OPTV...OpenTV Reports (4/27) Record First-Quarter Financial Results
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Leading Worldwide Provider of Digital Interactive Television Software Posts Revenue Increase of 87 Percent
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--April 27, 2000--OpenTV (Nasdaq:OPTV - news; Amsterdam Stock Exchange:OPTV), the leading worldwide provider of software to enable digital interactive television, today announced financial results for the first quarter ended March 31, 2000.
For the first quarter of 2000, revenues were $10.9 million, an 87 percent increase from the $5.9 million reported for the first quarter of 1999, and a 30 percent increase from the $8.4 million reported for the fourth quarter of 1999.
-- Royalties for the first quarter of 2000 were $7.7 million, an
increase of 164 percent from $2.9 million in the first quarter of
1999, and an increase of 63 percent from $4.7 million reported in
the fourth quarter of 1999.
-- License fees were $1.3 million for the first quarter of 2000, an
increase of 265 percent from $0.4 million in the first quarter of
1999, and an increase of 24 percent from $1.1 million in the
fourth quarter of 1999.
-- Services and other revenue for the first quarter of 2000 were $1.9
million, a decrease of 26 percent from $2.6 million for the first
quarter of 1999, and a decrease of 26 percent from $2.6 million in
the fourth quarter of 1999. The decrease in services and other
revenue was attributable to the company's shift in emphasis from
customer-funded development arrangements to revenue sharing
application initiatives.
Jan Steenkamp, president and chief executive officer of OpenTV, said: ``We are very pleased by our strong first-quarter results. OpenTV's momentum continues and is strengthened by the growth of digital interactive television worldwide. We are also experiencing an excellent response from consumers in markets where interactive TV services have been launched. Our progress this quarter also includes new partnerships with network operators that are launching digital interactive television services, as well as with several set-top box manufacturers and content developers.''
OpenTV's pro-forma operating expenses, excluding non-cash and non-recurring expenses, were $16.1 million in the first quarter of 2000, a 136 percent increase from $6.8 million in the first quarter of 1999, and a 22 percent increase from $13.3 million in the fourth quarter of 1999. As planned, the company has significantly increased its research and development expenditures, especially in its applications business, and has expanded its worldwide sales presence to address the rapidly developing global interactive television market opportunity. OpenTV's expanded sales organization won deployment commitments from several new network operators that will generate revenue in future periods. Over the past six months, OpenTV has increased its headcount from 187 to 283 employees. OpenTV also incurred a non-recurring technology development expense of $1.3 million, non-cash expenses of $0.4 million for amortization of purchased technology, $3.2 million for stock-based compensation, and $23.4 million for warrant expense. Including these non-cash and non-recurring charges, OpenTV's operating expenses were $44.4 million for the first quarter of 2000, as compared to $7.0 million in the first quarter of 1999 and $93.3 million in the fourth quarter of 1999.
Excluding the impact of non-cash and non-recurring charges, OpenTV's pro-forma net loss for the first quarter of 2000 was $2.4 million, compared to a pro-forma net loss of $1.0 million in the first quarter of 1999 and $4.0 million for the fourth quarter of 1999. This translates to pro-forma diluted net loss per share of 5 cents in the first quarter of 2000 compared to 3 cents in the first quarter of 1999 and 10 cents for the fourth quarter of 1999. Including the impact of non-cash and non-recurring charges, the company reported a net loss of $30.7 million for the first quarter of 2000, $1.2 million for the first quarter of 1999 and $113.1 million for the fourth quarter of 1999. This translates to a diluted net loss per share of 68 cents for the first quarter of 2000, 4 cents for the first quarter of 1999 and $2.93 for the fourth quarter of 1999.
As of March 31, 2000, OpenTV had cash and short-term investments of $153.3 million, total assets of $203.9 million, total liabilities of $13.8 million and shareholders' equity of $190.1 million.
2000 First-Quarter Highlights
OpenTV's results in the first quarter of 2000 included a number of significant achievements. Highlights for the quarter are as follows:
Spyglass Acquisition
-- On March 26, 2000, OpenTV announced a definitive agreement to
merge with Spyglass Inc. (Nasdaq:SPYG - news). The company believes that
this merger will strengthen OpenTV's position in the interactive
television software market by extending OpenTV's software product
to include Web browsing. OpenTV will be able to provide
Internet-based technology and content in addition to its core
interactive video technology, and to deliver a platform that is
adaptable to any standard that may develop in the marketplace. In
addition, the company believes that this merger will allow OpenTV
to expand its interactive television professional services
business by accessing Spyglass' management expertise, personnel
and current base of professional services customers. The company
believes that upon completion of the Spyglass merger, OpenTV will
be able to provide an interactive television software platform,
supported by a professional services team, that has greater
functionality and features that will drive additional deployments
and opportunities for accelerated revenue growth.
