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8-K - SONIC SOLUTIONS/CA/ | v210142_8k.htm |
news
release
FOR
IMMEDIATE RELEASE:
February
8, 2011
NASDAQ: SNIC
Sonic
Reports Third Quarter 2011 Financial Results
Novato, California (February 8,
2011) – Sonic Solutions®
(NASDAQ: SNIC) today reported financial results for its third quarter
of fiscal year 2011 ended December 31, 2010.
Third
Quarter Fiscal 2011 GAAP Results
For the
third quarter of its 2011 fiscal year, Sonic had net revenue of $26.4 million,
gross profit of $14.9 million representing a gross margin of 56%, and operating
expense of $36.9 million. Due primarily to the release of a valuation
allowance, Sonic’s tax benefit for the quarter was $25.8 million, resulting in
net income of $4.2 million, or $0.09 per diluted share based on 48.5 million
shares outstanding.
Third
Quarter Fiscal 2011 Non-GAAP Results
Sonic’s
non-GAAP net revenue for the December quarter was $46.3 million, calculated by
excluding the impact of $0.7 million in warrant-related contra revenue and by
taking into account $19.1 million in multi-year DivX site license payments,
minimum royalty payments, and unbilled per-unit royalties for units shipped
prior to Sonic’s acquisition of DivX (“black hole revenue”). Non-GAAP
gross profit, which excludes $955 thousand in amortization of acquired
intangibles, was $35.7 million. Based on an assumed effective tax
rate of 40%, Sonic’s non-GAAP net income for the quarter was $1.6 million, or
$0.03 per diluted share based on 48.5 million shares outstanding.
In
addition to Sonic’s results, DivX had revenue of $1.4 million during the period
between October 1, 2010 and the close of its acquisition by Sonic on October 7,
2010. Excluding the impact of this DivX revenue, Sonic’s Adjusted
EBITDA for the quarter totaled $2.9 million.
Given the
acquisition of DivX during the third quarter of fiscal 2011 and the lack of
consolidated or comparable results for prior periods, Sonic does not believe it
would be meaningful or appropriate to present corresponding non-GAAP results for
the nine months ended December 31, 2010 or for the corresponding three and nine
month periods in fiscal 2010.
Sonic
Solutions • 7250 Redwood Blvd., Suite 300 • Novato, CA 94945 • tel:
415.893.8000 • fax: 415.893.8008 • email: info@sonic.com
Sonic
Solutions Reports Third Quarter Fiscal 2011 Financial Results
Sonic
Solutions
GAAP
Condensed Consolidated Statements of Operations
(in
thousands, except per share data)
(unaudited)
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
December
31,
|
December
31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
revenue
|
$ | 26,427 | $ | 26,392 | $ | 77,175 | $ | 77,975 | ||||||||
Cost
of revenue
|
11,517 | 8,044 | 28,119 | 24,005 | ||||||||||||
Gross
profit
|
14,910 | 18,348 | 49,056 | 53,970 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Marketing
and sales
|
12,668 | 8,489 | 27,673 | 22,245 | ||||||||||||
Research
and development
|
13,928 | 5,784 | 26,195 | 19,024 | ||||||||||||
General
and administrative
|
7,925 | 4,673 | 17,144 | 13,689 | ||||||||||||
Restructuring
charges
|
- | (58 | ) | - | 508 | |||||||||||
Acquisition
expenses
|
2,400 | - | 4,966 | - | ||||||||||||
Total
operating expenses
|
36,921 | 18,888 | 75,978 | 55,466 | ||||||||||||
Operating
loss
|
(22,011 | ) | (540 | ) | (26,922 | ) | (1,496 | ) | ||||||||
Other
income (expense), net
|
496 | 84 | 882 | (266 | ) | |||||||||||
Loss
before income taxes
|
(21,515 | ) | (456 | ) | (26,040 | ) | (1,762 | ) | ||||||||
Provision
for (benefit from ) income taxes
|
(25,751 | ) | (112 | ) | (26,600 | ) | 619 | |||||||||
Net
income (loss)
|
$ | 4,236 | $ | (344 | ) | $ | 560 | $ | (2,381 | ) | ||||||
Net
income (loss) per share:
|
||||||||||||||||
Basic
|
$ | 0.09 | $ | (0.01 | ) | $ | 0.02 | $ | (0.09 | ) | ||||||
Diluted
|
