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Table of Contents
Quarterly Results of Operations
The following table presents certain unaudited statements of operations data for our eight most recent quarters ended January 31, 2009. In
management's opinion, this unaudited information has been prepared on the same basis as the audited annual financial statements and includes all
adjustments, consisting only of normal recurring adjustments, necessary for a fair representation of the unaudited information for the quarters presented. This
information should be read in conjunction with our audited consolidated financial statements and the notes thereto, included elsewhere in this annual report.
The results of operations for any quarter are not necessarily indicative of results that may be expected for any future period.
Three Months Ended
Jan 31,
2009 (1)
Oct 31,
2008 (2)
Jul 31,
2008 (3)
Apr 30,
2008 (4)
Jan 31,
2008 (5)
Oct 31,
2007 (6)
Jul 31,
2007 (7)
Apr 30,
2007
(unaudited, in thousands except per share and share amounts)
Revenues
Service revenues $ 44,115 $ 47,676 $ 48,174 $ 48,443 $ 51,025 $ 52,940 $ 53,376 $ 54,155
Technology revenues 4,353 3,997 5,369 6,407 7,027 5,339 3,084 3,932
Hardware revenues 10,712 12,777 11,699 5,945 16,066 17,240 6,199 2,293
Net revenues 59,180 64,450 65,242 60,795 74,118 75,519 62,659 60,380
Cost of revenues
Cost of service revenues 11,180 10,984 11,245 11,194 12,019 10,738 10,064 10,155
Cost of technology revenues 2,740 2,516 3,124 3,920 5,252 4,912 3,696 3,507
Cost of hardware revenues 15,764 16,339 15,274 10,365 23,929 29,144 28,239 10,740
Total cost of revenues 29,684 29,839 29,643 25,479 41,200 44,794 41,999 24,402
Gross margin 29,496 34,611 35,599 35,316 32,918 30,725 20,660 35,978
Operating expenses 15,459
Research and development 6,517 16,553 15,323 14,748 15,416 14,049 15,070 14,245
Sales and marketing 1,690 6,585 5,906 5,936 7,336 5,967 5,381 5,303
Sales and marketing, subscription acquisition costs 11,382 2,301 888 1,159 7,195 9,050 9,015 5,790
General and administrative 35,048 10,344 10,869 10,336 10,234 11,106 10,392 11,222
Litigation proceeds — (87,811) — — — — — —
Income (loss) from operations (5,552) 86,639 2,613 3,137 (7,263) (9,447) (19,198) (582)
Interest income 423 17,213 421 579 1,066 1,218 1,331 1,416
Interest expense and other (278) (94) (94) (87) (183) (45) 209 (83)
Income(loss) before income taxes (5,407) 103,758 2,940 3,629 (6,380) (8,274) (17,658) 751
Provision for income taxes 1,840 (3,132) (23) (13) (22) — — (8)
Net income(loss) $ (3,567) $ 100,626 $ 2,917 $ 3,616 $ (6,402) $ (8,274) $ (17,658) $ 743
Net income(loss) per common share-basic $ (0.04) $ 1.00 $ 0.03 $ 0.04 $ (0.06) $ (0.08) $ (0.18) $ 0.01
Net income(loss) per common share-diluted $ (0.04) $ 0.98 $ 0.03 $ 0.04 $ (0.06) $ (0.08) $ (0.18) $ 0.01
Weighted average common shares used to calculate basic net income(loss)
per share 101,303,123 100,804,813 100,025,002 99,386,826 98,517,991 97,611,001 97,084,184 96,829,128
Weighted average common shares used to calculate diluted net
income(loss) per share 101,303,123 102,569,559 102,217,222 102,709,583 98,517,991 97,611,001 97,084,184 98,046,685
(1) The fourth quarter of fiscal year ended January 31, 2009 results of operations includes a benefit of $518,000 in cost of hardware revenues resulting from
the sale of previously impaired inventory and a reduction of service revenues of $1.7 million related to the prospective change as of November 1, 2008
in estimated life of the product lifetime subscriptions from 54 months to 60 months.
(2) The third quarter of fiscal year ended January 31, 2009 results of operations includes a benefit of $1.4 million in cost of hardware revenues resulting
from the sale of previously impaired inventory.
(3) The second quarter of fiscal year ended January 31, 2009 results of operations includes a benefit of $1.4 million in cost of hardware revenues resulting
from the sale of previously impaired inventory.
(4) The first quarter of fiscal year ended January 31, 2009 results of operations includes a benefit of $1.6 million in cost of hardware revenues resulting
from the sale of previously impaired inventory.
(5) The fourth quarter of fiscal year ended January 31, 2008 results of operations includes a benefit of $4.1 million in cost of hardware revenues resulting
from the sale of previously impaired inventory and a reduction of service revenues of $2.5 million related to the prospective change as of November 1,
2007 in estimated life of the product lifetime subscriptions from 48 months to 54 months. Additionally, we recognized $1.1 million of DIRECTV
revenues deferred from the prior fiscal year as our obligation to provide services to DIRECTV in connection with those revenues expired on January 31,
2008.
(6) The third quarter of fiscal year ended January 31, 2008 results of operations include a benefit of $696,000 in cost of hardware revenues resulting from
the sale of previously impaired inventory.
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