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, please see the risk factors described in Acacia's most recent annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC.

Speaker #2: call may contain forward-looking statements earnings conference call.

Speaker #2: relating to current expectations, estimates, forecasts, and projections about future events that are forward-looking as defined in the Private Securities Litigation Reform Act of 1995.

Speaker #2: These forward-looking statements generally relate to the company's plans, objectives, and expectations for future operations and are based on current estimates and projections. Future results and trends may differ materially from those projected as a result of certain risks and uncertainties.

Elizabeth Chaconas: These forward-looking statements generally relate to the company's plans, objectives, and expectations for future operations and are based on current estimates and projections, future results, and trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, please see the risk factors described in Acacia's most recent annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC.

Speaker #2: For a discussion of such risks and uncertainties, please see the risk factors described in Acacia's most recent annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC.

Speaker #2: Earlier this morning, Acacia issued a press release regarding its 2025 financial results. The press release may be accessed on the company's website under the Press Releases section of the Investor Relations tab at acacia-research.com.

Elizabeth Chaconas: Earlier this morning, Acacia issued a press release disclosing its Q4 and year-end 2025 financial results. The press release may be accessed on the company's website under the Press Releases section of the Investor Relations tab at acaciaresearch.com. The company also posted its Q4 2025 earnings presentation, as well as its year-end 2025 corporate presentation to its website, both of which can be found under the Quarterly Results section of the Investor Relations tab. On today's call, the team will discuss certain non-GAAP financial measures, including adjusted EBITDA for the company and each of its operating segments. Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, can be found in the press release disclosing Q4 and year-end 2025 financial results available under the Press Releases section of the Investor Relations tab at acaciaresearch.com.

Speaker #2: The company also posted its Q4 2025 earnings presentation as well as its year-end 2025 corporate presentation to its website. Both of which can be found under the Quarterly Results section of the Investor Relations tab.

Elizabeth Chaconas: The company also posted its Q4 2025 earnings presentation, as well as its year-end 2025 corporate presentation to its website, both of which can be found under the Quarterly Results section of the Investor Relations tab. On today's call, the team will discuss certain non-GAAP financial measures, including adjusted EBITDA for the company and each of its operating segments.

Speaker #2: On today's call, the team will discuss certain non-GAAP financial measures, including adjusted EBITDA for the company and each of its operating segments. Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, can be found in the press release disclosing fourth quarter and year-end 2025 financial results available under the Press Releases section of the Investor Relations tab at acacia-research.com.

Elizabeth Chaconas: Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, can be found in the press release disclosing Q4 and year-end 2025 financial results available under the Press Releases section of the Investor Relations tab at acaciaresearch.com.I will now turn the call over to Acacia's Chief Executive Officer, MJ McNulty.

Speaker #2: I will now turn the call over to Acacia's Chief Executive Officer, MJ McNulty.

Elizabeth Chaconas: I will now turn the call over to Acacia's Chief Executive Officer, MJ McNulty.

Speaker #3: Thank you, Leslie, and thank you all for joining us this morning. Before getting into the specifics of this past quarter's results, I'd like to zoom out and take stock of Acacia today versus three years ago, when this team began our efforts.

Martin D. McNulty, Jr.: Thank you, Lizzie, and thank you all for joining us this morning. Before getting into the specifics of this past quarter's results, I'd like to zoom out and take stock of Acacia today versus 3 years ago when this team began our efforts. There are a few slides in our corporate overview deck which we believe show our progression well. Since we're not all on video together, I'll point you to slides 8 and 9 of our corporate presentation available on the top of our Quarterly Results tab of the Investor Relations section of our website at acaciaresearch.com. To set the stage, 3 years ago, we had approximately $350 million in cash on our balance sheet.

Martin McNulty, Jr: Thank you, Lizzie, and thank you all for joining us this morning. Before getting into the specifics of this past quarter's results, I'd like to zoom out and take stock of Acacia today versus 3 years ago when this team began our efforts. There are a few slides in our corporate overview deck which we believe show our progression well.

Speaker #3: Slides in our corporate overview deck, which we believe show our progression well. Since we're not all on video together, I'll point you to slides eight and nine of our corporate presentation, available on the top of our quarterly results tab of the Investor Relations section of our website at acacia-research.com.

Martin McNulty, Jr: Since we're not all on video together, I'll point you to slides 8 and 9 of our corporate presentation available on the top of our Quarterly Results tab of the Investor Relations section of our website at acaciaresearch.com. To set the stage, 3 years ago, we had approximately $350 million in cash on our balance sheet.

Speaker #3: To set the stage, three years ago, we had approximately $350 million of cash on our balance sheet. The parent company was burning over $30 million annually, with no operated segment cash flow to speak of, a large securities portfolio made up primarily of biotech assets left over from the Woodford investment, and an extremely valuable intellectual property business that was receiving no public market enterprise value.

Martin D. McNulty, Jr.: A parent company that was burning over $30 million annually, no operated segment cash flow to speak of, a large securities portfolio made up primarily of biotech assets left over from the Woodford investment, and an extremely valuable intellectual property business that was receiving no public market enterprise value. When I became CEO in Q4 2022, I told you that this team's vision and that of our board was to build a portfolio of operating companies that can create compounding value over the long term. Inherent in this vision was our goal to preserve your capital while simultaneously building a durable enterprise. In our efforts to execute on this vision, we zero-based the parent budget, right-sized the organization, and put in place the people, systems, and processes necessary to succeed in our initial efforts.

Martin McNulty, Jr: A parent company that was burning over $30 million annually, no operated segment cash flow to speak of, a large securities portfolio made up primarily of biotech assets left over from the Woodford investment, and an extremely valuable intellectual property business that was receiving no public market enterprise value.

Martin McNulty, Jr: When I became CEO in Q4 2022, I told you that this team's vision and that of our board was to build a portfolio of operating companies that can create compounding value over the long term. Inherent in this vision was our goal to preserve your capital while simultaneously building a durable enterprise. In our efforts to execute on this vision, we zero-based the parent budget, right-sized the organization, and put in place the people, systems, and processes necessary to succeed in our initial efforts.

Speaker #3: When I became CEO in the fourth quarter of 2022, I told you that this team's vision and that of our board was to build a portfolio of operating companies that can create compounding value over the long term.

Speaker #3: Inherent in this vision was our goal to preserve your capital while simultaneously building a durable enterprise. So in our efforts to execute on this vision, we zero-based the parent budget, right-sized the organization, and put in place the people, systems, and processes necessary to succeed in our initial efforts.

Speaker #3: This reorganization positioned us to successfully monetize several of our legacy assets, continue nurturing our intellectual property portfolio, return capital to shareholders, and acquire valuable operating businesses at attractive prices.

Martin D. McNulty, Jr.: This reorganization positioned us to successfully monetize several of our legacy assets, continue nurturing our intellectual property portfolio, return capital to shareholders, and acquire valuable operating businesses at attractive prices. All of which we believe will drive strong returns for you, our shareholders, over the long term. As a result of these initiatives, I am pleased to report that we sit today with $285.2 million in total 2025 revenue and $96.4 million in 2025 operated segment adjusted EBITDA, including our intellectual property operations. We've extracted $187 million from our valuable IP portfolio, have monetized most of our legacy assets, and have kept parent expenses relatively flat even as the organization has scaled.

Martin McNulty, Jr: This reorganization positioned us to successfully monetize several of our legacy assets, continue nurturing our intellectual property portfolio, return capital to shareholders, and acquire valuable operating businesses at attractive prices. All of which we believe will drive strong returns for you, our shareholders, over the long term.

Speaker #3: All of which we believe will drive strong returns for you, our shareholders, over the long term. As a result of these initiatives, I am pleased to report that we sit today with 285.2 million in total 2025 revenue and 96.4 million in 2025 operated segment adjusted EBITDA, including our intellectual property operations.

Martin McNulty, Jr: As a result of these initiatives, I am pleased to report that we sit today with $285.2 million in total 2025 revenue and $96.4 million in 2025 operated segment adjusted EBITDA, including our intellectual property operations. We've extracted $187 million from our valuable IP portfolio, have monetized most of our legacy assets, and have kept parent expenses relatively flat even as the organization has scaled.

Speaker #3: We've extracted 187 million from our valuable IP portfolio, have monetized most of our legacy assets, and have kept parent expenses relatively flat even as the organization has scaled.

Speaker #3: Through all of this, and perhaps most importantly in the current market environment, we preserved your capital and kept parent-level deployable cash consistent, having started with approximately $350 million of cash and securities at the end of '22 and ending our most recent fiscal year with about $340 million of cash in securities and short-term loan receivable.

Martin D. McNulty, Jr.: Through all of this, and perhaps most importantly in the current market environment, we preserved your capital and kept parent-level deployable cash consistent, having started with approximately $350 million of cash and securities at the end of 2022 and ending our most recent fiscal year with about $340 million of cash in securities and short-term loans receivable. If you take a look at page 9 of the corporate presentation, which we're particularly proud of, you can see how this happened numerically. We used a combination of approximately $10 million of cash and $92 million of non-recourse subsidiary-level debt to add approximately $36 million of durable operated segment EBITDA, which now has nicely eclipsed our parent costs.

Martin McNulty, Jr: Through all of this, and perhaps most importantly in the current market environment, we preserved your capital and kept parent-level deployable cash consistent, having started with approximately $350 million of cash and securities at the end of 2022 and ending our most recent fiscal year with about $340 million of cash in securities and short-term loans receivable.

Speaker #3: If you take a look at page nine of the corporate presentation, which we're particularly proud of, you can see this how this happened numerically.

Martin McNulty, Jr: If you take a look at page 9 of the corporate presentation, which we're particularly proud of, you can see how this happened numerically. We used a combination of approximately $10 million of cash and $92 million of non-recourse subsidiary-level debt to add approximately $36 million of durable operated segment EBITDA, which now has nicely eclipsed our parent costs.

Speaker #3: We used a combination of approximately 10 million dollars of cash and 92 million dollars of non-recourse subsidiary-level debt to add approximately 36 million dollars of durable operated segment EBITDA, which now has nicely eclipsed our parent costs.

Speaker #3: I expect that going forward, what we may need to add some incremental parent costs to support continued scaling of our business, continued improvements in our underlying stable businesses, whether from increased revenue, improved margins, or through continued acquisitions, should result in a high degree of earnings flow-through to Acacia's bottom line.

Martin D. McNulty, Jr.: I expect that going forward, while we may need to add some incremental parent costs to support continued scaling of our business, continued improvements in our underlying stable of businesses, whether from increased revenue, improved margins, or through continued acquisitions, should result in a high degree of earnings flow through to Acacia's bottom line. Stepping back, I would say the first three years have been an operational success, and today we're in a better position than ever to continue adding to our portfolio of value-generating and cash-flowing assets. With that, I'd like to turn to a brief view of 2025. We're not alone in navigating the unpredictable and uncertain macroeconomic and geopolitical backdrops.

Martin McNulty, Jr: I expect that going forward, while we may need to add some incremental parent costs to support continued scaling of our business, continued improvements in our underlying stable of businesses, whether from increased revenue, improved margins, or through continued acquisitions, should result in a high degree of earnings flow through to Acacia's bottom line.

Speaker #3: So, stepping back, I would say the first three years have been an operational success. And today, we're in a better position than ever to continue adding to our portfolio of value-generating and cash-flowing assets.

Martin McNulty, Jr: Stepping back, I would say the first three years have been an operational success, and today we're in a better position than ever to continue adding to our portfolio of value-generating and cash-flowing assets. With that, I'd like to turn to a brief view of 2025. We're not alone in navigating the unpredictable and uncertain macroeconomic and geopolitical backdrops.

Speaker #3: With that, I'd like to take turn to a brief view of 2025. While not alone in navigating the unpredictable and uncertain macroeconomic and geopolitical backdrops, we've made significant progress across each of our businesses and closed the year on a strong note, with full-year revenue of 282.5 million, 285.2 million, a record for Acacia as a public company, total adjusted EBITDA of 77.9 million, and operating cash flow of 75.2 million, all higher year over year.

Martin D. McNulty, Jr.: We've made significant progress across each of our businesses and closed the year on a strong note with full year revenue of $285.2 million, a record for Acacia as a public company, total adjusted EBITDA of $77.9 million, and operating cash flow of $75.2 million, all higher year-over-year. While tariff-related headwinds as well as inflation continue to present challenges in certain aspects of our portfolio, we continue to prudently manage each of our operating segments and consistently execute against our value-oriented strategy to drive growth in asset value. Underpinning this strategy are significant capital resources, an experienced management team, and an opportunistic approach to value-accretive opportunities. During the year, we leveraged the resilience of our businesses.

Martin McNulty, Jr: We've made significant progress across each of our businesses and closed the year on a strong note with full year revenue of $285.2 million, a record for Acacia as a public company, total adjusted EBITDA of $77.9 million, and operating cash flow of $75.2 million, all higher year-over-year.

