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 April 30, 2005.
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 000-27141
TIVO INC.
(Exact name of registrant as specified in its charter)
| Delaware | 77-0463167 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
2160 Gold Street, P.O. Box 2160, Alviso, CA 95002
(Address of principal executive offices including 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 Rule 12b-2 of the Exchange Act). YES x NO ¨.
The number of shares outstanding of the registrant’s common stock, $0.001 par value, was 83,250,897 as of May 27, 2005.
FORM 10-Q
FOR THE FISCAL QUARTER ENDED APRIL 30, 2005
TABLE OF CONTENTS
| PART I : FINANCIAL INFORMATION |
3 | |||
| ITEM 1. | 3 | |||
| 3 | ||||
| 4 | ||||
| 5 | ||||
| 6 | ||||
| 8 | ||||
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
22 | ||
| ITEM 3. | 58 | |||
| ITEM 4. | 58 | |||
| PART II : OTHER INFORMATION |
59 | |||
| ITEM 1. | 59 | |||
| ITEM 2. | 59 | |||
| ITEM 3. | 59 | |||
| ITEM 4. | 59 | |||
| ITEM 5. | 59 | |||
| ITEM 6. | 60 | |||
| SIGNATURES AND OFFICER CERTIFICATIONS | 61 | |||
©2005 TiVo Inc. All Rights Reserved.
Except as the context otherwise requires, the terms “TiVo”, “Registrant”, “company”, “we”, “us”, or “our” as used herein are references to TiVo Inc. and its consolidated subsidiaries.
2
PART I : FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(unaudited)
| April 30, 2005 |
January 31, 2005 |
|||||||
| ASSETS | ||||||||
| CURRENT ASSETS |
||||||||
| Cash and cash equivalents |
$ | 90,791 | $ | 87,245 | ||||
| Short-term investments |
14,700 | 19,100 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $113 and $104 |
8,128 | 25,879 | ||||||
| Finished goods inventories |
18,983 | 12,103 | ||||||
| Prepaid expenses and other, current |
3,790 | 4,476 | ||||||
| Total current assets |
136,392 | 148,803 | ||||||
| LONG-TERM ASSETS |
||||||||
| Property and equipment, net |
7,272 | 7,780 | ||||||
| Capitalized software and intangible assets, net |
5,990 | 2,231 | ||||||
| Prepaid expenses and other, long-term |
860 | 1,238 | ||||||
| Total long-term assets |
14,122 | 11,249 | ||||||
| Total assets |
$ | 150,514 | $ | 160,052 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| LIABILITIES |
||||||||
| CURRENT LIABILITIES |
||||||||
| Bank line of credit |
$ | 6,000 | $ | 4,500 | ||||
| Accounts payable |
12,246 | 18,736 | ||||||
| Accrued liabilities |
22,615 | 33,173 | ||||||
| Deferred revenue, current |
47,819 | 42,017 | ||||||
| Total current liabilities |
88,680 | 98,426 | ||||||
| LONG-TERM LIABILITIES |
||||||||
| Deferred revenue, long-term |
62,117 | 63,131 | ||||||
| Deferred rent and other |
830 | 1,187 | ||||||
| Total long-term liabilities |
62,947 | 64,318 | ||||||
| Total liabilities |
151,627 | 162,744 | ||||||
| COMMITMENTS AND CONTINGENCIES (see Note 8) |
||||||||
| STOCKHOLDERS’ DEFICIT |
||||||||
| Preferred stock, par value $0.001: Issued and outstanding shares – none |
— | — | ||||||
| Common stock, par value $0.001: |
83 | 82 | ||||||
| Additional paid-in capital |
656,979 | 654,746 | ||||||
| Deferred compensation |
(226 | ) | (428 | ) | ||||
| Accumulated deficit |
(657,949 | ) | (657,092 | ) | ||||
| Total stockholders’ deficit |
(1,113 | ) | (2,692 | ) | ||||
| Total liabilities and stockholders’ deficit |
$ | 150,514 | $ | 160,052 | ||||
The accompanying notes are an integral part of these consolidated statements.