$ | 0.09 | $ | (0.01 | ) | $ | 0.02 | $ | (0.09 | ) | ||||||
Shares
used in computing net income (loss) loss per share:
|
||||||||||||||||
Basic
|
47,792 | 27,317 | 36,439 | 26,871 | ||||||||||||
Diluted
|
48,493 | 27,317 | 37,252 | 26,871 |
Sonic
Solutions Reports Third Quarter Fiscal 2011 Financial Results
Sonic
Solutions
GAAP
Condensed Consolidated Balance Sheets
(in
thousands, except per share data)
(unaudited)
December
31,
|
March
31,
|
|||||||
2010
|
2010
(1)
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 43,374 | $ | 54,536 | ||||
Short
term investments
|
3,284 | - | ||||||
Accounts
receivable, net of allowances of $4,301 and $2,511 at December 31, 2010
and March 31, 2010, respectively
|
45,740 | 11,270 | ||||||
Inventory
|
2,403 | 1,941 | ||||||
Prepaid
expenses and other current assets
|
14,211 | 3,497 | ||||||
Total
current assets
|
109,012 | 71,244 | ||||||
Fixed
assets, net
|
2,407 | 1,670 | ||||||
Purchased
and internally developed software costs, net
|
433 | 165 | ||||||
Goodwill
|
107,756 | 4,628 | ||||||
Acquired
intangibles, net
|
104,880 | 16,174 | ||||||
Deferred
tax benefit, net of current portion
|
- | 66 | ||||||
Other
assets
|
15,175 | 1,463 | ||||||
Total
assets
|
$ | 339,663 | $ | 95,410 | ||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 6,063 | $ | 3,892 | ||||
Accrued
expenses and other current liabilities
|
28,329 | 21,916 | ||||||
Deferred
revenue, current portion
|
7,303 | 5,874 | ||||||
Capital
leases
|
64 | 123 | ||||||
Total
current liabilities
|
41,759 | 31,805 | ||||||
Other
long term liabilities, net of current portion
|
13,089 | 889 | ||||||
Deferred
revenue, net of current portion
|
359 | 76 | ||||||
Capital
leases, net of current portion
|
5 | 37 | ||||||
Total
liabilities
|
55,212 | 32,807 | ||||||
Commitments
and contingencies
|
||||||||
Shareholders'
equity:
|
||||||||
Common
stock, no par value, 100,000,000 shares authorized; 49,611,381 and
30,610,102 shares issued and outstanding at December 31, 2010 and March
31, 2010, respectively
|
421,691 | 200,375 | ||||||
Accumulated
deficit
|
(135,729 | ) | (136,289 | ) | ||||
Accumulated
other comprehensive loss
|
(1,511 | ) | (1,483 | ) | ||||
Total
shareholders' equity
|
284,451 | 62,603 | ||||||
Total
liabilities and shareholders' equity
|
$ | 339,663 | $ | 95,410 |
(1) Derived
from audited consolidated financial statements as of March 31,
2010.
Sonic
Solutions Reports Third Quarter Fiscal 2011 Financial Results
Non-GAAP
Measures
To
supplement our condensed consolidated financial statements, which are prepared
and presented in accordance with generally accepted accounting principles
(“GAAP”), we report the following non-GAAP financial measures in presenting
results: non-GAAP net revenue, non-GAAP cost of revenue, non-GAAP
gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP
operating margin, non-GAAP net income and non-GAAP net income per
share. We also provide information regarding our earnings before
interest, taxes, depreciation and amortization, excluding restructuring expense,
acquisition related expense, share-based compensation, certain tax-related
adjustments, “black hole revenue” and contra revenue (“Adjusted
EBITDA”). Our non-GAAP financial measures are not meant to be
considered in isolation nor as a substitute for comparable GAAP measures, but
should be considered in addition to and in conjunction with results presented in
accordance with GAAP. The non-GAAP financial measures are intended to
provide additional insight into our operations as a stand-alone company that,
when viewed with our GAAP results and the accompanying reconciliations to the
most directly comparable GAAP financial measures, offer a more complete
understanding of factors and trends affecting our business. Our
non-GAAP presentations should be read in conjunction with our consolidated
financial statements prepared in accordance with GAAP.
