Toggle SGML Header (+)


Section 1: 8-K (8-K)

Document


UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 8-K
 

 
CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

 
February 26, 2019
Date of Report (Date of earliest event reported)

 
TiVo Corporation
(Exact name of registrant as specified in its charter)
 
Delaware
 
 001-37870
 
61-1793262
(State or other jurisdiction of incorporation or organization)
 
(Commission File No.)
 
(I.R.S. employer identification number)
 
2160 Gold Street
San Jose, CA 95002
(Address of principal executive offices, including zip code)
 
(408) 519-9100
(Registrant’s telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
 
 o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
 o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
 o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o





ITEM 2.02    Results of Operations and Financial Condition
    
On February 26, 2019, the Company issued a press release reporting its financial results for the period ended December 31, 2018. A copy of the press release is furnished as Exhibit 99.1 to this report.

The press release is furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

ITEM 9.01    Financial Statements and Exhibits
 
       The following exhibit is furnished with this report on Form 8-K:
 
Exhibit
Number
 
99.1





SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
TiVo Corporation
(Registrant)
 
 
 
Date:
By:
/s/ Pamela Sergeeff
February 26, 2019
 
Pamela Sergeeff
 
 
Executive Vice President & General Counsel





 
       



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


EXHIBIT 99.1
 
396886370_image0a10.jpg
TiVo Corporation
2160 Gold Street
San Jose, CA 95002



TIVO CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 2018 FINANCIAL RESULTS

Company Continues to Advance Its Strategic Growth Initiatives
Strategic Transaction Discussions Continue for Product and IP Licensing Businesses
 
SAN JOSE, Calif. - (BUSINESS WIRE) - February 26, 2019 - TiVo Corporation (NASDAQ: TIVO) today reported financial results for the fourth quarter and for the full year ended December 31, 2018.

“In the quarter, we continued to advance our strategic goals, focusing on our five pillars for growth along with a continued focus on profitability. Further, at CES, we demonstrated, to select partners, a unique entertainment discovery experience for the internet age and received very promising feedback. We plan to launch this product in the second half of 2019. On the IP front, we continue to expand our licensing, particularly in international markets,” said Raghu Rau, Interim President and Chief Executive Officer. “We are very excited about the prospects for our long-term growth strategy.”

UPDATE ON STRATEGIC ALTERNATIVES TO MAXIMIZE VALUE FOR SHAREHOLDERS

We continue to make progress with our review of strategic alternatives and are still in ongoing discussions regarding potential strategic options or transactions for each of our Product and IP Licensing businesses. Due to the unique nature of our Product and IP Licensing businesses, this process is taking longer than we hoped.

We have proactively begun working internally on preparing for the possible separation of the two businesses to help address some of the complexities and potentially facilitate strategic transactions. The Board and management team continue to be thoughtful about the outcome that can best drive shareholder value for TiVo. We look forward to providing additional information by our first quarter earnings call.

BUSINESS OUTLOOK

TiVo’s management and Board are still conducting an in-depth review of its businesses, cost structure and strategic options to maximize shareholder value. Due to the broad range of potential outcomes, the Company is not currently providing financial estimates.

CAPITAL ALLOCATION

On February 21, 2019, TiVo’s Board of Directors declared a cash dividend of $0.18 per common share, to be paid on March 26, 2019 to stockholders of record as of the close of business on March 12, 2019.

CURRENT PERIOD FINANCIAL RESULTS

As discussed in detail during previous earnings calls, the Company adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, which superseded the previous revenue recognition requirements on January 1, 2018 using the modified retrospective transition approach. The Company’s results for 2017 are reported under the prior standard and results for 2018 are reported under the new standard. While there is no change in either the nature of our business operations or our cash flows, revenue recognition in 2018 is considerably different than in 2017. For instance, in the fourth quarter of 2018, TiVo recognized approximately $0.8 million less in revenue than it would have under the previous requirements.






