Company Reports Better than Expected
Results
On Track to Achieve $100 million Cost Synergy
Targets
Declares Quarterly Cash Dividend of $0.18 per
Share
Increases Stock Repurchase Program
Authorization to $150 million
TiVo Corporation (NASDAQ:TIVO) today reported financial results
for the fourth quarter and for the full year ended December 31,
2016.
“Our Q4 financial results reflect the strength of the new TiVo,
and strategically important deals with Samsung, Netflix and HBO
demonstrate the value of the combined company’s products and
intellectual property,” said Tom Carson, President and CEO of TiVo.
Mr. Carson added, “The TiVo integration is proceeding as planned
and we continue to expect revenues in excess of $800 million for
2017. We also continue to expect cost synergies of at least $100
million with 65% coming from actions taken within 12 months of the
close.”
Mr. Carson added, “Based upon our strong results, solid balance
sheet, long-term licensing arrangements, recurring product and IP
revenue models, and progress on our cost synergies target, we are
confident in TiVo’s ability to continue to generate substantial
positive cash flows. As such, I am pleased to announce that TiVo’s
Board of Directors has decided to initiate a quarterly cash
dividend of $0.18 per common share.”
Capital Allocation
TiVo’s Board of Directors declared a quarterly cash dividend of
$0.18 per common share, to be paid on March 15, 2017, to all
stockholders of record as of the close of business on March 1,
2017. TiVo’s Board believes it can reward its stockholders with a
meaningful quarterly dividend, while maintaining ample capacity for
the company to invest in the business, pursue its long term growth
aspirations, and consider additional capital allocation
alternatives such as opportunistic stock repurchases. On that
front, the Board also increased the Company’s stock repurchase
program authorization to $150 million. Pursuant to its strategy of
allocating excess capital to the highest risk-adjusted return
alternative available, the Board will continue to regularly review
all available capital allocation opportunities.
Product Development
Mr. Carson stated that “We are very excited about the future of
TiVo’s product strategy and discovery solutions. For example,
Virgin Media’s launch of a new 4K ultra high definition set top box
powered by TiVo software including VOD functionality, is a notable
product milestone. This comes on the heels of last quarter’s launch
of the TiVo BOLT+, a best-in-class, all-in-one, multi-room
entertainment device with six tuners and 3TB of recording capacity
for customers looking for the ultimate video entertainment
experience. Additionally, last quarter we announced the
next-generation of the TiVo user experience, which delivers content
more quickly and with less effort from a diverse array of sources.
I am proud to tell everyone that a large international service
provider will deploy this next generation TiVo user experience in
early 2017. I believe this clearly demonstrates the innovation and
product leadership that excited us about acquiring TiVo. I believe
this product leadership, combined with our strong IP licensing
business, position TiVo well for long-term success in our key
addressable markets.”
Fourth Quarter and Full Year 2016 Results
The Company reported fourth quarter revenue of $252.3 million,
an increase of 69% compared to $149.5 million in the fourth quarter
of 2015. As expected, revenues were higher than in the comparable
period of the prior year due to the completion of the TiVo
Solutions Inc. acquisition, which contributed $125.8 million in
revenues, including revenue from a license agreement with Samsung
which included catch-up payments to make the Company whole for the
pre-license period of use. Fourth quarter 2016 Net income was $9.8
million, compared to Net income of $26.3 million for the fourth
quarter of 2015. Fourth quarter 2016 Income from continuing
operations before income taxes was $23.0 million, compared to $27.1
million of Income from continuing operations before income taxes in
the fourth quarter of 2015.
On a Non-GAAP basis, fourth quarter 2016 Non-GAAP Pre-tax Income
was $90.8 million, compared to $57.8 million in the fourth quarter
of 2015. Estimated cash taxes for the quarter were approximately
$8.7 million. GAAP Diluted weighted average shares outstanding and
Non-GAAP Diluted Weighted Average Shares Outstanding for the fourth
quarter of 2016 were 119.3 million.
For the full year 2016, the Company reported revenues of $649.1
million, compared to $526.3 million for 2015. Including TiVo
Solutions Inc. in the results for the period increased revenue by
$147.4 million, which includes revenue from a license agreement
executed in the fourth quarter of 2016 with Samsung that included
catch-up payments to make the Company whole for the pre-license
period of use. The full year 2016 Income from continuing
operations, net of tax was $37.2 million, compared to a $4.3
million loss for 2015. After taking into consideration discontinued
operations, the full year 2016 Net income was $32.7 million,
compared to a $4.3 million loss for 2015.
