TiVo 2006 Annual Report Download - page 59

Table of Contents
of $1.6 million associated with the adoption of FAS123R. We expect sales and marketing expense to increase in fiscal year 2008, in terms of absolute dollars,
as a result of our planned new marketing and advertising strategies.
Sales and marketing expenses, as a percentage of net revenue, decreased by 4% for the fiscal year ended January 31, 2006, as compared to the prior
fiscal year and, in terms of absolute dollars decreased by 6%, or $2.3 million, for the fiscal year ended January 31, 2006, as compared to the prior fiscal year.
The largest contributor to the decreased sales and marketing expenses for the fiscal year ended January 31, 2006, in terms of absolute dollars, was advertising
expense that decreased by 35% or by $5.6 million, from the prior fiscal year. This decrease was offset by $1.4 million for salaries and bonuses due to an
increase in regular headcount by 10 employees. In addition we had a $1.3 million increase in public relations and events expense.
General and administrative expenses.
Fiscal Year Ended January 31,
2007 2006 2005
(In thousands, except percentages)
General and administrative $ 44,813 $ 38,018 $ 16,593
Change from same prior-year period 18% 129% 2%
Percentage of net revenues 17% 19% 10%
General and administrative expenses consist primarily of employee salaries and related expenses for executive, administrative, accounting, information
technology systems, customer operations personnel, facility costs, and legal and professional fees. General and administrative expenses, as a percentage of net
revenues decreased 2% for the fiscal year ended January 31, 2007, as compared to the same prior year period, and in terms of absolute dollars, increased 18%
compared to the same prior year period. These increases are largely related to increased salary and related costs of $3.3 million due to an increase in head
count of 14 employees and costs associated with transition arrangements of highly compensated executives. Additionally, we had an increase in stock
compensation expense of $5.6 million in connection with the adoption of FAS 123R. These increases were partially offset by a decrease in legal spending of
$2.4 million.
General and administrative expenses, as a percentage of net revenue increased 9% for the fiscal year ended January 31, 2006 as compared to the prior
fiscal year, and in terms of absolute dollars increased 129%, compared to the prior fiscal year. This increase was largely due to increased legal and consulting
expenses of $14.5 million in connection with our ongoing lawsuits with EchoStar and other parties. Salaries and wages expense increased by $4.0 million for
the fiscal year ended January 31, 2006 due to an increase in regular headcount of 13 personnel, costs associated with transition arrangements of highly
compensated executives and adoption of the non-executive bonus plan as compared to the prior fiscal year.
Interest income. Interest income resulting from cash and cash equivalents held in interest bearing accounts and short-term investments for the fiscal
year ended January 31, 2007 was $4.8 million or approximately a 55% increase over the $3.1 million from the prior fiscal year. The increase was a result of
an increase in the average interest rate earned in the fiscal year ended January 31, 2007 to approximately 5.0% from 3.3% in the prior fiscal year.
For the fiscal year ended January 31, 2006 interest income was $3.1 million, or approximately double the $1.5 million from the prior fiscal year. The
increase was a result of an increase to 3.3% in the average interest rate earned in the fiscal year ended January 31, 2006 from 1.4% in the prior fiscal year.
Interest expense and other. Interest expense and other for fiscal year ended January 31, 2007 was $51,000, as compared to $14,000 from the prior
fiscal year. For the fiscal year ended January 31, 2006 interest expense was $14,000, as compared to $5.5 million from the prior fiscal year. This decrease was
largely due to no outstanding convertible notes payable during fiscal year 2006.
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