SAN FRANCISCO, Aug. 2 /PRNewswire-FirstCall/ -- OpenTV
(NASDAQ:OPTV), a leading provider of solutions for the delivery of
advanced digital television and cross platform interactive
services, today announced financial results for its second quarter
ended June 30, 2007. "OpenTV is making good progress in refining
its global strategic vision as well as its ability to execute
effectively across the organization in support of that vision,"
said OpenTV's Chief Executive Officer, Alan Guggenheim. We
continued our trend of improved operating cash flows this quarter
generating $4.8 million in net cash during the first six months of
this year and we remain on track with our financial goals for the
full year. Our goal is to move expeditiously to generate
sustainable growth and profitability as we realize our vision of
becoming a leading provider of end-to-end solutions for the
delivery of convergent media experiences." Key Operating Measures
USD Millions Three months ended Three months ended Change June 30,
2007 June 30, 2006 Revenues $24.3m $23.7m 3% Adjusted EBITDA,
before unusual items $(1.1)m $0.4m $(1.5)m Cash, Cash Equivalents
and Marketable Debt Securities $74.1m $65.0m 14% Second Quarter
2007 Results For the quarter ended June 30, 2007, revenues were
$24.3 million, an increase of 3% over revenues of $23.7 million for
the second quarter of 2006. Royalties and license revenues
decreased 4% to $14.1 million, compared to the second quarter of
2006. Services and other revenues increased 13% to $10.2 million,
compared to the second quarter of 2006. Adjusted EBITDA, before
unusual items, was $(1.1) million for the quarter ended June 30,
2007, compared to $0.4 million for the second quarter of 2006. Net
loss for the second quarter of 2007 was $4.9 million, or $(0.04)
per share, compared to a net loss of $2.5 million, or $(0.02) per
share in the second quarter of 2006. As of June 30, 2007, the
Company had $32.8 million in deferred revenue, compared to $25.6
million at the end of 2006. As of June 30, 2007, the Company had
cash, cash equivalents and short and long-term marketable debt
securities totaling $74.1 million, compared to $65.2 million at
December 31, 2006. Segment Information (quarter over prior-year
quarter comparison) Revenues -- Middleware and Integrated
Technologies revenues increased by 9% to $20.0 million, compared to
$18.3 million. -- Applications revenues decreased by 11% to $4.2
million, compared to $4.7 million. -- BettingCorp revenues
decreased by 86% to $0.1 million, compared to $0.7 million.
Contribution Margin -- Middleware and Integrated Technologies
contribution margin decreased by $2.1 million to $4.6 million,
compared to $6.7 million. -- Applications contribution margin
improved by $0.5 million to $0.3 million, compared to a loss of
$0.2 million. -- BettingCorp contribution margin improved by $0.1
million to a loss of $0.8 million, compared to a loss of $0.9
million. For the second quarter of 2007, total contribution margin
from the Company's operating segments decreased to $4.1 million,
compared to $5.6 million in the second quarter of 2006. Unallocated
corporate overhead was $5.2 million in the second quarter of 2007,
the same as in the second quarter of 2006. Adjusted EBITDA, before
unusual items, and contribution margin are non-GAAP financial
measures. Reconciliations of the differences between these non-GAAP
financial measures and net loss, which is the most directly
comparable GAAP financial measure, are included at the end of this
press release. Additional information regarding the derivation of
Adjusted EBITDA and contribution margin and a statement of the
relevance to management of this information and its possible
usefulness to investors is also included at the end of this release
and on the investor relations page of our Web site. Conference Call
Details OpenTV will conduct a conference call to discuss the
Company's second quarter financial results. The details of the call
are as follows: Date and Time: Thursday, August 2, 2007 at 5 p.m.
ET / 2 p.m. PT Dial-in Number US: 866-383-7989 Dial-in Number
International: 617-597-5328 Pass Code: 93027450 Replay Number US:
888-286-8010 Replay Number International: 617-801-6888 Pass Code:
85919065 The conference call replay will be available from
Thursday, August 2 at 7 p.m. ET / 4 p.m. PT through Thursday,
August 9 until 11 p.m. ET / 8 p.m. PT. To access a live webcast of
the conference call, please go to the Investor Relations section of
the OpenTV Web site at http://www.opentv.com/. About Segment
Information Because our business segments reflect the manner in
which management reviews our business, they necessarily involve
judgments that management believes are reasonable in light of the
circumstances under which they are made. These judgments may change
over time or may be modified to reflect new facts or circumstances.