Martin McNulty, Jr: While tariff-related headwinds as well as inflation continue to present challenges in certain aspects of our portfolio, we continue to prudently manage each of our operating segments and consistently execute against our value-oriented strategy to drive growth in asset value. Underpinning this strategy are significant capital resources, an experienced management team, and an opportunistic approach to value-accretive opportunities. During the year, we leveraged the resilience of our businesses.

Speaker #3: While tariff-related headwinds, as well as inflation, continued to present challenges in certain aspects of our portfolio, we continue to prudently manage each of our operating segments and consistently execute against our value-oriented value.

Speaker #3: Underpinning this strategy are significant capital resources, an experienced management team, and an opportunistic approach to value a creative opportunities. During the year, we leveraged the resilience of our businesses, recall we like to acquire things people need, combined with targeted price increases and cost savings initiatives to help offset macroeconomic headwinds and position our companies for further growth.

Martin D. McNulty, Jr.: Recall, we like to acquire things people need, combined with targeted price increases and cost savings initiatives to help offset macroeconomic headwinds and position our companies for further growth. We also leveraged our strong cash generation to pay down debt in our Benchmark and Deflecto businesses and completed the acquisition of a portfolio of commercial loans collateralized by Bitcoin through our partnership with BILD Asset Management. The parent organization, as always, remains focused on managing expenses while overseeing prudent capital allocation and deployment. Turning to our businesses. Deflecto posted a good quarter in its seasonally weakest period of the year, with revenue of $26.4 million and adjusted EBITDA of $1.1 million. While the business continues to experience cyclical headwinds, we are encouraged by the progress made during the quarter.

Martin McNulty, Jr: Recall, we like to acquire things people need, combined with targeted price increases and cost savings initiatives to help offset macroeconomic headwinds and position our companies for further growth. We also leveraged our strong cash generation to pay down debt in our Benchmark and Deflecto businesses and completed the acquisition of a portfolio of commercial loans collateralized by Bitcoin through our partnership with BILD Asset Management.

Speaker #3: We also leveraged our strong cash generation to pay down debt in our benchmark and deflect our businesses, and completed the acquisition of a portfolio of commercial loans collateralized by Bitcoin through our partnership with Build Asset Management.

Martin McNulty, Jr: The parent organization, as always, remains focused on managing expenses while overseeing prudent capital allocation and deployment. Turning to our businesses. Deflecto posted a good quarter in its seasonally weakest period of the year, with revenue of $26.4 million and adjusted EBITDA of $1.1 million. While the business continues to experience cyclical headwinds, we are encouraged by the progress made during the quarter.

Speaker #3: The parent organization, as always, remains focused on managing expenses while overseeing prudent capital allocation and deployment. Turning to our businesses, deflectR posted a good quarter in its seasonally weakest period of the year, with revenue of $26.4 million and adjusted EBITDA of $1.1 million.

Speaker #3: While the business continues to experience cyclical headwinds, we are encouraged by the progress made during the quarter. We're trending well in the early part of Q1, and are encouraged about what we're seeing in our end markets.

Martin D. McNulty, Jr.: We're trending well in the early part of Q1 and are encouraged about what we're seeing in our end markets. During Q4, we successfully began the consolidation of our Portland facility into our Dover, Ohio facility, divested a small segment of our office products business, and in Q1 of this year, we completed the sale of a portion of our UK facility, which we do not currently occupy. Taken together, these actions resulted in nearly $5 million in net proceeds from asset sales, and the plant consolidation we expect will result in approximately $2 million of total annualized cost savings once complete, with additional benefits as volumes improve through the cycle. I would note that this plant consolidation is not only positive for our earnings, but also for the community of Dover, Ohio, which now has a significantly more profitable, efficient factory providing valuable employment to the area.

Martin McNulty, Jr: We're trending well in the early part of Q1 and are encouraged about what we're seeing in our end markets. During Q4, we successfully began the consolidation of our Portland facility into our Dover, Ohio facility, divested a small segment of our office products business, and in Q1 of this year, we completed the sale of a portion of our UK facility, which we do not currently occupy.

Speaker #3: During Q4, we successfully began the consolidation of our Portland facility into our Dover, Ohio facility, divested a small segment of our office products business, and in Q1 of this year, we completed the sale of a portion of our UK facility, which we do not currently occupy.

Speaker #3: Taken together, these actions resulted in nearly $5 million in net proceeds from asset sales, and the plant consolidation we expect will result in approximately $2 million of total annualized cost savings once complete.

Martin McNulty, Jr: Taken together, these actions resulted in nearly $5 million in net proceeds from asset sales, and the plant consolidation we expect will result in approximately $2 million of total annualized cost savings once complete, with additional benefits as volumes improve through the cycle. I would note that this plant consolidation is not only positive for our earnings, but also for the community of Dover, Ohio, which now has a significantly more profitable, efficient factory providing valuable employment to the area.

Speaker #3: With additional benefits as volumes improve through the cycle. I would note that this plant consolidation is not only positive for our earnings, but also for the community of Dover, Ohio, which now has a significantly more profitable, efficient factory providing valuable employment to the area.

Speaker #3: With that said, and as we've mentioned before, the deflect our business has experienced meaningful macroeconomic headwinds driven by uncertainty in the Class 8 trucking market, Canadian housing market, tariff-related demand and cost pressures, as well as input cost pressures.

Martin D. McNulty, Jr.: With that said, and as we've mentioned before, the Deflecto business has experienced meaningful macroeconomic headwinds, driven by uncertainty in the Class 8 trucking market, Canadian housing market, tariff-related demand, and cost pressures, as well as input cost pressures. Taking these one by one. The Class 8 market continues to be depressed relative to historical averages, primarily driven by macro factors. However, we've started to see green shoots emerge in recent months. Class 8 orders saw steady year-over-year improvement over the last 3 months, with December through February up 23%, 25%, and 156% respectively, after 11 straight months of year-over-year declines. Class 8 dealer inventories, which look like they peaked last summer, have finally begun to fall, and freight rates appear to be improving.

Martin McNulty, Jr: With that said, and as we've mentioned before, the Deflecto business has experienced meaningful macroeconomic headwinds, driven by uncertainty in the Class 8 trucking market, Canadian housing market, tariff-related demand, and cost pressures, as well as input cost pressures. Taking these one by one. The Class 8 market continues to be depressed relative to historical averages, primarily driven by macro factors.

Speaker #3: Taking these one by one. The Class 8 market continues to be depressed relative to historical averages. Primarily driven by macro factors. However, we've started to see green shoots emerge in recent months.

Martin McNulty, Jr: However, we've started to see green shoots emerge in recent months. Class 8 orders saw steady year-over-year improvement over the last 3 months, with December through February up 23%, 25%, and 156% respectively, after 11 straight months of year-over-year declines. Class 8 dealer inventories, which look like they peaked last summer, have finally begun to fall, and freight rates appear to be improving.

Speaker #3: Class 8 orders saw steady year-over-year improvement over the last three months with December through February, up 23%, 25%, and 156% respectively, after 11 straight months of year-over-year declines.

Speaker #3: Class 8 dealer inventories, which look like they peaked last summer, have finally begun to fall, and freight rates appear to be improving. Finally, the OEMs continue to take a conservative stance relative to new builds, and their commentary on the forward outlook of the market continues to improve.

Martin D. McNulty, Jr.: Finally, the OEMs continue to take a conservative stance relative to new builds, and their commentary on the forward outlook of the market continues to improve. Taken in whole, all these indicators lead us to believe that trucking activity and new and used truck sales should begin to pick up over the coming quarters, all of which should help our safety business within Deflecto. Moving to the Canadian housing market. Our air distribution segment does business in both Canada and the United States. The Canadian housing market has experienced building cost pressures related to general inflation, as well as a slowdown in the velocity of sales of both new and existing homes, the key driver for our business. The latter being a function of rates and economic uncertainty.

Martin McNulty, Jr: Finally, the OEMs continue to take a conservative stance relative to new builds, and their commentary on the forward outlook of the market continues to improve. Taken in whole, all these indicators lead us to believe that trucking activity and new and used truck sales should begin to pick up over the coming quarters, all of which should help our safety business within Deflecto.

Speaker #3: So taken in whole, all these indicators lead us to believe that trucking activity and new and used truck sales should begin to pick up over the coming quarters, all of which should help our safety business within Deflecto.

Speaker #3: Moving to the Canadian housing market, our air distribution segment does business in both Canada and the United States. The Canadian housing market has experienced building cost pressures related to general inflation, as well as a slowdown in the velocity of sales of both new and existing homes.

Martin McNulty, Jr: Moving to the Canadian housing market. Our air distribution segment does business in both Canada and the United States. The Canadian housing market has experienced building cost pressures related to general inflation, as well as a slowdown in the velocity of sales of both new and existing homes, the key driver for our business. The latter being a function of rates and economic uncertainty.

Speaker #3: A key driver for our business—the latter being a function of rates and economic uncertainty. As we continue to enact our value creation plan, one of the paths we're exploring is augmenting both U.S. and Canadian sales teams with resources to attack underserved areas of the market, which we think could be a meaningful opportunity.

Martin D. McNulty, Jr.: As we continue to enact our value creation plan, one of the paths we're exploring is augmenting both US and Canadian sales teams with resources to attack underserved areas of the market, which we think could be a meaningful opportunity. On tariffs, Deflecto is a global business, and as a result, we've been exposed to cost pressures from the IEEPA tariffs as well as demand-related uncertainty that has caused certain customers in our office products and safety segments to delay purchases. This pressure has been far greater than we anticipated. However, we have fared well, defending margins where possible through price increases and cost concessions, and have most importantly defended market share within our markets. For context, Deflecto paid approximately $2.4 million in tariffs in 2025, $2 million of which impacted earnings.

Martin McNulty, Jr: As we continue to enact our value creation plan, one of the paths we're exploring is augmenting both US and Canadian sales teams with resources to attack underserved areas of the market, which we think could be a meaningful opportunity. On tariffs, Deflecto is a global business, and as a result, we've been exposed to cost pressures from the IEEPA tariffs as well as demand-related uncertainty that has caused certain customers in our office products and safety segments to delay purchases.

Speaker #3: On tariffs, Deflect is a global business, and as a result, we've been exposed to cost pressures from the IEEPA tariffs, as well as demand-related uncertainty that has caused certain customers in our office products and safety segments to delay purchases.

Speaker #3: This pressure has been far greater than we anticipated. However, we have fared well, defending margins where possible through price increases and cost concessions, and have, most importantly, defended market share within our markets.

Martin McNulty, Jr: This pressure has been far greater than we anticipated. However, we have fared well, defending margins where possible through price increases and cost concessions, and have most importantly defended market share within our markets. For context, Deflecto paid approximately $2.4 million in tariffs in 2025, $2 million of which impacted earnings.

Speaker #3: For context, Deflect paid approximately $2.4 million in tariffs in 2025, $2 million of which impacted earnings. With the recent court ruling, we do expect a net benefit to our earnings, and while we likely will not be able to offset the full cost given the new section of 122 tariffs, we do expect relief in 2026.

Martin D. McNulty, Jr.: With the recent court ruling, we do expect a net benefit to our earnings, and while we likely will not be able to offset the full cost given the new Section 122 tariffs, we do expect relief in 2026. Tariffs from products imported from China have moved from a 20% tariff to a 10% tariff, and products imported from Canada have moved from a 25% tariff to a 10% tariff. While still too early to quantify, directionally, we believe this is a positive for our earnings power at Deflecto. We also note that we have and continue to avail ourselves of the administrative rights we have to recoup from the U.S. Customs and Border Protection tariffs previously paid.

Martin McNulty, Jr: With the recent court ruling, we do expect a net benefit to our earnings, and while we likely will not be able to offset the full cost given the new Section 122 tariffs, we do expect relief in 2026. Tariffs from products imported from China have moved from a 20% tariff to a 10% tariff, and products imported from Canada have moved from a 25% tariff to a 10% tariff.

Speaker #3: Tariffs on products imported from China have moved from a 20% tariff to a 10% tariff, and products imported from Canada have moved from a 25% tariff to a 10% tariff.

Speaker #3: While still too early to quantify, directionally we believe this is a positive for our earnings power at Deflecto. We also note that we have, and continue to, avail ourselves of the administrative rights we have to recoup from the US customs agency tariffs previously paid.

Martin McNulty, Jr: While still too early to quantify, directionally, we believe this is a positive for our earnings power at Deflecto. We also note that we have and continue to avail ourselves of the administrative rights we have to recoup from the U.S. Customs and Border Protection tariffs previously paid.

Speaker #3: While the tariff picture is changing rapidly, we have the processes in place to ensure that we're doing what's in our control to manage these changes.

Martin D. McNulty, Jr.: While the tariff picture is changing rapidly, we have the processes in place to ensure that we're doing what's in our control to manage these changes. We'll get to the specifics of oil prices in a second. While they've been a positive for Benchmark, they represent potential cost pressures in Deflecto and Printronix as shipping and input costs have upside price risk. In our energy segment, Benchmark continued to perform well during Q4, delivering solid operating production and cash flow. Benchmark posted record production during the quarter, bolstered by several non-operated projects that came online in Q4. We continue to see strong operator and investor interest in the Anadarko Basin, which has pushed the value of high-quality producing wells towards historically elevated valuations. Our geographic position is a key source of strength in our energy operations, given our exposure to some of the country's highest quality reserves.