FOURTH QUARTER 2018 FINANCIAL HIGHLIGHTS
Quarterly Financial Information
(In thousands)
 
 
 
Three Months Ended December 31,
 
 
 
2018
 
2017
 
% Change
GAAP Consolidated Results
 
 
 
 
 
Total Revenues, net
$
168,459

 
$
214,236

 
(21
)%
Goodwill impairment
269,000

 

 
N/a

Total costs and expenses (including goodwill impairment)
441,943

 
211,292

 
109
 %
Operating (loss) income
(273,484
)
 
2,944

 
(9,390
)%
Loss from continuing operations before income taxes
(287,442
)
 
(5,656
)
 
4,982
 %
(Loss) income from continuing operations, net of tax
(288,189
)
 
18,439

 
(1,663
)%
 
 
 
 
 
 
GAAP Diluted weighted average shares outstanding
123,802

 
122,362

 
 
 
 
 
 
 
 
Total Revenues, net
$
168,459

 
$
214,236

 
(21
)%
Legacy TiVo Solutions IP Licenses

 
(25,847
)
 
(100
)%
Hardware
(3,824
)
 
(7,694
)
 
(50
)%
Other Products
(3,660
)
 
(689
)
 
431
 %
Core Revenue (excludes revenue from Legacy TiVo Solutions IP Licenses, Hardware and Other Products)
$
160,975

 
$
180,006

 
(11
)%
Total Revenues, net and Core Revenue include $7.3 million and $19.6 million of revenue from out-of-license settlements in Q4 2018 and Q4 2017, respectively. Total Revenues, net and Core Revenue decreased $0.8 million as a result of adopting the amended revenue recognition guidance on January 1, 2018. The increase in Total costs and expenses is the result of a $269.0 million Goodwill impairment charge for our Product reporting unit, which was partially offset by lower Amortization of intangible assets, the Company’s continuing cost reduction efforts and a reduction in hardware COGS as a result of the planned transition of our MSO partners and retail customers to deploying the TiVo service on third-party hardware.
 
(In thousands)
 
 
 
Three Months Ended December 31,
 
 
 
2018
 
2017
 
% Change
Non-GAAP Consolidated Results
 
 
 
 
 
Adjusted EBITDA
$
42,141

 
$
74,567

 
(43
)%
Non-GAAP Pre-tax Income
30,151

 
60,309

 
(50
)%
Cash Taxes
3,519

 
1,318

 
167
 %
 
 
 
 
 
 
Non-GAAP Diluted Weighted Average Shares Outstanding
124,338

 
122,362

 
 

Adjusted EBITDA, Non-GAAP Pre-tax Income, Non-GAAP Diluted Weighted Average Shares Outstanding and Cash Taxes are defined below in the section entitled “Non-GAAP Financial Information.” Reconciliations between GAAP and Non-GAAP amounts are provided in the tables below. In accordance with the SEC’s interpretations on the use of Non-GAAP financial measures, TiVo does not report net income or EPS on a non-GAAP basis; however, TiVo provides financial metrics, including Non-GAAP Pre-tax Income, Non-GAAP Diluted Weighted Average Shares Outstanding and Cash Taxes, to assist those wanting to calculate such measures on a Non-GAAP basis.






SEGMENT RESULTS AND OPERATING HIGHLIGHTS - PRODUCT
 
(In thousands)
 
 
 
Three Months Ended December 31,
 
 
 
2018
 
2017
 
% Change
Platform Solutions
$
74,519

 
$
80,606

 
(8
)%
Software and Services
18,300

 
19,225

 
(5
)%
Other
3,660

 
689

 
431
 %
Total Product Revenue, net
96,479

 
100,520

 
(4
)%
Adjusted Operating Expenses
83,440

 
96,793

 
(14
)%
Adjusted EBITDA
$
13,039

 
$
3,727

 
250
 %
Adjusted EBITDA Margin
13.5
%
 
3.7
%
 
 
 
 
 
 
 
 
Total Product Revenue, net
$
96,479

 
$
100,520

 
(4
)%
Hardware
(3,824
)
 
(7,694
)
 
(50
)%
Other Products
(3,660
)
 
(689
)
 
431
 %
Core Product Revenue (excludes revenue from Hardware and Other Products)
$
88,995

 
$
92,137

 
(3
)%

The $6.1 million decrease in Platform Solutions revenue was largely attributable to a $3.9 million decrease in Hardware revenue, as a result of the planned transition of our MSO partners and retail customers to deploying the TiVo service on third-party hardware, a $2.2 million decrease in revenue from the Company's classic guide products and a $1.3 million decrease in revenue as a result of adopting the amended revenue recognition guidance on January 1, 2018; partially offset by an increase in revenue from TiVo MSO customers. Hardware revenue is expected to continue to decline due to the planned transition to deploying the TiVo service on third-party hardware. Revenues from classic guide products are expected to decline in the future as a result of customer churn and conversions to newer guide products, such as TiVo’s MSO guide product. Other revenue primarily consists of ACP revenue, which, while up in comparison to the same quarter a year ago, is expected to continue its decline in the future.

