8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 18, 2006

INTERVIDEO, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	000-49809	94-3300070
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

46430 Fremont Boulevard

Fremont, California 94538

(Address of Principal Executive Offices)

(510) 651-0888

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. Results of Operations and Financial Condition

The information in this Item 2.02 of Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

On January 24, 2006, InterVideo, Inc. (the “Company” or “InterVideo”) issued a press release announcing that it will restate its financial results for the fiscal quarters ended June 30, 2005 and September 30, 2005. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated by reference herein.

ITEM 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

(a) On January 18, 2006, senior management of the Company met with the Audit Committee of the Board of Directors to discuss management’s recommendation to restate the Company’s financial results. The Audit Committee concurred with senior management and authorized the Company to amend and restate its financial statements and other financial information for the quarters ended June 30, 2005 and September 30, 2005. The Company intends to file amendments to its Form 10-Qs for such quarters and previously issued financial statements for such interim periods should no longer be relied upon. Prior periods were not affected.

Adjustments to the previously reported unaudited financial statements noted above were the result of InterVideo’s review of its application of purchase accounting under Statement of Financial Accounting Standards No. 141, Business Combinations, and completion of its purchase price allocation. This review has resulted in the determination to apply the partial goodwill method (or parent company theory) instead of the previously applied full goodwill method (or entity theory), which is discussed in an exposure draft related to the Financial Accounting Standards Board’s reconsideration of the business combination accounting. The application of the partial goodwill method requires the Company to record its share of Ulead’s assets and liabilities, and resulting intangible assets, including goodwill, at the proportionate share acquired based upon the purchase price. The overstated amortization charges are the result of the Company incorrectly calculating purchase related in-process research and development costs and intangibles amortization. The deferred tax adjustments resulted from the finalization of the deferred income tax calculations associated with the Ulead purchase. The expected effects of the restatement, including the impact on net income (loss) and earnings (loss) per diluted share, are more fully discussed in the press release furnished as Exhibit 99.1 to this Form 8-K.

The Company’s Audit Committee of the Board of Directors has discussed these matters with its independent registered public accounting firm, Grant Thornton LLP.

ITEM 9.01. Financial Statements, Pro Forma Information and Exhibits

(c) Exhibits.

99.1    Press release of InterVideo, Inc. dated January 24, 2006.

SAFE HARBOR

THIS REPORT INCLUDES “FORWARD-LOOKING STATEMENTS” THAT ARE SUBJECT TO RISKS, UNCERTAINTIES AND OTHER FACTORS THAT COULD CAUSE ACTUAL RESULTS OR OUTCOMES TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY THE FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS IN THIS RELEASE ARE GENERALLY IDENTIFIED BY WORDS, SUCH AS “BELIEVES,” “ANTICIPATES,” “PLANS,” “INTENDS,” “EXPECTS,” “WILL,” “WOULD,” “GUIDANCE,” “PROJECTS” AND SIMILAR EXPRESSIONS WHICH ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THERE ARE A NUMBER OF IMPORTANT FACTORS THAT COULD CAUSE THE RESULTS OR OUTCOMES DISCUSSED HEREIN TO DIFFER MATERIALLY FROM THOSE INDICATED BY THESE FORWARD-LOOKING STATEMENTS, INCLUDING, AMONG OTHERS, THE RISKS THAT THE FINANCIAL RESULTS MAY CHANGE AFTER FINAL REVIEW BY THE COMPANY’S AUDITORS AND ADDITIONAL ERRORS IN THE FINANCIAL STATEMENTS. FURTHER INFORMATION ON POTENTIAL FACTORS THAT COULD AFFECT INTERVIDEO ARE INCLUDED IN RISKS DETAILED FROM TIME TO TIME IN INTERVIDEO’S SECURITIES AND EXCHANGE COMMISSION FILINGS. INTERVIDEO DOES NOT UNDERTAKE AN OBLIGATION TO UPDATE FORWARD-LOOKING OR OTHER STATEMENTS IN THIS REPORT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	INTERVIDEO, INC.
	(Registrant)
Date: January 24, 2006	/s/ Randall Bambrough
	Randall Bambrough
	Chief Financial Officer

INDEX OF EXHIBITS:

Exhibit Number	Description
99.1	Press release of InterVideo, Inc. dated January 24, 2006

EX-99.1

Exhibit 99.1

Investor contact:

Lisa Laukkanen

The Blueshirt Group for InterVideo

415-217-4967

lisa@blueshirtgroup.com

INTERVIDEO ANNOUNCES AMENDMENT TO FINANCIAL STATEMENTS RESULTING

IN UNDERSTATED EARNINGS

Company Corrects Previously Reported Charges Associated with its Majority Investment in Ulead Systems

Fremont, Calif., January 24, 2006—InterVideo, Inc. (Nasdaq:IVII), a leading provider of DVD software, announced today that it intends to file amendments to its Forms 10-Q for the quarters ended June 30, 2005 and September 30, 2005, due to the misapplication of certain complex accounting principles to its purchase of a controlling interest in Ulead Systems (Ulead) and other purchase accounting related adjustments pertaining to amortization charges of intangible assets and deferred taxes which resulted in the understatement of net income for both quarters. The expected effect of these restatements will be to decrease the loss for the second quarter of 2005 to approximately $1.8 million, or $0.13 per diluted share, and to increase earnings for the third quarter of 2005 to approximately $2.5 million, or $0.16 per diluted share. InterVideo previously reported a loss of $4.1 million, or $0.30 per diluted share, for the second quarter of 2005 and earnings of $2.4 million, or $0.16 per diluted share, for the third quarter of 2005. For the six months ended June 30, 2005, the expected effect of these restatements will be to increase earnings to approximately $831,000, or $0.05 per diluted share, from the previously reported loss of $1.5 million, or $0.11 per diluted share. For the nine months ended September 30, 2005, the expected effect of these restatements will be to increase earnings to approximately $3.4 million, or $0.22 per diluted share, from the previously reported earnings of $921,000, or $0.06 per diluted share.

