Company Reports Solid Third Quarter Results
Declares Fourth Quarter Cash Dividend of $0.18
per Share
TiVo Corporation (NASDAQ:TIVO) today reported financial results
for the third quarter ended September 30, 2017.
"TiVo executed well, making progress across all areas of our
business and delivered solid financial results in the third
quarter," said Tom Carson, President and CEO of TiVo. Carson added,
"We just launched our innovative voice search and the New TiVo
Experience, our new visually rich user interface, across our U.S.
retail platform. Our next generation operator product is now live
with Millicom in Colombia, one of the largest Pay-TV and mobile
operators in Latin America. We extended our licensing deal with
AT&T, the largest US Pay-TV operator, and expanded our
licensing relationship with Liberty Global, Europe's largest Pay-TV
operator. We also continued our progress in the CE and OTT spaces
with our Sony license renewal. Finally, given our substantial
operating cash flows, we declared a fourth quarter cash dividend of
$0.18 per common share to be paid in December, meaning TiVo will
have returned $0.72 per share to its shareholders in 2017."
Third Quarter Results
The Company reported third quarter revenue of $197.9 million, an
increase of 29% compared to $153.1 million in the third 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. Third quarter 2017 Net loss was
$17.0 million, compared to a Net income of $49.9 million for the
third quarter of 2016. The third quarter 2016 net income included
an $83.4 million tax benefit.
On a Non-GAAP basis, third quarter 2017 Non-GAAP Pre-tax Income
was $54.1 million, compared to $45.6 million in the third quarter
of 2016. Estimated cash taxes for the quarter were approximately $5
million. For the third quarter of 2017, GAAP Diluted weighted
average shares outstanding were 121 million and Non-GAAP Diluted
Weighted Average Shares Outstanding were 122 million.
Third quarter 2017 Adjusted EBITDA was $66.5 million compared to
$59.8 million in third quarter 2016.
Non-GAAP Pre-tax Income and Adjusted EBITDA are defined below in
the section entitled "Non-GAAP Information." Reconciliations
between GAAP and Non-GAAP amounts are provided in the tables
below.
2017 Business Outlook
For fiscal year 2017, the Company maintains its expected revenue
range of $810 million to $830 million, which includes approximately
$35 million of hardware revenues at the mid-point of expectations.
Additionally, the Company expects the full year GAAP Operating loss
to be $8 million to $2 million, which is an improvement from the
prior range due to lower equity-based compensation costs and
transaction, transition & integration costs. Adjusted EBITDA
expectations continue to be $276 million to $290 million. The
Company now expects a GAAP loss before taxes of $70 million to $60
million and for Non-GAAP Pre-tax Income to be $218 million to $232
million. Costs include Non-GAAP Cost of hardware revenue of
approximately $45 million at the mid-point of expectations. TiVo
anticipates it will incur $20 million to $22 million in Cash Taxes.
Additionally, 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.
Capital Allocation
On November 1, 2017, TiVo's Board of Directors declared a cash
dividend of $0.18 per common share, to be paid on December 20,
2017, to all stockholders of record as of the close of business on
December 6, 2017. TiVo's Board believes it can reward its
stockholders with a meaningful dividend, while maintaining ample
capacity for the Company to invest in the business, pursue
long-term growth aspirations, and consider additional capital
allocation alternatives. During 2017, TiVo expects to have returned
$0.72 per share to its investors, which based on our current stock
price equates to almost a 4% dividend yield.
TIVO BUSINESS AND OPERATING HIGHLIGHTS:
Product:
- Approximately 23 million subscriber
households around the world use TiVo's advanced television
experiences.
- TiVo launched voice search across live
TV, DVR, video-on-demand and popular online streaming services in
its latest U.S. retail consumer offering. Additionally, these
products also include the New TiVo Experience, our latest visually
rich, on-screen user experience.
- Millicom has deployed the New TiVo
Experience Platform in Colombia with other Latin American countries
to follow.