The decrease in Adjusted Operating Expenses primarily relates to a $5.6 million decrease in the Cost of hardware revenues and benefits from cost savings initiatives, partially offset by an increase in compensation costs.

The increase in Adjusted EBITDA Margin primarily relates to a shift in the Product business mix toward higher margin products as hardware becomes a smaller portion of the Product business as a result of the planned transition of our MSO partners and retail customers to deploying the TiVo service on third-party hardware and benefits from cost savings initiatives, partially offset by the effects of adopting the amended revenue recognition standard.

Product Segment Operating Highlights:

Approximately 22 million subscriber households around the world use TiVo's advanced television experiences.
izzi Telecom will expand deployment of TiVo’s Passport Guide for set-top boxes to its operations in Mexico City and Monterrey, and add TiVo Video metadata, which together provide a high-quality and intuitive user experience.
TiVo once again provided its retail subscribers with the innovative solution to go back and re-watch the Super Bowl, and to use their SKIP feature to skip the game and jump straight to the commercials. Over 20% more customers recorded the game this year compared to last year, the first year Game Skip was offered.
Minerva Networks, an IPTV industry pioneer and the leading supplier of service management infrastructure for the delivery of pay-TV services, will use TiVo as the primary metadata provider for their new cloud service delivery platform, Minerva YourTV Now.
A leading social network signed a 2-year agreement to use TiVo’s video metadata including trending scores and viewers ratings.
TikiLIVE, an over-the-top (OTT) and IPTV platform development and cloud hosting company that deploys enterprise solutions, has extended its license agreements for TiVo Video Metadata and standardized on TiVo as a one-stop-shop service for all its metadata requirements.
Sky Mexico, a leading provider of subscription television services in Mexico, Central America and the Dominican Republic, has signed a new metadata deal to use TiVo as the primary metadata provider for its next-generation platform.





Verizon extended a multi-year agreement to have access to the latest version of TiVo’s Personalized Content Discovery Platform conversation, search and recommendations services across set-top boxes, websites and popular streaming devices, bringing forth a more personal entertainment experience for its customers.
Launched TiVo’s first campaign with a major broadcaster using the new personalized advertising product, Sponsored Discovery, delivering a 142% increase in tune-in to the new show for those who saw the ad.
TiVo’s unique voice users grew 54%, from 2.4 million at the end of Q3 to 3.7 million unique users at the end of Q4. Additionally, quarterly queries grew by 93%, from 123 million queries in Q3 to 238 million in Q4.
TiVo’s Targeted Audience Delivery (TAD), the platform that creates segments of TV viewers from its TV return path data, had revenue growth of 117% compared to the previous quarter.
TiVo’s Targeted Audience Delivery (TAD) was adopted by additional customers in the TV and digital advertising industry:
Cross Screen Media, a marketing analytics and software company, licensed TAD data to optimize the impact of campaigns across screens for its clients.
TVSquared, the worldwide leader in TV attribution, licensed TAD data to measure and optimize the impact of campaigns across screens for its clients.
Simulmedia, a data-driven TV advertising company, licensed TAD data to improve the targeting and performance of its TV campaigns.

SEGMENT RESULTS AND OPERATING HIGHLIGHTS - IP LICENSING
 
(In thousands)
 
 
 
Three Months Ended December 31,
 
 
 
2018
 
2017
 
% Change
US Pay TV Providers
$
42,348

 
$
83,608

 
(49
)%
CE Manufacturers
8,890

 
12,923

 
(31
)%
New Media, International Pay TV Providers and Other
20,742

 
17,185

 
21
 %
Total IP Licensing Revenue, net
71,980

 
113,716

 
(37
)%
Adjusted Operating Expenses
25,742

 
27,812

 
(7
)%
Adjusted EBITDA
$
46,238

 
$
85,904

 
(46
)%
Adjusted EBITDA Margin
64.2
%
 
75.5
%
 
 
 
