Macrovision Corporation Reports Fourth Quarter and Full Year Financial Performance; Record Revenue for the Fourth Quarter and Full Year 2005.SANTA CLARA Santa Clara, city, Cuba Santa Clara (sän`tä klä`rä), city (1994 est. pop. 217,000), capital of Villa Clara prov., central Cuba. , Calif. -- Macrovision Macrovision is a company that develops and markets licensing, access control, and secure distribution technologies for electronically delivered creative works. This includes digital media (video, music), web publishing (text, images), and computer software (consumer software, Corporation (Nasdaq:MVSN MVSN Milizia Volontaria per la Sicurezza Nazionale (Italy) ) announced today record quarterly revenues of $61.0 million and $203.2 million in the fourth quarter and full year 2005, respectively. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income for the fourth quarter of 2005 was $4.5 million compared to $15.8 million for the fourth quarter of 2004. Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. GAAP earnings per share for the quarter were $0.09, compared with $0.31 for the comparable quarter in 2004. Non-GAAP (pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma ) earnings (excluding items such as amortization of intangibles from acquisitions, restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , discrete tax items, impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. on investments, stock-based compensation charges, and in process research and development charges) were $18.5 million, compared to $16.1 million in the fourth quarter of 2004. Non-GAAP (pro forma) diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the quarter were $0.36, compared to $0.31 in the same quarter of 2004. A reconciliation between net income on a GAAP and non-GAAP (pro forma) basis is provided in tables below. "We are pleased to be able to report record revenues for our business even with the organizational changes we conducted in the fourth quarter. We have seen significant progress and revenue strength in our software business which has more than offset the expected declines in DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. and other Entertainment revenues on a quarter over quarter and year over year basis," said Fred (Friendly Rollabout Engineered for Doctors) A mobile medical conferencing unit. See videoconferencing. 1. FRED - Robert Carr. Language used by Framework, Ashton-Tate. 2. Amoroso Am`o`ro´so n. 1. A lover; a man enamored. adv. 1. (Mus.) In a soft, tender, amatory style. , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Macrovision. "As you have seen in a previous press release, we are also pleased to announce today that we have reached an agreement to purchase eMeta Founded in 1998 and headquartered in New York City, eMeta Corporation provides access control, subscription management and ecommerce solutions for media, entertainment and software companies. . eMeta enables our Company to advance our strategic objectives by providing products that enable access, entitlement An individual's right to receive a value or benefit provided by law. Commonly recognized entitlements are benefits, such as those provided by Social Security or Workers' Compensation. and subscription rights management for our customers. The purchase price was $35 million in a cash transaction and we expect to close by February February: see month. 28, 2006." "Our quarterly results were good and we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about achieving our financial targets in 2006. Our revenues were higher than they have ever been and we were able to maintain high pro forma operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: even with all the realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. activities we conducted in the fourth quarter that could have caused business disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. ," added James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. Budge, Chief Financial Officer. "Our outlook for 2006 is that our revenue will range between $235 million and $245 million. Our expectation for fully diluted non-GAAP (pro forma) earnings per share ranges between $0.93 and $0.97 per share. In the first quarter of 2006, we expect revenue between $52 million and $54 million and we expect fully diluted non-GAAP (pro forma) earnings per share in the range of $0.17 to $0.19. All amounts are inclusive of inclusive of prep. Taking into consideration or account; including. the impact of the eMeta acquisition." Macrovision will hold an investor conference call on February 15, 2006, at 5:00 p.m. ET. Investors and analysts interested in participating in the conference are welcome to call 800-366-3908 (or international +1 303-262-2051) and reference the Macrovision call. The conference call can also be accessed via live Webcast at www.macrovision.com or www.fulldisclosure.com (or www.streetevents.com for subscribers) on February 15, 2006 at 5:00 p.m. ET. The on-demand On-Demand refers to a service or feature which