InterVideo Reports Solid Third Quarter 2004 Financial Results; Posts Strong Growth in Revenue from WinDVD Creator and Recognizes First Revenue for InstantON

Business Wire, Oct 28, 2004

INTERVIDEO, INC.

                   CONSOLIDATED STATEMENTS OF INCOME
               (in thousands, except per share amounts)
                              (unaudited)


                                  Three months ended Nine months ended
                                     September 30       September 30
                                  ------------------ -----------------
                                      2004     2003     2004     2003
                                  --------- -------- -------- --------

Revenue                            $18,509  $14,358  $54,035  $40,830

Cost of revenue :                    8,295    5,427   23,948   16,260

                                  --------- -------- -------- --------
     Gross Profit                   10,214    8,931   30,087   24,570

Operating Expenses  :
     Research and development        2,380    1,907    7,276    5,529
     Sales and marketing             2,299    2,230    7,771    6,625
     General and administrative      3,084    1,018    6,764    2,871
     Stock-based compensation           77      189      226      739
                                  --------- -------- -------- --------
         Total operating expenses    7,840    5,344   22,037   15,764
                                  --------- -------- -------- --------

Income from operations               2,374    3,587    8,050    8,806

Other income, net                      211      152      645      315

                                  --------- -------- -------- --------
Income before income taxes           2,585    3,739    8,695    9,121

Provision for income taxes           1,275    1,385    3,652    3,584

                                  --------- -------- -------- --------
Net income                         $ 1,310  $ 2,354  $ 5,043  $ 5,537
                                  ========= ======== ======== ========

Net income per share :
                Basic              $  0.10  $  0.21  $  0.38  $  1.03
                                  ========= ======== ======== ========
                Diluted            $  0.09  $  0.16  $  0.33  $  0.42
                                  ========= ======== ======== ========

Number of shares used in
   net income per share
    calculation:
                Basic               13,436   10,988   13,354    5,394
                                  --------- -------- -------- --------
                Diluted             15,274   15,020   15,352   13,138
                                  --------- -------- -------- --------




                           INTERVIDEO, INC.

                      CONSOLIDATED BALANCE SHEETS
               (in thousands, except per share amounts)



                                          September 30,   December 31,
                                              2004           2003
                                          -------------  -------------


Current assets :
   Cash and cash equivalents                 $32,664        $46,875
   Short term investments                     38,266         22,862
   Accounts receivable                         8,002          5,515
    (net of $261 and $254 allowance,
     respectively)
   Deferred tax assets                         1,611          1,543
   Prepayments and other current assets        2,452          1,976
   Inventory                                     600            492
                                          -------------  -------------
        Total current assets                  83,595         79,263

Property and equipment, net                    2,409          2,241
Goodwill                                       1,018          1,018
Other purchased intangible assets                133            283
Deferred tax assets                            4,685          4,685
Long term investments                          1,627             --
Other assets                                     268            429

                                          -------------  -------------
        Total assets                         $93,735        $87,919
                                          =============  =============


Current liabilities :
   Accounts payable                          $   957        $ 1,039
   Accrued liabilities                        11,594          9,503
   Income tax payable                          1,453          1,539
   Deferred revenue                            3,376          3,422
                                          -------------  -------------
        Total current liabilities             17,380         15,503
                                          -------------  -------------

Stockholders' equity :
   Common stock, $0.001 par value,                14             13
    150,000 shares authorized,
    13,526 and 12,970 shares issued and
    outstanding, respectively
   Additional paid-in capital                 74,812         76,283
   Notes receivable from stockholders           (821)          (905)
   Deferred stock compensation                  (160)          (531)
   Accumulated other comprehensive loss         (212)          (123)
   Retained earnings (accumulated deficit)     2,722         (2,321)
                                          -------------  -------------
        Total stockholders' equity            76,355         72,416
                                          -------------  -------------

        Total liabilities and
         stockholders' equity                $93,735        $87,919
                                          =============  =============