 
 
 
 
 
Total IP Licensing Revenue, net
$
71,980

 
$
113,716

 
(37
)%
Legacy TiVo Solutions IP Licenses

 
(25,847
)
 
(100
)%
Core Intellectual Property Licensing Revenue (excludes revenue from Legacy TiVo Solutions IP Licenses)
$
71,980

 
$
87,869

 
(18
)%

Intellectual Property Licensing revenue decreased 37% in the fourth quarter. The decline in revenue from US Pay TV Providers is primarily due to a $25.8 million decrease in revenue from TiVo Solutions agreements entered into prior to the TiVo Acquisition Date (the Time Warp patent agreements) as a result of the expiration of these contracts and a $17.1 million decrease in revenue from catch-up payments intended to make us whole for the pre-license period of use. The decrease in revenue from CE Manufacturers was primarily attributable to a customer being out-of-license in 2018 and a decrease in catch-up payments intended to make us whole for the pre-license period. We anticipate this customer will eventually execute a new license. The increase in revenue from New Media, International Pay TV Providers and Other was primarily attributable to a $5.7 million increase in catch-up payments intended to make us whole for the pre-license period.

The decrease in Adjusted Operating Expenses relates to benefits from cost savings initiatives.

The decrease in Adjusted EBITDA Margin is primarily the result of a decrease in Intellectual Property Licensing revenue, partially offset by benefits from cost savings initiatives.

Intellectual Property Licensing Segment Operating Highlights:

Samsung has renewed a global multi-year patent license agreement for the use of Rovi’s video discovery patents and technologies across Samsung’s smartphone and tablet devices.
Minerva Networks entered into a multi-year intellectual property (IP) license renewal.
TikiLIVE has extended its intellectual property (IP) license agreement.






CONFERENCE CALL INFORMATION

TiVo management will host a conference call today, February 26, 2019, 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 are welcome to call (866) 621-1214 (or international +1-706-643-4013) and reference conference ID 8197906. The conference call may also be accessed via live webcast in the Investor Relations section of TiVo’s website at http://ir.tivo.com.

A replay of the audio webcast will be available on TiVo’s website shortly after the live call ends, and we currently plan for it to remain on TiVo’s website until the next quarterly earnings call. Additionally, a telephonic replay of the call may be accessible shortly after the live call ends through March 5, 2019 by dialing (855) 859-2056 (or international +1-404-537-3406) and entering conference ID 8197906.

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 Excluding Goodwill Impairment, 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, goodwill impairment, 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 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 transaction, transition and integration expenses.

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, earn-out settlements, CEO transition cash costs, remeasurement of contingent consideration, gain on settlement of acquired receivable and changes in franchise tax reserves. Included in transition costs in the second quarter of 2018 was a $4.5 million loss associated with a legacy TiVo Solutions legal matter for which a settlement was agreed to in the third quarter of 2018.

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 Excluding Goodwill Impairment is defined as GAAP Total Operating costs and expenses excluding goodwill impairment.

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, earnout settlements, CEO transition cash costs, remeasurement of contingent consideration, gain on settlement of acquired receivable, additional depreciation resulting from facility rationalization actions 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, goodwill impairment, equity-based compensation, transaction, transition and integration expenses, retention earn-outs payable to former shareholders of acquired businesses, earnout settlements, CEO transition cash costs, remeasurement of contingent consideration, gain on settlement of acquired receivable, depreciation and changes in franchise tax reserves.

Adjusted EBITDA is defined as GAAP operating income (loss) excluding depreciation, amortization of intangible assets, restructuring and asset impairment charges, goodwill impairment, equity-based compensation, 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, gain on settlement of acquired receivable and changes in franchise tax reserves.

Non-GAAP Interest Expense is defined as GAAP interest expense, excluding accretion of contingent consideration, amortization or write-off of issuance costs, discounts on convertible debt and interest on franchise tax reserves, plus the reclassification of the current period benefit (cost) of the interest rate swaps from gain (loss) on interest rate swaps.

Cash Taxes are defined as GAAP current income tax expense excluding changes in reserves for unrecognized tax benefits.

