Dave Shull Brings Significant Operational and
Industry Experience to Implement Previously Announced Strategic
Direction
Raghu Rau To Assume Role of Vice Chair of the
Board
Company Expecting Solid Second Quarter
Financial Results and Raises Fiscal 2019 Expectations
TiVo Corporation (NASDAQ: TIVO), a global leader in
entertainment technology and audience insights, today announced
that its Board of Directors unanimously elected Dave Shull to the
position of president and CEO and a member of the Board of
Directors, effective May 31, 2019. Interim president and CEO Raghu
Rau will then assume the role of Vice Chairperson on the Company’s
Board of Directors.
“We are thrilled to announce Dave Shull as Raghu’s successor,”
said Jim Meyer, chairman of the Board of Directors. “In addition to
Dave’s deep experience in the Pay-TV, OTT and digital media fields,
he has a strong track record of driving value creating strategic
outcomes and operational transformations, most recently at The
Weather Channel and before that at Dish. Dave knows our industry
extremely well, having been a part of it in senior executive roles
for over fifteen years. He also has significant M&A experience
and is the right person to lead TiVo’s separation process, which we
believe will result in significant value for our stockholders.”
“I want to thank Raghu for stepping in and leading TiVo during
this critical time in the company’s evolution and for the important
role he will continue to play on our Board,” continued Mr. Meyer.
“As Vice Chair, Raghu will provide continuity in ongoing
discussions with strategic parties, continued support on TiVo’s
licensing resolution strategy with Comcast, and additional support
as needed in the separation of TiVo’s two businesses. Raghu’s
leadership has resulted in the planned launch of three new
ground-breaking products, continued growth in our licensing
business and the decision on our strategic direction.”
“I am honored and excited to be selected by the Board to lead
TiVo and its employees, and I look forward to leading the company’s
next phase,” said Dave Shull. “I believe in the company’s strategic
direction and my focus will be on driving the execution of that
strategy on both the separation and potential transaction front. My
understanding of the industry, experience with strategic
transactions, and demonstrated ability to drive cost efficiencies
can be instrumental in creating meaningful value for TiVo’s
stockholders.”
Dave Shull has over 15 years of senior leadership experience in
the Pay-TV, OTT and digital media fields. Most recently, he served
as the CEO of The Weather Channel cable network, which was sold in
a competitive bidding process in 2018. While at The Weather Channel
from 2015 to 2018, Mr. Shull overhauled the organization to
streamline operating costs, separated the digital assets from its
television and OTT products resulting in the successful sale of its
digital businesses to IBM in 2016, and oversaw record-setting
ratings during major hurricanes. Prior to The Weather Channel, Mr.
Shull held various executive roles at DISH Network/EchoStar for 10
years, including Executive Vice President and Chief Commercial
Officer, Senior Vice President, Programming, Senior Vice President
and Managing Director, Asia Pacific, and Vice President,
Operations. Mr. Shull holds a B.A. from Harvard University and an
M.B.A. from Oxford University.
Raghu Rau, Vice Chairperson of the Board commented, “It has been
my pleasure and an honor to lead TiVo for the last 11 months. My
role was always contemplated to be an interim step, and now is the
right time to transition the leadership to someone who can lead the
process for TiVo’s future. The Board has worked diligently to find
a CEO of Dave’s caliber who can execute on both our strategic
direction and the five-pillar growth with profitability plan that
we have successfully developed over the last year. I look forward
to working with Dave to deliver value to our stockholders.”
Updated Business Outlook
The Company also announced that, based upon improved visibility
into its sales pipeline, it is raising its expectations for Fiscal
2019 from those provided on May 9, 2019. The Company now expects
revenue of $644 million to $660 million, up from previous range of
$640 million to $654 million, and a GAAP loss before taxes of $72
million to $80 million, lowered from the previous range of a GAAP
loss before taxes of $75 million to $87 million. Additionally, the
Company now expects Adjusted EBITDA of $175 million to $185
million, up from the previous range of $172 million to $178
million, and non-GAAP Pre-tax Income of $123 million to $133
million, up from previous range of $120 million to $126 million.
TiVo anticipates it will incur $29 million to $30 million in Cash
Taxes based on its operating expectations. Additionally, TiVo
expects its GAAP Diluted Weighted Average Shares Outstanding to be
approximately 126 million and Non-GAAP Diluted Weighted Average
Shares Outstanding to be approximately 127 million.