We
believe these non-GAAP financial measures are useful to investors because
(1) they allow for greater transparency with respect to key metrics we use
in our financial and operational decision-making and (2) they are used by
some of our investors and the analyst community to help them analyze our
operating results. We use these non-GAAP measures internally to plan
and forecast future periods, to establish operational goals, to compare with our
business plan and individual operating budgets and to allocate
resources. Material limitations associated with the use of the
non-GAAP financial measures versus the comparable GAAP measures are (a) the
non-GAAP measures provide a view of our results that does not take into account
certain GAAP expenses that would otherwise reduce our profits or increase our
losses for the period in question, and (b) it may be difficult or
impossible to meaningfully compare our non-GAAP results with those of other
companies that do not present non-GAAP results utilizing similar
assumptions. We compensate for these limitations by providing full
disclosure of the effects of our non-GAAP measures. Additionally, we
present reconciliations between non-GAAP measures and their most directly
comparable GAAP measures for non-GAAP historical information so that investors
can use the information to perform their own analysis.
|
·
|
Contra
Revenue. We have excluded the effect of contra revenue
associated with our issuance and subsequent vesting of a warrant from our
calculation of the following: non-GAAP net revenue, non-GAAP
gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP
operating margin, non-GAAP net income, non-GAAP net income per share and
Adjusted EBITDA. Because of varying available valuation
methodologies, subjective assumptions and the fact that the financial
impacts of this warrant issuance do not result in ongoing cash
expenditures or otherwise have a material impact on our ongoing business
operations, we believe that providing non-GAAP financial measures that
exclude contra revenue allows investors and analysts to make meaningful
comparisons between our ongoing core business operating results and those
of other companies. Contra revenue adjustments associated with
the grant of this warrant, vesting of the warrant, and changes in the
assumptions used to value the warrant will recur during the 2-year vesting
period of the warrant.
|
|
·
|
“Black Hole
Revenue.” We have excluded the effect of so-called “black hole
revenue” from our calculation of the following: non-GAAP net
revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating
income, non-GAAP operating margin, non-GAAP net income, non-GAAP net
income per share and Adjusted EBITDA. Under acquisition
accounting rules, Sonic will not recognize certain revenue (which we refer
to as “black hole revenue”) that DivX would have recognized as a
stand-alone company in the ordinary course of its business, including
royalties and other amounts paid pursuant to certain multi-year site
licenses and guaranteed minimum-royalty licenses, royalties and other
amounts received by Sonic post-acquisition, based upon shipments and other
activities conducted by customers prior to the DivX acquisition, and
certain DivX deferred revenues which were reduced to a discounted fair
value by Sonic in its purchase accounting. Because the “black
hole revenue” will generally result in cash payments to Sonic to the same
extent as payments would have been made to DivX as a stand-alone company,
and because the “black hole revenue” represents amounts generated by
ongoing DivX business operations in the ordinary course, we believe that
providing non-GAAP financial measures that exclude the effect of “black
hole revenue” allows investors and analysts to make meaningful comparisons
between our ongoing core business operating results and those of other
companies. This reduction in revenues will recur in future
periods for GAAP purposes.
|
Sonic
Solutions Reports Third Quarter Fiscal 2011 Financial Results
|
·
|
Acquisition-Related Intangible
Amortization. Under
acquisition accounting rules, some portion of an acquisition purchase
price is generally allocated to intangibles, such as core and developed
technology and customer contracts, which are then amortized over various
periods of time. Our GAAP presentations include amortization on
certain acquired intangibles from prior consummated transactions,
including the DivX acquisition. We have excluded the effect of
amortization of acquired intangibles from our calculation of the
following: non-GAAP cost of revenue, non-GAAP gross profit,
non-GAAP gross margin, non-GAAP operating income, non-GAAP operating
margin, non-GAAP net income, non-GAAP net income per share and Adjusted
EBITDA. Amortization of acquired intangible assets expense is
inconsistent in amount and frequency and is significantly affected by the
timing and size of our various acquisitions. Further, the
amortization expense related to acquired intangibles does not result in
ongoing cash expenditures, and, in our view, does not otherwise have a
material impact on our ongoing business operations. Investors
should note that the use of acquired intangible assets contributed to
revenues earned during the periods presented and will continue to
contribute to future period revenues. This amortization expense
will recur in future periods for GAAP
purposes.