Non-GAAP Diluted Weighted Average Shares Outstanding is defined as GAAP diluted weighted average shares outstanding except for periods of a GAAP loss. In periods of a GAAP loss, GAAP diluted weighted average shares outstanding are adjusted to include dilutive common share equivalents outstanding that were excluded from GAAP diluted weighted average shares outstanding because the Company had a loss and therefore these shares would have been anti-dilutive.

The Company's management evaluates and makes decisions about its business operations primarily based on Non-GAAP financial information. Management uses Non-GAAP financial measures as the basis for decision-making as they exclude items management does not consider to be “core costs” or “core proceeds”. For each Non-GAAP financial measure, the adjustment provides management with information about the Company's underlying operating performance that enables a more meaningful comparison to its historical and projected financial performance in different reporting periods. For example, since the Company does not acquire businesses on a predictable cycle, management excludes the amortization of intangible assets, transaction, transition and integration costs, retention earn-outs payable to former shareholders of acquired businesses, 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 restructuring and asset impairment charges, goodwill impairment, 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 franchise tax reserves. 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 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, future growth and success of the Company’s Product and IP Licensing businesses, the timing of results and the Company’s exploration of strategic alternatives, as well as future business strategies, future product offerings and deployments, and technology and intellectual property licenses with various 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, whether inside or outside the Company’s control, in the Company’s exploration of its strategic alternatives, 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 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.

Investor Relations                    Press Relations
Debi Palmer                        Lerin O'Neill
TiVo Corporation                     TiVo Corporation
+1 818-295-6651                        +1 408-562-8455
debi.palmer@tivo.com                     lerin.oneill@tivo.com







TIVO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
Revenues, net:
 
 
 
 
 
 
 
Licensing, services and software
$
164,635

 
$
206,542

 
$
681,130

 
$
784,087

Hardware
3,824

 
7,694

 
14,735

 
42,369

Total Revenues, net
168,459

 
214,236

 
695,865

 
826,456

Costs and expenses:
 
 
 
 
 
 
 
Cost of licensing, services and software revenues, excluding depreciation and amortization of intangible assets
42,602

 
43,314

 
169,149

 
167,712

Cost of hardware revenues, excluding depreciation and amortization of intangible assets
5,231

 
10,822

 
19,491

 
46,699

Research and development
43,391

 
49,996

 
177,285

 
194,382

Selling, general and administrative
47,141

 
57,903

 
181,047

 
205,024

Depreciation
5,212

 
6,275

 
21,464

 
22,144

Amortization of intangible assets
27,873

 
41,557

 
147,336

 
166,657

Restructuring and asset impairment charges
1,493

 
1,425

 
10,061

 
19,048

Goodwill impairment
269,000

 

 
269,000

 

Total costs and expenses
441,943

 
211,292

 
994,833

 
821,666

Operating (loss) income
(273,484
)
 
2,944

 
(298,968
)
 
4,790

Interest expense
(12,909
)
 
(10,929
)
 
(49,150
)
 
(42,756
)
Interest income and other, net
2,711

 
(904
)
 
5,682

 
2,915

(Loss) gain on interest rate swaps
(3,760
)
 
3,233

 
3,425

 
1,859

TiVo Acquisition litigation

 

 

 
(14,006
)
Loss on debt extinguishment

 

 

 
(108
)
Loss on debt modification

 

 

 
(929
)
Loss from continuing operations before income taxes
(287,442
)
 
(5,656
)
 
(339,011
)
 
(48,235
)
Income tax expense (benefit)
747

 
(24,095
)
 
14,052

 
(10,279
)
(Loss) income from continuing operations, net of tax
(288,189
)
 
18,439

 
(353,063
)
 
(37,956
)
(Loss) income from discontinued operations, net of tax
(23
)
 

 
3,715

 

Net (loss) income
$
(288,212
)
 
$
18,439

 
$
(349,348
)
 
$
(37,956
)
 
 
 
 
 
 
 
 
Basic (loss) earnings per share:
 
 
 
 
 
 
 
Continuing operations
$
(2.33
)
 
$
0.15

 
$
(2.87
)
 
$
(0.32
)
Discontinued operations

 

 
0.03

 

Basic (loss) earnings per share
$
(2.33
)
 
$
0.15

 
$
(2.84
)
 
$
(0.32
)
Weighted average shares used in computing basic per share amounts
123,802

 
121,427

 
123,020

 
120,355

 
 
 
 
 
 
 
 
Diluted (loss) earnings per share:
 
