TiVo 2005 Annual Report Download - page 55

Table of Contents
Liquidity and Capital Resources
We have financed our operations and met our capital expenditure requirements primarily from the proceeds of the sale of equity and debt securities. Our
cash resources are subject, in part, to the amount and timing of cash received from our subscriptions, licensing and engineering services customers, and
hardware customers. At January 31, 2006, we had $104.2 million of cash and cash equivalents and short-term investments. We believe our cash and cash
equivalents, funds generated from operations, and our revolving line of credit facility with Silicon Valley Bank represent sufficient resources to fund
operations, capital expenditures, and working capital needs through the next twelve months.
Statement of Cash Flows Discussion
Our primary sources of liquidity are cash flows provided by operations and by financing activities. Although we currently anticipate these sources of
liquidity will be sufficient to meet our cash needs through the next twelve months, we may require or choose to obtain additional financing. Our ability to
obtain financing will depend, among other things, on our development efforts, business plans, operating performance, and the condition of the capital markets
at the time we seek financing. We cannot assure you that additional financing will be available to us on favorable terms when required, or at all. If we raise
additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights
of our common stock, and our stockholders may experience dilution. Please refer to Part I, Item 1A, "Risk Factors" for further discussion.
The following table summarizes our cash flow activities:
Fiscal Year Ended January 31,
2006 2005 2004
Net cash provided by (used in) operating activities $ 3,425 $ (37,214) $ (7,659)
Net cash used in investing activities (10,805) (18,099) (3,660)
Net cash provided by financing activities 5,433 4,348 109,128
Net Cash Used in Operating Activities
The increase in net cash provided by (used in) operating activities from fiscal year 2005 to 2006 was largely attributable to the decrease in net loss
incurred during fiscal year 2006. The primary changes in net loss for the fiscal year ended January 31, 2006 were higher service and technology gross margins
of $56.4 million coupled with lower rebates, revenue share, and other payments to channel of $7.7 million, which were partially offset by increased operating
expenses of $22.6 million, as compared to the prior fiscal year.
The increase in net cash used in operating activities from fiscal year 2004 to 2005 was primarily attributable to the increase in net loss incurred in fiscal
year 2005 compared to 2004. The primary change in net loss was an increase in sales and marketing expense of $18.4 million related to our increased
advertising activities and consumer rebate expenses of $37.1 million. The increase in net cash used in operations was partially offset by a decrease in
payments for accounts payable and accrued liabilities of $21.1 million during fiscal year 2005 as compared to the same prior-year period and by an increase in
revenues from subscriptions.
Cash from deferred revenues has increased during the fiscal years 2006, 2005, and 2004 because we sold product lifetime subscriptions and receive up
front license and engineering services payments. These activities cause us to receive cash payments in advance of providing the services, which we recognize
as deferred revenues.
Net Cash Used in Investing Activities
Net cash used in investing activities for fiscal years 2006 was largely due to the acquisition of intangible assets for $3.9 million and purchases of
property and equipment of $7.1 million to support our business. Short-term investment purchases were offset by short term investment sales. The decrease in
net cash used in investing was due to the decrease of $185,000 in short term investments activities for fiscal year ended January 31, 2006 as compared to the
increase of $14.1 million for the fiscal year ending January 31, 2005.
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