Back to GetFilings.com



Table of Contents
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-Q
 
(Mark One)
 
x
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2002
 
or
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                          to                         
 
Commission file number: 001-15473
 
OPENTV CORP.
(Exact name of registrant as specified in its charter)
 
British Virgin Islands
   
98-0212376
(Jurisdiction of incorporation)
   
(I.R.S. Employer Identification No.)
 
401 East Middlefield Road
Mountain View, California 94043
(650) 429-5500
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x No  ¨
 
As of October 31, 2002, the Registrant had outstanding:
 
40,896,432 Class A Ordinary Shares, no par value
 
30,631,746 Class B Ordinary Shares, no par value
 

Table of Contents
TABLE OF CONTENTS
 
        
Page
PART I.
  
FINANCIAL INFORMATION
     
Item 1.
     
1
      
1
      
2
      
3
      
4
Item 2.
     
16
Item 3.
     
24
Item 4.
     
25
PART II.
  
OTHER INFORMATION
     
Item 1.
     
26
Item 2.
     
27
Item 3.
     
28
Item 4.
     
28
Item 5.
     
28
Item 6.
     
28
  
29
  
30

i

Table of Contents
PART I.    FINANCIAL INFORMATION
 
ITEM 1.    FINANCIAL STATEMENTS
 
OPENTV CORP.
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 
    
September 30,
2002
     
December 31, 2001
  
    
(unaudited)
         
ASSETS
                  
Current assets:
                  
Cash and cash equivalents
   
$
110,515
 
   
$
69,249
 
Short-term marketable debt securities
   
 
24,822
 
   
 
28,454
 
Accounts receivable, net
   
 
9,339
 
   
 
22,681
 
Due from MIH Limited entities
   
 
147
 
   
 
4,290
 
Prepaid expenses and other current assets
   
 
5,995
 
   
 
7,248
 
    
  
Total current assets
   
 
150,818
 
   
 
131,922
 
Long-term marketable debt securities
   
 
27,352
 
   
 
91,839
 
Property and equipment, net
   
 
22,349
 
   
 
24,981
 
Long-term private equity investments
   
 
—  
 
   
 
15,208
 
Goodwill, net
   
 
—  
 
   
 
1,435,712
 
Intangible assets, net
   
 
18,329
 
   
 
63,487
 
Other assets
   
 
4,342
 
   
 
4,465
 
    
  
Total assets
   
$
223,190
 
   
$
1,767,614
 
    
  
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS’ EQUITY
                  
Current liabilities:
                  
Accounts payable
   
$
4,818
 
   
$
5,628
 
Accrued liabilities
   
 
18,774
 
   
 
19,624
 
Current portion of deferred revenue
   
 
6,872
 
   
 
6,587
 
    
  
Total current liabilities
   
 
30,464
 
   
 
31,839
 
Deferred revenue, less current portion
   
 
7,996
 
   
 
4,238
 
    
  
Total liabilities
   
 
38,460
 
   
 
36,077
 
Commitments and contingencies (Note 9)
                  
Minority interest
   
 
1,399
 
   
 
1,764
 
Shareholders’ equity:
                  
Class A Ordinary Shares, no par value, 500,000,000 shares authorized; 40,896,432 and 40,525,732 shares issued and outstanding at September 30, 2002 and December 31, 2001, respectively
   
 
2,143,060
 
   
 
2,138,383
 
Class B Ordinary Shares, no par value, 200,000,000 shares authorized; 30,631,746 shares issued and outstanding at September 30, 2002 and December 31, 2001
   
 
35,953
 
   
 
35,953
 
Additional paid-in capital
   
 
436,670
 
   
 
435,324
 
Treasury stock at cost, 50,629 and 49,629 shares at September 30, 2002 and December 31, 2001, respectively
   
 
(16
)
   
 
(16
)
Deferred share-based compensation
   
 
(639
)
   
 
(4,144
)
Accumulated other comprehensive income (loss)
   
 
200
 
   
 
(89
)
Accumulated deficit
   
 
(2,431,897
)
   