|
|
·
|
Acquisition-Related
Expense. We have excluded the effect of
acquisition-related expense from our calculation of the
following: non-GAAP operating expense, non-GAAP operating
income, non-GAAP operating margin, non-GAAP net income, non-GAAP net
income per share and Adjusted EBITDA. These expenses are
primarily attributable to acquisition expenses associated with the DivX
acquisition and the pending transaction with Rovi Corporation, and consist
of professional service fees and transition and integration
costs. We do not consider these acquisition-related costs to be
related to our ongoing operations of the acquired businesses and are
generally not relevant to assessing or estimating the long-term
performance of the acquired assets. By excluding
acquisition-related expenses from our non-GAAP measures, management is
better able to evaluate the Company's ability to utilize its existing
assets and estimate the long-term value that acquired assets will generate
for the Company. We believe that providing a supplemental
non-GAAP measure which excludes these items allows management and
investors to consider the ongoing operations of the business both with,
and without, such expenses.
|
|
·
|
Share-Based Compensation
Expense. We have excluded the effect of share-based
compensation expense from our calculation of the
following: non-GAAP operating expense, non-GAAP operating
income, non-GAAP operating margin, non-GAAP net income, non-GAAP net
income per share and Adjusted EBITDA. Because of varying
available valuation methodologies, subjective assumptions and the variety
of award types that companies may use, as well as the impact of
non-operational factors such as our share price and events such as tender
offers on the magnitude of this expense, we believe that providing
non-GAAP financial measures that exclude share-based compensation expense
allows investors and analysts to make meaningful comparisons between our
ongoing core business operating results and those of other
companies. Share-based compensation expense will recur in
future periods for GAAP purposes.
|
|
·
|
Payroll Tax Withholding
Liability. We have excluded the effect of the release of
a portion of a payroll tax liability we established during our 2009 fiscal
year in connection with our stock option review from our calculation of
the following: non-GAAP operating expenses, non-GAAP operating
income, non-GAAP operating margin, non-GAAP net income, non-GAAP net
income per share and Adjusted EBITDA. Because this release did
not result in cash receipts or otherwise have a material impact on our
ongoing business operations, we believe that providing non-GAAP financial
measures that exclude the impact of this release allows investors and
analysts to make meaningful comparisons between our ongoing core business
operating results and those of other
companies.
|
|
·
|
Tax Valuation
Allowance. We have excluded the effect of the release of
a portion of a tax valuation allowance we established during our 2009
fiscal year from our calculation of the following: non-GAAP net
income and non-GAAP net income per share. The release of the
valuation allowance did not result in the receipt of cash, and, in our
view, does not otherwise have a material impact on our ongoing business
operations. Accordingly, we believe that providing non-GAAP
financial measures that exclude this valuation expense allows investors
and analysts to make meaningful comparisons of our ongoing core business
operating results.
|
Sonic
Solutions Reports Third Quarter Fiscal 2011 Financial Results
|
·
|
Adjusted
EBITDA. We provide information regarding our Adjusted
EBITDA. We believe this performance measure is useful to
investors because (a) it corresponds closely to the cash operating
income generated from our core operations by excluding significant
non-cash operating expenses that do not arise out of our core ongoing
operating activities, and (b) it provides greater insight into
management decision-making, as Adjusted EBITDA is one of our primary
internal metrics for evaluating the performance of our
business.
|
Reconciliation
of GAAP to Non-GAAP Measures
As noted
above and as reflected in the following reconciliation tables, we have provided
reconciliations between the historical non-GAAP measures that we have disclosed
and the most directly comparable GAAP measures.