- Sharp selected TiVo's G-Guide to power
Sharp's AQUOS Smart TVs in Japan, allowing users of this product to
enjoy the industry's most advanced programing guide for Smart
TVs.
- J:COM, one of Japan's largest cable
television operators, signed a multi-year renewal for TiVo's
G-Guide.
- TiVo is partnering with Discovery
Networks to power their end-to-end audience-based marketing
inventory planning and execution with TiVo's own Audience Works for
Marketing.
IP Licensing:
- AT&T, the largest U.S. Pay-TV
provider, extended its IP license by three years through 2025,
highlighting the long-term value of our innovation and technology
to US Pay-TV providers. TiVo's two largest US Pay-TV deals extend
well into the 2020s.
- Liberty Global, Europe's largest Pay-TV
provider, expanded its license to cover all of their international
markets.
- Sony signed a multi-year IP license
renewal across all of its relevant entertainment products.
- J:COM, one of Japan's largest cable
television operators, signed an IP license multi-year renewal.
Conference Call Information
TiVo management will host a conference call today, November 2,
2017, at 2:00 p.m. PT/5:00 p.m. ET to discuss the financial and
operational results. Investors and analysts interested in
participating in the conference call are welcome to dial (866)
621-1214 (or international +1-706-643-4013) and reference
conference ID 16638241. 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 November 9, 2017 and can be accessed by dialing (855)
859-2056 (or international +1-404-537-3406) and entering conference
ID 16638241. A replay of the audio webcast will be available on
TiVo's website shortly after the live call ends and will remain on
TiVo'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, TiVo Acquisition litigation, retention
earn-outs payable to former shareholders of acquired businesses,
remeasurement 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, remeasurement 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, remeasurement 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, remeasurement of
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,
TiVo Acquisition litigation, retention earn-outs payable to former
shareholders of acquired businesses, remeasurement of 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 Report on Form 10-Q for the quarter ended September
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 EndedSeptember
30,
Nine Months EndedSeptember
30,
2017 2016 2017
2016 Revenues, net: Licensing, services and software $
188,031 $ 148,509 $ 577,545 $ 390,998
Hardware
9,867 4,612 34,675 5,752 Total
Revenues, net 197,898 153,121 612,220 396,750
Costs and expenses:
Cost of licensing, services and software revenues, excluding
depreciation and amortization of intangible assets 42,811 31,661
124,398 78,651 Cost of hardware revenues, excluding depreciation
and amortization of intangible assets 9,889 4,560 35,877 5,072
Research and development 48,872 30,380 144,386 76,112 Selling,
general and administrative 47,431 54,697 147,121 134,463
Depreciation 5,015 4,622 15,869 13,181 Amortization of intangible
assets 41,722 24,925 125,100 63,087
Restructuring and asset impairment
charges
3,710 22,311 17,623 24,644 Total costs
and expenses 199,450 173,156 610,374 395,210
Operating (loss) income (1,552 ) (20,035 ) 1,846 1,540
Interest expense (10,990 ) (11,021 ) (31,827 ) (32,411 ) Interest
income and other, net 1,059 353 3,819 322 (Loss) income on interest
rate swaps (39 ) 1,697 (1,374 ) (16,897 ) TiVo Acquisition
