UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
| x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended April 30, 2003. |
| ¨ | 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 000-27141
TIVO INC.
(Exact name of registrant as specified in its charter)
| Delaware |
77-0463167 | |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
| 2160 Gold Street, PO Box 2160, Alviso, CA |
95002 | |
| (Address of principal executive offices) | (Zip Code) |
(408) 519-9100
(Registrant’s telephone number including area code)
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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes x No ¨
The number of outstanding shares of the registrant’s Common Stock, $0.001 par value, was 64,866,286 as of June 6, 2003.
The accompanying notes are an integral part of these statements.
2
PART I : FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
| April 30, 2003 |
January 31, 2003 | |||||
| ASSETS | ||||||
| CURRENT ASSETS |
||||||
| Cash and cash equivalents |
$ | 39,657,000 | $ | 44,201,000 | ||
| Accounts receivable, net of allowance for doubtful accounts of $13,000 and $8,000 |
6,328,000 | 5,839,000 | ||||
| Accounts receivable-related parties |
887,000 | 1,271,000 | ||||
| Inventories |
5,269,000 | 7,273,000 | ||||
| Prepaid expenses and other |
2,326,000 | 2,376,000 | ||||
| Prepaid expenses and other-related parties |
2,948,000 | 2,851,000 | ||||
| Total current assets |
57,415,000 | 63,811,000 | ||||
| LONG-TERM ASSETS |
||||||
| Property and equipment, net |
11,059,000 | 12,143,000 | ||||
| Prepaid expenses and other |
1,193,000 | 1,392,000 | ||||
| Prepaid expenses and other-related parties |
4,879,000 | 4,974,000 | ||||
| Total long-term assets |
17,131,000 | 18,509,000 | ||||
| Total assets |
$ | 74,546,000 | $ | 82,320,000 | ||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
| LIABILITIES |
||||||
| CURRENT LIABILITIES |
||||||
| Accounts payable |
$ | 14,372,000 | $ | 15,260,000 | ||
| Accrued liabilities |
12,337,000 | 13,980,000 | ||||
| Accrued liabilities-related parties |
1,978,000 | 3,359,000 | ||||
| Deferred revenue |
25,385,000 | 24,000,000 | ||||
| Deferred revenue-related parties |
4,988,000 | 6,077,000 | ||||
| Total current liabilities |
59,060,000 | 62,676,000 | ||||
| LONG-TERM LIABILITIES |
||||||
| Convertible notes payable (face value $10,450,000) |
4,692,000 | 4,265,000 | ||||
| Convertible notes payable-related parties (face value $10,000,000) |
4,329,000 | 3,920,000 | ||||
| Deferred revenue |
33,521,000 | 32,373,000 | ||||
| Deferred rent and other |
3,475,000 | 3,783,000 | ||||
| Total long-term liabilities |
46,017,000 | 44,341,000 | ||||
The accompanying notes are an integral part of these statements.
3
TIVO INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(unaudited)
| April 30, 2003 |
January 31, 2003 |
|||||||
| Total liabilities |
105,077,000 | 107,017,000 | ||||||
| COMMITMENTS AND CONTINGENCIES (see Note 6) |
— | — | ||||||
| STOCKHOLDERS’ DEFICIT |
||||||||
| Common stock, par value $0.001: |
||||||||
| Authorized shares are 150,000,000 Issued and outstanding shares are 64,342,710 and 63,918,686, respectively |
64,000 | 64,000 | ||||||
| Additional paid-in capital |
523,538,000 | 522,101,000 | ||||||
| Prepaid marketing expense |
(627,000 | ) | (1,003,000 | ) | ||||
| Note receivable-related parties |
(392,000 | ) | (627,000 | ) | ||||
| Accumulated deficit |
(553,114,000 | ) | (545,232,000 | ) | ||||
| Total stockholders’ deficit |
(30,531,000 | ) | (24,697,000 | ) | ||||
| Total liabilities and stockholders’ deficit |
$ | 74,546,000 | $ | 82,320,000 | ||||
The accompanying notes are an integral part of these statements.