 
 
 
 
 
 
Continuing operations
$
(2.33
)
 
$
0.15

 
$
(2.87
)
 
$
(0.32
)
Discontinued operations

 

 
0.03

 

Diluted (loss) earnings per share
$
(2.33
)
 
$
0.15

 
$
(2.84
)
 
$
(0.32
)
Weighted average shares used in computing diluted per share amounts
123,802

 
122,362

 
123,020

 
120,355

 
 
 
 
 
 
 
 
Dividends declared per share
$
0.18

 
$
0.18

 
$
0.72

 
$
0.72


See notes to the Consolidated Financial Statements in our Annual Report on Form 10-K.






TIVO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
 
December 31,
2018
 
December 31,
2017
ASSETS
(Unaudited)
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
161,955

 
$
128,965

Short-term marketable securities
158,956

 
140,866

Accounts receivable, net
152,866

 
180,768

Inventory
7,449

 
11,581

Prepaid expenses and other current assets
30,806

 
34,751

Total current assets
512,032

 
496,931

Long-term marketable securities
73,207

 
82,711

Property and equipment, net
53,586

 
55,244

Intangible assets, net
513,770

 
643,924

Goodwill
1,544,343

 
1,813,227

Other long-term assets
63,365

 
71,641

Total assets
$
2,760,303

 
$
3,163,678

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued expenses
$
104,981

 
$
135,852

Unearned revenue
46,072

 
55,393

Current portion of long-term debt
373,361

 
7,000

Total current liabilities
524,414

 
198,245

Taxes payable, less current portion
5,156

 
3,947

Unearned revenue, less current portion
54,495

 
58,283

Long-term debt, less current portion
618,776

 
976,095

Deferred tax liabilities, net
45,030

 
50,356

Other long-term liabilities
19,491

 
23,736

Total liabilities
1,267,362

 
1,310,662

Stockholders' equity:
 
 
 
Preferred stock

 

Common stock
126

 
123

Treasury stock
(32,124
)
 
(24,740
)
Additional paid-in capital
3,239,395

 
3,273,022

Accumulated other comprehensive loss
(3,869
)
 
(2,738
)
Accumulated deficit
(1,710,587
)
 
(1,392,651
)
Total stockholders’ equity
1,492,941

 
1,853,016

Total liabilities and stockholders’ equity
$
2,760,303

 
$
3,163,678


See notes to the Consolidated Financial Statements in our Annual Report on Form 10-K.
  






TIVO CORPORATION AND SUBSIDIARIES
REVENUE AND SEGMENT DETAILS
(In thousands)
(Unaudited)

 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
Total Revenues, net
$
168,459

 
$
214,236

 
$
695,865

 
$
826,456

Legacy TiVo Solutions IP Licenses

 
(25,847
)
 
(20,063
)
 
(97,136
)
Hardware
(3,824
)
 
(7,694
)
 
(14,735
)
 
(42,369
)
Other Products
(3,660
)
 
(689
)
 
(8,667
)
 
(4,548
)
Core Revenue (excludes revenue from Legacy TiVo Solutions IP Licenses, Hardware and Other Products)
$
160,975

 
$
180,006

 
$
652,400

 
$
682,403

 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
Product Revenue
 
 
 
 
 
 
 
Platform Solutions
$
74,519

 
$
80,606

 
$
315,814

 
$
334,004

Software and Services
18,300

 
19,225

 
76,249

 
84,964

Other
3,660

 
689

 
8,667

 
4,548

Total Product Revenue, net
96,479

 
100,520

 
400,730

 
423,516

 
 
 
 
 
 
 
 
IP Licensing Revenue
 
 
 
 
 
 
 
US Pay TV Providers
42,348

 
83,608

 
185,954

 
278,973

CE Manufacturers
8,890

 
12,923

 
35,644

 
51,219

New Media, International Pay TV Providers and Other
20,742

 
17,185

 
73,537

 
72,748

Total IP Licensing Revenue, net
71,980

 
113,716

 
295,135

 
402,940

 
 
 
 
 
 
 
 
Total Revenues, net
$
168,459

 
$
214,236

 
$
695,865

 
$
826,456

 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
Total Product Revenue, net
$
96,479

 
$
100,520

 
$
400,730

 
$
423,516

Hardware
(3,824
)
 
