Company Reports Strong Q2 Results
Integration Efforts On Track to Achieve $100
million+ Cost Synergy Target
Declares Third Quarter Cash Dividend of $0.18
per Share
Raises Mid-Point of Revenue, Pre-tax Income and
Non-GAAP Pre-tax Income
TiVo Corporation (NASDAQ:TIVO) today reported financial results
for the second quarter ended June 30, 2017.
“TiVo executed well in the second quarter with strong financial
results,” said Tom Carson, President and CEO of TiVo. Mr. Carson
added, “We signed deals and launched products in Pay TV, OTT and
mobile during the quarter. This included product deals with
Millicom, Cable Onda and Service Electric and IP licensing deals
with Frontier, Foxtel, Funai and a large Canadian Pay-TV operator.
Our integration of legacy TiVo has been a success and we are
nearing completion against our financial synergies targets.
Additionally, based on TiVo’s ability to continue to generate
substantial positive cash flows, TiVo will pay a third quarter cash
dividend of $0.18 per common share in September.”
Second Quarter Results
The Company reported second quarter revenue of $208.6 million,
an increase of 67% compared to $125.2 million in the second quarter
of 2016. As expected, revenues were higher than in the comparable
period of the prior year due to the acquisition of TiVo Solutions
Inc. in the third quarter of 2016, which contributed $94.9 million
in revenues in the current quarter. Second quarter 2017 Net loss
was $4.8 million, compared to a Net loss of $9.4 million for the
second quarter of 2016.
On a Non-GAAP basis, second quarter 2017 Non-GAAP Pre-tax Income
was $66.4 million, compared to $36.9 million in the second quarter
of 2016. Estimated cash taxes for the quarter were approximately $5
million. GAAP Diluted weighted average shares outstanding were 120
million and Non-GAAP Diluted Weighted Average Shares Outstanding
for the second quarter of 2017 were 121 million.
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 tightened its expected revenue
range to $810 million to $830 million, raising the midpoint of the
range to $820 million, which includes approximately $35 million of
hardware revenues at the mid-point of expectations. Additionally,
for the full year, the Company expects GAAP Operating loss to be
$16 million to $11 million and Adjusted EBITDA, a measure that has
not been previously provided, to be $276 million to $290 million.
The Company now expects a GAAP loss before taxes of $80 million to
$70 million and has raised its expectations for Non-GAAP Pre-tax
Income to $218 million to $232 million, increasing the midpoint by
$12.5 million. Costs include Non-GAAP Cost of hardware revenue of
approximately $45 million at the mid-point of expectations. TiVo
anticipates it will incur $22 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 122 million and Non-GAAP Diluted Weighted
Average Shares Outstanding to be approximately 123 million
shares.
Capital Allocation
On August 2, 2017, TiVo’s Board of Directors declared a cash
dividend of $0.18 per common share, to be paid on September 21,
2017, to all stockholders of record as of the close of business on
September 7, 2017. TiVo’s Board believes it can reward its
stockholders with a meaningful dividend for the third quarter in a
row, 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.
TIVO BUSINESS AND OPERATING HIGHLIGHTS:
Products:
- Approximately 23 million subscriber
households around the world use TiVo’s advanced television
experiences.
- Millicom, a global media and
telecommunications company, will launch the full portfolio of
TiVo’s television offerings from low-cost one-way digital adapters
to whole home gateway DVRs, to its customers in South and Central
America.
- Cable Onda, a leading television
service provider in Panama signed a deal with TiVo to offer its
customers TiVo’s full portfolio of television offerings.
- Service Electric signed a deal to offer
TiVo’s advanced television product to its customers, including the
next-gen TiVo user interface.
- DISH has fully transitioned to TiVo
Metadata across its online, mobile and linear television services
as well as continues to use TiVo’s advanced search and
recommendation engine.
- Deployed Promo Optimizer across two
additional national cable networks.
IP Licensing:
- In our US Pay-TV category, Frontier
Communications, a top 10 U.S. Pay-TV provider, signed a multi-year
IP license renewal.