On a Non-GAAP basis, 2016 full year Non-GAAP Pre-tax Income was
$205.3 million, compared to $161.5 million for the full year in
2015.
Non-GAAP Pre-tax Income is defined below in the section entitled
“Non-GAAP Information.” Reconciliations between GAAP and Non-GAAP
amounts are provided in the tables below.
Business Outlook
For fiscal year 2017, the Company expects revenue of $800
million to $835 million, including hardware, with GAAP loss before
taxes of $55 million to $70 million and Non-GAAP Pre-tax Income of
$200 million to $225 million. TiVo anticipates it will incur $23
million to $24 million in cash taxes based on its 2017 operating
expectations. For fiscal year 2017, TiVo expects its GAAP diluted
weighted average shares outstanding to be approximately 121 million
and Non-GAAP Diluted Weighted Average Shares Outstanding to be
approximately 122 million shares.
TIVO BUSINESS AND OPERATING HIGHLIGHTS:
IP Licensing:
- Samsung agreed to an intellectual
property (IP) license under TiVo’s patent portfolios for Samsung’s
leading mobile, consumer electronic and set-top box
businesses.
- Netflix licensed TiVo’s patent
portfolios and Intellectual Ventures patent portfolio for
over-the-top offerings. The Netflix agreement represents one of the
first licenses granted under the exclusive partnership with
Intellectual Ventures announced in 2016.
- HBO signed a long-term intellectual
property license.
- The Company continued to grow and
expand its leading patent portfolio in 2016. In addition to the
inorganic growth through the acquisition of TiVo Inc. and its
partnership with Intellectual Ventures, the portfolio grew as a
result of the continuing and ongoing innovation within the company,
with new invention disclosures reaching record levels, up 30%
compared to last year.
Products:
- Approximately 23 million subscriber
households around the world use TiVo’s advanced television
experiences.
- Virgin Media in the UK launched a 4K
Ultra HD set-top box platform including VOD functionality powered
by TiVo.
- Panasonic Corporation, one of the
world’s top consumer electronics manufacturers, signed a multi-year
extension for the Japan market that includes G-Guide, G-Guide HTML
and G-Guide xD.
- Rogers, a leading service provider in
Canada, deployed Passport 7.
- A leading broadband provider plans to
launch TiVo’s innovative new flexible STB software that enables a
single low-cost STB to be deployed either as a stand-alone Cable
STB, as a client to an in-home DVR, or as a full IPTV client.
- Astra Telekom, a privately-held Serbian
telecom operator, will use Cubiware’s middleware solutions to
provide enhanced IPTV services to customers throughout Serbia.
- Reliance Jio Media Pvt. Ltd. selected
TiVo’s CubiTV to power advanced entertainment experiences for
subscribers in India.
- A leading developer of smart TV remote
apps licensed TiVo’s metadata for smartphones and tablets.
- A leading streaming music service
provider added TiVo’s artist images.
Conference Call Information
TiVo management will host a conference call today, February 15,
2017, at 2:00 p.m. PT/5:00 p.m. ET to discuss the financial
results. Investors and analysts interested in participating in the
conference are welcome to call (866) 621-1214 (or international
+1-706- 643-4013) and reference conference ID 56630960. The
conference call can also be accessed via live webcast in the
Investor Relations section of TiVo’s website at
http://www.tivo.com/.
A telephonic replay of the conference call will be available
through February 22, 2017 and can be accessed by dialing (855)
859-2056 (or international +1-404-537-3406) and entering conference
ID 56630960. A replay of the audio webcast will be available on
TiVo Corporation’s website shortly after the live call ends and
will remain on TiVo Corporation’s website until its next quarterly
earnings call.
Non-GAAP Financial Information
TiVo Corporation provides Non-GAAP information to assist
investors in assessing its operations in the way that its
management evaluates those operations. Non-GAAP Pre-Tax Income,
Non-GAAP Cost of licensing, services and software revenues,
excluding depreciation and amortization of intangible assets,
Non-GAAP Research and Development Expenses, Non-GAAP Selling,
General and Administrative Expenses, Non-GAAP Total OpEx, Non-GAAP
Total COGS and OpEx, and Non-GAAP Interest Expense are supplemental
measures of the Company’s performance that are not required by, and
are not determined in accordance with, GAAP. Non-GAAP financial
information is not a substitute for any financial measure
determined in accordance with GAAP.