Martin McNulty, Jr: While the tariff picture is changing rapidly, we have the processes in place to ensure that we're doing what's in our control to manage these changes. We'll get to the specifics of oil prices in a second. While they've been a positive for Benchmark, they represent potential cost pressures in Deflecto and Printronix as shipping and input costs have upside price risk. In our energy segment, Benchmark continued to perform well during Q4, delivering solid operating production and cash flow.

Speaker #3: We'll get to the specifics of oil prices in a second. While they've been a positive for Benchmark, they represent potential cost pressures in Deflect and Pentronics, as shipping and input costs have upside price risk.

Speaker #3: In our energy segment, Benchmark continued to perform well during the fourth quarter, delivering solid operating production and cash flow. The business posted record production during the quarter, bolstered by several non-operated projects that came online in Q4.

Martin McNulty, Jr: Benchmark posted record production during the quarter, bolstered by several non-operated projects that came online in Q4. We continue to see strong operator and investor interest in the Anadarko Basin, which has pushed the value of high-quality producing wells towards historically elevated valuations. Our geographic position is a key source of strength in our energy operations, given our exposure to some of the country's highest quality reserves.

Speaker #3: We continue to see strong operator and investor interest in the Anadarko Basin, which has pushed the value of high-quality producing wells towards historically elevated valuations.

Speaker #3: Our geographic position is a key source of strength in our energy operations, given our exposure to some of the country's highest-quality reserves. And while heightened valuations in this region have led to a more discerning approach to acquiring new producing assets, we continue to see a number of exciting ways to generate significant value in this segment in 2026.

Martin D. McNulty, Jr.: While heightened valuations in this region have led to a more discerning approach to acquiring new producing assets, we continue to see a number of exciting ways to generate significant value in this segment in 2026. As I mentioned last quarter, we spent time last year deliberately building our position within the attractive Cherokee play, acquiring and trading land packages to assemble a portfolio of what we believe to be highly economic drilling locations. With that work complete, we selected an attractive location, assembled a top-notch team of service providers, and began drilling our first Cherokee well, which was completed last week, and we anticipate will begin producing this week. We opportunistically funded this first new well from our balance sheet, which we believe will position us well to create partnership opportunities for future wells.

Martin McNulty, Jr: While heightened valuations in this region have led to a more discerning approach to acquiring new producing assets, we continue to see a number of exciting ways to generate significant value in this segment in 2026. As I mentioned last quarter, we spent time last year deliberately building our position within the attractive Cherokee play, acquiring and trading land packages to assemble a portfolio of what we believe to be highly economic drilling locations.

Speaker #3: As I mentioned last quarter, we spent time last year deliberately building our position within the attractive Cherokee play, acquiring and trading land packages to assemble a portfolio of what we believe to be highly economic drilling locations.

Speaker #3: With that work complete, we selected an attractive location, assembled a top-notch team of service providers, and began drilling our first Cherokee well, which was completed last week.

Martin McNulty, Jr: With that work complete, we selected an attractive location, assembled a top-notch team of service providers, and began drilling our first Cherokee well, which was completed last week, and we anticipate will begin producing this week. We opportunistically funded this first new well from our balance sheet, which we believe will position us well to create partnership opportunities for future wells.

Speaker #3: And we anticipate we'll begin producing this week. We opportunistically funded this first new well from our balance sheet, which we believe will position us well to create partnership opportunities for future wells.

Speaker #3: We were deliberate in our approach to this well and believe we have several additional attractive opportunities, which we will evaluate conservatively with a view to continuing to grow our asset value within the means of our cash flows.

Martin D. McNulty, Jr.: We were deliberate in our approach to this well and believe we have several additional attractive opportunities which we will evaluate conservatively with a view of continuing to grow our asset value within the means of our cash flows. In light of the recent price movements, particularly in oil, Benchmark's hedging strategy continues to perform as expected. As we've outlined previously, Benchmark hedges approximately 65% of its operated oil and gas production, with hedges currently in place through the beginning of 2028, protecting a significant amount of cash flow from downside price risk. On the flip side, when oil runs, as it has, we've traded that upside for downside protection. That said, we have been able to benefit from selling unhedged exposure as well as through sales of our natural gas liquids, which tend to track oil rather than gas prices.

Martin McNulty, Jr: We were deliberate in our approach to this well and believe we have several additional attractive opportunities which we will evaluate conservatively with a view of continuing to grow our asset value within the means of our cash flows. In light of the recent price movements, particularly in oil, Benchmark's hedging strategy continues to perform as expected.

Speaker #3: In light of the recent price movements, particularly in oil, Benchmark's hedging strategy continues to perform as expected. As we've outlined previously, Benchmark hedges approximately 75% of its operated oil and gas production, with hedges currently in place through the beginning of 2028.

Martin McNulty, Jr: As we've outlined previously, Benchmark hedges approximately 65% of its operated oil and gas production, with hedges currently in place through the beginning of 2028, protecting a significant amount of cash flow from downside price risk. On the flip side, when oil runs, as it has, we've traded that upside for downside protection. That said, we have been able to benefit from selling unhedged exposure as well as through sales of our natural gas liquids, which tend to track oil rather than gas prices.

Speaker #3: Protecting a significant amount of cash flow from downside price risk. On the flip side, when oil runs as it has, we've traded that upside for downside protection.

Speaker #3: That said, we have been able to benefit from selling unhedged exposure as well as through sales of our natural gas liquids, which tend to track oil rather than gas prices.

Speaker #3: As of the fourth quarter, approximately 54% of benchmarks LTM commodity revenue and 78% of LTM production on a BOE basis was driven by gas and NGLs.

Martin D. McNulty, Jr.: As of Q4, approximately 54% of Benchmark's LTM commodity revenue and 78% of LTM production on a BOE basis was driven by gas and NGLs. Importantly, Benchmark is also in a fortunate geographic position to be able to sell our gas in a variety of markets. With the recent volatility in energy markets, we continue to remain nimble in our hedging strategy. In our industrial segment, Printronix continues to be a great example of our team's diligent execution and ability to transform an asset's underlying operations and efficiencies to generate shareholder value. Our efforts over the past 2 years have led to a higher margin and optimized product mix for Printronix, which continues to generate consistent revenue and free cash flow.

Martin McNulty, Jr: As of Q4, approximately 54% of Benchmark's LTM commodity revenue and 78% of LTM production on a BOE basis was driven by gas and NGLs. Importantly, Benchmark is also in a fortunate geographic position to be able to sell our gas in a variety of markets. With the recent volatility in energy markets, we continue to remain nimble in our hedging strategy.

Speaker #3: Importantly, benchmark is also in a fortunate geographic position to be able to sell our gas in a variety of markets. With the recent volatility in the energy markets, we continue to remain nimble in our hedging strategy.

Speaker #3: In our industrial segment, Pentronics continues to be a great example of our team's diligent execution and ability to transform an asset's underlying operations and efficiencies to generate shareholder value.

Martin McNulty, Jr: In our industrial segment, Printronix continues to be a great example of our team's diligent execution and ability to transform an asset's underlying operations and efficiencies to generate shareholder value. Our efforts over the past 2 years have led to a higher margin and optimized product mix for Printronix, which continues to generate consistent revenue and free cash flow.

Speaker #3: Our efforts over the past two years have led to a higher margin and optimized product mix for Pentronics, which continues to generate consistent revenue and free cash flow.

Speaker #3: Lastly, looking at our Intellectual Property segment, we recorded total revenue and adjusted EBITDA of $326.0 million for the quarter, and $78.4 million and $56.3 million for the year, respectively.

Martin D. McNulty, Jr.: Lastly, looking at our intellectual property segment, we recorded total revenue and adjusted EBITDA of $326,000 and $12.1 million for the quarter, and $78.4 million and $56.3 million for the year respectively. Our Q4 EBITDA benefited from a settlement that occurred during the quarter, against which we incurred related costs in prior periods. While this area of our business is episodic in nature due to the variable timing of future settlements, our team continues to evaluate attractive opportunities in the space and remains open to opportunistically committing capital to investments that will maximize shareholder value. Mike will provide additional financial details in a few minutes, but before his remarks, I'd like to highlight a few key metrics for Q4 and the year.

Martin McNulty, Jr: Lastly, looking at our intellectual property segment, we recorded total revenue and adjusted EBITDA of $326,000 and $12.1 million for the quarter, and $78.4 million and $56.3 million for the year respectively. Our Q4 EBITDA benefited from a settlement that occurred during the quarter, against which we incurred related costs in prior periods.

Speaker #3: Our Q4 EBITDA benefited from a settlement that occurred during the quarter against which we incurred related costs in prior periods. While this area of our business is episodic in nature due to the variable timing of future settlements, our team continues to evaluate attractive opportunities in the space and remains open to opportunistically committing capital to investments that will maximize shareholder value.

Martin McNulty, Jr: While this area of our business is episodic in nature due to the variable timing of future settlements, our team continues to evaluate attractive opportunities in the space and remains open to opportunistically committing capital to investments that will maximize shareholder value. Mike will provide additional financial details in a few minutes, but before his remarks, I'd like to highlight a few key metrics for Q4 and the year.

Speaker #3: Mike will provide additional financial details in a few minutes, but before his remarks, I'd like to highlight a few key metrics for the fourth quarter in the year.

Speaker #3: In the fourth quarter, we delivered total revenue of $50.1 million, up 3% compared to the prior year period, primarily driven by our fourth full quarter of Deflecto.

Martin D. McNulty, Jr.: In Q4, we delivered total revenue of $50.1 million, up 3% compared to the prior year period, primarily driven by our fourth full quarter of Deflecto. The company's adjusted EBITDA was total company adjusted EBITDA was $17.4 million, and operated segment adjusted EBITDA, including our intellectual property operations, was $22.4 million. For the year, we generated record consolidated revenue of $285.2 million, up 133% year-over-year. Total company adjusted EBITDA of $77.9 million and operated segment adjusted EBITDA of $96.4 million. We recorded book value per share of $6.05 at 31 December, compared to $5.75 per share at 31 December 2024, an increase of 5% year-over-year.

Martin McNulty, Jr: In Q4, we delivered total revenue of $50.1 million, up 3% compared to the prior year period, primarily driven by our fourth full quarter of Deflecto. The company's adjusted EBITDA was total company adjusted EBITDA was $17.4 million, and operated segment adjusted EBITDA, including our intellectual property operations, was $22.4 million.

Speaker #3: The company adjusted EBITDA was total company adjusted EBITDA was $17.4 million, and operated segment adjusted EBITDA including our intellectual property operations was $22.4 million.

Speaker #3: For the year, we generated record consolidated revenue of $285.2 million, up 133% year over year. Total company adjusted EBITDA was $77.9 million, and operated segment adjusted EBITDA was $96.4 million.

Martin McNulty, Jr: For the year, we generated record consolidated revenue of $285.2 million, up 133% year-over-year. Total company adjusted EBITDA of $77.9 million and operated segment adjusted EBITDA of $96.4 million. We recorded book value per share of $6.05 at 31 December, compared to $5.75 per share at 31 December 2024, an increase of 5% year-over-year.

Speaker #3: We recorded book value per share of $605 at December 31st compared to $5.75 per share at December 31st of 2024, an increase of 5% year over year.

Speaker #3: These results reflect our ability to successfully navigate through significant macroeconomic challenges, leveraging our value-oriented strategy and the underlying strength of our assets. As I mentioned last quarter, while volatility creates headwinds, it can also be a source of opportunity for our businesses, as uncertain environments often create openings for us to swiftly implement operational changes at the companies we own.

Martin D. McNulty, Jr.: These results reflect our ability to successfully navigate through significant macroeconomic challenges, leveraging our value-oriented strategy and the underlying strength of our concepts. As I mentioned last quarter, while volatility creates headwinds, it can also be a source of opportunity for our businesses as uncertain environments often create openings for us to swiftly implement operational changes that the companies benefit from. Looking ahead, I'm confident in the strength of our team and our ability to balance thoughtful cost management with consistent execution to drive revenue, EBITDA, and free cash flow across our businesses. While I believe there's still a gap between our intrinsic equity value and what is reflected in our share price, the fundamentals of our business and the inherent value of our assets are strong and continue to improve.

Martin McNulty, Jr: These results reflect our ability to successfully navigate through significant macroeconomic challenges, leveraging our value-oriented strategy and the underlying strength of our concepts. As I mentioned last quarter, while volatility creates headwinds, it can also be a source of opportunity for our businesses as uncertain environments often create openings for us to swiftly implement operational changes that the companies benefit from.

Speaker #3: Looking ahead, I'm confident in the strength of our team and our ability to balance thoughtful cost management with consistent execution to drive revenue, EBITDA, and free cash flow across our businesses.