- In our Other IP category, we signed
numerous agreements across International Pay-TV and Consumer
Electronics, including:
- One of the largest Canadian cable
companies renewed its IP license.
- Foxtel, Australia’s leading pay-TV
provider, signed a multi-year IP license renewal.
- TCL, the third-largest TV manufacturer
globally, expanded its IP license agreement.
- Funai Electric, a leading global
consumer electronics manufacturer, signed a multi-year IP license
renewal.
- In our ongoing litigation with Comcast,
the International Trade Commission issued a favorable initial
determination for the company.
Conference Call Information
TiVo management will host a conference call today, August 3,
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 16633282. 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 August 10, 2017 and can be accessed by dialing (855)
859-2056 (or international +1-404-537-3406) and entering conference
ID 16633282. 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,
Non-GAAP Cost of hardware revenues, Non-GAAP Research and
Development Expenses, Non-GAAP Selling, General and Administrative
Expenses, Non-GAAP Depreciation, Non-GAAP Total OpEx, Non-GAAP
Total COGS and OpEx, Adjusted EBITDA 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, changes in the fair value of contingent
consideration, additional depreciation resulting from facility
rationalization actions, gain on settlement of acquired receivable,
expenses in connection with the extinguishment or modification of
debt and gains on the sale of strategic investments and changes in
franchise tax reserves.
Non-GAAP Cost of licensing, services and software revenues 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 the fourth quarter of 2016 was $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 Cost of hardware revenues is defined as GAAP cost of
hardware revenues, excluding depreciation and amortization of
intangible assets, excluding transition and integration
expenses.
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, changes in the fair value of contingent
consideration, gain on settlement of acquired receivable and
changes in franchise tax reserves.
Non-GAAP Depreciation is defined as GAAP depreciation expenses
excluding the impact of additional depreciation resulting from
changes in the estimated useful lives of assets involved in
facility rationalization actions.
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, changes in the fair value of contingent consideration,
additional depreciation resulting from facility rationalization
actions, gain on settlement of acquired receivable and changes in
franchise tax reserves.
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 changes in the fair value of contingent consideration,
additional depreciation resulting from facility rationalization
actions, gain on settlement of acquired receivables and changes in
franchise tax reserves.
Adjusted EBITDA is defined as GAAP operating income excluding
depreciation, amortization of intangible assets, restructuring and
asset impairment charges, equity-based compensation, transaction,
transition and integration costs, gain on settlement of acquired
receivable, retention earn-outs payable to former shareholders of
acquired businesses, earn-out settlements, changes in contingent
consideration and changes in franchise tax reserves.
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,
changes in the liability for dissenting shareholders, retention
earn-outs payable to former shareholders of acquired businesses,
changes in contingent consideration and gain on settlement of
acquired receivables 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 depreciation, restructuring and asset impairment
charges, additional depreciation resulting from facility
rationalization actions, expenses in connection with the