Segments may also be changed or modified from time to time to
reflect technologies and applications that are newly created or
that have changed, or other business conditions that evolve, each
of which may result in management reassessing specific segments,
the elements included therein and the methodologies used to assess
segment performance. In addition to reviewing the company's
business segments by revenues, management also reviews and assesses
the "contribution margin" of each of these segments, which is a
non- GAAP financial measure. Non-GAAP Financial Measures "EBITDA"
is an acronym for earnings before interest, taxes, depreciation and
amortization. Adjusted EBITDA, as used in this release, removes
from EBITDA the effects of amortization of intangible assets,
share-based compensation expense, other income and expense, and
minority interest. "Adjusted EBITDA before unusual items" removes
from Adjusted EBITDA the effects of contract amendments that
mitigated potential loss positions and restructuring costs.
"Contribution margin," as used in this release, is defined by the
company as segment revenues less related direct or indirect
allocable costs, including headcount and headcount-related overhead
costs, consulting and subcontractor costs, travel, marketing and
network infrastructure and bandwidth costs. Contribution margin
excludes unallocated corporate support, interest, taxes,
depreciation and amortization, amortization of intangible assets,
share-based compensation, impairment of goodwill, impairment of
intangibles, other income, minority interest, restructuring
provisions, and unusual items such as contract amendments that
mitigated potential loss positions. These exclusions reflect costs
not considered directly allocable to individual business segments
and result in a definition of contribution margin that does not
take into account the substantial cost of doing business.
Management believes that "Adjusted EBITDA before unusual items" and
"contribution margin" are relevant and useful measures, when
considered in conjunction with the comparable GAAP measures, for
use by investors in evaluating the operational performance of the
company. They are some of the principal measures used by OpenTV's
management to assess the financial performance of its business.
OpenTV's management believes that both Adjusted EBITDA before
unusual items and contribution margin provide meaningful
information because each measure represents a transparent view of
OpenTV's recurring operating performance and allows management to
readily view operating trends, perform analytical comparisons and
benchmarking between segments and identify strategies to improve
operating performance. While OpenTV's management may consider
Adjusted EBITDA before unusual items and contribution margin to be
important measures of comparative operating performance, they
should be considered in addition to, but not as a substitute for,
loss from operations, net loss, cash flow and other measures of
financial performance prepared in accordance with accounting
principles generally accepted in the United States that are
presented in the financial statements included in this press
release. Additionally, OpenTV's calculation of Adjusted EBITDA
before unusual items and contribution margin may be different from
the calculation used by other companies and, therefore,
comparability may be affected. OpenTV reconciles Adjusted EBITDA
before unusual items and each reported segment's contribution
margin to its consolidated net loss as presented in the
accompanying financial statements, because OpenTV believes
consolidated net loss is the most directly comparable financial
measure presented in accordance with GAAP. While OpenTV believes
that the presentation of non-GAAP financial measures contained in
this press release complies with the rules and guidance of the SEC,
it can give no assurance that it will be able to provide the same
or comparable measures in future press releases or announcements.