Martin McNulty, Jr: Looking ahead, I'm confident in the strength of our team and our ability to balance thoughtful cost management with consistent execution to drive revenue, EBITDA, and free cash flow across our businesses. While I believe there's still a gap between our intrinsic equity value and what is reflected in our share price, the fundamentals of our business and the inherent value of our assets are strong and continue to improve.

Speaker #3: While I believe there's still a gap between our intrinsic equity value and what is reflected in our share price, the fundamentals of our business and the inherent value of our assets are strong and continue to improve.

Speaker #3: Our management and board are committed to exploring and executing appropriate capital deployment initiatives, internally and externally, that will support our continued momentum and generate long-term value for our shareholders.

Martin D. McNulty, Jr.: Our management and board are committed to exploring and executing appropriate capital deployment initiatives internally and externally that will support our continued momentum and generate long-term value for our shareholders. With that, I'll pass it over to Mike to discuss the details of our financial results.

Martin McNulty, Jr: Our management and board are committed to exploring and executing appropriate capital deployment initiatives internally and externally that will support our continued momentum and generate long-term value for our shareholders. With that, I'll pass it over to Mike to discuss the details of our financial results.

Speaker #3: I'll pass it over to Mike to discuss the details of our financial results.

Speaker #2: Thank you, MJ. And, echoing your sentiment, we remain enthusiastic about the results and progress at each of our businesses and our continued success in managing parent costs.

Michael Zambito: Thank you, MJ. Echoing your sentiment, we remain enthusiastic about the results and progress at each of our businesses and our continued success in managing parent costs. Let me start with a few financial highlights from the quarter. Acacia recorded total revenue of $50.1 million during Q4. Our energy operations generated $16 million in revenue for the quarter, compared to $17.3 million in the same quarter last year, primarily reflecting a softer oil price environment year over year. Remember, we hedge approximately 75% of our operated production of Benchmark. Realized hedge gains not included in revenue were $1.7 million in Q4 2025 versus $1 million in Q4 2024. Manufacturing operations generated $26.4 million in revenue for the quarter.

Speaker #2: Let me start with a few financial highlights from the quarter. Acacia recorded total revenue of $50.1 million during the fourth quarter. Our energy operations generated $16 million in revenue for the quarter, compared to $17.3 million in the same quarter last year.

Speaker #2: Primarily reflecting a softer oil price environment year over year. Remember, we hedge approximately 75% of our operated production at benchmark. Realized hedge gains not included in revenue were $1.7 million in Q4 2025 versus $1 million in Q4 2024.

Michael Zambito: Remember, we hedge approximately 75% of our operated production of Benchmark. Realized hedge gains not included in revenue were $1.7 million in Q4 2025 versus $1 million in Q4 2024. Manufacturing operations generated $26.4 million in revenue for the quarter.

Speaker #2: Manufacturing operations generated $26.4 million in revenue. For the quarter, given we acquired Deflecto in October of last year, there is no full quarter prior year comparable.

Michael Zambito: Given we acquired Deflecto in October of last year, there is no full quarter prior year comparable. Our industrial operations generated $7.3 million in revenue during the quarter, compared to $8.2 million in the same quarter last year. Our intellectual property operations generated $0.3 million in licensing and other revenue during the quarter, compared to $0.1 million in the same quarter last year. Total consolidated G&A on a reported basis was $16.3 million during the Q4, compared to $21.5 million in the same quarter of last year. The decrease was primarily driven by third-party transaction costs in Q4 2024 associated with the Deflecto acquisition, which closed in October 2024.

Speaker #2: Our industrial operations generated $7.3 million in revenue during the quarter, compared to $8.2 million in the same quarter last year. Our intellectual property operations generated $0.3 million in licensing and other revenue during the quarter, compared to $0.1 million in the same quarter last year.

Speaker #2: Total consolidated G&A on a reported basis was $16.3 million during the fourth quarter, compared to $21.5 million in the same quarter of last year.

Michael Zambito: Total consolidated G&A on a reported basis was $16.3 million during the Q4, compared to $21.5 million in the same quarter of last year. The decrease was primarily driven by third-party transaction costs in Q4 2024 associated with the Deflecto acquisition, which closed in October 2024.

Speaker #2: The decrease was primarily driven by third-party transaction costs in Q4 2024 associated with the Deflecto acquisition, which closed in October 2024. Deflecto reported G&A expense for the fourth quarter of 2025 was $4.7 million, compared to $4.6 million in the prior quarter.

Michael Zambito: Deflecto reported G&A expense for Q4 2025 was $4.7 million compared to $4.6 million in the prior quarter. Of the $4.7 million in Deflecto G&A expense, approximately $1.2 million was related to depreciation of fixed assets and amortization of intangible assets, and $0.4 million was related to non-recurring severance and transaction-related costs. Our energy operations reported G&A expense was $0.6 million for Q4 2025 compared to $1.1 million for the prior quarter in 2024. Q4 2024 included certain one-time fees and expenses that didn't recur in Q4 2025. Reported G&A at the parent level for the fourth quarter decreased by $5 million year-over-year from $12 million to $7 million.

Speaker #2: Of the $4.7 million in Deflecto G&A expense, approximately $1.2 million was related to depreciation of fixed assets and amortization of intangible assets, and $0.4 million was related to non-recurring severance and transaction-related costs.

Speaker #2: Our energy operations reported G&A and expense was $0.6 million for the fourth quarter of 2025, compared to $1.1 million for the prior quarter in 2024.

Michael Zambito: Our energy operations reported G&A expense was $0.6 million for Q4 2025 compared to $1.1 million for the prior quarter in 2024. Q4 2024 included certain one-time fees and expenses that didn't recur in Q4 2025. Reported G&A at the parent level for the fourth quarter decreased by $5 million year-over-year from $12 million to $7 million.

Speaker #2: Q4 of 2024 included certain one-time fees and expenses that didn't recur in Q4 of 2025. Reported G&A at the parent level for the fourth quarter decreased by $5 million year over year, from $12 million to $7 million.

Speaker #2: Q4 of 2024 included third-party transaction expenses associated with the Deflecto acquisition. Parent G&A on an adjusted basis or our non-gap parent costs as shown in our adjusted EBITDA reconciliations remained relatively stable at $5 million in the quarter ended December 31, 2025, versus $4.8 million in the prior year.

Michael Zambito: Q4 2024 included third-party transaction expenses associated with the Deflecto acquisition. Parent G&A on an adjusted basis or our non-GAAP parent costs, as shown in our adjusted EBITDA reconciliations, remained relatively stable at $5 million in the quarter ended December 31, 2025, versus $4.8 million in the prior year. The company recorded a Q4 GAAP operating loss of $13.1 million compared to a GAAP operating loss of $15.8 million in the same quarter last year. This improvement was primarily due to year-over-year increase in revenue, slightly offset by higher cost of goods sold within our manufacturing operations, given the partial quarter in the prior year following the acquisition of Deflecto in October 2024.

Speaker #2: The company recorded a fourth quarter GAAP operating loss of $13.1 million, compared to a GAAP operating loss of $15.8 million in the same quarter last year.

Michael Zambito: The company recorded a Q4 GAAP operating loss of $13.1 million compared to a GAAP operating loss of $15.8 million in the same quarter last year. This improvement was primarily due to year-over-year increase in revenue, slightly offset by higher cost of goods sold within our manufacturing operations, given the partial quarter in the prior year following the acquisition of Deflecto in October 2024.

Speaker #2: This improvement was primarily due to year-over-year increase in revenue, slightly offset by higher cost of goods sold within our manufacturing operations, given the partial quarter in the prior year following the acquisition of Deflecto in October 2024.

Speaker #2: Energy operations contributed $3 million in GAAP operating income during the quarter, which included $3.4 million in non-cash depreciation, depletion, and amortization expense. And does not reflect the realized hedge gain of $1.7 million we realized during the quarter.

Michael Zambito: Energy operations contributed $3 million in GAAP operating income during the quarter, which included $3.4 million in non-cash depreciation, depletion, and amortization expense and does not reflect the realized hedge gain of $1.7 million we realized during the quarter. Adjusted EBITDA for our energy operations was $8.1 million, and free cash flow for our energy operations was $1 million in the quarter. This free cash flow included approximately $4.6 million of CapEx, primarily related to continued development in the Cherokee. Manufacturing operations had a $0.4 million GAAP operating loss during the quarter, which included $1.2 million in non-cash depreciation and amortization expense and $0.4 million in non-recurring transaction-related expenses and severance costs as part of our operational initiatives at Deflecto.

Speaker #2: Adjusted EBITDA for our energy operations was $8.1 million, and free cash flow for our energy operations was $1 million in the quarter. This free cash flow included approximately $4.6 million of capex, primarily related to continued development in the Cherokee.

Michael Zambito: This free cash flow included approximately $4.6 million of CapEx, primarily related to continued development in the Cherokee. Manufacturing operations had a $0.4 million GAAP operating loss during the quarter, which included $1.2 million in non-cash depreciation and amortization expense and $0.4 million in non-recurring transaction-related expenses and severance costs as part of our operational initiatives at Deflecto.

Speaker #2: Manufacturing operations had a $0.4 million GAAP operating loss during the quarter, which included $1.2 million in non-cash depreciation and amortization expense, and $0.4 million in non-recurring transaction-related expenses and severance costs as part of our operational initiatives at Deflecto.

Speaker #2: Adjusted EBITDA for our manufacturing operations was $1.1 million, and free cash flow for our manufacturing operations was -1.8 million in the quarter, primarily due to timing of certain working capital items.

Michael Zambito: Adjusted EBITDA for our manufacturing operations was $1.1 million, and free cash flow for our manufacturing operations was -$1.8 million in the quarter, primarily due to timing of certain working capital items. Industrial operations contributed $0.5 million in GAAP operating income during the quarter, which included $0.5 million in non-cash depreciation and amortization expense. Adjusted EBITDA for our industrial operations was $1.1 million, and free cash flow for our industrial operations was essentially flat in the quarter, primarily due to tariff-related payments, working capital items, and negative impacts from FX fluctuations. Yeah.

Speaker #2: Industrial operations contributed $0.5 million in GAAP operating income during the quarter, which included $0.5 million in non-cash depreciation and amortization expense. Adjusted EBITDA for our industrial operations was $1.1 million, and free cash flow for our industrial operations was essentially flat in the quarter, primarily due to tariff-related payments, working capital items, and negative impacts from FX fluctuations.

Michael Zambito: Adjusted EBITDA for our industrial operations was $1.1 million, and free cash flow for our industrial operations was essentially flat in the quarter, primarily due to tariff-related payments, working capital items, and negative impacts from FX fluctuations. Yeah.

Speaker #2: Net income attributable to Acacia Research Corporation in the fourth quarter was $3.4 million, or $0.04 per share, compared to a net loss attributable to Acacia of $13.4 million, or a $0.14 loss per share, in the prior year period, largely driven by our intellectual property operations results.

Michael Zambito: Net income attributable to Acacia Research Corporation in Q4 was $3.4 million, or $0.04 per share, compared to a net loss attributable to Acacia of $13.4 million for a $0.14 loss per share in the prior year period, largely driven by our intellectual property operations results. Included in GAAP net income for Q4 was $2.8 million in unrealized gains related to changes in the fair value of equity securities, offset by a realized loss of $3.5 million. Adjusted net income attributable to Acacia in Q4 of 2025 was $3.1 million, or $0.03 per share. Further details on these adjustments can be found in our press release. Turning to the full year results.

Speaker #2: Included in GAAP net income for the fourth quarter was $2.8 million in unrealized gains related to changes in the fair value of equity securities, offset by a realized loss of $3.5 million.

Michael Zambito: Included in GAAP net income for Q4 was $2.8 million in unrealized gains related to changes in the fair value of equity securities, offset by a realized loss of $3.5 million. Adjusted net income attributable to Acacia in Q4 of 2025 was $3.1 million, or $0.03 per share. Further details on these adjustments can be found in our press release. Turning to the full year results.

Speaker #2: Adjusted net income attributable to Acacia in the fourth quarter of 2025 was $3.1 million, or 3 cents per share. Further details on these adjustments can be found in our press release.

Speaker #2: Turning to the full year results, total 2025 revenues were $285.2 million, a record for Acacia, compared to $122.3 million in the prior year period.

Michael Zambito: Total 2025 revenues were $285.2 million, a record for Acacia, compared to $122.3 million in the prior year period. Our energy operations generated $63.8 million for the year, compared to $49.2 million last year, reflecting a full year of results from the acquisition of the Revolution assets in 2024. Our manufacturing operations generated $114.8 million in revenue for the year. Our industrial operations generated $28.3 million in revenue compared to $30.4 million last year. Our intellectual property operations generated $78.4 million in licensing and other revenue compared to $19.5 million last year. Reported G&A expenses were $65.1 million compared to $55.4 million last year.

Speaker #2: Our energy operations generated $63.8 million for the year, compared to $49.2 million last year, reflecting a full year of results from the acquisition of the Revolution Assets in 2024.

Speaker #2: Our manufacturing operations generated $114.8 million in revenue for the year. Our industrial operations generated $28.3 million in revenue, compared to $30.4 million last year.