|
·
|
Non-GAAP Net Revenue, Cost of Revenue,
Gross Profit & Gross Margin. The following
table provides reconciliations relating to net revenue, cost of revenue,
gross profit and gross margin (in thousands, except for margin
percentages, unaudited):
|
Three
Months Ended
|
||||
December
31, 2010
|
||||
GAAP
net revenue
|
$ | 26,427 | ||
Contra
revenue associated with warrants
|
730 | |||
Black
hole revenue adjustment for DivX
|
19,142 | |||
Non-GAAP
net revenue
|
$ | 46,299 | ||
GAAP
cost of revenue
|
$ | 11,517 | ||
Amortization
of purchased technology
|
(955 | ) | ||
Non-GAAP
cost of revenue
|
$ | 10,562 | ||
GAAP
gross profit
|
$ | 14,910 | ||
GAAP
gross margin (1)
|
56 | % | ||
Non-GAAP
gross profit
|
$ | 35,737 | ||
Non-GAAP
gross margin (2)
|
77 | % |
(1) The
GAAP gross margin percentage is calculated by dividing GAAP gross profit by GAAP
net revenue.
(2)
The Non-GAAP gross margin percentage is calculated by dividing Non-GAAP gross
profit by Non-GAAP net revenue.
Sonic
Solutions Reports Third Quarter Fiscal 2011 Financial Results
|
·
|
Operating Expenses. The following
table provides reconciliations relating to operating expenses (in
thousands, unaudited):
|
Three
Months Ended
|
||||
December
31, 2010
|
||||
GAAP
total operating expenses
|
$ | 36,921 | ||
Share-based
compensation expense (1)
|
(4,171 | ) | ||
Acquisition
expense (2)
|
(2,400 | ) | ||
Release
of payroll witholding liability (3)
|
3,136 | |||
Non-GAAP
total operating expenses
|
$ | 33,486 |
(1) Share-based
compensation expense is included in operating expenses on a GAAP
basis.
(2) Acquisition
expense is included as a separate line item in operating expenses on a GAAP
basis.
(3) The
release of the payroll witholding liability from the historical stock option
review is included in operating expenses on a GAAP basis.
Sonic
Solutions Reports Third Quarter Fiscal 2011 Financial
Results
|
·
|
Non-GAAP Operating Income, Operating
Margin, Net Income & Adjusted EBITDA. The following
table provides reconciliations relating to operating income, operating
margin, net income and Adjusted EBITDA (in thousands, except for margin
percentages, unaudited):
|
Three
Months Ended
|
||||
December
31, 2010
|
||||
GAAP
operating loss (1)
|
$ | (22,011 | ) | |
Non-GAAP
operating income (2)
|
2,251 | |||
GAAP
operating margin (3)
|
(83 | %) | ||
Non-GAAP
operating margin
(4)
|
5 | % | ||
GAAP
net income
|
$ | 4,236 | ||
Contra
revenue associated with the warrant
|
730 | |||
Black
hole revenue adjustment for DivX
|
19,142 | |||
Amortization
of purchased technology
|
955 | |||
Share-based
compensation expense
|
4,171 | |||
Acquisition
expenses
|
2,400 | |||
Release
of payroll withholding liability (5)
|
(3,136 | ) | ||
Release
of tax valuation allowance (6)
|
(27,011 | ) | ||
Provision
for income taxes
|
1,260 | |||
Tax
adjustment by applying an effective tax rate of 40%
|
(1,099 | ) | ||
Non-GAAP
net income
|
$ | 1,648 | ||
Depreciation
|
642 | |||
Other
expense
|
(496 | ) | ||
Tax
adjustment by applying an effective tax rate of 40%
|
1,099 | |||
Adjusted
EBITDA
|
$ | 2,893 |
(1) The GAAP operating
income is calculated by subtracting GAAP operating expenses from GAAP gross
profit.
(2) The Non-GAAP operating
income is calculated by subtracting Non-GAAP operating expenses from Non-GAAP
gross profit.
(3) The GAAP operating
margin percentage is calculated by dividing GAAP operating loss by GAAP net
revenue.
(4) The Non-GAAP operating
margin percentage is calculated by dividing Non-GAAP operating income by
Non-GAAP net revenue.
(5) The
release of the payroll witholding liability from the historical stock option
review is included in operating expenses on a GAAP basis.