OpenTV may, in the future, present non-GAAP financial measures
other than "Adjusted EBITDA before unusual items," "Adjusted
EBITDA" and "contribution margin" that it believes may be useful to
investors. Any such determinations will be made with the intention
of providing the most useful information to investors and will
reflect the information used by OpenTV's management in assessing
its business, which may change from time to time. Cautionary
Language Regarding Forward-Looking Information The foregoing
information contains certain "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995. These statements are based on management's
current expectations and are subject to uncertainty and changes in
circumstances. Actual results may differ materially from these
expectations due to changes in political, economic, business,
competitive, market and regulatory factors. In particular, factors
that could cause our actual results to differ include risks related
to: market acceptance of interactive television services and
applications such as ours; delays in the development or
introduction of new applications and versions of our service;
technical difficulties with networks or operating systems; our
ability to manage our resources effectively; changes in
technologies that affect the television industry; and the
protection of our proprietary information. These and other risks
are more fully described in our periodic reports and registration
statements filed with the Securities and Exchange Commission and
can be obtained online at the Commission's web site at
http://www.sec.gov/. Readers should consider the information
contained in this release together with other publicly available
information about our company for a more informed overview of our
company. We disclaim any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. About Open TV OpenTV is
one of the world's leading providers of solutions for the delivery
of digital and interactive television. The company's software has
been integrated in over 92 million digital set-top boxes and
digital televisions around the world. The software enables enhanced
program guides, video-on-demand, personal video recording, enhanced
television, interactive shopping, interactive and addressable
advertising, games and gaming and a variety of consumer care and
communication applications. For more information, please visit
http://www.opentv.com/. OPENTV CORP. UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts)
June 30, December 31, 2007 2006 * ASSETS Current assets: Cash and
cash equivalents $45,283 $48,616 Short-term marketable debt
securities 25,673 8,681 Accounts receivable, net of allowance for
doubtful accounts of $593 and $348 at June 30, 2007 and December
31, 2006, respectively 18,551 20,560 Prepaid expenses and other
current assets 5,985 5,799 Total current assets 95,492 83,656
Long-term marketable debt securities 3,146 7,928 Property and
equipment, net 6,675 7,231 Goodwill 98,687 98,645 Intangible
assets, net 15,075 18,477 Other assets 3,889 4,827 Total assets
$222,964 $220,764 LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS'
EQUITY Current liabilities: Accounts payable $3,210 $4,335 Accrued
liabilities 13,848 17,020 Current portion of accrued restructuring
972 416 Current portion of deferred revenue 24,515 12,614 Total
current liabilities 42,545 34,385 Long-term liabilities: Taxes
payable 1,767 1,920 Deferred rent 1,047 1,201 Accrued restructuring
1,097 1,954 Deferred revenue 8,294 12,987 Total long-term
liabilities 12,205 18,062 Total liabilities 54,750 52,447
Commitments and contingencies Minority interest 469 486
Shareholders' equity: Class A ordinary shares, no par value,
500,000,000 shares authorized; 108,534,104 and 107,906,960 shares
issued and outstanding, including treasury shares, at June 30, 2007
and December 31, 2006, respectively 2,235,872 2,235,495 Class B
ordinary shares, no par value, 200,000,000 shares authorized;
30,206,154 and 30,631,746 shares issued and outstanding at June 30,
2007 and December 31, 2006, respectively 35,953 35,953 Additional
paid-in capital 499,122 491,630 Treasury shares at cost, 76,327
shares (38) (38) Accumulated other comprehensive loss (208) (261)
Accumulated deficit (2,602,956) (2,594,948) Total shareholders'
equity 167,745 167,831 Total liabilities, minority interest and
shareholders' equity $222,964 $220,764 * The condensed consolidated
balance sheet at December 31, 2006 has been derived from the
company's audited consolidated financial statements at that date.
OPENTV CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except share and per share amounts) Three
Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006
Revenues: Royalties and licenses $14,066 $14,743 $31,927 $31,114
Services and other 10,200 8,978 18,745 17,503 Total revenues 24,266