(7,694
)
 
(14,735
)
 
(42,369
)
Other Products
(3,660
)
 
(689
)
 
(8,667
)
 
(4,548
)
Core Product Revenue (excludes revenue from Hardware and Other Products)
$
88,995

 
$
92,137

 
$
377,328

 
$
376,599

 
 
 
 
 
 
 
 
Total IP Licensing Revenue, net
$
71,980

 
$
113,716

 
$
295,135

 
$
402,940

Legacy TiVo Solutions IP Licenses

 
(25,847
)
 
(20,063
)
 
(97,136
)
Core Intellectual Property Licensing Revenue (excludes revenue from Legacy TiVo Solutions IP Licenses)
$
71,980

 
$
87,869

 
$
275,072

 
$
305,804

 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
Adjusted EBITDA:
 
 
 
 
 
 
 
Product
$
13,039

 
$
3,727

 
$
67,010

 
$
46,409

IP Licensing
46,238

 
85,904

 
195,603

 
305,881

Corporate
(17,136
)
 
(15,064
)
 
(62,521
)
 
(62,148
)
Adjusted EBITDA
$
42,141

 
$
74,567

 
$
200,092

 
$
290,142






TIVO CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands)
(Unaudited)
 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
GAAP loss before income taxes from continuing operations
$
(287,442
)
 
$
(5,656
)
 
$
(339,011
)
 
$
(48,235
)
Amortization of intangible assets
27,873

 
41,557

 
147,336

 
166,657

Restructuring and asset impairment charges
1,493

 
1,425

 
10,061

 
19,048

Goodwill impairment
269,000

 

 
269,000

 

Equity-based compensation
11,553

 
13,780

 
39,779

 
52,561

Transaction, transition and integration costs
494

 
4,663

 
9,797

 
20,364

Earnout amortization

 
958

 
1,494

 
3,833

CEO transition cash costs

 
4,305

 
(975
)
 
4,305

Remeasurement of contingent consideration

 
(1,340
)
 
1,104

 
(1,023
)
TiVo Acquisition litigation

 

 

 
14,006

Loss on debt extinguishment

 

 

 
108

Loss on debt modification

 

 

 
929

Gain on settlement of acquired receivable

 

 

 
(2,537
)
Accelerated depreciation

 
639

 

 
1,491

Other-than-temporary impairment of strategic investment

 
1,210

 

 
1,210

Gain on sale of strategic investments
(145
)
 

 
(662
)
 
(3,143
)
Accretion of contingent consideration

 
123

 
235

 
634

Amortization of note issuance costs
591

 
548

 
2,300

 
2,136

Amortization of convertible note discount
3,369

 
3,217

 
13,246

 
12,645

Mark-to-market loss related to interest rate swaps
3,365

 
(5,120
)
 
(6,848
)
 
(10,215
)
Non-GAAP Pre-tax Income
$
30,151

 
$
60,309

 
$
146,856

 
$
234,774


 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
GAAP Diluted weighted average shares outstanding
123,802

 
122,362

 
123,020

 
120,355

Dilutive effect of equity-based compensation awards
536

 

 
575

 
1,039

Non-GAAP Diluted Weighted Average Shares Outstanding
124,338

 
122,362

 
123,595

 
121,394


 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
GAAP Cost of licensing, services and software revenues, excluding depreciation and amortization of intangible assets
$
42,602

 
$
43,314

 
$
169,149

 
$
167,712

Equity-based compensation
(1,295
)
 
(1,244
)
 
(4,558
)
 
(4,504
)
Transaction, transition and integration costs
(315
)
 
(163
)
 
(373
)
 
(530
)
Non-GAAP Cost of Licensing, Services and Software Revenues
$
40,992

 
$
41,907

 
$
164,218

 
$
162,678







 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
GAAP Cost of hardware revenues, excluding depreciation and amortization of intangible assets
$
5,231

 
$
10,822

 
$
19,491

 
$
46,699

Transaction, transition and integration costs

 

 

 
(1,021
)
Non-GAAP Cost of Hardware Revenues
$
5,231

 
$
10,822

 
$
19,491

 
$
45,678


 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
GAAP Research and development expenses
$
43,391

 
$
49,996

 
$
177,285

 
$
194,382

Equity-based compensation
(4,029
)
 
(3,912
)
 