litigation (1,100 ) — (14,006 ) — Loss on debt extinguishment — —
(108 ) — Loss on debt modification — — (929 ) —
Loss before income taxes (12,622 ) (29,006 ) (42,579 )
(47,446 ) Income tax expense (benefit) 4,341 (83,445 )
13,816 (74,825 ) (Loss) income from continuing operations,
net of tax (16,963 ) 54,439 (56,395 ) 27,379 Loss from discontinued
operations, net of tax — (4,517 ) — (4,517 ) Net
(loss) income $ (16,963 ) $ 49,922 $ (56,395 ) $ 22,862
Basic (loss) earnings per share: Continuing
operations $ (0.14 ) $ 0.60 $ (0.47 ) $ 0.32 Discontinued
operations — (0.05 ) — (0.05 ) Basic (loss) earnings
per share $ (0.14 ) $ 0.55 $ (0.47 ) $ 0.27 Weighted
average shares used in computing basic per share amounts 120,935
91,131 119,994 84,895
Diluted (loss) earnings per share:
Continuing operations $ (0.14 ) $ 0.59 $ (0.47 ) $ 0.32
Discontinued operations — (0.05 ) — (0.05 ) Diluted
(loss) earnings per share $ (0.14 ) $ 0.54 $ (0.47 ) $ 0.27
Weighted average shares used in computing diluted per share
amounts 120,935 92,144 119,994 85,858 Dividends declared per
share $ 0.18 $ — $ 0.54 $ —
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)
September 30,2017
December 31,2016
ASSETS
(Unaudited) Current assets: Cash and cash equivalents $ 92,787 $
192,627 Short-term marketable securities 132,418 117,084 Accounts
receivable, net 191,010 147,142 Inventory 11,710 13,186 Prepaid
expenses and other current assets 47,449 37,400 Total
current assets 475,374 507,439 Long-term marketable securities
88,112 128,929 Property and equipment, net 44,339 48,372 Intangible
assets, net 685,455 806,838 Goodwill 1,813,236 1,812,118 Other
long-term assets 66,235 17,147 Total assets $
3,172,751 $ 3,320,843
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities: Accounts payable and accrued expenses $
124,977 $ 226,451 Deferred revenue 67,445 49,145 Current portion of
long-term debt 7,000 7,000 Total current liabilities
199,422 282,596 Taxes payable, less current portion 4,936 4,893
Deferred revenue, less current portion 43,521 43,545 Long-term
debt, less current portion 973,957 967,732 Deferred tax
liabilities, net 78,399 77,454 Other long-term liabilities 28,528
34,987 Total liabilities 1,328,763 1,411,207
Stockholders' equity: Common stock 123 121 Treasury stock (22,430 )
(9,646 ) Additional paid-in capital 3,280,689 3,280,905 Accumulated
other comprehensive loss (3,304 ) (7,049 ) Accumulated deficit
(1,411,090 ) (1,354,695 )
Total stockholders' equity
1,843,988 1,909,636
Total liabilities and stockholders'
equity
$ 3,172,751 $ 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 EndedSeptember
30,
Nine Months EndedSeptember
30,
2017 2016 2017
2016
Intellectual Property Licensing Revenues: US Pay TV Providers $
63,288 $ 58,150 $ 195,365 $ 135,027 Other 31,020 24,936
93,859 72,038 Total Intellectual Property Licensing
Revenues 94,308 83,086 289,224 207,065 Product Revenues:
Platform Solutions 82,244 47,285 253,398 119,364 Software and
Services 20,718 19,994 65,739 59,863 Other 628 2,756
3,859 10,458
Total Product Revenues
103,590 70,035 322,996 189,685 Total
Revenues $ 197,898 $ 153,121 $ 612,220 $
396,750
TIVO CORPORATION AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL INFORMATION
(In thousands)
(Unaudited)
Three Months EndedSeptember
30,
Nine Months Ended September
30,
2017 2016 2017 2016 GAAP Loss before
income taxes $ (12,622 ) $ (29,006 ) $ (42,579 ) $ (47,446 )
Amortization of intangible assets 41,722 24,925 125,100 63,087
Restructuring and asset impairment charges 3,710 22,311 17,623
