EXHIBIT 99.1
Contacts: | ||
Investor Relations: | Public Relations: | |
Ed Lockwood | Rebecca Baer | |
(408) 519-9345 | (408) 519-9225 | |
Email: ir@tivo.com | Email: rebecca@tivo.com | |
TiVo Adds Record Number of Subscribers and
Reports First Cash Flow Positive Quarter
| • | Annual service and technology revenues more than tripled; total subscriber base grew 64% to approximately 624,000; |
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| • | Fourth quarter service and technology revenue doubled compared to previous year; Q4 loss per share of $(0.25); |
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| • | Sony, Toshiba and DIRECTV with Hughes, Philips and Samsung expected to deliver products powered by TiVo this year. |
SAN JOSE, CA – March 6, 2003 – TiVo (NASDAQ: TIVO), the creator of television services for digital video recorders (DVR), today announced results for the fourth quarter and year ended January 31, 2003.
TiVo added approximately 115,000 new subscribers in the fourth quarter, bringing the total subscriber base to approximately 624,000 as of January 31, 2003. The company’s subscriber base grew 64% during the fiscal year.
Service and technology revenue for the quarter increased 103% to $13.7 million, compared with $6.8 million for the three months ended January 31, 2002. Net loss for the quarter was $14.7 million, or $(0.25) per share, an improvement from a net loss of $41.6 million, or $(0.92) per share, for the three months ended January 31, 2002. These quarterly net loss results exclude non-cash items related to the temporary reduction in the conversion price of our notes.
Service and technology revenue for the fiscal year ended January 31, 2003 grew 210% to $60.2 million, compared with $19.4 million for the twelve months ended January 31, 2002. Net loss for the year was $55.2 million, or $(1.08) per share compared to a net loss of $160.7 million, or $(3.74) per share for the twelve months ended January 31, 2002. These annual net loss results exclude items related to the repurchase of convertible preferred shares from AOL in April 2002 and also exclude non-cash items related to the temporary reduction in the conversion price of our notes.
TiVo generated $2.2 million of cash flow, as measured by Adjusted EBITDA, in the fourth quarter, compared to a loss of $23.8 million in the fourth quarter of last year. In fiscal year 2003, Adjusted EBITDA improved by nearly $80 million, to a loss of $21 million, compared to a loss of $100.4 million in fiscal year 2002.
“TiVo achieved important milestones during the year,” commented Mike Ramsay, TiVo’s CEO. “We delivered record subscriber growth, we added important consumer electronics companies who
have licensed TiVo technology and will deliver TiVo products this year, and we accomplished a key financial objective in Q4, reporting positive cash flow for the quarter.”
New Consumer Electronics Products With TiVo Planned in FY-04
In January, Samsung, Philips and Toshiba announced new consumer products that integrate the TiVo Service, joining Sony and Hughes. Toshiba unveiled its new DVD/DVR product with TiVo. Samsung and Philips announced that they will offer DIRECTV receivers with TiVo later this year. And existing partner Hughes announced at the Consumer Electronics Show that it will offer an HDTV receiver built on a new TiVo technology platform.
Home Media Option, TiVo Promotions, Advertising and Audience Measurement Expected to Generate Incremental Revenue
TiVo sees strong interest in the Home Media Option™, based on pre-sales inquiries. The new premium feature package promises to transform TiVo from a digital recording device to a networked entertainment center that allows consumers to effortlessly enjoy video, music and photos throughout the home.
TiVo Showcases continue to attract a blue-chip roster of advertisers who will distribute branded entertainment content on the TiVo Service. Recently, TiVo distributed promotional content for partners that included Universal Music, New Line Cinema, Sony Pictures, Twentieth Century Fox, the NFL, PBS, Best Buy and others.
TiVo Affirms Fiscal Year 2004 Outlook: Management Expects Sub Growth to Double, Subscriber Base to Top 1 Million, Breakeven to Positive Cash Flow for the Year.