Michael Zambito: Our industrial operations generated $28.3 million in revenue compared to $30.4 million last year. Our intellectual property operations generated $78.4 million in licensing and other revenue compared to $19.5 million last year. Reported G&A expenses were $65.1 million compared to $55.4 million last year.

Speaker #2: And our intellectual property operations generated $78.4 million in licensing and other revenue, compared to $19.5 million last year. Reported G&A expenses were $65.1 million, compared to $55.4 million last year.

Speaker #2: The increase primarily due to the full year impact of Deflecto, compared to an approximate three-month period in 2024, offset by lower transaction-related costs in 2025.

Michael Zambito: The increase primarily due to the full year impact of Deflecto compared to an approximate 3-month period in 2024, offset by lower transaction-related costs in 2025. GAAP operating income was $6.4 million compared to an operating loss of $32.9 million in the prior year period. Our energy operations contributed $10.2 million in operating income, which included $15.2 million of depreciation, depletion, and amortization charges. Our industrial operations contributed $1.2 million in operating income, which included $2.2 million of depreciation and amortization charges. Our manufacturing operations contributed $0.3 million in operating income for the year, which included $5.4 million of depreciation and amortization charges and $1.7 million of non-recurring severance costs and transaction-related expenses.

Speaker #2: Gap operating income was $6.4 million, compared to an operating loss of $32.9 million in the prior year period. Our energy operations contributed $10.2 million in operating income, which included $15.2 million of depreciation, depletion, and amortization charges, our industrial operations contributed $1.2 million in operating income, which included $2.2 million of depreciation and amortization charges, and our manufacturing operations contributed $0.3 million in operating income for the year, which included $5.4 million of depreciation and amortization charges, and $1.7 million of non-recurring severance costs and transaction-related expenses.

Michael Zambito: Our industrial operations contributed $1.2 million in operating income, which included $2.2 million of depreciation and amortization charges. Our manufacturing operations contributed $0.3 million in operating income for the year, which included $5.4 million of depreciation and amortization charges and $1.7 million of non-recurring severance costs and transaction-related expenses.

Speaker #2: Consolidated GAAP net income was $21.7 million, or $0.22 per diluted share in 2025, compared to a net loss of $36.1 million, or -$0.36 per diluted share last year.

Michael Zambito: Consolidated GAAP net income was $21.7 million or $0.22 per diluted share in 2025 compared to a net loss of $36.1 million or -$0.36 per diluted share last year. Net income in 2025 included $1.1 million in unrealized gains from the change in fair value of equity securities, offset by a $25,000 realized loss. Adjusted net income attributable to Acacia Research Corporation for the full year 2025 was $29.2 million or $0.30 per share. Further detail on these adjustments can be found in our press release.

Speaker #2: Net income in 2025 included $1.1 million in unrealized gains from the change in fair value of equity securities, offset by a $25,000 realized loss.

Speaker #2: Adjusted net income attributable to Acacia Research Corporation for the full year 2025 was $29.2 million, or $0.30 per share. Further detail on these adjustments can be found in our press release.

Speaker #2: As MJ alluded to earlier, we are exceptionally proud that we have grown LTM-operated segment adjusted EBITDA, excluding our episodic IP operations, from $4.3 million as of the fourth quarter of 2023 to over $40 million as of the fourth quarter of 2025, while maintaining relatively consistent parent costs to date, as defined, of $18 to $19 million.

Michael Zambito: As MJ alluded to earlier, we're exceptionally proud that we have grown LTM operated segment adjusted EBITDA, excluding our episodic IP operations from $4.3 million as of Q4 of 2023 to over $40 million as of Q4 of 2025, while maintaining relatively consistent parent costs to date as defined of $18 to 19 million. Turning to the balance sheet. Cash and cash equivalents, equity securities measured at fair value, and loans receivable totaled $339.6 million at 31 December 2025, compared to $332.4 million at 30 September 2025, and $297 million at 31 December 2024.

Speaker #2: Turning to the balance sheet, cash and cash equivalents, equity securities measured at fair value, and loans receivable totaled $339.6 million at December 31, 2025, compared to $332.4 million at September 30, 2025, and $297 million at December 31, 2024.

Michael Zambito: Cash and cash equivalents, equity securities measured at fair value, and loans receivable totaled $339.6 million at 31 December 2025, compared to $332.4 million at 30 September 2025, and $297 million at 31 December 2024.

Speaker #2: The increase of $42.6 million for the year was primarily due to cash generated from operating activities across all operated segments of $86.7 million, proceeds from the sale of the floor mat assets of $3 million, and $1.2 million of working capital benefit from the Deflecto transaction.

Michael Zambito: The increase of $42.6 million for the year was primarily due to cash generated from operating activities across all operated segments of $86.7 million, proceeds from the sale of the floor mat assets of $3 million, and $1.2 million of working capital benefit from the Deflecto transaction. Cash was reduced by parent costs of $11.4 million and further by $9.7 million and $1.4 million of capital expenditures at Benchmark and Deflecto, respectively, as well as $6.1 million in spend at Benchmark for new oil and gas leasehold interests.

Speaker #2: Cash was reduced by

Speaker #1: By parent costs of $11.4 million and further by $9.7 million and $1.4 million of capital expenditures . At Benchmark and de facto , respectively , as well as $6.1 million in spend at benchmark for new oil and gas leasehold interests Additionally , cash , cash used in financing activities reduced cash by $22.7 million .

Michael Zambito: Additionally, cash used in financing activities reduced cash by $22.7 million, primarily from $12 million of debt repayment on the Benchmark revolving credit facility and $15.1 million debt repayment on the Deflecto facility, offset by a $5 million draw on the Benchmark revolving credit facility for the purchase of additional leasehold interests. The parent company's total indebtedness was 0 at 31 December 2025. On a consolidated basis, Acacia's total indebtedness as of 31 December 2025 was $92.1 million, consisting of $59.5 million and $32.6 million in non-recourse debt at Benchmark and Deflecto, respectively. Since closing the acquisition of the Revolution assets in April 2024, Benchmark has paid down approximately $23 million in total debt, underscoring the strong free cash flow generation of the Benchmark business.

Speaker #1: Primarily from $12 million of debt repayment on the benchmark revolving credit facility and $15.1 million of debt repayment on the defective facility , offset by a $5 million draw on the benchmark revolving credit facility for the purchase of additional leasehold interests .

Speaker #1: The parent company's total indebtedness was zero at December 31st , 2025 . On a consolidated basis , Acacia's total indebtedness as of December 31st , 2025 was $92.1 million , consisting of $59.5 million and $32.6 million in nonrecourse debt .

Michael Zambito: The parent company's total indebtedness was 0 at 31 December 2025. On a consolidated basis, Acacia's total indebtedness as of 31 December 2025 was $92.1 million, consisting of $59.5 million and $32.6 million in non-recourse debt at Benchmark and Deflecto, respectively. Since closing the acquisition of the Revolution assets in April 2024, Benchmark has paid down approximately $23 million in total debt, underscoring the strong free cash flow generation of the Benchmark business.

Speaker #1: At Benchmark and deflected , respectively Since closing the acquisition of the Revolution assets in April 2024 , benchmark has paid down approximately $23 million in total debt , underscoring the strong free cash flow generation of the benchmark business Additionally , since acquiring Defecto in October 2024 , the company has paid down approximately $16 million in total .

Michael Zambito: Additionally, since acquiring Deflecto in October 2024, the company has paid down approximately $16 million in total Deflecto debt. These capital allocation decisions have significantly reduced our consolidated debt and interest expense, providing further operational flexibility. For more information on Acacia's Q4 and full year results, please see our press release issued this morning and our annual report on Form 10-K, which we will file with the SEC later this week.

Speaker #1: Debt These capital allocation decisions have significantly reduced our consolidated debt and interest expense , providing further operational flexibility . For more information on Acacia's fourth quarter and full year results , please see our press release issued this morning .

Speaker #1: And our annual Report on Form 10-K , which we will file with the SEC later this week And now I'll turn the call back over to you , MJ Thanks , Mike As you've heard today , we're excited .

Michael Zambito: Now I'll turn the call back over to you, MJ.

Martin D. McNulty, Jr.: Thanks, Mike. As you heard today, we're excited. We've executed well throughout Q4 and the full year. Our diverse portfolio and targeted strategy allow us to consistently streamline operations, materially improve performance, and drive long-term growth across each of our operating businesses. Looking ahead, we'll continue to appropriately balance prudent cost control initiatives with a deliberate approach to value generation across our platforms, while continuing to build our pipeline of attractive opportunities for growth in 2026. With that, I'll hand it back over to Jenny.

Martin McNulty, Jr: Thanks, Mike. As you heard today, we're excited. We've executed well throughout Q4 and the full year. Our diverse portfolio and targeted strategy allow us to consistently streamline operations, materially improve performance, and drive long-term growth across each of our operating businesses. Looking ahead, we'll continue to appropriately balance prudent cost control initiatives with a deliberate approach to value generation across our platforms, while continuing to build our pipeline of attractive opportunities for growth in 2026. With that, I'll hand it back over to Jenny.

Speaker #1: We've executed well throughout the fourth quarter and full year . Our diverse portfolio and targeted strategy allow us to consistently streamline operations , materially improve performance and drive long term growth across each of our operating businesses .

Speaker #1: Looking ahead, we'll continue to appropriately balance prudent cost control initiatives with the deliberate approach to value generation across our platforms, while continuing to build our pipeline of attractive opportunities for growth in 2026.

Speaker #1: With that , I'll hand it back over to Jennie

Speaker #2: Thank you very much . At this time , we will be conducting a question and answer session . If you would like to ask a question , please press star one on your phone keypad .

Operator 4: Thank you very much. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star two if you would like to remove your question from the queue. For any participants using speaker equipment, it might be necessary to pick up your handsets before you press the key. Please wait a moment while we poll for questions. Thank you. Our first question is coming from Anthony Stoss of Craig-Hallum. Anthony, your line is live.

Operator: Thank you very much. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star two if you would like to remove your question from the queue. For any participants using speaker equipment, it might be necessary to pick up your handsets before you press the key. Please wait a moment while we poll for questions. Thank you. Our first question is coming from Anthony Stoss of Craig-Hallum. Anthony, your line is live.

Speaker #2: Now . A confirmation tone will indicate that your line is in the queue . You may press star two . If you would like to remove your question from the queue for any participants using speaker equipment , it might be necessary to pick up your handset before you press the key .

Speaker #2: Please wait a moment whilst we poll for questions Thank you . Our first question is coming from Anthony Stoss of Craig-hallum Anthony , your line is live .

Speaker #3: Thank you . Good morning MJ , Michael and George . MJ , can you your first . Well good morning . You drilled your first well in Cherokee up .

Anthony Stoss: Thank you. Good morning, MJ, Michael, and George. MJ, can you-

Martin D. McNulty, Jr.: Hey, Tony.

Martin McNulty, Jr: Hey, Tony.

Anthony Stoss: Good morning. You drilled your first well in Cherokee. I don't know if you can share kind of expectations. Do you think it's gonna be 10%, 20%, whatever percent better than the rest of the benchmark wells? What are your plans maybe over the next three months, let's say, on how many more drills or more wells you'll drill? Add a couple follow-ups after that.

Speaker #3: I don't know if you can share kind of expectations . Do you think it's going to be 10% 20% whatever percent better than the rest of the benchmark wells ?

Speaker #3: And what are your plans ? Maybe over the next three months , let's say , on how many more drills are more up Wells , you'll drill and add a couple follow ups after that

Speaker #1: Look , I think that's a good question . I think it's difficult to compare the new wells to the wells that we have at benchmark , because as you remember , when we acquired the win , right ?

Martin D. McNulty, Jr.: Look, I think that's a good question. I think it's difficult to compare the new well to the wells that we have at Benchmark because as you remember, when we acquired the Winright assets and then subsequently the Revolution assets, we were acquiring kind of, you know, mid-life, low-decline, shallow decline wells that we thought were long lived. When we drilled this new well, we spent a lot of time high grading the acreage. You know, Anthony, we talked a lot about the acreage that we got, quote, for free from the Revolution acquisition, and this kind of fit in that bucket. We did take some existing acreage we had that we didn't like as much, swapped it for acreage around positions that we did like, and we built a little bit around that.

Martin McNulty, Jr: Look, I think that's a good question. I think it's difficult to compare the new well to the wells that we have at Benchmark because as you remember, when we acquired the Winright assets and then subsequently the Revolution assets, we were acquiring kind of, you know, mid-life, low-decline, shallow decline wells that we thought were long lived. When we drilled this new well, we spent a lot of time high grading the acreage. You know, Anthony, we talked a lot about the acreage that we got, quote, for free from the Revolution acquisition, and this kind of fit in that bucket. We did take some existing acreage we had that we didn't like as much, swapped it for acreage around positions that we did like, and we built a little bit around that.

Speaker #1: Assets and then subsequently the revolution assets , we were acquiring kind of midlife low decline , shallow decline , wells that that we thought were long lived .

