Exhibit 99.1
Contacts : | Investor Relations | Public Relations | ||
Ed Lockwood | David Shane | |||
(408) 519-9345 | (408) 519-9245 | |||
ir@tivo.com | dshane@tivo.com |
TIVO DOUBLES SUBSCRIPTION ADDITIONS AND
EXPECTS TO REACH PROFITABILITY BY FISCAL YEAR END
• | Total subscription base grows to over 3 million; |
• | Service revenues 73% higher than Q4 of last year; |
• | Operating cash flow increases to $17.8 million; |
• | Company plans enhanced service offerings during the year |
ALVISO, Calif. – March 10, 2005 – TiVo Inc. (NASDAQ: TIVO), the creator of and a leader in television services for digital video recorders (DVRs), reported today that it added approximately 698,000 net subscription additions in the fourth quarter, more than double the number it added in Q4 of last year. At over 3 million, the Company’s total installed base of subscriptions is more than double what it was a year ago.
Service revenue for the quarter increased 73% to $33.0 million, compared with $19.1 million for the three months ended January 31, 2004. TiVo’s net loss in Q4 was ($33.7) million, or ($0.42) per share, compared to a net loss of ($12.4) million, or ($0.18) per share, for the three months ended January 31, 2004. The increase in net loss for the quarter reflects the impact of TiVo’s increase in rebate expense during in the quarter, as part of the Company’s previously announced subscription acquisition activities. Additionally, this quarter’s results include $3.2 million in non-cash charges related to TiVo’s recently completed redemption of its 7% Convertible Senior Notes.
Operating cash flow during the quarter was approximately $17.8 million, compared with approximately $13.4 million in Q4 of last year. TiVo ended the year with $106.3 million in cash and short-term investments.
“This was a yet another year of continued growth for TiVo, and we met our objective of doubling our total subscription base in the year,” said Mike Ramsay, TiVo’s Chairman and CEO. “Now, with total subs over 3 million-strong and growing, we are focused on reaching profitability. We have a growing base of recurring revenues that, combined with planned reductions in total acquisition spending in the year, will put us in a position to achieve this goal by Q4.”
Broadband, Mobility Differentiate TiVo Service From Competing DVRs
TiVo is investing to further differentiate the TiVo service from generic cable and satellite DVRs, offering new entertainment and information applications to enrich its subscription offering and offer consumers unprecedented choice and convenience in their home entertainment. The newly released TiVoToGo™ service enhancement, which allows subscribers to transfer their shows to a PC, portable media player or DVD burner, is the latest example of the applications that are envisioned as part of the future ‘Personal Entertainment Network.’ “Rapid broadband adoption and growing consumer demand for mobility are dramatically changing the way people enjoy home entertainment,” said Ramsay. “TiVo is innovating to build upon the award winning user experience that we introduced five years ago, when we first launched DVR, and to deliver to our customers innovative new services,” said Ramsay.
Management Provides Guidance for the First Quarter
First Quarter Management Guidance | Quarter ending April 30, 2005 | |
(in millions, except subscription numbers) | ||
Service and Technology Revenues | $37.4 - $38.0 | |
Rebates, Revenue Share and Other Payments to Channel | $(10.0) - $(11.0) | |
Cost of Service and Technology Revenues | $9.2 - $9.5 | |
Hardware Gross Margin | $(2.0) - $(3.0) | |
Gross Margin | $14.2 - $16.5 | |
Net Loss | $(8.0) - $(10.0) | |
TiVo-Owned Subscription Net Additions | 65,000 – 75,000 | |
DIRECTV Subscription Net Additions | 200,000 – 225,000 | |
Total Subscription Net Additions | 265,000 – 300,000 |
Management Provides Revenue and Net Loss Guidance for Year Ending January 31, 2006
Management guidance for annual service and technology revenues is a range of $155.0 million to $165.0 million in the year. Management guidance for net loss for the year is a range of $10.0 million to $25.0 million, excluding options expense. Management also provided guidance that it expects to reach profitability by the fourth quarter, excluding options expense.