Non-GAAP Pre-tax Income is defined as GAAP income (loss) from
continuing operations before income taxes, as adjusted for the
effects of items such as amortization of intangible assets,
equity-based compensation, accretion of contingent consideration,
amortization or write-off of note issuance costs and discounts on
convertible debt and mark-to-market adjustments for interest rate
swaps; as well as items which impact comparability that are
required to be recorded under GAAP, but that the Company believes
are not indicative of its core operating results such as
restructuring and asset impairment charges, transaction, transition
and integration costs, changes in the liability for dissenting
shareholders, retention earn-outs payable to former shareholders of
acquired businesses, earn-out settlements, changes in the fair
value of contingent consideration, gains from the release of Sonic
payroll tax withholding liabilities related to a stock option
review, payments to note holders and expenses in connection with
the extinguishment or modification of debt, gains on sale of
strategic investments, changes in franchise tax reserves and
contested proxy election costs.
Non-GAAP Cost of licensing, services and software revenues,
excluding depreciation and amortization of intangible assets is
defined as GAAP cost of licensing, services and software revenues,
excluding depreciation and amortization of intangible assets,
excluding equity-based compensation and transition and integration
expenses. Included in Transaction, transition and integration costs
in 2016 is $10.0 million in expenses for additional guaranteed
license payments related to the Company’s over-the-top licensing
partnership with Intellectual Ventures. These payments were
expensed in the fourth quarter of 2016 as the payments were
triggered by the execution of a patent license agreement during the
quarter and are not expected to be recoverable from the net direct
revenue resulting from the patent license agreement and the related
TiVo product partnership. This expense was included in Transaction,
transition and integration costs as the patent license agreement
was entered into as part of continuing, and broadening, the product
relationship with TiVo.
Non-GAAP Research and Development Expenses is defined as GAAP
research and development expenses excluding equity-based
compensation, transition and integration expenses and retention
earn-outs payable to former shareholders of acquired
businesses.
Non-GAAP Selling, General and Administrative Expenses is defined
as GAAP selling, general and administrative expenses excluding
equity-based compensation, transaction, transition and integration
expenses, retention earn-outs payable to former shareholders of
acquired businesses, earn-out settlements, changes in the fair
value of contingent consideration, changes in franchise tax
reserves and contested proxy election costs.
Non-GAAP Total OpEx is defined as the sum of GAAP research and
development and selling, general and administrative expenses,
depreciation and gain on sale of patents excluding equity-based
compensation, transaction, transition and integration expenses,
retention earn-outs payable to former shareholders of acquired
businesses, earn-out settlements, changes in the fair value of
contingent consideration, changes in franchise tax reserves and
contested proxy election costs.
Non-GAAP Total COGS and OpEx is defined as GAAP Total Operating
costs and expenses, excluding amortization of intangible assets,
restructuring and asset impairment charges, equity-based
compensation, transaction, transition and integration expenses,
retention earn-outs payable to former shareholders of acquired
businesses, earn-out settlements, changes in the fair value of
contingent consideration, changes in franchise tax reserves and
contested proxy election costs.
Non-GAAP Interest Expense is defined as GAAP interest expense,
excluding interest on franchise tax reserves, accretion of
contingent consideration, amortization or write-off of issuance
costs and discounts on convertible debt plus the reclassification
of the current period benefit (cost) of the interest rate swaps
from gain (loss) on interest rate swaps.
Cash taxes are defined as GAAP current income tax expense
excluding changes in reserves for unrecognized tax benefits.
Non-GAAP Diluted Weighted Average Shares Outstanding is defined
as GAAP diluted weighted average shares outstanding except for
periods of a GAAP loss. In periods of a GAAP loss, GAAP diluted
weighted average shares outstanding are adjusted to include
dilutive common share equivalents outstanding that were excluded
from GAAP diluted weighted average shares outstanding because the
Company had a loss and therefore these shares would have been
anti-dilutive.
