Summary of ACCELRYS, INC. - Yahoo! Finance

Results of Operations and Financial Condition, Financial Statements and Exhibits

Item 2.02. Results of Operations and Financial Condition

On October 30, 2008, Accelrys, Inc. (the "Company") issued a press release announcing its financial results for the quarter ended September 30, 2008. A copy of this press release is attached hereto as Exhibit 99.1.

The press release describes financial measures for operating income, net income and net income per share that exclude stock-based compensation expense, amortization of purchased intangible assets and restructuring charges. These financial measures are not calculated in accordance with generally accepted accounting principles (GAAP) and are not based on any comprehensive set of accounting rules or principles.

Management believes these non-GAAP financial measures provide a useful measure of the Company's operating results, a meaningful comparison with historical results and with the results of other companies, and insight into the Company's ongoing operating performance. Further, management and the Board of Directors utilize these measures, in addition to GAAP measures, when evaluating and comparing the Company's operating performance against internal financial forecasts and budgets. These non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. Investors are encouraged to review the reconciliation of the non-GAAP financial measures presented in the press release to their most directly comparable GAAP financial measures included in the press release.

As described above, the Company excludes the following items from its non-GAAP financial measures:

Stock-based compensation expense. Stock-based compensation expenses consist of expenses recorded for employee stock options, restricted stock units, restricted stock awards and employee stock purchase rights recorded in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment("SFAS No. 123R"). These expenses are excluded from the Company's non-GAAP financial measures because they are non-cash expenses that the Company believes are not reflective of ongoing operating results. Further, the Company believes it is useful to investors to understand the impact of the application of SFAS No. 123R to its results of operations. Stock-based compensation expense is recorded in the cost of revenue, product development, sales and marketing, and general and administrative lines in the Company's consolidated statements of operations.

Purchased intangible asset amortization. Purchased intangible asset amortization reflects the amortization expense recorded for intangible assets acquired through a business combination. These expenses are excluded from the Company's non-GAAP financial measures primarily because they are non-cash expenses that the Company believes are not reflective of ongoing operating results. Purchased intangible asset amortization is recorded in the cost of revenue line in the Company's consolidated statements of operations.

Restructuring charges. Restructuring charges consist of lease obligation exit costs, facility closure costs and severance and other related costs incurred in connection with the Company's various restructuring activities. The Company excludes these costs because it believes they are not reflective of ongoing operating results.

In accordance with General Instruction B.2. of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.