Under the merger agreement, OpenTV will acquire all of Spyglass'
outstanding stock in a tax-free, stock-for-stock transaction.
Spyglass stockholders will receive 0.7236 OpenTV Series A Ordinary
Shares in exchange for each share of Spyglass common stock.
Spyglass stockholders, option holders and warrant holders will
receive approximately 14.9 million OpenTV shares and own
approximately 18 percent of the combined company's stock on a
fully diluted basis.
OpenTV Joint Venture with EchoStar
-- OpenTV formed a joint venture with EchoStar Communications
(Nasdaq:DISH - news) in February 2000 to develop a low-cost, one box
solution that includes digital interactive television and
hard-drive functionality in a set-top box for the mass TV-viewing
market. The company expects that this partnership will ultimately
provide interactive television viewers with a cost-effective
product, with broad functionality, that includes features such as
video-on-demand, entertainment services and e-commerce
capabilities.
OpenTV purchased a 50 percent interest in the joint venture from
Echostar, in exchange for approximately 2.25 million shares of
OpenTV Class A Ordinary Shares and contribution of a non-exclusive
license to certain OpenTV intellectual property. The shares have
been placed in an escrow account until certain milestones,
relating to the deployment of OpenTV-enabled set-top boxes, have
been met by EchoStar.
OpenAdvantage Program
-- OpenTV's developer program was launched in the first quarter and
has already secured more than 300 independent OpenTV application
developers from around the world. The OpenAdvantage program
encourages independent developers to write applications for
OpenTV's "open platform." The expanding OpenAdvantage membership
continues to drive interactive television deployment for the
company, as well as generate incremental revenues from the sales
of authoring tools, training and other products.
Worldwide Network Operators
Four additional network operators committed to deploy interactive television using OpenTV technology, bringing the total number of digital television network operator commitments to 28.
-- Quiero Television, Spain's first digital terrestrial network,
chose OpenTV as a software provider for interactive television
services, which is expected to expand OpenTV's reach into the
Spanish digital television market in addition to its existing
relationship with Via Digital. Quiero Television has indicated
that it intends to launch OpenTV-enabled interactive services to
its customers in the second quarter of 2000. Quiero is the second
digital terrestrial network operator in Europe, in addition to
Senda, the platform operator of the Swedish digital terrestrial
network, to select OpenTV's technology.
-- Galaxy Latin America (GLA) selected OpenTV's interactive
television software solutions for its DIRECTV(TM) service in Latin
America and the Caribbean. GLA is the exclusive provider of
DIRECTV in Latin America, where it reaches 27 countries and 96
percent of the potential market. This recently announced
relationship gives OpenTV an initial presence in Latin America and
the Caribbean and brings it closer to achieving its vision of
providing globally accepted end-to-end digital interactive
television solutions.
-- PrimaCom AG, Germany's third-largest independent cable network
operator, chose OpenTV as its software provider for digital
interactive television services. PrimaCom plans to launch its
first digital interactive television services in Leipzig in May.
The interactive services, powered by OpenTV, will later be made
available to PrimaCom's 1.35 million household customer base
through its advanced broadband hybrid-fibre-coax cable network,
which will be extended across Germany.
-- E-Vision, (Emirates Cable TV and Multimedia LLC), the United Arab
Emirates' first digital cable television network, has chosen
OpenTV for its interactive television services platform. Siemens,
a worldwide leading systems integrator, won the bid to provide the
United Arab Emirates with the countries' first digital cable TV
network and led the selection of OpenTV's digital interactive TV
solution for E-Vision. E-Vision is a subsidiary of Etisalat -- the
United Arab Emirates' (UAE) national provider of telecommunication
products and services. E-Vision's initial launch phase covers a
total of 20,000 homes and businesses in Abu Dhabi and Dubai.
Sharjah will be added soon followed by a rapid expansion of the
network nationwide, which encompasses an estimated total of
500,000 homes.
Worldwide Applications Partners
OpenTV also announced several partnerships to develop interactive television applications. Under the agreements, OpenTV will share with its partners the recurring revenues generated by the applications.
-- OpenTV has partnered with Commerce.TV to integrate the OpenTV
software platform with Commerce.TV's high-volume transaction
processing network to be deployed in the United States and Canada.
Together, the companies intend to offer cable and satellite
operators an easy-to-use, enhanced television service at no cost
to subscribers, and thereby create a better viewing experience.
