Macrovision Corporation Reports Results for the Second Quarter of 2005; Company Achieves Record Second Quarter Revenues.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 second quarter 2005 net revenues of $44.4 million, an increase of 25% compared to $35.7 million in the second quarter of 2004. Pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. (before amortization of intangibles from acquisitions and adjustments for changes to our tax rate, as applicable) were $8.0 million, compared to $9.5 million in the second quarter of 2004. 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 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 $0.16, compared to $0.19 in the same quarter of 2004. The Company generated $16.8 million of cash from operations and its ending cash and cash equivalents, short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments and long term marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has were $268.3 million. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income for the second quarter of 2005 was $6.1 million, compared to $8.8 million for the second 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 $0.12, compared with $0.18 for the year ago quarter. "Our second quarter activities have been directed at building for the future," 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. at Macrovision. "With our acquisition of Zero G, we strengthened our multi-server, multi-operating system offering for complex software installation environments. Further, with our acquisition of Trymedia last week we expanded our PC games CD-ROM CD-ROM: see compact disc. CD-ROM in full compact disc read-only memory Type of computer storage medium that is read optically (e.g., by a laser). copy protection business into a more comprehensive full service online distribution business." Amoroso continued, "During the quarter we made progress in gaining traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. with our three new entertainment technologies' products -- Hawkeye for peer-to-peer anti-piracy; CDS-300 for music copy protection; and RipGuard for preventing PC ripping (1) Converting an audio CD from its native CD-DA format to MP3, AAC or some other compressed audio format. When the term was coined, it had a perverse meaning. Many loved the idea they were "ripping off" the music industry by making copyrighted works available in a compact format . We signed several new contracts and deployed the technologies in many of the major worldwide manufacturing facilities. However, the 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. industry appears to have hit a few road bumps bumps a term used to describe a variety of papulonodular dermatoses in horses, including 'heat bumps', 'feed bumps', 'protein bumps', 'wheat bumps' and others. No specific disease or etiology has been assigned to the term and veterinary dermatologists wish it would disappear from use. and our customers are forecasting lower DVD growth in future quarters. This will naturally impact our copy protection business. Looking ahead, we are lowering our FY2005 guidance for revenues to be between $205 and $215 million, and for our pro forma EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. to be between $0.89 and $0.92. For Q3 2005, we are estimating that our business will be essentially flat compared to Q2 in the range of $46-$48 million and our pro forma EPS will be in the range of $0.15 to $0.17. However, for Q4, we are expecting our traditional seasonally strong performance." Macrovision will hold an investor conference call on August 1, 2005, at 5:00 p.m. ET. Investors and analysts interested in participating in the conference are welcome to call 800-219-6110 (or international +1 303-262-2050) 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 August 1, 2005 at 5:00 p.m. ET. Approximately 1-2 hours after the live Webcast ends, the on-demand Webcast of Macrovision's earnings conference call can be accessed until September Until September is a 1984 romantic drama set in France. It stars Karen Allen as an American tourist in Paris who falls in love with a married Frenchman (Thierry Lhermitte). External links 1, 2005. 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 11035134#. Access to the replay is available through August 2, 2005. About Macrovision Macrovision develops and markets content value management and software value management technologies for the home video, PC games, music, cable/satellite, consumer software, and enterprise software industries,. Macrovision holds a total of 204 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 1,172 issued or pending international patents, and continues to increase its patent portfolio with new and innovative technologies in related fields. Macrovision has its corporate headquarters 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. , with other offices in Schaumburg, Illinois Schaumburg is a village in Cook County and DuPage County, Illinois. As of the 2000 census, the village had a total population of 75,386. As of 2005, the population slightly dropped to 72,690 according to the Census Bureau. , San Francisco, California “San Francisco” redirects here. For other uses, see San Francisco (disambiguation). The City and County of San Francisco (EN IPA: [sænfrənˈsɪskoʊ] , the United Kingdom, Amsterdam, Frankfurt, Tel Aviv Tel Aviv (tĕl əvēv`), city (1994 pop. 355,200), W central Israel, on the Mediterranean Sea. Oficially named Tel Aviv–Jaffa, it is Israel's commercial, financial, communications, and cultural center and the core of its largest , Tokyo, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , Taipei, Seoul and Alicante, Spain. Note to Editors: For more information on Macrovision Corporation and its products, please visit www.macrovision.com. (C) 2005 Macrovision Corporation. Macrovision, FLEXnet, Hawkeye, InstallShield and RipGuard DVD 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, 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 features and benefits of the products 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 2004 and such other documents as are filed with the Securities and Exchange Commission from time to time. 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 is not obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. 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 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 non-cash, non-operating or non-recurring items (such as amortization of intangibles from acquisitions, amortization of deferred stock-based compensation, 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. gains and losses on investments, and adjustments for changes to the tax rate) are excluded from the pro forma earnings calculation. The Company believes this presentation is more indicative of its ongoing operational performance. The tables below present the differences between pro forma earnings and GAAP net income on an absolute and per share basis.