Net loss excluding options expense is a supplemental non-GAAP financial measure. Management is presenting this measure because it does not believe that options expense is indicative of the Company’s core operating performance, and presenting net loss excluding options expense will foster comparison of our results with prior periods. In addition, due to the ongoing implementation of Statement of Financial Accounting Standards 123R and the uncertainties related to the magnitude of the future options expense, management is not able to estimate at this time the magnitude of the impact of the options expense on net loss for the 2006 fiscal year. However, because options expense does impact our income statement, this measure should not be considered as a substitute for net loss determined in accordance with GAAP as a measure of financial performance.
Conference Call and Web Cast
TiVo will host a conference call to discuss fourth quarter financial and operating results at 2:00 pm PT (5:00 pm ET), today, March 10, 2005. To listen to the discussion, please visit www.tivo.com/ir and click on the link provided for the webcast conference call or dial 800-289-0569 and use the password 2049382. The web cast will be archived and available through March 17, 2005 at www.tivo.com/ir or by calling 888-203-1112 and entering the conference ID number 2049382.
About TiVo Inc.
Founded in 1997, TiVo Inc. (NASDAQ: TIVO), a pioneer in home entertainment, created a brand new category of products with the development of the first digital video recorder (DVR). Today, the Company continues to revolutionize the way consumers watch and access home entertainment by making TiVo the focal point of the digital living room, a center for sharing and experiencing television, music, photos and other content. TiVo connects consumers to the digital entertainment they want, where and when they want it. The Company is based in Alviso, Calif.
This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, 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.” More information on potential factors that could affect the
Company’s financial results is included from time to time in the Company’s public reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2004, as amended, and the Quarterly Reports on Form 10-Q for the periods ended April 30, 2004, July 31, 2004, and October 31, 2004, 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 and the TiVo Logo are registered trademarks of TiVo Inc. in the United States and other jurisdictions. TiVoToGo is a trademark of TiVo Inc. All rights reserved.
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TIVO INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended | Twelve Months Ended | |||||||||||||||
January 31, 2005 | January 31, 2004 | January 31, 2005 | January 31, 2004 | |||||||||||||
Service revenues | $ | 32,996 | $ | 19,083 | $ | 107,166 | $ | 61,560 | ||||||||
Technology revenues | 1,169 | 2,126 | 8,310 | 15,797 | ||||||||||||
Service and Technology revenues | 34,165 | 21,209 | 115,476 | 77,357 | ||||||||||||
Hardware sales | 50,452 | 25,537 | 111,275 | 72,882 | ||||||||||||
Rebates, rev share & other pmts to channel | (25,188 | ) | (4,114 | ) | (54,696 | ) | (9,159 | ) | ||||||||
Net revenues | 59,429 | 42,632 | 172,055 | 141,080 | ||||||||||||
Cost of service revenues | 10,426 | 5,252 | 29,360 | 17,705 | ||||||||||||
Cost of technology revenues | 440 | 2,496 | 6,575 | 13,609 | ||||||||||||
Cost of hardware sales | 52,267 | 26,687 | 120,323 | 74,836 | ||||||||||||
Gross margin | (3,704 | ) | 8,197 | 15,798 | 34,930 | |||||||||||
Research and development | 11,206 | 5,474 | 37,634 | 22,167 | ||||||||||||
Sales and marketing | 11,529 | 4,742 | 37,367 | 18,947 | ||||||||||||
General and administrative | 4,194 | 4,508 | 16,594 | 16,296 | ||||||||||||
Loss from operations | (30,633 | ) | (6,527 | ) | (75,797 | ) | (22,480 | ) | ||||||||
Interest and other income (expense), net | (3,006 | ) | (5,537 | ) | (3,911 | ) | (9,089 | ) | ||||||||