23,721 50,672 48,617 Cost of revenues: Royalties and licenses 1,934
1,807 3,701 3,687 Services and other 11,063 9,332 21,421 18,251
Total cost of revenues 12,997 11,139 25,122 21,938 Gross profit
11,269 12,582 25,550 26,679 Operating expenses: Research and
development 8,000 7,654 16,863 16,017 Sales and marketing 2,993
3,297 5,889 5,950 General and administrative 4,777 4,266 10,291
9,614 Restructuring and impairment costs (28) 20 (28) 20
Amortization of intangible assets 510 530 1,020 1,059 Total
operating expenses 16,252 15,767 34,035 32,660 Loss from operations
(4,983) (3,185) (8,485) (5,981) Interest income 748 898 1,252 1,448
Other expenses (123) (201) (50) (198) Minority interest 9 10 17 19
Loss before income taxes (4,349) (2,478) (7,266) (4,712) Income tax
expense 515 14 742 907 Net loss $(4,864) $(2,492) $(8,008) $(5,619)
Net loss per share, basic and diluted $(0.04) $(0.02) $(0.06)
$(0.04) Shares used in per share calculation, basic and diluted
138,659,811 137,392,075 138,576,223 136,684,318 OPENTV CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In
thousands) Six Months Ended June 30, 2007 2006 Cash flows from
operating activities: Net loss $(8,008) $(5,619) Adjustments to
reconcile net loss to net cash provided by operating activities:
Depreciation and amortization of property and equipment 1,972 1,539
Amortization of intangible assets 3,402 3,529 Share-based
compensation 2,287 2,052 Non-cash employee compensation 76 42
Provision for doubtful accounts 245 (18) Loss on disposal of fixed
assets 2 10 Minority interest (17) (19) Changes in operating assets
and liabilities: Accounts receivable 1,764 (573) Prepaid expenses
and other current assets (186) 1,594 Other assets 938 (1,387)
Accounts payable (1,125) (1,297) Accrued liabilities, taxes payable
and deferred rent (3,479) 494 Accrued restructuring (301) (232)
Deferred revenue 7,208 1,520 Net cash provided by operating
activities 4,778 1,635 Cash flows from investing activities:
Purchase of property and equipment (1,391) (1,668) Proceeds from
sale of marketable debt securities 6,995 6,800 Purchase of
marketable debt securities (19,186) (6,555) Net cash used in
investing activities (13,582) (1,423) Cash flows from financing
activities: Repurchase of employee stock options (167) - Capital
contribution from the controlling shareholder 5,395 - Proceeds from
issuance of ordinary shares 236 772 Net cash provided by financing
activities 5,464 772 Effect of exchange rate changes on cash and
cash equivalents 7 (214) Net increase (decrease) in cash and cash
equivalents (3,333) 770 Cash and cash equivalents, beginning of
period 48,616 47,229 Cash and cash equivalents, end of period
$45,283 $47,999 Supplemental disclosure of cash flow information:
Cash paid for income taxes $(1,004) $(340) Non-cash investing and
financing activities: Conversion of exchangeable shares $42 $17,491
Value of bonus shares issued to employees $- $2,658 OPENTV CORP.
UNAUDITED SEGMENT INFORMATION AND RECONCILIATION OF CONTRIBUTION
MARGIN AND ADJUSTED EBITDA TO NET LOSS (In thousands) Three Months
Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006
Revenue: Middleware and integrated technologies Royalties and
licenses $12,976 $13,829 $29,527 $29,410 Services and other 6,953
4,532 12,076 8,783 Subtotal - Middleware and integrated
technologies 19,929 18,361 41,603 38,193 Applications Royalties and
licenses 1,055 914 2,365 1,704 Services and other 3,148 3,783 6,284
7,080 Subtotal - Applications 4,203 4,697 8,649 8,784 BettingCorp
Royalties and licenses 35 - 35 - Services and other 99 663 385
1,640 Subtotal - BettingCorp 134 663 420 1,640 Total Revenue
$24,266 $23,721 $50,672 $48,617 Contribution Margin: Middleware and
integrated technologies $4,570 $6,633 $11,274 $14,291 Applications
350 (176) 438 (969) BettingCorp (827) (905) (1,694) (1,714) Total
Contribution Margin 4,093 5,552 10,018 11,608 Unallocated corporate
support (5,179) (5,167) (10,794) (10,407) Adjusted EBITDA before
unusual items (1,086) 385 (776) 1,201 Restructuring and impairment
costs 28 (20) 28 (20) Adjusted EBITDA (1,058) 365 (748) 1,181
Depreciation and amortization (1,002) (790) (1,972) (1,539)
Amortization of intangible assets (1,701) (1,764) (3,402) (3,529)
Share-based and non-cash compensation (1,222) (996) (2,363) (2,094)
Interest income 748 898 1,252 1,448 Other expenses (123) (201) (50)
(198) Minority interest 9 10 17 19 Loss before income taxes (4,349)
(2,478) (7,266) (4,712) Income tax expense 515 14 742 907 Net loss
$(4,864) $(2,492) $(8,008) $(5,619) DATASOURCE: OpenTV CONTACT:
Investor, Denise Roche, , or Brad Edwards, , both of Brainerd
Communicators, +1-212-986-6667; or Press, Lisa Ruiz-Rogers of
Manning, Selvage, and Lee, +1-323-866-6059, , all for OpenTV Web
site: http://www.opentv.com/
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