 
(875,638
)
    
  
Total shareholders’ equity
   
 
183,331
 
   
 
1,729,773
 
    
  
Total liabilities, minority interest and shareholders’ equity
   
$
223,190
 
   
$
1,767,614
 
    
  
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

1

Table of Contents
OPENTV CORP.
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
 
   
Three Months Ended September 30,
     
Nine Months Ended September 30,
  
   
2002
     
2001
     
2002*
     
2001
  
Revenues:
                                   
Royalties
  
$
3,878
 
   
$
10,645
 
   
$
16,243
 
   
$
29,678
 
Services and other
  
 
5,933
 
   
 
8,679
 
   
 
19,015
 
   
 
28,308
 
Channel fees
  
 
2,741
 
   
 
1,135
 
   
 
7,890
 
   
 
1,135
 
License fees
  
 
759
 
   
 
4,617
 
   
 
3,236
 
   
 
11,099
 
   
  
  
  
Total revenues
  
 
13,311
 
   
 
25,076
 
   
 
46,384
 
   
 
70,220
 
   
  
  
  
Operating expenses:
                                   
Cost of revenues(1)
  
 
9,421
 
   
 
10,027
 
   
 
30,087
 
   
 
27,084
 
Research and development(2)
  
 
7,765
 
   
 
14,575
 
   
 
25,211
 
   
 
36,163
 
Sales and marketing(3)
  
 
6,260
 
   
 
10,456
 
   
 
23,953
 
   
 
36,627
 
General and administrative(4)
  
 
5,758
 
   
 
4,717
 
   
 
15,924
 
   
 
14,924
 
Restructuring costs
  
 
1,552
 
   
 
—  
 
   
 
11,172
 
   
 
—  
 
Impairment of goodwill
  
 
514,206
 
   
 
—  
 
   
 
514,206
 
   
 
—  
 
Impairment of intangible assets
  
 
24,796
 
   
 
—  
 
   
 
24,796
 
   
 
—  
 
Amortization of goodwill
  
 
—  
 
   
 
97,691
 
   
 
—  
 
   
 
293,074
 
Amortization of intangible assets
  
 
3,421
 
   
 
5,572
 
   
 
11,677
 
   
 
15,178
 
   
  
  
  
Total operating expenses
  
 
573,179
 
   
 
143,038
 
   
 
657,026
 
   
 
423,050
 
   
  
  
  
Loss from operations
  
 
(559,868
)
   
 
(117,962
)
   
 
(610,642
)
   
 
(352,830
)
Interest income
  
 
1,827
 
   
 
2,125
 
   
 
4,663
 
   
 
8,379
 
Other income (expense), net
  
 
(18
)
   
 
(4
)
   
 
(79
)
   
 
1
 
Impairment of equity investments and notes receivable
  
 
(4,698
)
   
 
(2,290
)
   
 
(10,923
)
   
 
(7,290
)
Share of losses of equity investee
  
 
—  
 
   
 
—  
 
   
 
(7,275
)
   
 
—  
 
Realized loss on sale of marketable equity securities
  
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
(24,014
)
Minority interest
  
 
88
 
   
 
(25
)
   
 
365
 
   
 
71
 
   
  
  
  
Loss before income taxes
  
 
(562,669
)
   
 
(118,156
)
   
 
(623,891
)
   
 
(375,683
)
Income tax benefit (expense)
  
 
(384
)
   
 
(378
)
   
 
(1,101
)
   
 
6,034
 
   
  
  
  
Loss before cumulative effect of accounting change
  
 
(563,053
)
   
 
(118,534
)
   
 
(624,992
)
   
 
(369,649
)
Cumulative effect of accounting change, net of tax
  
 
—  
 
   
 
—  
 
   
 
(931,267
)
   
 
—  
 
   
  
  
  
Net loss
  
$
(563,053
)
   
$
(118,534
)
   
$
(1,556,259
)
   
$
(369,649
)
   
  
  
  
Net loss per share, basic and diluted