Provision for taxes | (26 | ) | (297 | ) | (134 | ) | (449 | ) | ||||||||
Net loss attributable to common stockholders | $ | (33,665 | ) | $ | (12,361 | ) | $ | (79,842 | ) | $ | (32,018 | ) | ||||
Net loss per common share - basic and diluted | $ | (0.42 | ) | $ | (0.18 | ) | $ | (0.99 | ) | $ | (0.48 | ) | ||||
Weighted average common shares used to calculate basic & diluted | 81,021 | 69,055 | 80,321 | 66,784 | ||||||||||||
TIVO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
January 31, 2005 | January 31, 2004 | ||||||
ASSETS | |||||||
Cash, cash equivalents and short-term investments | $ | 106,345 | $ | 143,235 | |||
Accounts receivable, net | 25,879 | 12,131 | |||||
Inventories | 12,103 | 8,566 | |||||
Prepaid expenses and other | 5,714 | 9,063 | |||||
Intangible, property and equipment, net | 10,011 | 10,896 | |||||
Total assets | $ | 160,052 | $ | 183,891 | |||
LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||
Bank line of credit | $ | 4,500 | $ | — | |||
Accounts payable and other liabilities | 53,096 | 31,967 | |||||
Deferred revenue | 105,148 | 80,287 | |||||
Convertible notes payable, long term | — | 6,005 | |||||
Total stockholders’ equity (deficit) | (2,692 | ) | 65,632 | ||||
Liabilities & stockholders’ equity (deficit) | $ | 160,052 | $ | 183,891 | |||
TIVO INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three months ended | Twelve months ended | |||||||||||||||
January 31, 2005 | January 31, 2004 | January 31, 2005 | January 31, 2004 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net loss attributable to common stockholders | $ | (33,665 | ) | $ | (12,361 | ) | $ | (79,842 | ) | $ | (32,018 | ) | ||||
Non-cash adjustments to reconcile net loss to net cash provided by operating activities: | 4,934 | 6,673 | 10,441 | 15,431 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Working capital | 25,888 | 5,585 | 3,934 | (8,471 | ) | |||||||||||
Long-term prepaid assets and liabilities | 937 | (1,042 | ) | 3,014 | (482 | ) | ||||||||||
Deferred revenue | 19,690 | 14,566 | 24,861 | 17,837 | ||||||||||||
Net cash provided by (used in) operating activities | 17,784 | 13,421 | (37,592 | ) | (7,703 | ) | ||||||||||
Acquisition of property and equipment and intangibles, net | (520 | ) | (645 | ) | (3,646 | ) | (2,391 | ) | ||||||||
Purchases and Sales and maturities of marketable securities, net | (1,375 | ) | 75 | (14,075 | ) | (1,225 | ) | |||||||||
Net cash used in investing activities | (1,895 | ) | (570 | ) | (17,721 | ) | (3,616 | ) | ||||||||
Net cash provided by financing activities | 549 | 68,652 | 4,348 | 109,128 | ||||||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | ||||||||||||||||
Balance at beginning of period | 70,807 | 56,707 | 138,210 | 40,401 | ||||||||||||
Balance at end of period | 87,245 | 138,210 | 87,245 | 138,210 | ||||||||||||
Net increase (decrease) in cash | $ | 16,438 | $ | 81,503 | $ | (50,965 | ) | $ | 97,809 | |||||||
TIVO INC.
OTHER DATA
Subscriptions
Three Months Ended | Twelve Months Ended | |||||||||||
(Subscriptions in thousands) | January 31, 2005 | January 31, 2004 | January 31, 2005 | January 31, 2004 | ||||||||
Subscription Net Additions | ||||||||||||
TiVo-Owned | 251 | 130 | 485 | 260 | ||||||||
DIRECTV | 447 | 200 | 1,184 | 448 | ||||||||
Total Subscription Net Additions | 698 | 330 | 1,669 | 708 | ||||||||
Cumulative Subscriptions | ||||||||||||
TiVo-Owned | 1,141 | 656 | 1,141 | 656 | ||||||||
DIRECTV | 1,860 | 676 | 1,860 | 676 | ||||||||
Total Cumulative Subscriptions | 3,001 | 1,332 | 3,001 | 1,332 | ||||||||
% of TiVo-Owned Cumulative Subscriptions paying recurring fees | 50 | % | 40 | % | 50 | % | 40 | % |
Included in the 3,001,000 subscriptions are approximately 65,000 product lifetime subscriptions that have reached the end of the 48-month period TiVo uses to recognize lifetime subscription revenue. These lifetime subscriptions no longer generate subscription revenue.