Rovi's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Rovi (ROVI)

Q1 2012 Earnings Call

May 03, 2012 4:30 pm ET


Chris Keller -

Thomas Carson - Chief Executive Officer, President and Director

James W. Budge - Chief Financial Officer and Chief Operating Officer

Peter C. Halt - Chief Accounting Officer


Ralph Schackart - William Blair & Company L.L.C., Research Division

Michael J. Olson - Piper Jaffray Companies, Research Division

Sterling P. Auty - JP Morgan Chase & Co, Research Division

Robert W. Stone - Cowen and Company, LLC, Research Division

Edward Maguire - Credit Agricole Securities (USA) Inc., Research Division

Perry Huang - Goldman Sachs Group Inc., Research Division

Jeff Rath - Canaccord Genuity, Research Division

Ryan Fiftal - Morgan Stanley, Research Division

Todd T. Mitchell - Brean Murray, Carret & Co., LLC, Research Division



Ladies and gentlemen, thank you for standing by. Welcome to the Rovi First Quarter 2012 Earnings Conference Call. [Operator Instructions] I'd now like to turn the conference over to Mr. Chris Keller, Vice President of Investor Relations. Please go ahead, sir.

Chris Keller

Welcome, ladies and gentlemen, to Rovi Corporation's First Quarter 2012 Earnings Conference Call. I'm Chris Keller, and I'm joined today by Tom Carson, our President and CEO; James Budge, our CFO and COO; Peter Halt, our SVP of Finance and Chief Accounting Officer.

Before we discuss our results, which were released earlier today, I would like to start with some housekeeping items.

First, I would like to remind you that all statements made during our conference call that are not statements of historical fact, including, but not limited to, statements regarding the company's forecast of future revenues, expenses and earnings, as well as business strategies and product plans constitute forward-looking statement and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results could vary materially from those contained in these forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements are described in our Form 10-Q for the period ended March 31, 2012, and other filings with the SEC that are filed from time to time.

Second, our results were released earlier today, as well as our discussion on this call, include non-GAAP adjusted pro forma information, which exclude, as applicable, noncash items and items that impact comparability. Examples of such items include amortization, equity-based compensation and discrete tax items and the tax effect of all non-GAAP adjustments. Depreciation expense, while a noncash item, is included in adjusted pro forma operating results as a proxy for capital expenditures to demonstrate recurring cash-based earnings. Adjusted pro forma combined company information assumes the Sonic Solutions acquisition and the Roxio consumer software disposition were both effective on January 1, 2010. Adjusted pro forma reconciliations for historical results, including Sonic Solutions and excluding the Roxio consumer software business, are in our press release.

We have presented and are discussing adjusted pro forma combined company information because this is how we have and will evaluate our business. We believe that this presentation may be meaningful to our investors in analyzing the company's results of operations. This presentation is not intended to be a substitute for our financial results presented in conformity with generally accepted accounting principles in the United States, and investors and potential investors are encouraged to review the reconciliation of adjusted pro forma financial measures included in our earnings press release.

And as a final piece of housekeeping, the webcast of this conference call will be available on our Investor Relations web page until our next quarterly earnings call.

I would now like to turn the call over to Tom.

Thomas Carson

Thank you, Chris. Thanks, everyone, for joining us today for our quarterly conference call. As you may have seen in today's earnings press release, we recorded adjusted pro forma revenue of $175 million in Q1. Similar to previous quarters, our business benefited from new license agreements, increases in device shipments that incorporate our products, our license under our patents, the continued conversion of analog TV subscribers to digital and advertising growth. Adjusted pro forma EPS for the quarter totaled $0.56. I'm pleased with our financial results, as well as the significant progress we've made securing customer wins for our new solutions across our verticals.

I'll discuss our progress in more depth shortly, but first, I'd like to announce that James Budge will be leaving Rovi in mid-May and Peter Halt will be named Chief Financial Officer. Peter has been working closely with James for over 4 years, and he is highly qualified for the job. I personally worked with Peter since 2006, and I'm delighted to be working with him in this new role. I believe that many of you have met Peter at investor conferences with James, and I am confident that he is the right person at the right time for this important position of CFO. James has been at Rovi for nearly 7 years, and I've enjoyed working with him and wish him well with his new opportunity. James will make a few comments now and then Peter will review some of the financial metrics for the company. James?

James W. Budge

Thank you, Tom. Let me just say that the past 7 years at Rovi and the past 4 years working with outstanding management talent like Tom and Peter have been the most rewarding years of my career. While I'm excited for the new opportunity that I have, it was certainly hard to make the decision to leave Rovi. But having worked with Tom and Peter, I could not be leaving the hand -- or the company in the hands of 2 more capable professionals. I very much enjoyed my association with each member of the investment community, and I'm confident that you will continue to see great things come from Rovi.

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