Macrovision Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
----------------- -----------------
2005 2004 2005 2004
------- ------- ------- -------
Net Revenues $44,414 $35,670 $95,671 $73,652
Costs and expenses:
Costs of revenues, including
amortization of intangibles of
$2,466 and $777 for the three
months ended June 30, 2005 and
2004, respectively, and $4,882
and $1,556 for the six months
ended June 30, 2005 and 2004,
respectively 7,465 3,240 15,259 6,324
Research and development 7,925 5,708 16,622 11,295
Selling and marketing 13,027 8,770 25,948 17,326
General and administrative 7,461 5,120 15,888 10,633
Deferred compensation expense
relating to Globetrotter -- -- -- 185
Impairment losses (gains) on
investments -- -- 5,726 (1,040)
------- ------- ------- -------
Total costs and expenses 35,878 22,838 79,443 44,723
------- ------- ------- -------
Income before interest and income
taxes 8,536 12,832 16,228 28,929
Interest and other income, net 974 985 1,911 1,713
------- ------- ------- -------
Income before income taxes 9,510 13,817 18,139 30,642
Income taxes 3,440 4,974 6,603 11,031
------- ------- ------- -------
Net income $ 6,070 $ 8,843 11,536 19,611
======= ======= ======= =======
Diluted earnings per share $ 0.12 $ 0.18 $ 0.22 $ 0.39
======= ======= ======= =======
Shares used in computing diluted
earnings per share 51,263 50,411 51,298 50,311
======= ======= ======= =======
Macrovision Corporation and Subsidiaries
Pro forma Reconciliation of Condensed Consolidated
Statements of Income (Unaudited) (1)
(In thousands, except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
----------------- -----------------
2005 2004 2005 2004
------- ------- ------- -------
Net income $ 6,070 $ 8,843 $11,536 $19,611
Add:
Amortization of intangibles from
acquisitions (net of taxes) 1,767 643 3,504 1,290
Deferred compensation expense
relating to Globetrotter -- -- -- 185
Adjustment to pro-forma tax rate 159 -- 345 --
Impairment losses (gains) on
investments (net of taxes) -- -- 3,751 (670)
------- ------- ------- -------
Pro forma net income $ 7,996 $ 9,486 $19,136 $20,416
======= ======= ======= =======
Diluted earnings per share
reconciliation:
Net income $ 0.12 $ 0.18 $ 0.22 $ 0.39
Add:
Amortization of intangibles from
acquisitions (net of taxes) 0.04 0.01 0.07 0.03
Deferred compensation expense
relating to Globetrotter -- -- -- --
Adjustment to pro-forma tax rate -- -- 0.01 --
Impairment losses (gains) on
investments (net of taxes) -- -- 0.07 (0.01)
------- ------- ------- -------
Pro forma diluted earnings per
share $ 0.16 $ 0.19 $ 0.37 $ 0.41
======= ======= ======= =======
Shares used in computing diluted
earnings per share 51,263 50,411 51,298 50,311
======= ======= ======= =======
Notes:
(1) Pro forma results for the three and six months ended June 30, 2005
and 2004 are presented for information purposes only. These results
present the operating results of Macrovision Corporation, excluding
costs associated with amortization of intangibles from acquisitions,
amortization of capitalized patents from our acquisition of TTR's
assets in the second quarter of 2003, deferred compensation expense,
adjustments to the pro forma tax rate, and impairment losses (gains)
on investments. These costs were $1,926 for the three month period
ended June 30, 2005, and $7,600 for the six month period ending June
30, 2005, net of taxes when applicable, using the Company's pro forma
effective rate. The amortization expense for capitalized TTR patents
included in cost of revenues was $231 and $467 for the three and six
months ended June 30, 2005, respectively. The format presented above
is not in accordance with Generally Accepted Accounting Principles.
Macrovision Corporation and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
June 30, December 31,
2005 2004
----------- ------------
ASSETS
Cash and cash equivalents $ 132,427 $ 104,957
Restricted cash -- 859
Short-term investments 114,487 101,299
Accounts receivable, net 34,848 41,468
Prepaid expenses and other assets 14,370 12,643
---------- -----------
Total Current Assets 296,132 261,226
Property and equipment, net 11,507 9,295
Long-term marketable investment securities 21,377 47,414
Goodwill 81,519 74,529
Other intangibles from acquisitions, net 29,629 31,185
Deferred tax assets 18,682 17,151
Patents and other assets 11,190 11,673
---------- -----------
TOTAL ASSETS $ 470,036 $ 452,473
========== ===========
LIABILITIES
Accounts payable $ 3,702 $ 5,907
Accrued expenses and income taxes payable 33,454 32,639
Deferred revenue 19,516 14,604
---------- -----------
Total Current Liabilities 56,672 53,150
Other liabilities 1,354 979
---------- -----------
TOTAL LIABILITIES 58,026 54,129
STOCKHOLDERS' EQUITY 412,010 398,344
---------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 470,036 $ 452,473
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