extinguishment or modification of debt and gains on the 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
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 are 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
Annual Report on Form 10-K for fiscal year ended December 31, 2016,
its Quarterly Reports on Form 10-Q for the quarters ended March 31,
2017 and June 30, 2017, and other documents of TiVo Corporation 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
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
amounts)
(Unaudited)
Three Months Ended June 30, Six Months
Ended June 30, 2017 2016 2017
2016 Revenues, net: Licensing, services and software
$ 198,964 $ 124,478 $ 389,514 $ 242,489 Hardware 9,594 767
24,808 1,140 Total Revenues, net 208,558
125,245 414,322 243,629 Costs and expenses: Cost of licensing,
services and software revenues, excluding depreciation and
amortization of intangible assets 39,281 24,682 81,587 46,990 Cost
of hardware revenues, excluding depreciation and amortization of
intangible assets 11,767 283 25,988 512 Research and development
46,592 23,668 95,514 45,732 Selling, general and administrative
45,741 43,079 99,690 79,766 Depreciation 5,382 4,325 10,854 8,559
Amortization of intangible assets 41,678 19,030 83,378 38,162
Restructuring and asset impairment charges 9,374 —
13,913 2,333 Total costs and expenses 199,815
115,067 410,924 222,054 Operating income 8,743
10,178 3,398 21,575 Interest expense (10,573 ) (10,859 ) (20,837 )
(21,390 ) Interest income and other, net 2,823 (14 ) 2,760 (31 )
Loss on interest rate swaps (1,856 ) (5,507 ) (1,335 ) (18,594 )
Loss on debt extinguishment — — (108 ) — Loss on debt modification
— — (929 ) — Litigation settlement — — (12,906 ) —
Loss before income taxes (863 ) (6,202 ) (29,957 ) (18,440 )
Income tax expense 3,908 3,206 9,475 8,620
Net loss $ (4,771 ) $ (9,408 ) $ (39,432 ) $ (27,060 )
Basic loss per share $ (0.04 ) $ (0.11 ) $ (0.33 ) $ (0.33 )
Weighted average shares used in computing basic per share amounts
120,209 82,110 119,515 81,742 Diluted loss per share $ (0.04
) $ (0.11 ) $ (0.33 ) $ (0.33 ) Weighted average shares used in
computing diluted per share amounts 120,209 82,110 119,515 81,742
Dividends declared per share $ 0.18 $ — $ 0.36 $ —
See notes to the Condensed Consolidated
Financial Statements in our Quarterly Report on Form 10-Q.
TIVO CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except per share
amounts)
June 30, 2017
December 31, 2016
ASSETS (Unaudited) Current assets: Cash and cash equivalents
$ 89,895 $ 192,627 Short-term marketable securities 123,576 117,084
Accounts receivable, net 184,870 147,142 Inventory 10,919 13,186
Prepaid expenses and other current assets 41,428 37,400
Total current assets 450,688 507,439 Long-term marketable
securities 102,778 128,929 Property and equipment, net 40,298
48,372 Intangible assets, net 726,948 806,838 Goodwill 1,813,676
1,812,118 Other long-term assets 36,560 17,147 Total
assets $ 3,170,948 $ 3,320,843
LIABILITIES
AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable
and accrued expenses $ 120,889 $ 226,451 Deferred revenue 47,547
49,145 Current portion of long-term debt 7,000 7,000
Total current liabilities
175,436 282,596 Taxes payable, less current portion 4,990 4,893
Deferred revenue, less current portion 44,116 43,545 Long-term
debt, less current portion 971,868 967,732 Deferred tax
liabilities, net 79,159 77,454 Other long-term liabilities 32,947
34,987 Total liabilities 1,308,516 1,411,207
Stockholders' equity: Common stock 122 121 Treasury stock (20,926 )
(9,646 ) Additional paid-in capital 3,281,016 3,280,905 Accumulated
other comprehensive loss (3,653 ) (7,049 ) Accumulated deficit
(1,394,127 ) (1,354,695 ) Total stockholders’ equity 1,862,432
1,909,636 Total liabilities and stockholders’ equity
$ 3,170,948 $ 3,320,843
See notes to the Condensed Consolidated
Financial Statements in our Quarterly Report on Form 10-Q.