24,644 Equity-based compensation 13,007 13,676 38,781 32,031
Transaction, transition and integration costs 3,394 13,996 15,701
20,039 Earnout amortization and settlement 958 319 2,875 1,508
Remeasurement of contingent consideration 243 — 317 — TiVo
Acquisition litigation 1,100 — 14,006 — Loss on debt extinguishment
— — 108 — Loss on debt modification — — 929 — Gain on settlement of
acquired receivable — — (2,537 ) — Accelerated depreciation 639 —
852 — Gain on sale of strategic investments — — (3,143 ) — Change
in franchise tax reserve — — — 154 Accretion of contingent
consideration 143 67 511 67 Amortization of note issuance costs 538
499 1,588 1,468 Amortization of convertible note discount 3,179
3,035 9,428 9,000 Mark-to-market (income) loss related to interest
rate swaps (1,923 ) (4,252 ) (5,095 ) 9,702 Interest on franchise
tax reserve — — —
280 Non-GAAP Pre-tax Income $ 54,088 $ 45,570
$ 174,465 $ 114,534
Three Months EndedSeptember
30,
Nine Months Ended September
30,
2017 2016 2017 2016
GAAP Diluted weighted average shares
outstanding
120,935 92,144 119,994 85,858
Dilutive effect of equity-based
compensation awards
920 — 1,074 —
Non-GAAP Diluted Weighted Average Shares Outstanding
121,855 92,144 121,068
85,858
Three Months EndedSeptember
30,
Nine Months Ended September
30,
2017 2016 2017 2016 GAAP Cost of
licensing, services and software revenues, excluding depreciation
and amortization of intangible assets $ 42,811 $ 31,661 $ 124,398 $
78,651 Equity-based compensation (1,225 ) (749
)
(3,260
)
(2,814 ) Transition and integration costs (94 ) (136
)
(368
)
(136 ) Non-GAAP Cost of licensing, services and software
revenues $ 41,492 $ 30,776 $ 120,770 $ 75,701
Three Months EndedSeptember
30,
Nine Months Ended September
30,
2017 2016 2017 2016 GAAP Cost of
hardware revenues, excluding depreciation and amortization of
intangible assets $ 9,889 $ 4,560 $ 35,877 $ 5,072 Transition and
integration costs — — (1,021
)
—
Non-GAAP Cost of hardware revenues $ 9,889 $ 4,560
$ 34,856 $ 5,072
Three Months EndedSeptember
30,
Nine Months Ended September
30,
2017 2016 2017 2016 GAAP Research and
development expenses $ 48,872 $ 30,380 $ 144,386 $ 76,112
Equity-based compensation (4,803 ) (3,188 ) (12,859 ) (6,186 )
Transition and integration costs (670 ) (1,508 ) (3,445 ) (1,508 )
Earnout amortization and settlement (184 ) (61 )
(552 ) (61 ) Non-GAAP Research and Development
Expenses $ 43,215 $ 25,623 $ 127,530 $ 68,357
Three Months EndedSeptember
30,
Nine Months Ended September
30,
2017 2016 2017 2016 GAAP Selling,
general and administrative expenses $ 47,431 $ 54,697 $ 147,121 $
134,463 Equity-based compensation (6,979 ) (9,739 ) (22,662 )
(23,031 ) Transaction, transition and integration costs (2,630 )
(12,352 ) (10,868 ) (18,395 ) Earnout amortization and settlement
(774 ) (258 ) (2,323 ) (1,447 ) Remeasurement of contingent
consideration (243 ) — (317 ) — Gain on settlement of acquired
receivable — — 2,537 — Change in franchise tax reserve —
— — (154 ) Non-GAAP
Selling, General and Administrative Expenses $ 36,805 $
32,348 $ 113,488 $ 91,436
Three Months EndedSeptember
30,
Nine Months Ended September
30,
2017 2016 2017 2016 GAAP Depreciation $
5,015 $ 4,622 $ 15,869 $ 13,181
Accelerated depreciation
(639 ) —
(852
)
—
Non-GAAP Depreciation $ 4,376 $ 4,622 $ 15,017
$ 13,181
Three Months EndedSeptember
30,
Nine Months Ended September
30,
2017 2016 2017 2016 GAAP Total
Operating costs and expenses $ 199,450 $ 173,156 $ 610,374 $
395,210 Amortization of intangible assets (41,722 ) (24,925 )