TiVo expects to add 450,000 to 600,000 subscribers in FY-04, more than double the number it added in FY-03. This would result in an installed base of well over 1 million subscribers by January 31, 2004, the end of TiVo’s fiscal year. Service and technology revenues are expected to be $62 million to $70 million. Total operating loss for the year is expected to be in a range of $27 million to $38 million, and the company expects Adjusted EBITDA to be breakeven to positive for the year.
First Quarter Business Outlook
(in millions, except subscriber numbers) |
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| Quarter ending |
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Service and Technology Revenues |
| $13.5 – $14.5 |
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Rebates, revenue share, and other payments to channel |
| $3.8 – $4.3 |
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Cost of service and technology revenues |
| $7.4 – $7.9 |
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Research and Development |
| $6.7 – $7.2 |
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Sales and Marketing and Sales and Marketing, Related Parties |
| $5.0 – $5.4 |
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General and Administrative |
| $4.1 – $4.4 |
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Operating Loss |
| $ (13.0) – $(15.2) |
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Adjusted EBITDA |
| $ (6.0) – $(7.5) |
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Net Activations |
| 55,000 – 65,000 |
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Cumulative Subscribers |
| 679,000 – 689,000 |
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Conference Call and Web Cast
TiVo will host a conference call to discuss fourth quarter financial and operating performance at 2:00 pm PT (5:00 PM ET), today, March 6, 2003. To listen to the discussion, please visit www.tivo.com and click on the link provided for the webcast conference call or dial 719-457-2727 and use the password 461071. The web cast will be archived and available through March 13, 2003 at www.tivo.com or by calling 719-457-0820 and entering the conference ID number 461071.
About TiVo
Founded in 1997 with the mission to dramatically improve consumers’ television viewing experiences, TiVo is the creator of television services for digital video recorders (DVR). TiVo’s leadership has defined and inspired the entire category, earning the company patents for pioneering inventions associated with DVR software and hardware design. TiVo was the first to deliver on the promise of consumer choice and control over TV viewing, building a loyal and passionate subscriber base with over 97% of customers surveyed recommending TiVo to a friend. This enthusiasm has contributed to overwhelming growth over the past year, and the total subscriber base exceeds 624,000. TiVo is headquartered in San Jose, CA. Additional information can be found at www.tivo.com.
This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, TiVo’s business, services, business development, strategy, customers or other factors that may affect future earnings or financial results. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, “believe,” “expect,” “may,” “will,” “intend,” “estimate,” “continue,” or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include delays in development, competitive service offerings and lack of market acceptance, as well as the “Factors That May Affect Future Operating Results” and other risks detailed in our Annual Report on Form 10-K for the period ended January 31, 2002, and the Quarterly Reports on Form 10-Q for the periods ended April 30, 2002, July 31, 2002 and October 31, 2002, filed with the Securities and Exchange Commission. We caution you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date hereof. TiVo disclaims any obligation to update these forward-looking statements.
TiVo is a registered trademark of TiVo Inc. in the United States and other jurisdictions. All other company or product names mentioned may be trademarks or registered trademarks of the respective companies with which they are associated.