-- Through a strategic alliance with Health Hero Network, OpenTV
intends to bring interactive health content and services to
interactive television consumers throughout the world. As a part
of OpenTV's vision to continually enhance the viewer experience,
OpenTV and the Health Hero Network intend to create the first
television "Interactive Health Channel," which will offer
personalized health content, community and commerce services.
-- OpenTV entered into an applications development agreement with
Pacific Digital Media Corp. (PDMC), a digital network operator
planning to launch a new satellite-based pay-TV service in Taiwan
later this year. Under the terms of the agreement, OpenTV will
develop a suite of applications for PDMC and share in a portion of
the revenue derived from the applications.
Worldwide Technology Partners
OpenTV recently announced the following technology partnerships in connection with its efforts to enhance the flexibility and adaptability of its interactive television software platform:
-- Nokia Multimedia Terminals Oy and Philips Digital Networks BV have
extended their relationship with OpenTV with new agreements to
license EN2, OpenTV's next generation interactive television
operating system for digital set-top boxes.
-- Hughes Network Systems, a division of Hughes Electronics with
headquarters in the United States, agreed to port OpenTV's EN2
software to its set-top boxes.
-- Korea's TechSan Electronics Co. Ltd., Tae Young Telstar Co. Ltd.
and Hyundai Digital Technology Co. Ltd. also agreed to port
OpenTV's EN2 software to their set-top boxes. OpenTV has now
developed partnerships with 29 set-top box manufacturers from
around the world.
-- Furthering its U.S. cable initiative, OpenTV is in the process
integrating its set-top box software with Motorola's conditional
access system. Philips Digital Networks has also integrated its
Cryptoworks conditional access system with OpenTV. OpenTV is now
integrated with seven different conditional access systems.
Company Expansion
-- OpenTV expanded its global presence with the opening of new
offices in Munich, Germany and Madrid, Spain, increasing the
company's total office count to nine worldwide.
About OpenTV
OpenTV is the leading worldwide provider of software that enables digital interactive television. OpenTV provides a complete end-to-end solution for the development and delivery of interactive services via digital satellite, cable and terrestrial broadcast. OpenTV set-top box software has been shipped with or installed in more than 6.1 million digital set-top boxes worldwide. To date, OpenTV software solutions have been selected by 28 television network operators worldwide, including British Sky Broadcasting (BSkyB) in the United Kingdom and TPS in France. EchoStar's DISH Network(TM) is scheduled to launch interactive services utilizing OpenTV software in the United States in 2000.
The OpenTV set-top box software is licensed to 29 digital set-top box manufacturers, and OpenTV's authoring tools are licensed to more than 100 independent developers and content and service providers. OpenTV is a member of the Digital Video Broadcasting (DVB) project, CableLabs OpenCable initiative and ATSC DASE. OpenTV is a licensee of Personal Java(TM) from Sun Microsystems.
OpenTV is supported by investments from eight leading Internet, broadcast and broadband companies including America Online (NYSE: AOL - news), General Instrument Corp. (NYSE:GIC - news), Liberty Digital (Nasdaq:LDIG - news), News Corp. (NYSE:NWS - news), Time Warner (NYSE:TWX - news) and Shaw Communications (NYSE:SJR - news) in addition to Sun Microsystems (Nasdaq:SUNW - news) and MIH Ltd. (Nasdaq:MIHL - news).
Worldwide headquarters for OpenTV is located in Mountain View, with offices in Paris; London; Madrid, Spain; Munich, Germany; Seoul, South Korea; Tokyo; Beijing; and Sydney, Australia. Information on OpenTV is available at www.opentv.com.
Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those contemplated herein, including but not limited to the closing of the merger with Spyglass Inc., the risk that OpenTV and Spyglass (the ``Combined Company'') businesses will not be integrated successfully and unanticipated costs of such integration, failure of the Combined Company to retain and hire key executives, technical personnel and other employees, failure of the Combined Company to manage its growth, failure of the Combined Company to successfully manage its changing relationship with customers, suppliers and strategic solution center customers, the timely development, acceptance and pricing of new products and services using OpenTV enabled solutions, the impact of competitive products and services, and the pricing of those competitive products and services, and other risk factors detailed in the Registration Statement on Form F-1 and other documents filed from time to time by OpenTV Corp. with the Securities and Exchange Commission. OpenTV undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
(c)1999 OpenTV Inc. All rights reserved. OpenTV, OpenAuthor, OpenTV Runtime, OpenStreamer and the OpenTV logo are trademarks or registered trademarks of OpenTV Inc. in the United States and other countries. Java and all Java-based trademarks and logos are trademarks or registered trademarks of Sun Microsystems Inc. in the United States and other countries. All other trademarks are the property of their respective owners.
