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Constituent Review
J. Andrew Braswell, Equity Analyst Newbridge Institutional Research Data as of 3-30-07		Quote/News
		Nano Materials

Review
1/10/07- SMMX announced the release of Symyx Software Notebook 4.0. This tool enables pharmaceutical researchers to plan, record, analyze and search experiments and procedures more efficiently and effectively than with traditional paper lab notebooks.

1/10/17- Intematix Corp., of Fremont, CA, announced that it had resolved pending litigation with SMMX. The parties entered into a cross-license of their combinatorial chemistry technologies.

1/29/07- Introduced Benchtop Systems, a new offering in the Symyx Tools product line designed to automate multiple steps of experimental procedures. Benchtop Systems utilize the hardware framework of the Symyx Core Module Robotic Base Station, offering miniaturized material preparation, processing and analysis capabilities powered by Symyx Software. Applications currently supported include analytical sample preparation, coatings, crystallization, excipient compatibility, forced degradation/stability, formulations and solubility. This is the first product developed at the company’s new European headquarters in Geneva, gained through the acquisition of Autodose in June 2006.

2/08/07- Released Q4 results pre-open. Revenue for Q4 was $39.9M, (+29% Y/Y), including $14.1M from collaborations, $17.3M from tools, $6.8M from software, $0.4M from sensors and $1.3M in license and royalty revenue. On a GAAP basis, net income was $4.8M (+20% Y/Y), or $0.14 per share. Excluding options expense of $0.06 per share in the recent quarter and non-recurring items from both periods, non-GAAP net income was $9.6M (+41% Y/Y), or $0.22 per share. SMMX ended the period with $150M in cash.

For 2007, the company forecasts revenue of $133-$140M, approximately $90M of which is already committed. EPS is seen at $0.33-$0.38 on a GAAP basis, or $0.40-$0.45 excluding options expense. Consensus expectations for the year are currently revenue of $142.9M and EPS of $0.45.

Commentary
Shares of SMMX drifted steadily lower to the tune of 18% in Q1, extending their 21% slide from 2006. The lackluster Q1 earnings release and 2007 guidance only added to the negative sentiment. We wrote in our last report that we believe some significant news, either in the form of acquisitions, new collaborations, or royalty-bearing commercialization, is needed to restore positive momentum to the stock. We stand by that assessment, but none of those potential catalysts has been realized. Despite an investment of $30M to repurchase 1.2M shares of common stock in 2006, total shares outstanding has remained relatively steady around 33M as the program only offsets the dilution caused by the liberal granting of stock options. A new polymer material discovered by SMMX was commercialized by JSR Corp for an undisclosed electronics application, bringing the total number of commercialized materials to five. The rate of such commercial introductions, accompanied by their high-margin associated royalties, has lagged our expectations.