TiVo Says Inventory Write-Off Widened Q2 Loss
By Jon Hemingway -- Broadcasting & Cable, 8/30/2007 10:18:00 AM
Digital video recorder (DVR) supplier TiVo posted a net loss of $17.7 million in its fiscal second quarter of 2007, a wider loss than previously forecasted and which the company attributed to an inventory write-off.
The loss was more than double the $6.45-million loss TiVo posted in the same period a year ago. The company originally forecasted the loss at $5 million to $8 million, but says it grew due to an $11.2 million write-down of standard definition (SD) DVR inventory.
"Increased consumer demand for high definition products, which accelerated retailers' movement toward high definition sales, resulted in a continuation of the tepid trend in standard definition sales,” TiVo CEO Tom Rogers said in a statement. “Consequently, we ended the quarter with higher than anticipated inventory levels of long-lead time components and parts related to our standard definition product.”
Last month the company launched a low cost high definition (HD) unit for $299 that will enable it to focus on the wave of HD television sales.
According to Rogers, “Early indications are that retailer orders are very promising, which we believe will lead to sequential improvements in TiVo-Owned gross additions in Q3."
TiVo-owned subscription gross additions for Q2 were 41,000 compared to 74,000 in the same quarter a year ago. The company attributed the downswing in part to retailers moving their sales focus to high definition. The monthly churn rate ticked up to 1.2% from 1.1%.
Revenues at TiVo in the second quarter were up 5.6% to $62.7 million versus the same period last year with service and technology revenues rising 7% to $56.5 million. Total cost of revenues rose 23% to $42 million in the quarter.
The company’s loss before accounting for interest, taxes, depreciation and amortization (EBITDA) was $11.2 million versus $1.9 million a year ago.
The company said it expects service and technology revenues in the third quarter to be in the range of $56 million to $57 million and the net loss to be in the range of $14 million to $17 million.
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