addresses the user's need for instant gratification and immediacy of use. In most cases the value proposition for an on-demand service is wrapped up in the fact that the user or consumer of the service avoids a significant up-front audio Webcast of Macrovision's earnings conference call can be accessed approximately 1-2 hours after the live Webcast ends. Investors and analysts interested in listening to a recorded replay of the conference are welcome to call 800-405-2236 (or international +1 303-590-3000) and enter passcode 11051948#. Access to the replay is available through February 16, 2006. About Macrovision Macrovision provides distribution, commerce and consumption solutions for software and entertainment content to the home video, PC games, music, cable/satellite, consumer software, and enterprise software industries, Macrovision holds a total of 220 issued or pending United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. patents and 1,200 issued or pending international patents, and continues to increase its patent portfolio with new and innovative technologies in related fields. Macrovision is headquartered in Santa Clara, California Santa Clara, California (IPA: /ˌsæntəˈklærə/) , founded in 1777 and incorporated in 1852, is a city in Santa Clara County, in the U.S. state of California. , U.S.A. with other offices across the United States and around the world. More information about Macrovision can be found at www.macrovision.com. (C)Macrovision 2006. Macrovision, FLEXnet Flexnet is Macrovision's flagship software protection system, successor of the Safecast protection system. Combining the strength of Safecast and Flexlm, featuring product activation and executable wrapping, supporting floating and node locked licensing models. , InstallShield A popular install program for Windows from Macrovision Corporation, Santa Clara, CA (www.macrovision.com). InstallShield was one of the first commercial programs that was deployed and used to install hundreds of millions of applications worldwide. and TotalPlay are registered trademarks or trademarks of Macrovision Corporation. All other brands and product names and trademarks are the registered property of their respective companies. All statements contained herein, including the quotations attributed to Mr. Amoroso and Mr. Budge, as well as oral statements that may be made by the Company or by officers, directors or employees of the Company acting on the Company's behalf, that are not statements of historical fact, including statements that use the words "will," "believes," "anticipates," "estimates," "expects," "intends" or "looking to the future" or similar words that describe the Company's or its management's future plans, objectives, or goals, are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " and are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements include the Company's forecast of future revenues and earnings, the business strategies and product plans of the Company and the expected results of the headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. and expense reduction action of the Company. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to be materially different from the historical results and/or from any future results or outcomes expressed or implied by such forward-looking statements. Among the important factors that could cause results to differ materially are the following: the failure of markets for home video, audio CDs, consumer or enterprise software value management, or markets for the technological protection of copyrighted materials contained in such products, to continue, develop or expand, and the failure of the Company's products to achieve or sustain market acceptance or to meet, or continue to meet, the changing demands of content or software providers. Other factors include those outlined in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2004, the latest Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended September 30, 2005 and such other documents as are filed with the Securities and Exchange Commission from time to time (available at www.sec.gov). These factors may not constitute all factors that could cause actual results to differ materially from those discussed in any forward-looking statement. The Company operates in a continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. changing business environment and new factors emerge from time to time. The Company cannot predict such factors, nor can it assess the impact, if any, of such factors on the Company or its results. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. The Company assumes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or that may arise after the date of this release. Macrovision uses non-GAAP (pro forma) condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated statements of income in the presentation of financial results and earnings guidance. Management believes that this presentation may be more meaningful in analyzing the results of operations and income generation as this is how the business is managed. The tables below present the differences between non-GAAP (pro forma) earnings and GAAP net income on an absolute and per share basis.