Speaker #1: And so when we drilled this new well , we spent a lot of time high grading the acreage , you know , Tony , we talked a lot about the acreage that we got , for free from the the Revolution acquisition .

Speaker #1: And this kind of fit in that bucket . We did take some existing acreage we had that we didn't like as much , swapped it for acreage around positions that we did like , and we built a little bit around that , you know , in terms of the number of wells we might drill , I don't think we're ready to say that .

Martin D. McNulty, Jr.: You know, in terms of the number of wells we might drill, I don't think we're ready to say that. I will say that we have several locations like this well that we just drilled that we've high graded and think are very attractive. If you think about the production decline in a well, you will see an uptick in production, for the rest of this year, once this well comes online, which is imminent.

Martin McNulty, Jr: You know, in terms of the number of wells we might drill, I don't think we're ready to say that. I will say that we have several locations like this well that we just drilled that we've high graded and think are very attractive. If you think about the production decline in a well, you will see an uptick in production, for the rest of this year, once this well comes online, which is imminent.

Speaker #1: I will say that we have several locations like this. Well, that we just rolled, that we've high-graded and think are very attractive.

Speaker #1: But if you think about the production decline in a well , you will see an uptick in production for the rest of this year .

Speaker #1: Once this well comes online, which is imminent.

Speaker #3: Gotcha . And I know you guys got this for a very attractive price . And clearly you could sell it for more . Now , is there any thought process on seeing what that first ?

Anthony Stoss: Gotcha. I know you guys got this for a very attractive price and clearly could sell it for more now. Is there any thought process on seeing what that first well will produce, take that and potentially sell all the Cherokee assets for shareholder value?

Speaker #3: Well , will produce ? Take that and potentially sell all the Cherokee assets for for shareholder value

Speaker #1: That is an option . It's one of many options . As you know , the oil and gas business is interesting in that you have a team and you have assets , and you tend to be able to keep the team and sell the assets and there they're different pieces of benchmark that have different profiles .

Martin D. McNulty, Jr.: That is an option. It's one of many options. As you know, the oil and gas business is interesting in that you have a team and you have assets, and you tend to be able to keep the team and sell the assets. There are different pieces of Benchmark that have different profiles. For example, we have Cleveland wells. We have now a Cherokee well. We have wells in different counties within Texas and Oklahoma that fit with other people's production profiles. There are a lot of ways to monetize the package in pieces, or as a whole. As we see activity continuing to develop in our little basin, we'll evaluate opportunities around all of those.

Martin McNulty, Jr: That is an option. It's one of many options. As you know, the oil and gas business is interesting in that you have a team and you have assets, and you tend to be able to keep the team and sell the assets. There are different pieces of Benchmark that have different profiles. For example, we have Cleveland wells. We have now a Cherokee well. We have wells in different counties within Texas and Oklahoma that fit with other people's production profiles. There are a lot of ways to monetize the package in pieces, or as a whole. As we see activity continuing to develop in our little basin, we'll evaluate opportunities around all of those.

Speaker #1: For example , we have Cleveland Wells , we have now Cherokee . Well , we have wells in different counties within Texas and Oklahoma that fit with other people's production profiles .

Speaker #1: And so there are a lot of ways to monetize the package and pieces or as a whole and as as we see activity continuing to develop in our little basin , we'll evaluate opportunities around all of those .

Speaker #3: Got it. And then maybe this isn't the right way of phrasing the question, but you've hedged away 75% of the oil.

Anthony Stoss: Got it. Maybe this isn't the right way of phrasing the question, but you've hedged away 75% of the oil. What's the average hedge price per barrel right now for you guys? Now with oil over $90 a barrel, you say you're gonna continue to hedge that. Like, in the next couple of quarters, what can that number move up to?

Speaker #3: What's the average hedge price per barrel right now for you guys? And now, with oil over $90 a barrel, you say you're going to continue to hedge that, like in the next couple of quarters.

Speaker #3: What can that number move up to

Speaker #1: Yeah . So our average hedge price is about $70 a barrel right now . If you look at the front end of the curve for the next call it 12 to 18 months .

Martin D. McNulty, Jr.: Yeah. Our average hedge price is about $70 a barrel right now. If you look at the front end of the curve for the next, call it, 12 to 18 months, that front end has moved up pretty significantly. And as you know, if you're watching oil prices, it's bounced around in a pretty wide range over the last few days. We are fully hedged for 2026. We will be hedging the volumes that come on from this new well, and so hopefully get the benefit of the curve, the front end of the curve right now. Then we'll continue to look at the curve out past 2028 as we layer on new hedges, not only in oil, but in gas, and to the extent that the liquidity in the market is there, NGLs.

Martin McNulty, Jr: Yeah. Our average hedge price is about $70 a barrel right now. If you look at the front end of the curve for the next, call it, 12 to 18 months, that front end has moved up pretty significantly. And as you know, if you're watching oil prices, it's bounced around in a pretty wide range over the last few days. We are fully hedged for 2026. We will be hedging the volumes that come on from this new well, and so hopefully get the benefit of the curve, the front end of the curve right now. Then we'll continue to look at the curve out past 2028 as we layer on new hedges, not only in oil, but in gas, and to the extent that the liquidity in the market is there, NGLs.

Speaker #1: That front end has moved up pretty significantly. And as you know, if you're watching, oil prices have bounced around in a pretty wide range over the last few days.

Speaker #1: But we are fully hedged for 2026. We will be hedging the volumes that come on from this new well, and so hopefully get the benefit of the curve.

Speaker #1: The front end of the curve right now . And then we'll continue to look at the curve out past 28 as we layer on new hedges , not only in oil but in in gas .

Speaker #1: And to the extent that the editing the market is there , Engels . And so we think , you know , that we're in a pretty advantageous position now .

Martin D. McNulty, Jr.: We think, you know, that we're in a pretty advantageous position. Now, also recall that we're selling oil and gas into the market today that's unhedged. The 25% of the exposure that's unhedged, we are taking advantage of market prices. NGL hedging has less liquidity and less term on it or duration on it, and NGLs tend to trade based on a ratio to oil. Those NGLs I think we'll benefit from as well.

Martin McNulty, Jr: We think, you know, that we're in a pretty advantageous position. Now, also recall that we're selling oil and gas into the market today that's unhedged. The 25% of the exposure that's unhedged, we are taking advantage of market prices. NGL hedging has less liquidity and less term on it or duration on it, and NGLs tend to trade based on a ratio to oil. Those NGLs I think we'll benefit from as well.

Speaker #1: Also recall that we're selling we're selling oil and gas into the market today . That's unhedged . So the 25% of the exposure that's unhedged we are taking advantage of market prices .

Speaker #1: And NGL hedging has less liquidity and less term on it or duration on it . And NGLs tend to trade based on a ratio to oil .

Speaker #1: And so those NGLs I think will benefit from as well .

Speaker #3: Very good . Thanks for answering my questions and nice execution . Again .

Anthony Stoss: Very good. Thanks for answering my questions and nice execution again.

Speaker #1: Yeah . Thanks , Tony .

Martin D. McNulty, Jr.: Yeah, thanks, Tony.

Martin McNulty, Jr: Yeah, thanks, Tony.

Speaker #2: Thank you very much . Our next question is coming from Brett Reese of Janney Montgomery Scott . Brett , your line is live

Operator 4: Thank you very much. Our next question is coming from Brett Reiss of Janney Montgomery Scott. Brett, your line is live.

Operator: Thank you very much. Our next question is coming from Brett Reiss of Janney Montgomery Scott. Brett, your line is live.

Speaker #4: Yeah. Good morning. And MJ, good show to you and the team on the quarterly and yearly results.

Brett Reiss: Yeah. Good morning, and MJ, good show to you and the team on the quarterly and yearly results.

Speaker #1: Yeah. Thanks, Brent. We really appreciate it.

Martin D. McNulty, Jr.: Yeah. Thanks, Brett. We really appreciate it.

Martin McNulty, Jr: Yeah. Thanks, Brett. We really appreciate it.

Speaker #4: Just one question on on benchmark . If you do retain Cherokee and other acreage , you know , based on what you think the intermediate and long term , you know , pricing on on hydrocarbons are , would your goal be to just kind of sustain your 6000 barrels a day production or materially increase it

Brett Reiss: Just one question on Benchmark. If you do retain Cherokee and other acreage, you know, based on what you think the intermediate and long-term, you know, pricing on hydrocarbons are, would your goal be to just kind of sustain your 6,000 barrels a day production or materially increase it?

Speaker #1: I mean , what we think about is being able to add and maintain production inside our current cash flows . And so , you know , we're not you're not going to see us go out and borrow a bunch of money in order to materially increase production .

Martin D. McNulty, Jr.: I mean, what we think about is being able to add and maintain production inside our current cash flows. You know, you're not gonna see us go out and borrow a bunch of money in order to materially increase production. That's not our model. Our model is a production one, so where we can take existing cash flows and put them into high ROI projects, whether that's acquiring new businesses or it's drilling new wells, that's how we're gonna evaluate it. We are gonna be very judicious and conservative in how we use cash flow to do that.

Martin McNulty, Jr: I mean, what we think about is being able to add and maintain production inside our current cash flows. You know, you're not gonna see us go out and borrow a bunch of money in order to materially increase production. That's not our model. Our model is a production one, so where we can take existing cash flows and put them into high ROI projects, whether that's acquiring new businesses or it's drilling new wells, that's how we're gonna evaluate it. We are gonna be very judicious and conservative in how we use cash flow to do that.

Speaker #1: That's not our model . Our models of production . One . So where we can take existing cash flows and put them into high ROI projects , whether that's acquiring new businesses or it's or or it's drilling new wells , that's how we're going to evaluate it .

Speaker #1: But we are going to be very judicious and conservative in how we use cash flow to do that.

Speaker #4: Okay . Pivoting to deflect between the green shoots you talked about in your opening remarks . Plus the operational improvements , you know that Clay key fob brings to the table .

Brett Reiss: Okay. Pivoting to Deflecto. Between the green shoots you talked about in your opening remarks, plus the operational improvements, you know, that Clay Faber brings to the table, what is your aspirations on operating margins and EBITDA? I mean, you know, the operating margins are at X right now, and EBITDA is at X. Where do you think it can go 18 months to 2 years from now?

Speaker #4: What is your aspirations on operating margins and EBITDA ? I mean , you know , the operating margins are at ECS right now , and EBITDA is at X , with where where do you think it can go 18 months to two years from now ?

Speaker #1: Look , I think without answering that question with guidance on margins and EBITDA , I think that we're in a very good position right now .

Martin D. McNulty, Jr.: Look, I think without answering that question, with guidance on margins and EBITDA, I think that we're in a very good position right now. I think we have taken our licks from tariff-related issues, and some inflation. But we are well on our way of operational improvement from a margin standpoint, not only the consolidation of our Portland facility into Dover, but also general lean manufacturing initiatives on the shop floor. As those take root and volumes come back, you know, you mentioned the green shoots in Class 8. That is a cyclical industry. We are seeing positive data points, albeit three consistent after a long trend of down Class 8 sales. As volumes pick up, we anticipate that we'll benefit from the initiatives that have been put into it.

Martin McNulty, Jr: Look, I think without answering that question, with guidance on margins and EBITDA, I think that we're in a very good position right now. I think we have taken our licks from tariff-related issues, and some inflation. But we are well on our way of operational improvement from a margin standpoint, not only the consolidation of our Portland facility into Dover, but also general lean manufacturing initiatives on the shop floor. As those take root and volumes come back, you know, you mentioned the green shoots in Class 8. That is a cyclical industry. We are seeing positive data points, albeit three consistent after a long trend of down Class 8 sales. As volumes pick up, we anticipate that we'll benefit from the initiatives that have been put into it.

Speaker #1: I think we have taken our licks from tariff related issues and some inflation . But but we are well on our way of operational improvement from a margin standpoint , not only the consolidation of our Portland facility into Dover , but also general lean manufacturing initiatives on the shop floor .

Speaker #1: And so as those take root and volumes come back , we you know , you mentioned the green shoots in class eight . That is a cyclical industry .

Speaker #1: We are seeing positive data points, albeit three, but three consistent after a long trend of down Class Eight sales. As volumes pick up.

Speaker #1: We you know , we anticipate that will benefit from the initiatives that that have been put into it . The air distribution business has had a little bit of headwinds , more recently on the Canadian housing market side , but it's held up pretty well , and it's a nice competitive business with good share in the markets in which it plays .

Martin D. McNulty, Jr.: The air distribution business has had a little bit of headwinds more recently on the Canadian housing market side, but it's held up pretty well, and it's a nice competitive business with good share in the markets in which it plays. As we see some of this cyclical rebound, A, B, our initiatives to drive growth through sales channels and the like, and C, the cost enhancement, or margin enhancement opportunities that we're taking advantage of, we feel like we're kinda hitting on all cylinders in spite of where the market sits.

