Exhibit 99.1
Sonic Solutions Updates Financial Guidance
NOVATO, Calif.--(BUSINESS WIRE)--Aug. 8, 2006--Sonic Solutions(R)
(NASDAQ:SNIC) management provided updated financial guidance during
its first quarter ended June 30, 2006 earnings conference call today.
For the second fiscal quarter ending September 30, 2006,
management anticipates net revenue, on a GAAP basis, will be between
$36 million and $38 million; fully diluted earnings per share will be
between $0.11 and $0.14; and non-GAAP fully diluted earnings per share
will be between $0.14 and $0.17. As of April 1, 2006, Sonic adopted
Statement of Financial Accounting Standard No. 123R ("SFAS 123R")
"Share-Based Payments." The non-GAAP earnings per share forecast for
the quarter ending September 30, 2006 excludes the impact of the stock
option expense pursuant to SFAS 123R and the amortization of acquired
intangibles expense to be recorded in the income statement, which
Sonic forecasts will be approximately $0.02 and $0.04 per fully
diluted share, respectively, before being adjusted for income taxes.
Given the significance and non-cash nature of these expenses, and for
the reasons set forth below, management has excluded such expenses
from the non-GAAP earnings per share guidance.
About Non-GAAP Financial Measures
To supplement Sonic's updated financial guidance for the second
quarter ending September 30, 2006, management is providing high and
low forecasts of non-GAAP fully diluted earnings per share. Management
does not itself, nor does it suggest that investors should, consider
such non-GAAP financial measures in isolation from, or as a substitute
for or superior to, financial information prepared and presented in
accordance with GAAP. Management believes the non-GAAP presentation is
useful to investors because such presentation excludes non-cash
expenses of equity-based compensation relating to SFAS 123R and
amortization on acquired intangibles, which offers investors a better
understanding of Sonic's core operating results and budget-planning
decisions. The amortization expense on acquired intangibles does not
result in ongoing cash expenditures and, in management's view, does
not otherwise have a material impact on Sonic's ongoing operations. In
addition, Sonic's financial results for the second quarter ended
September 30, 2005 did not include non-cash equity-based compensation
expenses; therefore the exclusion of non-cash expenses of equity-based
compensation facilitates comparison of Sonic's projections for the
second quarter ending September 30, 2006 and the operating results for
the second quarter ended September 30, 2005. Sonic further believes
this non-GAAP presentation is useful to investors in allowing for
greater transparency with respect to supplemental information used by
management in its financial and operational decision making.
Management uses these non-GAAP measures internally to plan and
forecast future periods, to establish operational goals, to compare
with its business plan and individual operating budgets and to
allocate resources. The economic substance behind the decision to use
these non-GAAP measures is an increase of approximately $0.03, tax
adjusted, per fully diluted share over the comparable GAAP measures.
Material limitations associated with the use of these measures versus
the comparable GAAP measures include the fact that our competitors,
who each have their own unique operating and acquisition history, may
address the impact of acquisitions and adoption of SFAS 123R
differently. Management compensates for these limitations by providing
full disclosure of the effects of the non-GAAP measures, by presenting
the corresponding GAAP financial measures in this release and in
Sonic's financial statements and by providing a reconciliation to the
corresponding GAAP measures to enable investors to perform their own
analysis.
Sonic Solutions
Reconciliation of GAAP earnings per diluted share
to non-GAAP earnings per diluted share
(unaudited)
Second Quarter Ending
September 30, 2006,
Low High
--- ----
Estimated GAAP earnings per diluted
share $ 0.11 $ 0.14
Amortization of acquired intangibles 0.04 0.04
Estimated stock compensation expense
under SFAS 123R 0.02 0.02
Estimated tax impact of non-GAAP
adjustments (0.03) (0.03)
----------------------------
Estimated non-GAAP earnings per
diluted share $ 0.14 $ 0.17
============================
About Sonic Solutions
Sonic Solutions (Nasdaq:SNIC)(http://www.sonic.com) is the leader
in digital media software, providing a broad range of interoperable,
platform-independent software tools and applications for creative
professionals, business and home users, and technology partners.
Sonic's products range from advanced DVD authoring systems and
interactive content delivery technologies used to produce the majority
of Hollywood DVD film releases, to the award-winning Roxio(R)-branded
CD and DVD creation, playback and backup solutions that have become
the premier choice for consumers, prosumers and business users
worldwide.
Sonic products are globally available from major retailers as well
as online at Sonic.com and Roxio.com, and are bundled with PCs,
after-market drives and consumer electronic devices. Sonic's digital
media creation engine is the de facto standard and has been licensed
by major software and hardware manufacturers, including Adobe,
Microsoft, Scientific-Atlanta, Sony, and many others. Sonic Solutions
is headquartered in Marin County, California.
Sonic, the Sonic logo, Sonic Solutions, and Roxio are trademarks
or registered trademarks of Sonic Solutions in the U.S. and/or other
countries. All other company or product names are trademarks or
registered trademarks of their respective owners and, in some cases,
are used by Sonic under license.
Forward-Looking Statements
This press release and Sonic's first quarter ended June 30, 2006
earnings conference call contain forward-looking statements that are
based upon current expectations. Such forward-looking statements
include revenue and earnings per share guidance for the second quarter
ending September 30, 2006; and views regarding the potential benefits
of our partnership with Movielink, opportunities presented by the
"download and burn" business model, our ability to strengthen our
relationships with end-users, the opportunities and benefits achieved
through Sonic's integration of the Roxio Consumer Software Division,
and the evolution of, and opportunities for Sonic arising from
next-generation high definition formats and channels. These
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results to
differ materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. Important
factors that could cause such differences include, but are not limited
to, the timely introduction and acceptance of new products, including
but not limited to Sonic's high definition series products; the costs
associated with new product introductions and the possible adverse
effect on gross margin; any fluctuation in demand for Sonic products;
the transition of products to new hardware configurations and
platforms; unforeseen increases in operating expenses, new product
introductions, cost of Sarbanes Oxley ("SOX") compliance or business
expansion; loss of significant customers or key suppliers; risks
related to acquisitions and international operations; costs associated
with litigation or prosecution and intellectual property claims;
changes in effective tax rates; and other factors, including those
discussed in Sonic's annual and quarterly reports on file with the
Securities and Exchange Commission. This press release should be read
in conjunction with Sonic's most recent annual report on Form 10-K and
Sonic's other reports on file with the Securities and Exchange
Commission, which contain a more detailed discussion of Sonic's
business including risks and uncertainties that may affect future
results. Sonic does not undertake to update any forward-looking
statements.
CONTACT: Sonic Solutions
A. Clay Leighton, 415-893-8000
Fax: 415-893-8008
clay_leighton@sonic.com
or
StreetSmart Investor Relations
Brooke Deterline, 415-893-7824
Anne Leschin, 415-775-1788
investinsonic@sonic.com