Additionally, the Company stated that it expects to repay the
$345.0 million of currently outstanding 2020 Convertible Notes, by
the maturity date, from its cash, cash equivalents and marketable
securities on the balance sheet and its anticipated operating cash
flow. The Company will also review options to refinance its
existing Term Loan B Facility before separation of the IP Licensing
and Product businesses. Finally, the Company reaffirmed that it
expects to complete this separation in the first half of 2020
through a tax-free spinoff of the Product business to its
shareholders.
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 and
Adjusted EBITDA and 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, discounts on
convertible debt and mark-to-market adjustments for interest rate
swaps and interest on escheat liabilities; 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 goodwill impairment, restructuring and
asset impairment charges, separation costs, transaction, transition
and integration costs, retention earn-outs payable to former
shareholders of acquired businesses, earn-out settlements, CEO
transition cash costs, remeasurement of contingent consideration,
TiVo acquisition litigation, expenses in connection with the
extinguishment or modification of debt, gain on settlement of
acquired receivable, additional depreciation resulting from
facility rationalization actions, other-than temporary impairment
losses on strategic investments, gains on the sale of strategic
investments and changes in acquired escheat liabilities.
Adjusted EBITDA is defined as GAAP operating income (loss)
excluding depreciation, amortization of intangible assets, goodwill
impairment, restructuring and asset impairment charges,
equity-based compensation, strategic review costs, separation
costs, transaction, transition and integration costs, retention
earn-outs payable to former shareholders of acquired businesses,
earn-out settlements, CEO transition cash costs, remeasurement of
contingent consideration and gain on settlement of acquired
receivable.
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 or dispose of
businesses on a predictable cycle, management excludes the
amortization of intangible assets, separation costs, transition and
integration costs, retention earn-outs payable to former
shareholders of acquired businesses, earnout settlements, CEO
transition cash costs, remeasurement of contingent consideration,
TiVo Acquisition litigation, 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 goodwill impairment, restructuring and asset
impairment charges, expenses in connection with the extinguishment
or modification of debt, gain on the settlement of acquired
receivable, additional depreciation resulting from facility
rationalization actions, other-than-temporary impairment losses on
strategic investments, gains on the sale of strategic investments
and changes in escheat liability. 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 accretion of contingent
consideration, amortization or write-off of note issuance costs and
discounts on convertible debt, mark-to-market adjustments for
interest rate swaps and interest on acquired escheat liability 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.
TIVO CORPORATION AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
FORECAST FINANCIAL INFORMATION
(In millions)
(Unaudited)
FY 2019 Expectations Low
High GAAP loss from continuing operations before
income taxes $ (72 ) $ (80 ) Amortization of intangible assets 113
113 Restructuring and asset impairment charges 2 3 Equity-based
compensation 36 38 Separation costs 25 40 Transition and
integration costs 1 1 Amortization of note issuance costs and
convertible note discount 16 16 Mark-to-market loss related to
interest rate swaps (1) 2 2 Non-GAAP Pre-tax Income
(1) $ 123 $ 133 Cash Taxes $ 29 $ 30
(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.
FY 2019 Expectations Low
High GAAP Operating loss $ (25 ) $ (33 ) Depreciation 23 23
Amortization of intangible assets 113 113 Restructuring and asset
impairment charges 2 3 Equity-based compensation 36 38 Separation
costs 25 40 Transition and integration costs 1 1
Adjusted EBITDA $ 175 $ 185
FY 2019Expectations
GAAP Diluted weighted average shares outstanding 126 Dilutive
effect of equity-based compensation awards 1 Non-GAAP Diluted
Weighted Average Shares Outstanding 127
About TiVo
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.
Caution Concerning 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 success of the
Company's plans to separate the Product and IP Licensing businesses
into two independent companies, intended repayment of convertible
senior notes with cash flow from its balance sheet and operations,
and estimated future financial results. 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,
for reasons inside or outside the Company’s control, delay or
failure to accomplish the planned separation of the Company’s
Product and IP Licensing businesses, changes in the Company’s
financial condition and results of operations impacting its ability
to repay the convertible senior notes with cash flow from its
balance sheet and operations, delays in development, the failure to
deliver competitive service offerings and lack of market acceptance
of any offerings delivered, as well as the other potential factors
described under "Risk Factors" included in TiVo’s Quarterly
Report on Form 10-Q for the three months ended March 31,
2019 and Annual Report on Form 10-K for the year
ended December 31, 2018 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 and the TiVo logo are registered trademarks of TiVo
Corporation and its subsidiaries worldwide.
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version on businesswire.com: https://www.businesswire.com/news/home/20190530005812/en/
Investor RelationsDebi
PalmerTiVo Corporation+1 818-295-6651debi.palmer@tivo.com
Press RelationsLerin
O'NeillTiVo Corporation+1 408-562-8455lerin.oneill@tivo.com
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