TIVO

TiVo Inc. (TIVO)

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TiVo Inc. (TIVO)

F4Q10 (01/31/10) Earnings Call

March 8, 2010 5:00 pm ET

Executives

Derrick Nueman – IR

Tom Rogers – CEO and President

Anna Brunelle – VP and CFO

Naveen Chopra – SVP, Corporate Development & Strategy

Matt Zinn – SVP, General Counsel & Chief Privacy Officer

Analysts

Tony Wible – Janney Montgomery Scott

Bridget Weishaar – JP Morgan

Barton Crockett – Lazard Capital

David Miller – Caris & Company

Alan Gould – Soleil Securities

Todd Mitchell – Kaufman Brothers

Mark Argento – Craig-Hallum Capital

Tuna Amobi – Standard & Poor's

Presentation

Operator

Welcome to the TiVo fourth quarter fiscal 2010 conference call. I would like to turn the call over to Derrick Nueman, Head of Investor Relations.

Derrick Nueman

Thank you and good afternoon. I'm Derrick Nueman, TiVo's Head of Investor Relations. With me today are Tom Rogers, CEO; Anna Brunelle, CFO; Naveen Chopra, SVP of Business Development and Corporate Strategy; and Matt Zinn, General Counsel.

We are here today to discuss TiVo's financial results for its fourth quarter ending January 31st, 2010. We have just distributed a press release and 8-K detailing our financial results. We have also released a financial and key metric summary, which is posted on our Investor Relations website.

Additionally, we will be posting a recording of this call later today on the Investor Relations section of our website. Our remarks today should take about 30 minutes and will be followed by a question-and-answer session.

Our discussion today includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements relate to, among other things, TiVo's future subscription, advertising, research businesses, profitability, operations and financial performance and guidance, including future marketing, R&D and other operating expenditures, distribution of TiVo's service domestically with DIRECTV, RCN, Comcast and Cox, and internationally with Virgin Media UK, Seven HTS in Australia and New Zealand, TiVo's current and future services and product releases, partner initiatives, and TiVo's ongoing litigation with EchoStar and AT&T and Verizon.

You can identify these statements by the use of terminology such as guidance, believe, expect, will or similar forward-looking terms. We caution you not to place undue reliance on these forward-looking statements, as they involve risks and uncertainties that may cause actual results to vary materially from these forward-looking statements.

Factors that may cause actual results to differ materially include delays in development, competitive service offerings, and lack of market acceptance, as well as other factors described in the risk factors in our public reports filed with the SEC including our latest 10-K and 10-Qs. Any forward-looking statements made on this call reflect analysis as of today and we have no plan or duty to update them. Additionally, some of the metrics today are non-GAAP measures. Please see our fourth quarter year 2010 key metric sheet for a reconciliation of these items.

With that, I will now turn over the call to Tom Rogers. Tom?

Tom Rogers

Thanks, Derrick. Good afternoon, everyone. This past year was a significant one for TiVo. We made a tremendous amount of progress toward our goal of building on our leadership position in advanced television. We put a significant amount of efforts behind creating a whole new HD user experience that takes our vision of integrating traditional and broadband TV content to unparalleled levels.

We put in place key distribution relationships in the U.S. and internationally that leveraged those efforts and because advanced television solutions are increasing in importance for these providers in a new world of television consumption and because we offer so much more than the DVR, the deals we established in fiscal 2010 incorporate more predicable deployment commitments underscoring the importance of TiVo to our distribution partners.

On the retail front, we established a broad-based strategic relationship with the largest consumer electronics retailer in the world, a relationship that goes way beyond the availability of TiVo products at retail. And as we begin this new era for TiVo, going way beyond the DVR, by no means – by no means have we forgotten our legacy in the DVR business and the importance of our intellectual property and the important job we have in protecting it.

And as you all know, in a major victory for TiVo on that front, just a few days ago the United States Court of Appeals for the Federal Circuit in Washington fully affirmed the U.S. District Court for the Eastern District of Texas' finding of contempt of its permanent injunction against EchoStar, including both the disablement and infringement provisions, regarding EchoStar's ongoing infringement of our Time Warp patent.

This ruling paves the way for TiVo to collect the previously awarded approximately $300 million in damages and contempt sanctions for EchoStar's continued infringement through July 1st, 2009, bringing the total awards related to this case to date to about $400 million. We will seek additional compensation for continued infringement for the period after July 1st of 2009 and we will continue our efforts to protect our intellectual property from further infringement.

This year was also about continuing to be financially prudent as our advanced television and distribution strategies continue to play out. We recorded our second consecutive full year of adjusted EBITDA profitability and increased our cash position by $37 million over the course of the year, bringing us to approximately $240 million in cash with no debt.

We move forward on all of these actions with the understanding that the future of television isn’t simply about a set-top box or a guide or a user interface or millions of content choices, but is also about putting all of that together into an easy and intuitive user experience and creating the elements necessary for the media industry to build a business model around it. Thus making certain that the advertising and research components of our business continue to develop, which is a critical – which is critical to making sure that B2B side of television can keep pace with all of our consumer advances.

Read the rest of this transcript for free on seekingalpha.com