The Company’s management evaluates and makes decisions about its
business operations primarily based on Non-GAAP financial
information. Management uses Non-GAAP financial measures as the
basis for decision-making as they exclude items management does not
consider to be “core costs” or “core proceeds”. For each Non-GAAP
financial measure, the adjustment provides management with
information about the Company’s underlying operating performance
that enables a more meaningful comparison to its historical and
projected financial performance in different reporting periods. For
example, since the Company does not acquire businesses on a
predictable cycle, management excludes the amortization of
intangible assets, transaction, transition and integration costs,
retention earn-outs payable to former shareholders of acquired
businesses, changes in contingent consideration, and earn-out
settlements from its Non-GAAP financial measures in order to make
more consistent and meaningful evaluations of the Company’s
operating expenses as these items may be significantly impacted by
the timing and magnitude of acquisitions. Management also excludes
the effect of restructuring and asset impairment charges, expenses
in connection with the extinguishment or modification of debt and
gains on sale of strategic investments. Management excludes the
impact of equity-based compensation to provide meaningful
supplemental information that allows investors greater visibility
to the underlying performance of our business operations,
facilitates comparison of our results with other periods, and may
facilitate comparison with the results of other companies in our
industry, as well as to provide the Company’s management with an
important tool for financial and operational decision making and
for evaluating the Company’s performance over different periods of
time. Due to varying valuation techniques, reliance on subjective
assumptions and the variety of award types and features that may be
in use, we believe that providing non-GAAP financial measures
excluding equity-based compensation allows investors to make more
meaningful comparisons between our operating results and those of
other companies. Management excludes the amortization or write-off
of note issuance costs and discounts on convertible debt, accretion
of contingent consideration and mark-to-market adjustments for
interest rate swaps when management evaluates the Company’s
operating expenses. Management reclassifies the current period
benefit (cost) of the interest rate swaps from gain (loss) on
interest rate swaps to interest expense in order for Non-GAAP
Interest Expense to reflect the effects of the interest rate swaps
as these interest rate swaps were entered into to control the
effective interest rate the Company pays on its debt.
Management uses these Non-GAAP financial measures to help it
make decisions, including decisions that affect operating expenses
and operating margin. Management believes that making Non-GAAP
financial information available to investors, in addition to GAAP
financial information, may facilitate more consistent comparisons
between the Company’s performance over time with the performance of
other companies in our industry, which may use similar financial
measures to supplement their GAAP financial information.
Management recognizes that these Non-GAAP financial measures
have limitations as analytical tools, including the fact that
management must exercise judgment in determining which types of
items to exclude from the Non-GAAP financial information. In
addition, as other companies, including companies similar to TiVo
Corporation, may calculate their non-GAAP financial measures
differently than the Company calculates its Non-GAAP financial
measures, these Non-GAAP financial measures may have limited
usefulness to investors when comparing financial performance among
companies. Management believes, however, that providing Non-GAAP
financial information, in addition to GAAP financial information,
facilitates consistent comparison of the Company’s financial
performance over time. The Company provides Non-GAAP financial
information to the investment community, not as an alternative, but
as an important supplement to GAAP financial information; to enable
investors to evaluate the Company’s core operating performance in
the same way that management does. Reconciliations for each
Non-GAAP financial measure to its most directly comparable GAAP
financial measure is provided in the tables below.
About TiVo Corporation
TiVo (NASDAQ: TIVO) is a global leader in entertainment
technology and audience insights. From the interactive program
guide to the DVR, TiVo delivers innovative products and licensable
technologies that revolutionize how people find content across a
changing media landscape. TiVo enables the world’s leading media
and entertainment providers to deliver the ultimate entertainment
experience. Explore the next generation of entertainment at
tivo.com, forward.tivo.com or follow us on Twitter @tivo or
@tivoforbusiness.
Forward Looking Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These statements relate to, among other things, the Company’s
estimates of future financial performance, including future
revenues, earnings, expenses, and dividends, as well as future
business strategies and future product offerings, deployments and
technology and intellectual property licenses with various named
customers. These forward-looking statements are based on TiVo’s
current expectations, estimates and projections about its business
and industry, management’s beliefs and certain assumptions made by
the company, all of which are subject to change. Forward-looking
statements generally can be identified by the use of
forward-looking terminology such as, “future,” “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 and higher costs
in connection with the integration of TiVo Inc. (now known as TiVo
Solutions Inc.), delays in development, competitive service
offerings and lack of market acceptance, as well as the other
potential factors described under “Risk Factors” included in TiVo’s
most recent Annual Report on Form 10-K and other documents of TiVo
Corporation, Rovi Corporation and TiVo Solutions Inc. (formerly
known as TiVo Inc.) on file with the Securities and Exchange
Commission (available at www.sec.gov). TiVo cautions you not to
place undue reliance on forward-looking statements, which reflect
an analysis only and speak only as of the date hereof. TiVo assumes
no obligation to update any forward-looking statements in order to
reflect events or circumstances that may arise after the date of
this release, except as required by law.
