NOVATO, Calif. Feb. 8, 2011 /PRNewswire/ -- 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
|
|
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
|
|
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.
|
|
|
|
|
|
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.
- 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.
- 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.
|
|
|
- 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.
|
|
|
- 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.
|
|
|
- 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.
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;
- risks associated with international operations, including risks
related to currency fluctuations, as well as our extensive software
development operations in China;
- changes in our product and service offerings that could cause
us to defer the recognition of revenue, thereby harming our
operating results;
- our ability to maintain sufficient liquidity and continue to
fund our capital needs;
- the loss of key management personnel;
- risks related to acquisition and integration of acquired
business assets, personnel and systems generally;
- costs associated with litigation, patent prosecution,
intellectual property and other claims;
- changes in effective tax rates; and
- earthquakes, natural disasters and other unexpected
events.
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.
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.
SOURCE Sonic Solutions