TIVO INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except subscriber and per share data)
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| Three Months Ended |
| Three Months Ended |
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| January 31, 2003 |
| January 31, 2002 |
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| Excluding effects |
| Non-cash items |
| As reported |
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Service revenues | $ | 11,350 |
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| $ | 11,350 |
| $ | 6,753 |
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Technology revenues |
| 2,365 |
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| 2,365 |
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| — |
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Service and Technology revenues |
| 13,715 |
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| — |
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| 13,715 |
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| 6,753 |
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Hardware sales |
| 14,511 |
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| 14,511 |
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| — |
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Rebates, revenue share & other payments to channel * |
| (5,212 | ) |
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| (5,212 | ) |
| — |
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Net revenues |
| 23,014 |
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| — |
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| 23,014 |
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| 6,753 |
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Cost of service and technology revenues |
| 6,829 |
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| 6,829 |
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| 4,822 |
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Cost of hardware sales |
| 14,048 |
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| 14,048 |
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| — |
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Gross profit |
| 2,137 |
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| — |
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| 2,137 |
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| 1,931 |
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Research and development |
| 6,319 |
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| 6,319 |
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| 5,874 |
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Sales and marketing |
| 3,965 |
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| 3,965 |
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| 27,729 |
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General and administrative |
| 3,365 |
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| 3,365 |
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| 4,587 |
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Operating loss |
| (11,512 | ) |
| — |
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| (11,512 | ) |
| (36,259 | ) | |
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Interest (income) and other expense, net |
| 555 |
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| 555 |
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| 1,015 |
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Preferred stock dividend and accretion |
| — |
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| — |
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| 428 |
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Amortization of discount on convertible debt and other non-cash expenses |
| 2,429 |
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| 17,870 |
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| 20,299 |
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| 3,880 |
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Provision for taxes |
| 164 |
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| 164 |
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| — |
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Net loss attributable to common stock | $ | (14,660 | ) |
| $(17,870 | ) | $ | (32,530 | ) | $ | (41,582 | ) | |
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Net loss per share - basic and diluted | $ | (0.25 | ) |
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| $ | (0.56 | ) | $ | (0.92 | ) | |
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Shares used in per share computation |
| 57,576 |
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| 920 |
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| 58,496 |
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| 45,276 |
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Other Data |
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Net Activations |
| 115,000 |
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| 115,000 |
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| 100,000 |
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Cumulative Subscribers |
| 624,000 |
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| 624,000 |
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| 380,000 |
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Calculation of Adjusted EBITDA |
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Operating loss | $ | (11,512 | ) |
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| $ | (11,512 | ) | $ | (36,259 | ) | |
Depreciation, amortization and other non-cash charges |
| 2,530 |
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| 2,530 |
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| 4,362 |
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EBITDA ** |
| (8,982 | ) |
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| (8,982 | ) |
| (31,897 | ) | |
Change in deferred revenue |
| 11,174 |
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| 11,174 |
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| 8,127 |
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Adjusted EBITDA *** | $ | 2,192 |
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| $ | 2,192 |
| $ | (23,770 | ) | |
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* Reflects TiVo’s adoption of EITF 01-09, a new accounting rule which requires that certain payments to customers are shown as a reduction of revenue rather than a sales and marketing expense. There were no such payments in FY2002.
** EBITDA is the loss from operations less depreciation, amortization, and other non-cash charges.
*** Adjusted EBITDA is EBITDA plus the change in deferred revenue over the reporting period.
Certain reclassifications have been made to prior years’ financial information to conform with the current period presentation.
TIVO INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except subscriber and per share data)
|
| 12 Months Ended |
| 12 Months Ended |
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| January 31, 2003 |
| January 31, 2002 |
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| Excluding effects |
| Items related to |
| Non-cash items |
| As reported |
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Service revenues | $ | 39,261 |
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| $ | 39,261 |
| $ | 19,297 |
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Technology revenues |
| 20,909 |
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| 20,909 |
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| 100 |
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Service and Technology revenues |
| 60,170 |
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| — |
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| 60,170 |
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| 19,397 |
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Hardware sales |
| 45,620 |
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| 45,620 |
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| — |
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Rebates, revenue share & other payments to channel * |
| (9,780 | ) |
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| (9,780 | ) |
| — |
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Net revenues |
| 96,010 |
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| — |
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| 96,010 |