(6) The
release of the tax valuation allowance is included in provision for income taxes
on a GAAP basis.
Sonic
Solutions Reports Third Quarter Fiscal 2011 Financial Results
|
·
|
GAAP and Non-GAAP Net Income Per
Share. The following
table provides net income per share (in thousands except per share data,
unaudited):
|
Three
Months Ended
|
||||
December
31, 2010
|
||||
GAAP
net income per share
|
||||
Basic
|
$ | 0.09 | ||
Diluted
|
$ | 0.09 | ||
Non-GAAP
net income per share
|
||||
Basic
|
$ | 0.03 | ||
Diluted
|
$ | 0.03 | ||
Shares
used in calculating GAAP & Non-GAAP net income per
share:
|
||||
Basic
|
47,792 | |||
Diluted
|
48,493 |
About
Sonic Solutions
Sonic
Solutions® (NASDAQ: SNIC) is a leading developer of technologies, products and
services that enable the creation, management, and enjoyment of digital media
content across a wide variety of technology platforms. The Company’s
products and services offer innovative technologies to consumers, Hollywood and
independent studios, original equipment manufacturers (“OEMs”), businesses,
high-end professional DVD authoring experts and developers. Sonic
distributes its products and services through retailers and distributors,
personal computer (“PC”) and consumer electronic (“CE”) OEMs, Internet websites
and other channels. The Company’s brands now include Roxio®,
RoxioNow™, DivX®, Sonic® and MainConcept®, among others. The Company
also licenses core technology and intellectual property to other software
companies and technology manufacturers for integration into their own products
and services. Sonic software is intended for use with Microsoft
Windows and Apple Mac operating systems, as well as some Linux environments and
proprietary platforms. On December 22, 2010, Rovi Corporation and
Sonic Solutions signed a definitive agreement for Rovi to acquire Sonic in a
stock and cash transaction.
Sonic
Solutions Reports Third Quarter Fiscal 2011 Financial Results
Forward-Looking
Statements
This
press release for the third quarter of fiscal year 2011 contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
that are made as of the date of this press release based upon our current
expectations. All statements, other than statements of historical
fact, regarding our strategy, future operations, financial position, estimated
revenue, projected costs, projected savings, prospects, plans, opportunities,
and objectives constitute “forward-looking statements.” The words
“may,” “will,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,”
“potential” or “continue” and similar types of expressions identify such
statements, although not all forward-looking statements contain these
identifying words. These forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual results
to differ materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. Important
factors that could cause such differences include, but are not limited
to:
|
·
|
risks
and uncertainties relating to satisfaction of closing conditions for the
acquisition of Sonic by Rovi including the tender of a majority of the
outstanding shares of common stock of Sonic; the effects of the
announcement of the Rovi acquisition of Sonic on Sonic’s business; the
impact of any failure to complete the
acquisition;
|
|
·
|
the
continuing negative impact of current macroeconomic conditions on
consumers and associated impact on their ability and inclination to spend
on leisure and entertainment related activities and related software and
electronics;
|
|
·
|
our
ability to generate net income;
|
|
·
|
our
ability to integrate DivX into our
operations;
|
|
·
|
our
ability to maintain the strength of our
brands;
|
|
·
|
our
ability to adapt to rapid changes in technology and consumer preferences,
and to successfully and cost-effectively develop and introduce new and
enhanced products and services;
|
|
·
|
competitive
pressures on our products and services, both from large established
competitors with greater technological and financial resources than we
possess, and from smaller companies that are able to compete effectively
through low-cost Internet sales of their software products and
services;
|
|
·
|
the
impact of declines in our consumer products revenue relating to the DVD
format;
|
|
·
|
changes
in operating results, requirements or business models of our OEM or other
major customers;
|
|
·
|
our
ability to successfully introduce and profitably run our RoxioNow and DivX
TV initiatives, businesses with which we have had limited experience,
which are dependent on third parties for premium content selection and
delivery services, and which may give rise to legal exposure and other
business risks;
|
|
·
|
expenses
and issues associated with qualifying and supporting our products on
multiple computer platforms and in developing products and services
designed to comply with industry
standards;
|
|
·
|
issues
impacting third parties who supply us with services and operate our web
store, as well as retailers, resellers and distributors of our
products;
|
|
·
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risks
associated with international operations, including risks related to
currency fluctuations, as well as our extensive software development
operations in China;
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·
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changes
in our product and service offerings that could cause us to defer the
recognition of revenue, thereby harming our operating
results;
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·
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our
ability to maintain sufficient liquidity and continue to fund our capital
needs;
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·
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the
loss of key management personnel;
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·
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risks
related to acquisition and integration of acquired business assets,
personnel and systems generally;
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·
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costs
associated with litigation, patent prosecution, intellectual property and
other claims;
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·
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changes
in effective tax rates; and
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·
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earthquakes,
natural disasters and other unexpected
events.