TIVO CORPORATION AND
SUBSIDIARIES
REVENUE BY SEGMENT
(In thousands)
(Unaudited)
Three Months Ended June 30, Six Months
Ended June 30, 2017 2016 2017
2016 Intellectual Property Licensing Revenues: US Pay
TV Providers $ 68,733 $ 43,567 $ 132,077 $ 76,877 Other 35,462
24,152 62,839 47,102 Total Intellectual
Property Licensing Revenues 104,195 67,719 194,916 123,979
Product Revenues: Platform Solutions 82,971 36,595 171,154 72,079
Software and Services 19,752 19,482 45,021 39,869 Other 1,640
1,449 3,231 7,702
Total Product Revenues
104,363 57,526 219,406 119,650 Total
Revenues $ 208,558 $ 125,245 $ 414,322 $
243,629
TIVO CORPORATION AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL INFORMATION
(In thousands)
(Unaudited)
Three Months Ended June 30, Six Months
Ended June 30, 2017 2016
2017 2016 GAAP Loss before
income taxes $ (863 ) $ (6,202 ) $ (29,957 ) $ (18,440 )
Amortization of intangible assets 41,678 19,030 83,378 38,162
Restructuring and asset impairment charges 9,374 — 13,913 2,333
Equity-based compensation 11,749 9,917 25,774 18,355 Transaction,
transition and integration costs 5,108 6,043 12,307 6,043 Earnout
amortization and settlement 959 1,189 1,917 1,189 Change in
contingent consideration liability 398 — 74 — Loss on debt
extinguishment — —
108
— Loss on debt modification — — 929 — Litigation settlement — —
12,906 — Gain on settlement of acquired receivable (2,537 ) —
(2,537 ) — Accelerated depreciation 213 — 213 — Gain on sale of
strategic investments (3,143 ) — (3,143 ) — Change in franchise tax
reserve — 154 — 154 Accretion of contingent consideration 213 — 368
— Amortization of note issuance costs 528 489 1,050 969
Amortization of convertible note discount 3,143 3,000 6,249 5,965
Mark-to-market (income) loss related to interest rate swaps (410 )
2,966 (3,172 ) 13,954 Interest on franchise tax reserve —
280 — 280 Non-GAAP
Pre-tax Income $ 66,410 $ 36,866 $ 120,377 $
68,964
Three Months Ended June 30, Six
Months Ended June 30, 2017 2016
2017 2016 GAAP Diluted weighted average
shares outstanding 120,209 82,110 119,515 81,742 Dilutive effect of
equity-based compensation awards 799 795
1,151 939 Non-GAAP Diluted
Weighted Average Shares Outstanding 121,008
82,905 120,666 82,681
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 2017
2016 GAAP Cost of licensing, services and software
revenues, excluding depreciation and amortization of intangible
assets $ 39,281 $ 24,682 $ 81,587 $ 46,990 Equity-based
compensation (991 ) (1,003 ) (2,035 ) (2,065 ) Transition and
integration costs (174 ) — (273 )
— Non-GAAP Cost of licensing, services and software
revenues $ 38,116 $ 23,679 $ 79,279 $ 44,925
Three Months Ended June 30, Six Months
Ended June 30, 2017 2016
2017 2016 GAAP Cost of hardware
revenues, excluding depreciation and amortization of intangible
assets $ 11,767 $ 283 $ 25,988 $ 512 Transition and integration
costs 338 — (1,021 ) —
Non-GAAP Cost of hardware revenues $ 12,105 $ 283
$ 24,967 $ 512
Three Months Ended
June 30, Six Months Ended June 30, 2017
2016 2017 2016
GAAP Research and development expenses $ 46,592 $ 23,668 $ 95,514 $
45,732 Equity-based compensation (4,059 ) (2,405
)
(8,056 ) (2,998 ) Transition and integration costs (1,535 ) —
(2,775 ) — Earnout amortization and settlement (184 )
— (368 ) — Non-GAAP
Research and Development Expenses $ 40,814 $ 21,263 $
84,315 $ 42,734
Three Months Ended June
30, Six Months Ended June 30, 2017
2016 2017 2016 GAAP
Selling, general and administrative expenses $ 45,741 $ 43,079 $
99,690 $ 79,766 Equity-based compensation (6,699 ) (6,509 ) (15,683
) (13,292 ) Transaction, transition and integration costs (3,737 )
(6,043 ) (8,238 ) (6,043 ) Earnout amortization and settlement (775
) (1,189 ) (1,549 ) (1,189 ) Change in contingent consideration
liability (398 ) — (74 ) — Gain on settlement of acquired
receivable 2,537 — 2,537 — Change in franchise tax reserve —