TIVO CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
amounts)
(Unaudited)
Three Months EndedDecember
31,
Year Ended December 31, 2016 2015
2016 2015 Revenues, net: Licensing, services
and software $ 238,476 $ 149,170 $ 629,474 $ 525,482 Hardware
13,867 374 19,619 789 Total Revenues,
net 252,343 149,544 649,093 526,271 Costs and expenses: Cost of
licensing, services and software revenues, excluding depreciation
and amortization of intangible assets 61,015 24,332 139,666 102,466
Cost of hardware revenues, excluding depreciation and amortization
of intangible assets 13,984 231 19,056 504 Research and development
49,060 25,196 125,172 99,902 Selling, general and administrative
58,292 40,790 192,755 155,173 Depreciation 5,517 4,312 18,698
17,410 Amortization of intangible assets 41,902 19,193 104,989
76,982 Restructuring and asset impairment charges 2,672 403 27,316
2,160
Gain on sale of patents
— (82 ) — (82 ) Total costs and expenses 232,442
114,375 627,652 454,515 Operating
income from continuing operations 19,901 35,169 21,441 71,756
Interest expense (11,270 ) (11,405 ) (43,681 ) (46,826 ) Interest
income and other, net 1,366 (373 ) 1,688 716 Income (loss) on
interest rate swaps 13,013 3,738 (3,884 ) (13,368 ) Loss on debt
extinguishment — — — (2,815 ) Income (loss)
from continuing operations before income taxes 23,010 27,129
(24,436 ) 9,463 Income tax expense (benefit) 13,140 831
(61,685 ) 13,755 Income (loss) from continuing
operations, net of tax 9,870 26,298 37,249 (4,292 )
Loss from discontinued operations, net of
tax
(71 ) — (4,588 ) — Net income (loss) $ 9,799 $
26,298 $ 32,661 $ (4,292 ) Basic earnings
(loss) per share: Continuing operations $ 0.08 $ 0.33 $ 0.40 $
(0.05 ) Discontinued operations — — (0.05 ) —
Basic earnings (loss) per share $ 0.08 $ 0.33 $ 0.35
$ (0.05 ) Weighted average shares used in computing basic
per share amounts 117,394 80,677 93,064 84,133 Diluted
earnings (loss) per share: Continuing operations $ 0.08 $ 0.32 $
0.40 $ (0.05 ) Discontinued operations — — (0.05 ) —
Diluted earnings (loss) per share $ 0.08 $ 0.32
$ 0.35 $ (0.05 ) Weighted average shares used in
computing diluted per share amounts 119,298 81,055 94,262 84,133
See notes to the Consolidated Financial
Statements in our Annual Report on Form 10-K.
TIVO CORPORATION AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31,2016
December 31,2015
ASSETS Current assets: Cash and cash equivalents $ 192,627 $
101,675 Short-term marketable securities 117,084 107,879 Accounts
receivable, net 147,142 87,128 Inventory 13,186 456 Prepaid
expenses and other current assets 37,400 13,735 Total
current assets 507,439 310,873 Long-term marketable securities
128,929 114,715 Property and equipment, net 48,372 34,984
Intangible assets, net 806,838 386,742 Goodwill 1,812,118 1,343,652
Other long-term assets 17,147 8,330 Total assets $
3,320,843 $ 2,199,296
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities: Accounts payable and accrued expenses $
226,451 $ 74,113 Deferred revenue 49,145 12,106 Current portion of
long-term debt 7,000 7,000 Total current liabilities
282,596 93,219 Taxes payable, less current portion 4,893 5,332
Deferred revenue, less current portion 43,545 9,414 Long-term debt,
less current portion 967,732 960,156 Deferred tax liabilities, net
77,454 66,116 Other long-term liabilities 34,987 34,494
Total liabilities 1,411,207 1,168,731 Stockholders' equity:
Common stock 121 131 Treasury stock (9,646 ) (1,163,533 )
Additional paid-in capital 3,280,905 2,419,921 Accumulated other
comprehensive loss (7,049 ) (6,503 ) Accumulated deficit (1,354,695
) (219,451 ) Total stockholders’ equity 1,909,636 1,030,565
Total liabilities and stockholders’ equity $ 3,320,843
$ 2,199,296
See notes to the Consolidated Financial
Statements in our Annual Report on Form 10-K.