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| 19,397 |
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Cost of service and technology revenues |
| 25,152 |
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| 25,152 |
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| 19,914 |
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Cost of hardware sales |
| 44,647 |
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| 44,647 |
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| — |
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Gross profit (loss) |
| 26,211 |
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| — |
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| 26,211 |
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| (517 | ) | |
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Research and development |
| 20,714 |
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| 20,714 |
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| 27,205 |
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Sales and marketing |
| 36,502 |
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| 11,615 |
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| 48,117 |
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| 104,897 |
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General and administrative |
| 14,465 |
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| 14,465 |
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| 18,875 |
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Operating loss |
| (45,470 | ) |
| (11,615 | ) |
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| (57,085 | ) |
| (151,494 | ) | |
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Interest (income) and other expense, net |
| 2,730 |
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| (3,855 | ) |
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| (1,125 | ) |
| 658 |
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Preferred stock dividend and accretion |
| 220 |
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| 1,445 |
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| 1,665 |
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| 3,018 |
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Amortization of discount on convertible debt and other non- cash expenses |
| 6,341 |
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| 17,870 |
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| 24,211 |
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| 4,553 |
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Provision for taxes |
| 425 |
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| 425 |
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| 1,000 |
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Net loss attributable to common stock | $ | (55,186 | ) | $ | (9,205 | ) | $ | (17,870 | ) | $ | (82,261 | ) | $ | (160,723 | ) | |
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Net loss per share - basic and diluted | $ | (1.08 | ) |
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| $ | (1.61 | ) | $ | (3.74 | ) | |
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Shares used in per share computation |
| 50,989 |
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| 230 |
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| 51,219 |
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| 42,956 |
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Other Data |
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Net Activations |
| 245,000 |
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| 245,000 |
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| 226,000 |
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Cumulative Subscribers |
| 624,000 |
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| 624,000 |
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| 380,000 |
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Calculation of Adjusted EBITDA |
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Operating loss | $ | (45,470 | ) |
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| $ | (57,085 | ) | $ | (151,494 | ) | |
Depreciation, amortization and other non-cash charges |
| 9,835 |
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| 21,450 |
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| 21,674 |
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EBITDA ** |
| (35,635 | ) |
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| (35,635 | ) |
| (129,820 | ) | |
Change in deferred revenue |
| 14,685 |
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| 14,685 |
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| 29,443 |
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Adjusted EBITDA *** | $ | (20,950 | ) |
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| $ | (20,950 | ) | $ | (100,377 | ) | |
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* Reflects TiVo’s adoption of EITF 01-09, a new accounting rule which requires that certain payments to customers are shown as a reduction of revenue rather than a sales and marketing expense. There were no such payments in FY2002.
** EBITDA is the loss from operations less depreciation, amortization, and other non-cash charges.
*** Adjusted EBITDA is EBITDA plus the change in deferred revenue over the reporting period.
Certain reclassifications have been made to prior years’ financial information to conform with the current period presentation.
TIVO INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
|
| January 31, 2003 |
| January 31, 2002 |
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ASSETS |
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Cash, cash equivalents and short-term investments | $ | 44,201 |
| $ | 52,327 |
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Restricted cash |
| — |
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| 51,735 |
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Accounts receivable, net |
| 5,839 |
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| 2,185 |
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Accounts receivable - related parties |
| 1,271 |
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| 6,687 |
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Inventories |
| 7,273 |
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| — |
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Prepaid expenses and other |
| 3,768 |
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| 6,431 |
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Prepaid expenses and other - related parties |
| 7,825 |
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| 12,423 |
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Property and equipment, net |
| 12,143 |
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| 18,146 |
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Total assets | $ | 82,320 |
| $ | 149,934 |
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LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK & STOCKHOLDERS’ DEFICIT |
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Accounts payable and accrued liabilities | $ | 33,023 |
| $ | 28,915 |
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Accounts payable and accrued liabilities - related parties |
| 3,359 |
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| 28,902 |
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Deferred revenue |
| 56,373 |
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| 36,338 |
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Deferred revenue - related parties |
| 6,077 |
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| 11,427 |
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Convertible notes payable, long term (face value $10,450) |
| 4,265 |
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| 18,315 |
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Convertible notes payable - related parties, long term (face value $10,000) |
| 3,920 |
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| 9,426 |
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Redeemable convertible preferred stock |
| — |
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| 46,555 |
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Total stockholders’ deficit |
| (24,697 | ) |
| (29,944 | ) | |
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Liabilities, redeemable convertible preferred stock & stockholders’ deficit | $ | 82,320 |
| $ | 149,934 |
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