MACROVISION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
QUARTERLY PERIOD
Three Months
Ended December 31,
-----------------------------------------------------
2005 2005 2005 2004 2004 2004
Pro Pro
Forma Forma
US GAAP Adjust- Pro US GAAP Adjust- Pro
ments Forma ments Forma
---------------------------- ------------------------
Net Revenues: 60,969 60,969 59,588 59,588
Cost and
expenses:
Cost of
revenues 6,727 6,727 5,218 5,218
TTR
amortization 284 (284) -- 229 (229) --
Amortization
of intangibles 3,137 (3,137) -- 2,411 (2,411) --
------- -------- -------- -------- ------- --------
Total cost of
revenues 10,148 (3,421) 6,727 7,858 (2,640) 5,218
Research and
development 9,131 9,131 8,948 -- 8,948
Selling and
marketing 16,234 16,234 13,673 -- 13,673
General and
administrative 8,175 8,175 8,233 -- 8,233
Deferred
compensation
expense 221 (221) -- -- -- --
IPR&D -- -- -- -- --
Impairment
charges, net
of gains -- -- -- --
Restructuring
charge 2,531 (2,531) -- -- -- --
------- -------- -------- -------- ------- --------
Total costs
and
expenses 46,440 (6,173) 40,267 38,712 (2,640) 36,072
Operating income 14,529 6,173 20,702 20,876 2,640 23,516
Interest and
other income,
net 1,699 -- 1,699 1,705 -- 1,705
------- -------- -------- -------- ------- --------
Income before
income taxes 16,228 6,173 22,401 22,581 2,640 25,221
Provision for
income taxes 11,738 (7,807) 3,931 6,786 2,293 9,079
------- -------- -------- -------- ------- --------
Net income $4,490 $13,980 $18,470 $15,795 $347 $16,142
======= ======== ======== ======== ======= ========
Shares for EPS:
Basic 51,182 51,182 51,182 49,881 49,881 49,881
Diluted 51,526 51,526 51,526 51,282 51,282 51,282
Basic EPS $0.09 $0.27 $0.36 $0.32 $0.00 $0.32
Diluted EPS $0.09 $0.27 $0.36 $0.31 $0.00 $0.31
MACROVISION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEAR TO DATE PERIOD
Twelve Months
Ended December 31,
-----------------------------------------------------
2005 2005 2005 2004 2004 2004
Pro Pro
Forma Forma
US GAAP Adjust- Pro US GAAP Adjust- Pro
ments Forma ments Forma
-------- -------- -------- -------- -------- --------
Net Revenues: 203,230 203,230 182,099 182,099
Cost and
expenses:
Cost of
revenues 22,562 22,562 15,386 15,386
TTR
amortization 972 (972) -- 904 (904) --
Amortization
of
intangibles 10,986 (10,986) -- 6,370 (6,370) --
-------- -------- -------- -------- -------- --------
Total cost of
revenues 34,520 (11,958) 22,562 22,660 (7,274) 15,386
Research and
development 34,336 34,336 28,652 28,652
Selling and
marketing 55,932 55,932 42,226 42,226
General and
administrative 32,866 32,866 25,501 25,501
Deferred
compensation
expense 221 (221) -- 185 (185) --
IPR&D 500 (500) -- 5,400 (5,400) --
Impairment
charges, net
of gains 5,648 (5,648) -- 4,258 (4,258) --
Restructuring
charge 2,531 (2,531) -- -- -- --
-------- -------- -------- -------- -------- --------
Total costs
and
expenses 166,554 (20,858) 145,696 128,882 (17,117) 111,765
Operating
income 36,676 20,858 57,534 53,217 17,117 70,334
Interest and
other income,
net 4,927 -- 4,927 4,173 -- 4,173
-------- -------- -------- -------- -------- --------
Income before
income taxes 41,603 20,858 62,461 57,390 17,117 74,507
Provision for
income taxes 19,488 (1,699) 17,789 20,660 6,163 26,823
-------- -------- -------- -------- -------- --------
Net income $22,115 $22,557 $44,672 $36,730 $10,954 $47,684
======== ======== ======== ======== ======== ========
Shares for EPS:
Basic 50,708 50,708 50,708 49,516 49,516 49,516
Diluted 51,373 51,373 51,373 50,619 50,619 50,619
Basic EPS $0.44 $0.44 $0.88 $0.74 $0.22 $0.96
Diluted EPS $0.43 $0.44 $0.87 $0.73 $0.21 $0.94
MACROVISION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31 December 31,
2005 2004
------------ -------------
ASSETS
Cash and cash equivalents 135,625 104,957
Restricted cash -- 859
Short-term investments 111,039 101,299
Accounts receivable, net 45,254 41,468
Prepaid expenses and other assets 7,508 12,643
------------ -------------
Total Current Assets 299,426 261,226
Property and equipment, net 13,398 9,295
Long-term marketable investment securities 15,040 47,414
Goodwill 107,329 74,529
Other intangibles from acquisitions, net 32,755 31,185
Deferred tax assets 18,895 17,151
Patents and other assets 11,082 11,673
------------ -------------
TOTAL ASSETS 497,925 452,473
------------ -------------
LIABILITIES
Accounts payable 5,380 5,907
Accrued expenses 20,152 20,768
Income taxes payable 20,022 11,871
Deferred revenue 23,262 14,604
------------ -------------
Total Current Liabilities 68,816 53,150
Other liabilities 959 979
------------ -------------
TOTAL LIABILITIES 69,775 54,129
------------ -------------
STOCKHOLDERS' EQUITY 428,150 398,344
------------ -------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 497,925 452,473
------------ -------------
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