TIVO CORPORATION AND
SUBSIDIARIES
REVENUE BY SEGMENT
(In thousands)
(Unaudited)
Three Months EndedDecember
31,
Year Ended December 31,
2016 2015 2016 2015
Intellectual Property Licensing Revenues: Service Provider $
104,024 $ 72,433 $ 268,078 $ 216,777 Consumer Electronics 36,328
17,118 79,339 65,045 Total Intellectual
Property Licensing Revenues 140,352 89,551 347,417 281,822
Product Revenues: Platform Solutions 86,031 34,975 205,395 137,814
Software and Services 23,948 21,769 83,811 84,956 Other 2,012
3,249 12,470 21,679 Total Product Revenues
111,991 59,993 301,676 244,449 Total
Revenues $ 252,343 $ 149,544 $ 649,093 $
526,271
TIVO CORPORATION AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL INFORMATION
(In thousands)
(Unaudited)
Three Months EndedDecember
31,
Year Ended December 31, 2016
2015 2016
2015 GAAP Income (loss) before income taxes $
23,010 $ 27,129 $ (24,436 ) $ 9,463 Amortization of intangible
assets
41,902
19,193 104,989 76,982 Restructuring and asset impairment charges
2,672
403 27,316 2,160 Equity-based compensation
15,639
11,603 47,670 42,647 Transaction, transition and integration costs
19,911
— 39,950
—
Earnout amortization and settlement
959
— 2,467
—
Reduction of contingent consideration liability
(1,614
)
— (1,614 ) (860 ) Change in franchise tax reserve
—
859 154 859 Contested proxy election costs
—
— — 4,346 Interest on franchise tax reserve
—
255 280 255 Accretion of contingent consideration
273
— 340 — Amortization of note issuance costs
509
471 1,977 2,360 Amortization of convertible note discount
3,070
2,931 12,070 11,504 Mark-to-market (income) loss related to
interest rate swaps
(15,538
)
(5,090 ) (5,836 ) 8,949 Loss on debt extinguishment
—
— — 2,815 Non-GAAP
Pre-tax Income $ 90,793 $ 57,754 $ 205,327 $
161,480
Three Months EndedDecember
31,
Year Ended December 31, 2016
2015 2016 2015
GAAP Weighted average diluted shares outstanding
119,298
81,055
94,262 84,133
Dilutive effect of equity-based
compensation awards
—
— — 418 Non-GAAP
Diluted Weighted Average Shares Outstanding
119,298
81,055 94,262 84,551
Three Months EndedDecember
31,
Year Ended December 31, 2016
2015 2016 2015
GAAP Total Operating costs and expenses $ 232,442 $ 114,375
$ 627,652 $ 454,515 Amortization of intangible assets
(41,902
)
(19,193 ) (104,989 ) (76,982 ) Restructuring and asset impairment
charges
(2,672
)
(403 ) (27,316 ) (2,160 ) Equity-based compensation
(15,639
)
(11,603 ) (47,670 ) (42,647 ) Transaction, transition and
integration costs
(19,911
)
— (39,950 ) — Earnout amortization and settlement
(959
)
— (2,467 ) — Reduction of contingent consideration liability
1,614
— 1,614 860 Change in franchise tax reserve
—
(859 ) (154 ) (859 ) Contested proxy election costs
—
— — (4,346 ) Non-GAAP
Total COGS and OpEx $ 152,973 $ 82,317 $ 406,720
$ 328,381
Three Months EndedDecember
31,
Year Ended December 31,
2016 2015
2016 2015 GAAP Cost of
licensing, services and software revenues, excluding depreciation
and amortization of intangible assets
$
61,015
$ 24,332 $ 139,666 $ 102,466 Equity-based compensation
(1,005
)
(1,298
)
(3,819
)
(5,207 ) Transition and integration costs
(10,216
)
— (10,352 ) — Non-GAAP Cost of
licensing, services and software revenues, excluding depreciation
and amortization of intangible assets $ 49,794 $ 23,034
$ 125,495 $ 97,259
Three Months EndedDecember
31,