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This
press release should be read in conjunction with our quarterly report on Form
10-Q expected to be filed on February 9, 2011, and our other reports currently
on file with the Securities and Exchange Commission (“SEC”), which contain more
detailed discussion of risks and uncertainties that may affect future
results. We do not undertake to update any forward-looking statements
unless otherwise required by law.
Sonic
Solutions Reports Third Quarter Fiscal 2011 Financial Results
Additional
Information and Where to Find It
This
communication is neither an offer to purchase nor a solicitation of an offer to
sell shares of Sonic stock. Rovi has filed a registration statement
on Form S-4 (containing a prospectus/offer to purchase and certain other offer
documents) and a tender offer statement on Schedule TO with the Securities
Exchange Commission (“SEC”) and Sonic has filed a solicitation/recommendation
statement on Schedule 14D-9, all with respect to the Offer and the Mergers (as
defined in those documents). Sonic shareholders are urged to read the
registration statement (including the prospectus/offer to purchase and the other
offer documents contained therein), the tender offer statement and the
solicitation/recommendation statement, as they may be amended, because they
contain important information that shareholders should consider before making
any decision regarding tendering their shares. The registration
statement (including the prospectus/offer to purchase and other offer
documents), the tender offer statement and the solicitation/recommendation
statement are also available for free at the SEC’s web site at
www.sec.gov. Free copies of the prospectus/offer to purchase (and
other offer documents) are also available from Rovi by mail to Rovi Corporation,
2830 De La Cruz Blvd, Santa Clara, CA 95050, attention: Investor
Relations, and free copies of the solicitation/recommendation statement are
available from Sonic by mail to Sonic Solutions, 7250 Redwood Blvd., Suite 300
Novato, CA 94945, attention: Investor Relations. In
addition, the prospectus/offer to purchase (and other offer documents) may be
obtained free of charge by directing a request to the Information Agent for the
offer, Phoenix Advisory Partners, 110 Wall Street, 27th floor, New York, NY
10005 (banks and brokers call (212) 493-3910; all others call toll
free: (800) 576-4314). American Stock Transfer & Trust
Company, LLC is acting as depositary for the tender offer.
In
addition to the foregoing materials filed with the SEC, Rovi and Sonic file
annual, quarterly and special reports, proxy statements and other information
with the SEC. Investors may read and copy any reports, statements or
other information filed by Rovi or Sonic at the SEC public reference room at 100
F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference
room. Rovi’s and Sonic’s filings with the SEC are also available to
the public from commercial document-retrieval services and at the website
maintained by the SEC at www.sec.gov.
Interests
of Certain Persons in the Offer and the Merger
Rovi will
be, and certain other persons may be, soliciting Sonic shareholders to tender
their shares into the exchange offer. The directors and executive
officers of Rovi and the directors and executive officers of Sonic may be deemed
to be participants in Rovi’s solicitation of Sonic’s shareholders to tender
their shares into the exchange offer.
Investors
and shareholders may obtain more detailed information regarding the names,
affiliations and interests of the directors and officers of Rovi and Sonic in
the exchange offer by reading the prospectus/offer to purchase and certain other
offer documents, as well as the solicitation/recommendation statement, as they
may be amended.
For
Investor Relations questions, contact:
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For
Corporate Communications questions, contact:
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Nils
Erdmann
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Chris
Taylor
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Phone: 415.893.8000
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Phone: 415.893.8000
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