4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| Three Months Ended April 30, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues |
||||||||
| Service and technology revenues (includes $4,312,000 and |
$ | 16,068,000 | $ | 9,860,000 | ||||
| Hardware revenues |
14,809,000 | 3,780,000 | ||||||
| Rebates, revenue share and other payments to channel |
(2,357,000 | ) | (600,000 | ) | ||||
| Net revenues |
28,520,000 | 13,040,000 | ||||||
| Costs of revenues |
||||||||
| Costs of service and technology revenues |
7,803,000 | 5,453,000 | ||||||
| Cost of hardware revenues |
14,178,000 | 3,665,000 | ||||||
| Total cost of revenues |
21,981,000 | 9,118,000 | ||||||
| Gross margin |
6,539,000 | 3,922,000 | ||||||
| Research and development |
5,472,000 | 5,002,000 | ||||||
| Sales and marketing |
2,126,000 | 7,855,000 | ||||||
| Sales and marketing-related parties |
1,873,000 | 22,922,000 | ||||||
| General and administrative |
3,778,000 | 3,759,000 | ||||||
| Total operating expenses |
13,249,000 | 39,538,000 | ||||||
| Loss from operations |
(6,710,000 | ) | (35,616,000 | ) | ||||
| Interest income |
114,000 | 4,099,000 | ||||||
| Interest expense and other (includes $175,000 and $412,000 |
(1,274,000 | ) | (1,992,000 | ) | ||||
| Loss before income taxes |
(7,870,000 | ) | (33,509,000 | ) | ||||
| Provision for income taxes |
(12,000 | ) | — | |||||
| Net loss |
(7,882,000 | ) | (33,509,000 | ) | ||||
| Less: Series A redeemable convertible preferred stock dividend |
— | (220,000 | ) | |||||
| Less: Accretion to redemption value of Series A |
— | (1,445,000 | ) | |||||
| Net loss attributable to common stockholders |
$ | (7,882,000 | ) | $ | (35,174,000 | ) | ||
| Net loss per common share basic and diluted |
$ | (0.12 | ) | $ | (0.74 | ) | ||
| Weighted average common shares outstanding—basic and |
64,021,345 | 47,343,887 | ||||||
The accompanying notes are an integral part of these statements.
5
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
(unaudited)
| Common Stock |
Additional Paid-In |
Prepaid Marketing |
Note Receivable- |
Accumulated Deficit |
||||||||||||||||||||
| Shares |
Amount |
Total |
||||||||||||||||||||||
| BALANCE JANUARY 31, 2003 |
63,918,686 | $ | 64,000 | $ | 522,101,000 | $ | (1,003,000 | ) | $ | (627,000 | ) | $ | (545,232,000 | ) | $ | (24,697,000 | ) | |||||||
| Issuance of common stock related to exercise of common stock options |
235,918 | — | 617,000 | — | — | — | 617,000 | |||||||||||||||||
| Issuance of common stock related to employee stock purchase plan |
188,106 | — | 820,000 | — | — | — | 820,000 | |||||||||||||||||
| Amortization of prepaid marketing expense |
— | — | — | 376,000 | — | — | 376,000 | |||||||||||||||||
| Amortization of note receivable |
— | — | — | — | 235,000 | — | 235,000 | |||||||||||||||||
| Net loss |
— | — | — | — | — | (7,882,000 | ) | (7,882,000 | ) | |||||||||||||||
| BALANCE APRIL 30, 2003 |
64,342,710 | $ | 64,000 | $ | 523,538,000 | $ | (627,000 | ) | $ | (392,000 | ) | $ | (553,114,000 | ) | $ | (30,531,000 | ) | |||||||
The accompanying notes are an integral part of these statements.
6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Three Months Ended April 30, |
||||||||
| 2003 |
2002 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
| Net loss |
$ | (7,882,000 | ) | $ | (33,509,000 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
1,491,000 | 1,750,000 | ||||||
| Amortization of prepaid marketing expense |
— | 5,000,000 | ||||||
| Amortization of prepaid advertising-related parties |
376,000 | 376,000 | ||||||
| Non-cash interest expense |
916,000 | 1,052,000 | ||||||
| Amortization of prepaid marketing related to value of warrants |
— | 11,615,000 | ||||||
| Recognition of stock-based compensation expense |
— | 118,000 | ||||||
| Amortization of note receivable |
235,000 | 236,000 | ||||||
| Changes in assets and liabilities: |
||||||||
| Accounts receivable, net |
(489,000 | ) | (590,000 | ) | ||||
| Accounts receivable-related parties |
384,000 | 4,110,000 | ||||||
| Inventories |
2,004,000 | (1,663,000 | ) | |||||
| Prepaid expenses and other |
(30,000 | ) | 451,000 | |||||
| Prepaid expenses and other-related parties |
(97,000 | ) | (1,199,000 | ) | ||||
| Prepaid expenses and other, long-term |
199,000 | (246,000 | ) | |||||
| Prepaid expenses and other-related parties, long-term |
95,000 | (144,000 | ) | |||||
| Accounts payable |
(888,000 | ) | 2,196,000 | |||||
| Accrued liabilities |
(1,643,000 | ) | 1,109,000 | |||||
| Accrued liabilities-related parties |
(1,381,000 | ) | (18,700,000 | ) | ||||
| Deferred revenue |
1,385,000 | |||||||