3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share amounts)
(unaudited)
| Three Months Ended April 30, |
||||||||
| 2005 |
2004 |
|||||||
| Revenues |
||||||||
| Service and technology revenues (includes $5,087 from related parties for the three months ended April 30, 2004) |
$ | 40,020 | $ | 25,174 | ||||
| Hardware revenues |
10,526 | 14,337 | ||||||
| Rebates, revenue share and other payments to channel |
(3,638 | ) | (4,988 | ) | ||||
| Net revenues |
46,908 | 34,523 | ||||||
| Costs of revenues |
||||||||
| Costs of service and technology revenues |
8,866 | 7,555 | ||||||
| Cost of hardware revenues |
15,642 | 16,850 | ||||||
| Total cost of revenues |
24,508 | 24,405 | ||||||
| Gross margin |
22,400 | 10,118 | ||||||
| Research and development |
10,904 | 8,999 | ||||||
| Sales and marketing (includes $816 to related parties for the three months ended April 30, 2004) |
6,830 | 5,600 | ||||||
| General and administrative |
6,138 | 4,239 | ||||||
| Total operating expenses |
23,872 | 18,838 | ||||||
| Loss from operations |
(1,472 | ) | (8,720 | ) | ||||
| Interest income |
624 | 327 | ||||||
| Interest expense and other |
(1 | ) | (656 | ) | ||||
| Loss before income taxes |
(849 | ) | (9,049 | ) | ||||
| Provision for income taxes |
(8 | ) | (18 | ) | ||||
| Net loss |
$ | (857 | ) | $ | (9,067 | ) | ||
| Net loss per common share basic and diluted |
$ | (0.01 | ) | $ | (0.11 | ) | ||
| Weighted average common shares used to calculate - basic and diluted |
82,380,871 | 79,799,865 | ||||||
The accompanying notes are an integral part of these consolidated statements.
4
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
(In thousands, except share amounts)
(unaudited)
| Common Stock |
Additional Paid-In |
Deferred |
Accumulated Deficit |
Total |
||||||||||||||||||
| Shares |
Amount |
|||||||||||||||||||||
| BALANCE JANUARY 31, 2005 |
82,280,876 | $ | 82 | $ | 654,746 | $ | (428 | ) | $ | (657,092 | ) | $ | (2,692 | ) | ||||||||
| Issuance of common stock related to exercise of common stock options |
342,424 | 1 | 1,318 | 1,319 | ||||||||||||||||||
| Issuance of common stock related to employee stock purchase plan |
245,655 | 1,175 | 1,175 | |||||||||||||||||||
| Retirement due to forfeiture of unvested restricted common stock |
(30,510 | ) | (260 | ) | 260 | 0 | ||||||||||||||||
| Reversal of deferred compensation expense due to forfeiture of unvested restricted common stock |
(216 | ) | (216 | ) | ||||||||||||||||||
| Recognition of stock based compensation expense |
158 | 158 | ||||||||||||||||||||
| Net loss |
(857 | ) | (857 | ) | ||||||||||||||||||
| BALANCE APRIL 30, 2005 |
82,838,445 | $ | 83 | $ | 656,979 | $ | (226 | ) | $ | (657,949 | ) | $ | (1,113 | ) | ||||||||
The accompanying notes are an integral part of these consolidated statements.
5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
| Three Months Ended April 30, |
||||||||
| 2005 |
2004 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
| Net loss |
$ | (857 | ) | $ | (9,067 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization of property and equipment and intangibles |
1,424 | 1,223 | ||||||
| Loss on disposal of fixed assets |
3 | — | ||||||
| Non-cash interest expense |
— | 464 | ||||||
| Recognition of stock-based compensation expense |
(58 | ) | 298 | |||||
| Changes in assets and liabilities: |
||||||||
| Accounts receivable, net (change includes $(301) from related parties for the three months ended April 30, 2004 ) |
17,751 | 2,044 | ||||||
| Finished goods inventories |
(6,880 | ) | 3,412 | |||||
| Prepaid expenses and other, current (change includes $986 to related parties for the three months ended April 30, 2004) |
686 | 604 | ||||||
| Prepaid expenses and other, long-term (change includes $1,426 to related parties for the three months ended April 30, 2004) |
378 | 760 | ||||||
| Accounts payable |
(6,490 | ) | (2,350 | ) | ||||
| Accrued liabilities (change includes $(623) to related parties for the three months ended April 30, 2004) |
(10,558 | ) | (4,024 | ) | ||||
| Deferred revenue, current (change includes $(1,739) from related parties for the three months ended April 30, 2004) |
5,802 | (791 | ) | |||||
| Deferred revenue, long-term |
(1,014 | ) | 1,183 | |||||
| Deferred rent and other long-term liabilities |
(357 | ) | (96 | ) | ||||
| Net cash used in operating activities |
(170 | ) | (6,340 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
| Purchases of short-term investments |
(1,025 | ) | (14,750 | ) | ||||
| Sales of short-term investments |
5,425 | 4,350 | ||||||
| Acquisition of property and equipment, net |
(763 | ) | (750 | ) | ||||
| Acquisition of capitalized software and intangibles |
(3,915 | ) | — | |||||
| Net cash used in investing activities |
(278 | ) | (11,150 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
| Borrowing under bank line of credit |
1,500 | — | ||||||
| Proceeds from issuance of common stock related to employee stock purchase plan |
1,175 | 1,228 | ||||||
| Proceeds from issuance of common stock related to exercise of common stock options |
1,319 | |||||||