Martin McNulty, Jr: The air distribution business has had a little bit of headwinds more recently on the Canadian housing market side, but it's held up pretty well, and it's a nice competitive business with good share in the markets in which it plays. As we see some of this cyclical rebound, A, B, our initiatives to drive growth through sales channels and the like, and C, the cost enhancement, or margin enhancement opportunities that we're taking advantage of, we feel like we're kinda hitting on all cylinders in spite of where the market sits.

Speaker #1: And so, as we see some of this cyclical rebound, our initiatives to drive growth through sales channels and the like, and see the cost enhancement or margin enhancement opportunities that we're taking advantage of.

Speaker #1: We feel like we're kind of hitting on all cylinders in spite of where the market sits .

Speaker #4: Okay . Could you just give me the thought process and thinking of the sale of the floor mat business ? You know , why that one and why at this time

Brett Reiss: Okay. Could you just give me the thought process in thinking of the sale of the floor mat business? You know, why that one and why at this time?

Speaker #1: Yeah . Well , when we looked at the remember when we bought deflect ? Oh , it was a lot of different businesses .

Martin D. McNulty, Jr.: Yeah. Well, when we looked at the—remember, when we bought Deflecto, it was a lot of different businesses, and we looked at what was most strategic for us within safety, air, and office. When we looked at the floor mat business in particular, we thought it was subscale. We thought that the owner, the current owner, the group that bought it from us was a better owner for that business. They offered us a fair price for it, so we found that from a capital allocation standpoint, it was the right thing to do.

Martin McNulty, Jr: Yeah. Well, when we looked at the—remember, when we bought Deflecto, it was a lot of different businesses, and we looked at what was most strategic for us within safety, air, and office. When we looked at the floor mat business in particular, we thought it was subscale. We thought that the owner, the current owner, the group that bought it from us was a better owner for that business. They offered us a fair price for it, so we found that from a capital allocation standpoint, it was the right thing to do.

Speaker #1: And we looked at what was most strategic for us within safety , air and office . And when we looked at at the floor mat business in particular , we thought it was subscale and and we thought that the owner , the current owner , the the group that bought it from us was a better owner for that business .

Speaker #1: And they offered us a fair price for it . And so we found that from a capital allocation standpoint , it was the right thing to do .

Speaker #4: Okay A question on the legacy patent business . You know , there's been a lot of turmoil with AI . You know , impacting software .

Brett Reiss: Okay. A question on the legacy patent business. You know, there's been a lot of turmoil with AI, you know, impacting software and the protective moats everyone thought that would exist. Has that impacted negatively or positively, you know, our legacy patent portfolio?

Speaker #4: And the protective moats . Everyone thought that would exist . Has that impacted negatively or positively ? You know , our legacy patent portfolio .

Speaker #1: Yeah . I mean , look , our legacy patent portfolio is around , you know , the the overwhelming majority of it is around Wi-Fi six .

Martin D. McNulty, Jr.: Yeah. I mean, look, our legacy patent portfolio is around, you know, the overwhelming majority of it is around five by six. We really haven't seen a negative impact from AI. In fact, I would think that AI would actually be a tailwind for the value of that portfolio in terms of connectivity and interconnectivity and how it is today and the continued evolution of that.

Martin McNulty, Jr: Yeah. I mean, look, our legacy patent portfolio is around, you know, the overwhelming majority of it is around five by six. We really haven't seen a negative impact from AI. In fact, I would think that AI would actually be a tailwind for the value of that portfolio in terms of connectivity and interconnectivity and how it is today and the continued evolution of that.

Speaker #1: And so we really haven't seen a negative impact from AI. In fact, I would think that AI would actually be a tailwind for the value of that portfolio in terms of connectivity and interconnectivity.

Speaker #1: And how it is today . And the continued evolution of that .

Speaker #4: Right . There's been a lot of stress in private credit and in private equity . Has that stress risen to a point where , you know , pricing of some things in that space , you might want to purchase is is closer to fruition ?

Brett Reiss: Right. There's been a lot of stress in private credit and in private equity. Has that stress risen to a point where, you know, pricing of some things in that space you might wanna purchase is closer to fruition?

Speaker #1: Yeah , that's a great question . And and this is really an evolving scenario , I think we've talked about this for the past couple quarters that , you know , the valuations at which private equity funds are holding assets and their ability to hold assets for a longer period of time without a daily mark to market , has given them a little bit of a place to hide in the area of the market that we look at sort of mid-market , lower middle market , businesses and not commenting on the public businesses right now , because I think there's a lot of opportunity there as well .

Martin D. McNulty, Jr.: Yeah, that's a great question. This is really an evolving scenario. I think we've talked about this for the past couple quarters, that, you know, the valuations at which private equity funds are holding assets and their ability to hold assets for a longer period of time without a daily mark to market has given them a little bit of a place to hide. In the area of the market that we look at, sort of mid-market, lower middle market, private businesses, and not commenting on the public businesses right now because I think there's a lot of opportunity there as well.

Martin McNulty, Jr: Yeah, that's a great question. This is really an evolving scenario. I think we've talked about this for the past couple quarters, that, you know, the valuations at which private equity funds are holding assets and their ability to hold assets for a longer period of time without a daily mark to market has given them a little bit of a place to hide. In the area of the market that we look at, sort of mid-market, lower middle market, private businesses, and not commenting on the public businesses right now because I think there's a lot of opportunity there as well.

Speaker #1: On the private businesses , the the great assets , the assets that are hitting on all cylinders are able to be sold and there's a bid for them and there's a very good bid for them .

Martin D. McNulty, Jr.: On the private businesses, the great assets, the assets that are hitting on all cylinders are able to be sold, and there's a bid for them, and there's a very good bid for them. As we've talked about many times in the past, we kind of like the B and C quartile assets, and that area is starting to see a freeze up in deal activity where it's not necessarily the bid-ask, which had been in the past. Now it's people showing up to buy those assets.

Martin McNulty, Jr: On the private businesses, the great assets, the assets that are hitting on all cylinders are able to be sold, and there's a bid for them, and there's a very good bid for them. As we've talked about many times in the past, we kind of like the B and C quartile assets, and that area is starting to see a freeze up in deal activity where it's not necessarily the bid-ask, which had been in the past. Now it's people showing up to buy those assets.

Speaker #1: As we've talked about many times in the past, we kind of like to B and C quartile assets, and that area is starting to see a freeze-up in deal activity, where it's not necessarily the bid-ask, which it had been in the past.

Speaker #1: Now it's people showing up to buy those assets . And so if we believe in our operating capabilities , which which we do , we become a very logical buyer .

Martin D. McNulty, Jr.: If we believe in our operating capabilities, which we do, we become a very logical buyer and solution to these private equity funds that are now, you know, 2020, 2021, maybe early 2022 acquisitions that are 4 to 5 years through a hold period, where we can, you know, be a buyer at a reasonable price, with an operating partner that can help us really take advantage of the situation, and build that business and fix that business. I'm encouraged by what we're seeing, albeit at the cost of our.

Martin McNulty, Jr: If we believe in our operating capabilities, which we do, we become a very logical buyer and solution to these private equity funds that are now, you know, 2020, 2021, maybe early 2022 acquisitions that are 4 to 5 years through a hold period, where we can, you know, be a buyer at a reasonable price, with an operating partner that can help us really take advantage of the situation, and build that business and fix that business. I'm encouraged by what we're seeing, albeit at the cost of our.

Speaker #1: And solution to these private equity funds that are now , you know , 2021 , maybe early 22 acquisitions that are 4 to 5 years through a hold period where we can , you know , be a buyer at a reasonable price with an operating partner that can help us really take advantage of the situation and build that business and fix that business .

Speaker #1: So I'm encouraged by what we're seeing, albeit at the cost of our—our—

Speaker #4: Great, last one for me, and thank you for letting me ask all the questions. Have any of the potential sellers of things you're looking at wanted, instead of just all cash as part of the consideration for the sale of their assets, to have it be in your company's stock?

Brett Reiss: Great. Last one for me, and thank you for letting me ask all the questions.

Martin D. McNulty, Jr.: Yeah, of course, Brett.

Martin McNulty, Jr: Yeah, of course, Brett.

Brett Reiss: Have any of the potential sellers of things you're looking at wanted instead of just all cash, a part of the consideration for the sale of their assets to be in your company's stock?

Speaker #1: We get that question all the time , and the answer is we'll pay you cash .

Martin D. McNulty, Jr.: We get that question all the time, and the answer is we'll pay you cash.

Martin McNulty, Jr: We get that question all the time, and the answer is we'll pay you cash.

Speaker #4: Okay , MJ , thanks for answering my questions and good show .

Brett Reiss: Okay. MJ, thanks for answering my questions, and good show.

Speaker #1: Thanks . Talk to you soon , Brett .

Speaker #4: You bet .

Martin D. McNulty, Jr.: Thanks. Talk to you soon, Brett.

Martin McNulty, Jr: Thanks. Talk to you soon, Brett.

Speaker #2: Thank you very much. Just a reminder there: if there are any remaining questions, you can still join the queue by pressing star one on your phone keypad.

Brett Reiss: You bet.

Operator 4: Thank you very much. Just a reminder there, if there are any remaining questions, you can still join the queue by pressing star one on your phone keypad now. Our next question is coming from Adam Eagleston of Formidable Asset Management. Adam, your line is live.

Operator: Thank you very much. Just a reminder there, if there are any remaining questions, you can still join the queue by pressing star one on your phone keypad now. Our next question is coming from Adam Eagleston of Formidable Asset Management. Adam, your line is live.

Speaker #2: Now, our next question is coming from Adam Eggleston of Formidable Asset Management. Adam, your line is live.

Speaker #5: Good morning everyone .

Adam Eagleston: Good morning, everyone.

Speaker #1: Adam .

Speaker #5: Hey again , echo the comments from everyone else . Nice to see the execution this quarter . You guys touched on it a little bit in terms of Brett's call on what's happening in the private equity markets , but if I heard you correctly , despite the headlines we see on private equity , private credit , it sounds like it's not yet a buyer's market yet , at least for the good assets .

Martin D. McNulty, Jr.: Hey, Adam.

Martin McNulty, Jr: Hey, Adam.

Adam Eagleston: Hey. Again, echo the comments for everyone else. Nice to see the execution this quarter. You guys touched on it a little bit, in terms of Brett's call on what's happening in the private equity markets. If I heard you correctly, despite the headlines we see on private equity, private credit, it sounds like it's not yet a buyer's market yet, at least for the good assets. Just kind of confirm that, A, and then B, just overall capital allocation-wise, how are you guys thinking right now?

Speaker #5: So just kind of confirm that A and then B just overall capital allocation wise , how are you guys thinking right now .

Speaker #1: Yeah. So, and I'm glad you brought it back up, Adam, because—and Brett, I apologize I didn't address the point on private credit.

Martin D. McNulty, Jr.: Yeah, I'm glad you brought it back up, Adam. Brett, I apologize, I didn't address the point on private credit. I think it's too early in private credit. I think the issue in private credit is predominantly around the software businesses that are in there. There are a lot of private equity funds that have borrowed from private credit funds on software businesses. We are very cautious on software businesses. We are trying to, when we look at them, look for systems of record, compliance-related interconnectivity, where there's less risk of displacement.

Martin McNulty, Jr: Yeah, I'm glad you brought it back up, Adam. Brett, I apologize, I didn't address the point on private credit. I think it's too early in private credit. I think the issue in private credit is predominantly around the software businesses that are in there. There are a lot of private equity funds that have borrowed from private credit funds on software businesses. We are very cautious on software businesses. We are trying to, when we look at them, look for systems of record, compliance-related interconnectivity, where there's less risk of displacement.

Speaker #1: I think it's too early in private credit . I think the the issue in private credit I think is predominantly around the software businesses that are in there .

Speaker #1: And there are a lot of private equity funds that have borrowed from private credit funds that own software businesses . And so we are very cautious on software businesses .

Speaker #1: We are trying to, when we look at them, look for systems of record, compliance-related interconnectivity where there's less risk of displacement.

Speaker #1: But I think what's going on in the private credit market is A generalization because I don't think people know all the details yet of software businesses losing C licenses and what that does to earnings and the flow through on earnings for these software businesses .

Martin D. McNulty, Jr.: I think what's going on in the private credit market is a generalization because I don't think people know all the details yet of software businesses losing C licenses and what that does to earnings and the flow-through on earnings for these software businesses. I'm not sure that we know yet what the impact for our types of businesses is in the private credit markets. In the private equity markets, we are again seeing opportunities where B and C quartile assets just are not moving despite a desire by a sponsor to move those assets. They've gone through over the last, you know, several years and quarters.

Martin McNulty, Jr: I think what's going on in the private credit market is a generalization because I don't think people know all the details yet of software businesses losing C licenses and what that does to earnings and the flow-through on earnings for these software businesses. I'm not sure that we know yet what the impact for our types of businesses is in the private credit markets. In the private equity markets, we are again seeing opportunities where B and C quartile assets just are not moving despite a desire by a sponsor to move those assets. They've gone through over the last, you know, several years and quarters.