(13,986
)
 
(16,771
)
Transaction, transition and integration costs
(178
)
 
(1,029
)
 
(1,613
)
 
(4,474
)
Earnout amortization

 
(184
)
 
(287
)
 
(736
)
GAAP Research and development expenses
$
39,184

 
$
44,871

 
$
161,399

 
$
172,401


 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
GAAP Selling, general and administrative expenses
$
47,141

 
$
57,903

 
$
181,047

 
$
205,024

Equity-based compensation
(6,229
)
 
(8,624
)
 
(21,235
)
 
(31,286
)
Transaction, transition and integration costs
(1
)
 
(3,471
)
 
(7,811
)
 
(14,339
)
Earnout amortization

 
(774
)
 
(1,207
)
 
(3,097
)
CEO transition cash costs

 
(4,305
)
 
975

 
(4,305
)
Remeasurement of contingent consideration

 
1,340

 
(1,104
)
 
1,023

Gain on settlement of acquired receivable

 

 

 
2,537

Non-GAAP Selling, General and Administrative Expenses
$
40,911

 
$
42,069

 
$
150,665

 
$
155,557


 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
GAAP Total operating costs and expenses
$
441,943

 
$
211,292

 
$
994,833

 
$
821,666

Goodwill impairment
(269,000
)
 

 
(269,000
)
 

Non-GAAP Total OpEx Excluding Goodwill Impairment
$
172,943

 
$
211,292

 
$
725,833

 
$
821,666







 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
GAAP Total operating costs and expenses
$
441,943

 
$
211,292

 
$
994,833

 
$
821,666

Depreciation
(5,212
)
 
(6,275
)
 
(21,464
)
 
(22,144
)
Amortization of intangible assets
(27,873
)
 
(41,557
)
 
(147,336
)
 
(166,657
)
Restructuring and asset impairment charges
(1,493
)
 
(1,425
)
 
(10,061
)
 
(19,048
)
Goodwill impairment
(269,000
)
 

 
(269,000
)
 

Equity-based compensation
(11,553
)
 
(13,780
)
 
(39,779
)
 
(52,561
)
Transaction, transition and integration costs
(494
)
 
(4,663
)
 
(9,797
)
 
(20,364
)
Earnout amortization

 
(958
)
 
(1,494
)
 
(3,833
)
CEO transition cash costs

 
(4,305
)
 
975

 
(4,305
)
Remeasurement of contingent consideration

 
1,340

 
(1,104
)
 
1,023

Gain on settlement of acquired receivable

 

 

 
2,537

Non-GAAP Total COGS and OpEx
$
126,318

 
$
139,669

 
$
495,773

 
$
536,314


 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
GAAP Operating (loss) income
$
(273,484
)
 
$
2,944

 
$
(298,968
)
 
$
4,790

Depreciation
5,212

 
6,275

 
21,464

 
22,144

Amortization of intangible assets
27,873

 
41,557

 
147,336

 
166,657

Restructuring and asset impairment charges
1,493

 
1,425

 
10,061

 
19,048

Goodwill impairment
269,000

 

 
269,000

 

Equity-based compensation
11,553

 
13,780

 
39,779

 
52,561

Transaction, transition and integration costs
494

 
4,663

 
9,797

 
20,364

Earnout amortization

 
958

 
1,494

 
3,833

CEO transition cash costs

 
4,305

 
(975
)
 
4,305

Remeasurement of contingent consideration

 
(1,340
)
 
1,104

 
(1,023
)
Gain on settlement of acquired receivable

 

 

 
(2,537
)
Adjusted EBITDA
$
42,141

 
$
74,567

 
$
200,092

 
$
290,142


 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
GAAP Interest expense
$
(12,909
)
 
$
(10,929
)
 
$
(49,150
)
 
$
(42,756
)
Accretion of contingent consideration

 
123

 
235

 
634

Amortization of note issuance costs
591

 
548

 
2,300

 
2,136

Amortization of convertible note discount
3,369

 
3,217

 
13,246

 
12,645

Reclassify current period cost of interest rate swaps
(396
)
 
(1,886
)
 
(3,423
)
 
(8,356
)
Non-GAAP Interest Expense
$
(9,345
)
 
$
(8,927
)
 
$
(36,792
)
 
$
(35,697
)



(Back To Top)