(154 ) — (154 ) Non-GAAP
Selling, General and Administrative Expenses $ 36,669 $
29,184 $ 76,683 $ 59,088
Three
Months Ended June 30, Six Months Ended June 30,
2017 2016 2017
2016 GAAP Depreciation $ 5,382 $ 4,325 $ 10,854 $
8,559 Accelerated depreciation (213 ) —
(213 ) — Non-GAAP Depreciation $ 5,169 $ 4,325
$ 10,641 $ 8,559
Three Months Ended
June 30, Six Months Ended June 30, 2017
2016 2017 2016 GAAP Total
Operating costs and expenses $ 199,815 $ 115,067 $ 410,924 $
222,054 Amortization of intangible assets (41,678 ) (19,030 )
(83,378 ) (38,162 ) Restructuring and asset impairment charges
(9,374 ) — (13,913 ) (2,333 ) Equity-based compensation (11,749 )
(9,917 ) (25,774 ) (18,355 ) Transaction, transition and
integration costs (5,108 ) (6,043 ) (12,307 ) (6,043 ) Earnout
amortization and settlement (959 ) (1,189 ) (1,917 ) (1,189 )
Change in contingent consideration liability (398 ) — (74 ) — Gain
on settlement of acquired receivable 2,537 — 2,537 — Accelerated
depreciation (213 ) — (213 ) — Change in franchise tax reserve
— (154 ) — (154 )
Non-GAAP Total COGS and OpEx $ 132,873 $ 78,734 $
275,885 $ 155,818
Three Months Ended June
30, Six Months Ended June 30, 2017
2016 2017 2016
GAAP Interest expense $ (10,573 ) $ (10,859 ) $ (20,837 ) $ (21,390
) Accretion of contingent consideration 213 — 368 — Amortization of
note issuance costs 528 489 1,050 969 Amortization of convertible
note discount 3,143 3,000 6,249 5,965 Reclassify current period
cost of interest rate swaps (2,266 ) (2,541 ) (4,508 ) (4,640 )
Interest on franchise tax reserve — 280
— 280 Non-GAAP Interest Expense $
(8,955 ) $ (9,631 ) $ (17,678 ) $ (18,816 )
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 before income taxes (1) $
(80
) $
(70
) $ (24.4 ) Amortization of intangible assets 166 166 105.0
Restructuring and asset impairment charges 17 19 27.3 Equity-based
compensation 60 64 47.7 Transaction, transition and integration
costs 24 27 40.0 Earnout amortization and settlement 5 5 2.5
Litigation settlement 13 13 — Mark-to-market income related to
interest rate swaps (1) (3 ) (3 ) (5.8 ) Amortization of note
issuance costs and convertible debt discount 15 15 14.0 Gain on
sale of strategic investments (3 ) (3 ) — Gain on settlement of
acquired receivable (3 ) (3 ) — Other
7
2
(1.0 ) Non-GAAP Pre-tax Income (1) $ 218 $ 232
$ 205.3 Cash taxes $ 22 $ 24 $ 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
Year Outlook
2016
Full YearActual
Low High
GAAP Operating income (loss)
$ (16 ) $ (11 ) $ 21.4 Depreciation 23 23 18.7
Amortization of intangible assets 166 166 105.0 Restructuring and
asset impairment charges 17 19 27.3 Equity-based compensation 60 64
47.7 Transaction, transition and integration costs 24 27 40.0
Earnout amortization and settlement 5 5 2.5 Gain on settlement of
acquired receivable (3 ) (3 ) — Other
—
— (1.5 )
Adjusted EBITDA
$ 276 $ 290 $ 261.1
Current 2017Full
YearOutlook
GAAP Diluted weighted average shares outstanding 122 Dilutive
effect of equity-based compensation awards 1 Non-GAAP
Diluted Weighted Average Shares Outstanding 123
Current 2017Full
YearOutlook
Cost of hardware revenues, excluding depreciation and amortization
of intangible assets $ 47 Transition and integration costs (2 )
Non-GAAP Cost of hardware revenues $ 45
Current Q4 2017Outlook
GAAP Total Operating costs and expenses $ 200 Amortization of
intangible assets (42 ) Restructuring and asset impairment charges
(2 ) Equity-based compensation (16 ) Transaction, transition and
integration costs (3 ) Earnout amortization and settlement (1 )
Other (1 ) Non-GAAP Total COGS and OpEx $ 135
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170803006422/en/
Investor RelationsTiVo
CorporationDerrick Nueman, +1
408-519-9677dnueman@TiVo.comorPress
RelationsTiVo CorporationJennifer Miu,
+1-408-764-5411jennifer.miu@tivo.com
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