Year Ended December 31, 2016
2015 2016 2015
GAAP Research and development expenses $ 49,060 $ 25,196 $
125,172 $ 99,902 Equity-based compensation
(4,784
)
(2,678 ) (10,970 ) (8,525 ) Transition and integration costs
(2,274
)
— (3,782 ) — Earnout amortization and settlement
(184
)
— (245 ) — Non-GAAP Research and
Development Expenses $ 41,818 $ 22,518 $ 110,175
$ 91,377
Three Months EndedDecember
31,
Year Ended December 31,
2016 2015
2016 2015 GAAP Selling, general
and administrative expenses $ 58,292 $ 40,790 $ 192,755 $ 155,173
Equity-based compensation
(9,850
)
(7,627 ) (32,881 ) (28,915 ) Transaction, transition and
integration costs
(7,421
)
— (25,816 ) — Earnout amortization and settlement
(775
)
— (2,222 ) — Reduction of contingent consideration liability
1,614
— 1,614 860 Change in franchise tax reserve
—
(859 ) (154 ) (859 ) Contested proxy election costs
—
— — (4,346 ) Non-GAAP
Selling, General and Administrative Expenses $ 41,860 $
32,304 $ 133,296 $ 121,913
Three Months EndedDecember
31,
Year Ended December 31, 2016
2015 2016 2015
GAAP Interest expense $ (11,270 ) $ (11,405 ) $ (43,681 ) $
(46,826 ) Interest on franchise tax reserve
—
255 280 255 Accretion of contingent consideration
273
— 340 — Amortization of note issuance costs
509
471 1,977 2,360
Amortization of convertible note
discount
3,070
2,931 12,070 11,504
Reclassify current period cost of interest
rate swaps
(2,525
)
(1,351 ) (9,720 ) (4,418 ) Non-GAAP Interest
Expense $ (9,943 ) $ (9,099 ) $ (38,734 ) $ (37,125 )
TIVO CORPORATION AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
FORECAST FINANCIAL INFORMATION
(In millions)
(Unaudited)
Current 2017 Full
YearOutlook
2016
FullYearActual
Low High GAAP (Loss) income before income
taxes (1) $ (70.0 ) $ (55.0 ) $ (24.4 ) Amortization of intangible
assets 166.0 166.0 105.0 Restructuring and asset impairment charges
6.0 8.0 27.3 Equity-based compensation 60.0 64.0 47.7 Transaction,
transition and integration costs 19.0 22.0 40.0 Earnout
amortization and settlement 4.0 4.0 2.5 Mark-to-market loss related
to interest rate swaps — — (5.8 ) Amortization of note issuance
costs and convertible debt discount 14.0 14.0 14.0 Other 1.0
2.0 (1.0 ) Non-GAAP Pre-tax Income $ 200.0 $ 225.0
$ 205.3 Cash taxes $ 23.0 $ 24.0 $ 24.3
(1) Due to their nature, changes in the mark-to-market of interest
rate swaps have only been included in the outlook to the extent
they have already occurred. Actual results may differ materially
from the outlook.
Current 2017 Full
YearOutlook
GAAP Weighted average diluted shares outstanding 121.0
Dilutive effect of equity-based
compensation awards
1.0
Non-GAAP Diluted Weighted Average Shares
Outstanding
122.0
Current Q42017 Outlook
GAAP Total Operating costs and expenses $ 200.0 Amortization of
intangible assets (41.0 ) Restructuring and asset impairment
charges (5.0 ) Equity-based compensation (16.0 ) Transaction,
transition and integration costs (2.0 ) Earnout amortization and
settlement (1.0 ) Other — Non-GAAP Total COGS and OpEx $
135.0
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version on businesswire.com: http://www.businesswire.com/news/home/20170215006189/en/
Investor ContactsTiVo CorporationPeter Halt, +1
818-295-6800CFOorTiVo CorporationPeter Ausnit, +1 818-565-5200VP
IRPeter.Ausnit@TiVo.com
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