Speaker #1: So I'm not sure that we know yet what the impact for our types of businesses is in the private credit markets , in the private equity markets , we are again , seeing opportunities where B and C quartile assets just are not moving despite a desire by a sponsor to move those assets .

Speaker #1: They've gone through over the last several years . And quarters they've gone through pruning their best assets , taking their cash off the table and making their return .

Martin D. McNulty, Jr.: They've gone through pruning their best assets, taking their cash off the table and making their return, and they will need to clean up the rest of those portfolios, which we think is an opportunity for us.

Martin McNulty, Jr: They've gone through pruning their best assets, taking their cash off the table and making their return, and they will need to clean up the rest of those portfolios, which we think is an opportunity for us.

Speaker #1: And they will need to clean up the rest of those portfolios , which we think is an opportunity for us

Speaker #5: Got it . Okay . And then capital allocation wise , I know you're you're coming up on some milestones here . I think at least that might open up opportunities for for buybacks .

Adam Eagleston: Got it. Okay. Capital allocation-wise, you know, I know you're coming up on some milestones here. I think at least that might open up opportunities for buybacks. How do you balance that with putting capital to work in operating businesses versus any disruptions you're seeing in the public equity space?

Speaker #5: How do you balance that with putting capital to work and operating businesses, versus any disruptions you're seeing in the public equity space?

Speaker #1: Yeah . Look , I think there's a lot of disruption and opportunity on the on the public and private space . I , I also , you know , we in our board are looking at all alternatives all the time in terms of how we best allocate capital for you all .

Martin D. McNulty, Jr.: Yeah. Look, I think there's a lot of disruption and opportunity on the public and private space. I also, you know, we and our board are looking at all alternatives all the time in terms of how we best allocate capital for you all. When you look at the slides in our deck and you see where we are on earnings from our segments relative to our parent costs, we think there's, you know, new acquisitions and any improvement in the underlying portfolio drive a lot of flow-through to the bottom line of Acacia. It's balancing that in the opportunity set, which I think is pretty robust right now, with the net impact of buyback. We evaluate that on a consistent basis.

Martin McNulty, Jr: Yeah. Look, I think there's a lot of disruption and opportunity on the public and private space. I also, you know, we and our board are looking at all alternatives all the time in terms of how we best allocate capital for you all. When you look at the slides in our deck and you see where we are on earnings from our segments relative to our parent costs, we think there's, you know, new acquisitions and any improvement in the underlying portfolio drive a lot of flow-through to the bottom line of Acacia. It's balancing that in the opportunity set, which I think is pretty robust right now, with the net impact of buyback. We evaluate that on a consistent basis.

Speaker #1: When you look at the slides in our deck and you see where we are on earnings from our segments , relative to our parent costs , we think there's , you know , new acquisitions and any improvement in underlying portfolio drive a lot of flow through to the bottom line at Acacia .

Speaker #1: And so it's balancing that, and the opportunity set, which I think is pretty robust right now with the net impact of buyback, and we evaluate that on a consistent basis.

Speaker #5: Got it . Okay . Thanks for thanks for the time .

Adam Eagleston: Got it. Okay. Thanks for the time.

Speaker #1: Yeah .

Martin D. McNulty, Jr.: Yeah, of course.

Martin McNulty, Jr: Yeah, of course.

Speaker #6: Of course .

Speaker #2: Thank you very much . And our next question is coming from Todd Stelter of 88 management LLC . Todd , your line is live .

Operator 4: Thank you. Thank you very much. Our next question is coming from Todd Slutter of 88 Management LLC. Todd, your line is live.

Operator: Thank you. Thank you very much. Our next question is coming from Todd Slutter of 88 Management LLC. Todd, your line is live.

Speaker #7: Thank you very much. Good morning, team, and congratulations on a strong 2025.

Todd Slutter: Thank you very much. Good morning, team, and congratulations on a strong 2025.

Speaker #1: Thanks , Todd .

Martin D. McNulty, Jr.: Thanks, Todd.

Martin McNulty, Jr: Thanks, Todd.

Todd Slutter: Quick question. I noticed a somewhat de minimis revenue number on the IP this quarter and a very robust EBITDA number.

Speaker #7: I noticed a somewhat diminished revenue number on the IT this quarter, and a very robust EBITDA number. Can you kind of give us a better understanding of that?

Martin D. McNulty, Jr.: Yeah.

Martin McNulty, Jr: Yeah.

Todd Slutter: Can you kind of give us a better understanding of that?

Speaker #1: Yeah . No , that's a good question . And I try to address it in the script , but I'm happy to address it here as well .

Martin D. McNulty, Jr.: Yeah, no, that's a good question, and I tried to address it in script, but I'm happy to address it here as well. We had a settlement with a service provider that dates back to 2017, 2018 time frame. We were pursuing that settlement over the course of 2025. We had costs burning our EBITDA in prior quarters and the Q4 associated with that. We recorded from a matching standpoint the settlement that we received as part of that, not IP monetization related, in EBITDA, which is what drives that difference, Todd.

Martin McNulty, Jr: Yeah, no, that's a good question, and I tried to address it in script, but I'm happy to address it here as well. We had a settlement with a service provider that dates back to 2017, 2018 time frame. We were pursuing that settlement over the course of 2025. We had costs burning our EBITDA in prior quarters and the Q4 associated with that. We recorded from a matching standpoint the settlement that we received as part of that, not IP monetization related, in EBITDA, which is what drives that difference, Todd.

Speaker #1: So we we had a settlement with a service provider that dates back to 2017 , 2018 time frame . And we were pursuing that settlement over the course of 2025 .

Speaker #1: We had costs burdening our EBITDA in prior quarters , and the fourth quarter associated with that . And and so we recorded from a matching standpoint , the settlement that we received as part of that , not IP monetization related in EBITDA , which is what drives that difference .

Speaker #1: Todd .

Speaker #7: Gotcha , gotcha . Well , MJ , first of all , I want to give you some additional thoughts on eyeballing benchmark and making that acquisition , because I know you had a lot of experience in that complex .

Todd Slutter: Gotcha. Well, MJ, first of all, I want to give you some additional plaudits on eyeballing Benchmark and making that acquisition. I know you had a lot of experience in that complex. What a great purchase that was. Guys, I hate to harp on this one last issue again, but considering the way the markets are right now, our balance sheet, and the fact that the currency still trades at a significant discount to the underlying book value, what was the thought process in not considering putting forth some sort of a buyback announcement?

Speaker #7: So what a great purchase that was . Guys , I hate to harp on this one last issue . Again , but considering the way the markets are right now , our balance sheet and the fact that the currency still trades at a significant discount to the underlying book value , what was the thought process in not considering putting forth some sort of a buyback announcement

Martin D. McNulty, Jr.: Let's take a step back and let's put that in two pieces. One, the conversations we have at the management and board level about a buyback and capital allocation, versus an announcement of a potential buyback. I think we're thinking about it and considering all the alternatives all the time. When we think it's appropriate or if we think it's appropriate, we'll put something in place. We don't wanna put one in place without, you know, intending to use it. You know, if we get to the capital allocation decision that we intend to use it and we wanna buy back shares, that's when you'd see an announcement.

Speaker #1: I think , you know , when let's take a step back and let's put that in two pieces . One , the conversations we have at the management and board level about a buyback and capital allocation versus an announcement of a potential buyback , I think we're thinking about it .

Martin McNulty, Jr: Let's take a step back and let's put that in two pieces. One, the conversations we have at the management and board level about a buyback and capital allocation, versus an announcement of a potential buyback. I think we're thinking about it and considering all the alternatives all the time. When we think it's appropriate or if we think it's appropriate, we'll put something in place. We don't wanna put one in place without, you know, intending to use it. You know, if we get to the capital allocation decision that we intend to use it and we wanna buy back shares, that's when you'd see an announcement.

Speaker #1: And and considering all the alternatives all the time . And when we think it's appropriate , or if we think it's appropriate , we'll put something in place .

Speaker #1: But but we we don't want to put one in place without , you know , intending to intending to use it . And so if we get to the capital allocation decision that we intend to use it , we want to buy back shares .

Speaker #1: That's when you'd see an announcement.

Speaker #7: Great . And is that something that we'd have to wait another three months for , or do you guys have the flexibility and the ability to execute on that during the quarter

Todd Slutter: Great. Is that something that we would have to wait another three months for? Or do you guys have the flexibility and the ability to execute on that during the quarter?

Speaker #1: We still have some constraints that we're monitoring , and we're working with our tax advisors on a regular basis to monitor those constraints .

Martin D. McNulty, Jr.: We still have some constraints that we're monitoring, and we're working with our tax advisors on a regular basis to monitor those constraints. When we're in a position where we feel like we have the cushion to do it, then we will evaluate that with the other uses of capital that we're evaluating.

Martin McNulty, Jr: We still have some constraints that we're monitoring, and we're working with our tax advisors on a regular basis to monitor those constraints. When we're in a position where we feel like we have the cushion to do it, then we will evaluate that with the other uses of capital that we're evaluating.

Speaker #1: And when we're in a position where we feel like we have the cushion to do it , then we will evaluate that with the other uses of capital that we that we're evaluating

Speaker #7: Gotcha. I know there was a period of time that a case was precluded based upon the acquisition, and that was about three years.

Todd Slutter: Gotcha. I know there was a period of time that a case was precluded based upon the acquisition, and that was about three years. Could you kindly share with us when that period gets sunsetted and when you would be unencumbered and seeing clear to purchase if you wanted to?

Speaker #7: Do you have—could you kindly share with us when that period gets sunsetted, and when you would be unencumbered and seeing clear to purchase, if you wanted to?

Speaker #1: Yeah . It becomes we start to become unencumbered towards the end of this quarter , beginning of next quarter . And then we have a little bit of a rollout period on that .

Martin D. McNulty, Jr.: Yeah. We start to become unencumbered, towards the end of this quarter, beginning of next quarter, and then we have a little bit of a roll-off period on that.

Martin McNulty, Jr: Yeah. We start to become unencumbered, towards the end of this quarter, beginning of next quarter, and then we have a little bit of a roll-off period on that.

Speaker #7: What was that last part ? You have a little bit of a what period ?

Todd Slutter: What was that last part? You have a little bit of a what period?

Speaker #1: There's a little bit . So it starts to become uncovered towards the end of this quarter , beginning of next quarter . And then there's a little bit of a roll off to to be completely unencumbered .

Martin D. McNulty, Jr.: It starts to become unencumbered towards the end of this quarter, beginning of next quarter, and then there's a little bit of a roll-off to be completely unencumbered.

Martin McNulty, Jr: It starts to become unencumbered towards the end of this quarter, beginning of next quarter, and then there's a little bit of a roll-off to be completely unencumbered.

Speaker #7: Gotcha . Is that months or is that go for a longer period of time that roll off .

Todd Slutter: Got you. Is that months or does that go for a longer period of time, that roll-off?

Speaker #1: It's probably a couple quarters

Martin D. McNulty, Jr.: It's probably a couple quarters.

Martin McNulty, Jr: It's probably a couple quarters.

Speaker #7: Gotcha. And would that mean you're precluded during that couple of quarter period from making any purchases, or just limit the amount that you could purchase?

Todd Slutter: Gotcha. Would that mean you're precluded during that couple of quarter period from making any purchases or just limit the amount that you can purchase?

Speaker #1: There are limits on it .

Martin D. McNulty, Jr.: There are limits on it.

Martin McNulty, Jr: There are limits on it.

Speaker #7: Gotcha , gotcha . Well , listen , keep up the good work . I appreciate it , and thank you very much .

Todd Slutter: Gotcha. Well, listen, keep up the good work. I appreciate it and thank you very much.

Speaker #1: Yeah . Thanks , Todd .

Martin D. McNulty, Jr.: Yeah, thanks, Todd.

Martin McNulty, Jr: Yeah, thanks, Todd.

Speaker #2: Thank you very much . Well , we appear to have reached the end of our question and answer session . I will now turn the call over to MJ for closing remarks .

Operator 4: Thank you very much. Well, we appear to have reached the end of our question and answer session. I will now turn the call over to MJ for closing remarks.

Operator: Thank you very much. Well, we appear to have reached the end of our question and answer session. I will now turn the call over to MJ for closing remarks.

Speaker #1: Thanks , Jenny . Thanks to everyone for taking the time this morning for following us , for asking good questions . We'll talk to you pretty shortly on Q1 and looking forward to it .

Martin D. McNulty, Jr.: Thanks, Jenny. Thanks to everyone for taking the time this morning, for following us, for asking good questions. We'll talk to you pretty shortly on Q1, looking forward to it. Take care, everyone.

Martin McNulty, Jr: Thanks, Jenny. Thanks to everyone for taking the time this morning, for following us, for asking good questions. We'll talk to you pretty shortly on Q1, looking forward to it. Take care, everyone.

Speaker #1: Take care everyone

Speaker #2: Thank you very much . This does conclude today's conference . You may disconnect your phone lines at this time and have a wonderful day .

Operator 4: Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful day. We thank you for your participation.

Operator: Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful day. We thank you for your participation.

Q4 2025 Acacia Research Corp Earnings Call

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