(125,100 ) (63,087 ) Restructuring and asset impairment charges
(3,710 ) (22,311 ) (17,623 ) (24,644 ) Equity-based compensation
(13,007 ) (13,676 ) (38,781 ) (32,031 ) Transaction, transition and
integration costs (3,394 ) (13,996 ) (15,701 ) (20,039 ) Earnout
amortization and settlement (958 ) (319 ) (2,875 ) (1,508 )
Remeasurement of contingent consideration (243 ) — (317 ) — Gain on
settlement of acquired receivable — — 2,537 — Accelerated
depreciation (639 ) — (852 ) — Change in franchise tax reserve
— — — (154 )
Non-GAAP Total COGS and OpEx $ 135,777 $ 97,929 $
411,662 $ 253,747
Three Months EndedSeptember
30,
Nine Months Ended September
30,
2017 2016 2017 2016 GAAP Operating
(loss) income $ (1,552 ) $ (20,035 ) $ 1,846 $ 1,540 Depreciation
5,015 4,622 15,869 13,181 Amortization of intangible assets 41,722
24,925 125,100 63,087 Restructuring and asset impairment charges
3,710 22,311 17,623 24,644 Equity-based compensation 13,007 13,676
38,781 32,031 Transaction, transition and integration costs 3,394
13,996 15,701 20,039 Earnout amortization and settlement 958 319
2,875 1,508 Remeasurement of contingent consideration 243 — 317 —
Gain on settlement of acquired receivable — — (2,537 ) — Change in
franchise tax reserve — — —
154 Adjusted EBITDA $ 66,497 $ 59,814
$ 215,575 $ 156,184
Three Months EndedSeptember
30,
Nine Months Ended September
30,
2017 2016 2017 2016 GAAP Interest
expense $ (10,990 ) $ (11,021 ) $ (31,827 ) $ (32,411 ) Accretion
of contingent consideration 143 67 511 67 Amortization of note
issuance costs 538 499 1,588 1,468 Amortization of convertible note
discount 3,179 3,035 9,428 9,000 Reclassify current period cost of
interest rate swaps (1,962 ) (2,555 ) (6,470 ) (7,195 ) Interest on
franchise tax reserve — — —
280 Non-GAAP Interest Expense $ (9,092 ) $
(9,975 ) $ (26,770 ) $ (28,791 )
TIVO CORPORATION AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
FORECAST FINANCIAL INFORMATION
(In millions)
(Unaudited)
Current 2017 Full
YearOutlook
2016 Full Year Actual
Low High GAAP Loss before income taxes (1) $
(70 ) $ (60 ) $ (24.4 ) Amortization of intangible assets 166 167
105.0 Restructuring and asset impairment charges 19 20 27.3
Equity-based compensation 55 58 47.7 Transaction, transition and
integration costs 20 22 40.0 Earnout amortization and settlement 4
5 2.5 TiVo Acquisition litigation 14 14 — Mark-to-market income
related to interest rate swaps (1) (5 ) (5 ) (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 6 2 (1.0 )
Non-GAAP Pre-tax Income (1) $ 218 $ 232 $ 205.3
Cash taxes $ 20 $ 22 $ 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
2016 Full Year Actual
Low High GAAP Operating income (loss) $ (8 ) $
(2 ) $ 21.4 Depreciation 23 23 18.7 Amortization of intangible
assets 166 167 105.0 Restructuring and asset impairment charges 19
20 27.3 Equity-based compensation 55 58 47.7 Transaction,
transition and integration costs 20 22 40.0 Earnout amortization
and settlement 4 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 121 Dilutive
effect of equity-based compensation awards 1 Non-GAAP
Diluted Weighted Average Shares Outstanding 122
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
(1 ) Equity-based compensation (16 ) Transaction, transition and
integration costs (4 ) 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/20171102006528/en/
Investor RelationsTiVo
CorporationDerrick Nueman, +1
408-519-9677derrick.nueman@TiVo.comorPress
RelationsFinn Partners for TiVoRicca Silverio,
+1-415-348-2724tivo@finnpartners.com
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