Macrovision Corporation Reports Record Revenues and Pro Forma Earnings for Fourth Quarter 2004
February 28, 2005 4:34:00 PM ET
Macrovision Corporation MVSN announced today that fourth quarter 2004 net revenues were a record $59.6 million, compared with $39.9 million in the fourth quarter of 2003, an increase of 49%. Pro forma earnings (before amortization of intangibles from acquisitions, non-cash deferred compensation expense, impairment gains and losses on investments, adjustments for changes to our tax rate, and in-process research and development write-offs) were $16.1 million, or 48% higher than last year's fourth quarter. Pro forma diluted earnings per share for the quarter were $0.31, or 41% higher than the comparable pro forma earnings per share in the fourth quarter a year ago.
Net income for the fourth quarter of 2004 was $15.8 million. Diluted earnings per share for the quarter were $0.31.
Cash and cash equivalents, short-term investments and long-term marketable securities were $254.5 million as of December 31, 2004.
"We are very pleased with our fourth quarter results," said Bill Krepick, President and CEO at Macrovision. "Our revenues benefited from continued strong performance in our software value management business, and our DVD and pay-per-view (PPV) copy protection businesses. As we look forward to 2005, we are pleased with the progress we are making with our emerging products. We have seen strong growth in our prospect pipeline for our Update Service product for software publishers; we signed a major record label and a second movie studio to our Hawkeye peer-to-peer file sharing service, and our Ripguard DVD antipiracy product was applied to a major European DVD title release. Looking ahead, we are confirming our FY2005 guidance for revenues to be between $220 and $230 million, with pro forma EPS in the $1.03-$1.06 range, and GAAP earnings per share in the range of $0.90-$0.93. GAAP earnings do not reflect stock option expenses under accounting rules which are effective July 1, 2005, the impact of which is currently being estimated. For Q1 2005, we are estimating that our revenues will be in the range of $49-$51 million and our pro forma EPS will be in the range of $0.17-$0.18. This forecast takes into account the fact that we have a number of new products that we expect will slowly gain traction as the year progresses and will culminate in a strong Q4, which will reflect historical seasonality in both of our business units. These projections include the impact of the InstallShield(R) acquisition for the full year."
Restatement of 2003 Effective Tax Rate
In the course of preparing our 2004 financial statements, we became aware of an understatement of approximately $2.8 million of tax expense for the fourth quarter of 2003. The understatement resulted from a clerical error related to U.S. taxation on income earned outside the U.S. and is not expected to have a current cash impact on the Company. We plan to restate our previously issued financial statements for the fourth quarter and fiscal year 2003 to reflect the correction. Further details of this restatement are available in the related Form 8-K we filed today, which may be accessed through our website at www.macrovision.com. The adjustment remains subject to ongoing review and we expect to file our corrected financial statements covering the affected period(s) within the next few weeks.
We continue to use pro forma reconciliation condensed 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 gains and losses on investments, adjustments for changes to our tax rate, and in-process research and development write-offs) are excluded from the pro forma earnings calculation. This presentation may be considered more indicative of our ongoing operational performance. The tables below present the differences between pro forma earnings and net income on an absolute and per share basis.
Immediately following the Q4 2004 earnings release, Macrovision will hold an investor conference call on February 28, 2005, from 5:00 p.m. to 6:00 p.m. ET. Investors and analysts interested in participating in the conference are welcome to call 800-218-0713 (or international +1 303-262-2075) and reference the Macrovision call.