OPENTV CORP.
Unaudited Consolidated Statements of Operations
(in thousands, except share and per-share amounts)
Quarters Ended
March 31, Dec. 31, March 31,
2000 1999 1999
Revenues:
Royalties $ 7,705 $ 4,721 $ 2,915
License fees 1,312 1,060 359
Services and other 1,928 2,613 2,586
Total revenues 10,945 8,394 5,860
Operating expenses:
Services 1,845 2,499 1,331
Research and development 8,179 4,909 2,228
Sales and marketing 5,028 3,814 2,174
General and administrative 2,390 2,037 1,079
Amortization of intangible 382 383 0
Amortization of
stock compensation 3,224 10,777 214
Non-cash warrant expense 23,356 68,883 0
Total operating expenses 44,404 93,302 7,026
Loss from operations (33,459) (84,908) (1,166)
Other income/(expense), net 2,744 877 (65)
Minority interest 0 2,153 0
Net loss $ (30,715) $ (81,878) $ (1,231)
Preferred stock
deemed dividend 0 31,250 0
Net loss attributable to
ordinary shares $ (30,715) $ (113,128) $ (1,231)
Shares used in computing
net loss per share,
basic and diluted 45,236,028 38,646,742 33,830,583
Net loss per share,
basic and diluted $ (0.68) $ (2.93) $ (0.04)
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OPENTV CORP.
Pro-Forma Consolidated Statements of Operations
(in thousands, except share and per-share amounts)
Quarters Ended
March 31, Dec. 31, March 31,
2000 1999 1999
Revenues:
Royalties $ 7,705 $ 4,721 $ 2,915
License fees 1,312 1,060 359
Services and other 1,928 2,613 2,586
Total revenues 10,945 8,394 5,860
Operating expenses:
Services 1,845 2,499 1,331
Research and development 6,842 4,909 2,228
Sales and marketing 5,028 3,814 2,174
General and administrative 2,390 2,037 1,079
Total operating expenses 16,105 13,259 6,812
Loss from operations (5,160) (4,865) (952)
Other income/(expense),
net 2,744 877 (65)
Net loss $ (2,416) $ (3,988) $ (1,017)
Shares used in computing
net loss per share,
basic and diluted 45,236,028 38,646,742 33,830,583
Net loss per share,
basic and diluted $ (0.05) $ (0.10) $ (0.03)
Note: The above unaudited pro forma combined consolidated statements
of operations exclude the effects of the following (in thousands):
-- One-time, non-recurring research and development fee of $2,600, of
which $1,337 was amortized during the quarter ended March 31,
2000.
-- Amortization of intangibles of $383 and $382 for the quarters
ended Dec. 31, 1999 and March 31, 2000, respectively.
-- Amortization of non-cash, stock based compensation of $214,
$10,777 and $3,224 for the quarters ended March 31, 1999, Dec. 31,
1999, and March 31, 2000, respectively.
-- Additional General Instrument non-cash performance warrant expense
related to the warrant's variable accounting treatment and
quarterly amortization totaling $5,032 and $23,356 for the
quarters ended Dec. 31, 1999 and March 31, 2000, respectively.
-- Non-Cash warrant expense of $63,851 related to the warrants issued
to strategic investors in the quarter ended Dec. 31, 1999.
-- Minority stockholder's interest of $2,153 for the quarter ended
Dec. 31, 1999.
-- Preferred stock deemed dividend of $31,250 for the quarter ended
Dec. 31, 1999.
-0-
OPENTV CORP.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands of U.S. dollars)
March 31, Dec. 31,
2000 1999
Assets
Cash and short-term investments $153,251 $186,535
Accounts receivable, net 9,909 6,234
Prepaid expenses and other
current assets 3,061 1,698
Long-term marketable securities 14,255 0
Property and equipment, net 6,360 5,025
Long-term private equity
investments 10,000 0
Other assets, net 7,098 7,298
Total assets $203,934 $206,790
Liabilities and shareholders' equity
Accounts payable and accrued
liabilities $9,285 $8,665
Deferred revenue 4,528 3,564
Total liabilities 13,813 12,229
Shareholders' equity:
Total shareholders' equity 190,121 194,561
Total liabilities and
shareholders' equity $203,934 $206,790
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Contact:
OpenTV, Mountain View
Steve Polcyn, 650/429-5498 (Investors/Financial Media)
spolcyn@opentv.com
Carolyn Bretschneider, 650/429-5575
(Trade/Business Media)
carolyn@opentv.com
or
Kekst and Company, New York
Michael Freitag, 212/521- |