Adjustments to the previously reported unaudited financial statements noted above were the result of InterVideo’s review of its application of purchase accounting under Statement of Financial Accounting Standards No. 141, Business Combinations, and completion of its purchase price allocation. This review has resulted in the determination to apply the partial goodwill method (or parent company theory) instead of the previously applied full goodwill method (or entity theory), which is discussed in an exposure draft related to the Financial Accounting Standards Board’s reconsideration of the business combination accounting. The application of the partial goodwill method requires the Company to record its share of Ulead’s assets and liabilities, and resulting intangible assets, including goodwill, at the proportionate share acquired based upon the purchase price. The overstated amortization charges are the result of the Company incorrectly calculating purchase related in-process research and development costs and intangibles amortization. The

deferred tax adjustments resulted from the finalization of the deferred income tax calculations associated with the Ulead purchase. The total effect of the restatement, including the impact on GAAP net income (loss) and earnings (loss) per diluted share, is summarized in the table below.

A Form 8-K is being filed in conjunction with this press release and amended Forms 10-Q for the quarters ended June 30, 2005 and September 30, 2005 will be filed in the coming weeks.

About InterVideo, Inc.

InterVideo is a leading provider of DVD software. InterVideo has developed a technology platform from which it has created a broad suite of integrated multimedia software products that allow users to capture, edit, author, burn, distribute, and play digital video. InterVideo’s software is bundled with products sold by the majority of the leading PC OEMs. The company is headquartered in Fremont, CA with regional offices in Europe, Taiwan, China and Japan. For more information, contact InterVideo at 510/651-0888 or visit the company’s Web site at www.intervideo.com.

Safe Harbor Statement

Except for the historical statements contained herein, the foregoing release contains forward-looking statements, including statements regarding, among other matters, the anticipated effect on the Company’s financial results of the restatement described herein. These forward-looking statements are subject to risks and uncertainties, and actual results could differ materially due to several factors, including the risk that the financial results may change after final review by our auditors and other risks and uncertainties. Please consult the various reports and documents filed by InterVideo with the U.S. Securities and Exchange Commission, including but not limited to InterVideo’s annual report on Form 10-K for other risk factors potentially affecting the Company’s future financial results. All forward-looking statements are made as of the date hereof and InterVideo disclaims any responsibility to update or revise any forward-looking statement provided in this news release. InterVideo is a registered trademark of InterVideo, Inc. All other trademarks are the property of their respective holders.

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2

Restatement Summary for the Three and Six Months Ended June 30, 2005

and the Three and Nine Months Ended September 30, 2005

Selected Financial Statement Information

(in millions except per share and share data)

	Three Months Ended June 30, 2005 (unaudited)						Six Months Ended June 30, 2005 (unaudited)						Three Months Ended September 30, 2005 (unaudited)						Nine Months Ended September 30, 2005 (unaudited)
	As Reported			Expected Restated Amounts			As Reported			Expected Restated Amounts			As Reported			Expected Restated Amounts			As Reported			Expected Restated Amounts
Selected Statement of Operations Components
Revenue	$	27.6		$	27.6		$	49.5		$	49.5		$	29.0		$	29.0		$	78.5		$	78.5
Cost of revenue		(10.9	)		(10.7	)		(20.1	)		(19.9	)		(9.9	)		(9.7	)		(30.0	)		(29.5	)
Gross profit		16.7			16.9			29.4			29.6			19.1			19.3			48.5			49.0
Total operating expenses		(19.5	)		(17.3	)		(28.2	)		(26.0	)		(15.7	)		(15.7	)		(43.9	)		(41.6	)
Provision for income taxes		(0.6	)		(0.8	)		(2.3	)		(2.4	)		(2.1	)		(2.2	)		(4.3	)		(4.6	)
Net income (loss)	$	(4.1	)	$	(1.8	)	$	(1.5	)	$	0.8		$	2.4		$	2.5		$	0.9		$	3.4
Net income (loss) per share:
Basic	$	(0.30	)	$	(0.13	)	$	(0.11	)	$	0.06		$	0.17		$	0.18		$	0.07		$	0.24
Diluted	$	(0.30	)	$	(0.13	)	$	(0.11	)	$	0.05		$	0.16		$	0.16		$	0.06		$	0.22
Number of shares used in net income per share calculation (in 000’s)
Basic		13,980			13,980			13,886			13,886			14,046			14,046			13,940			13,940
Diluted		13,980			13,980			13,886			15,406			15,382			15,382			15,400			15,400

	As of June 30, 2005 (unaudited)					As of September 30, 2005 (unaudited)
	As Reported			Expected Restated Amounts		As Reported		Expected Restated Amounts
Selected Balance Sheet Components
Held for sale asset	$	—		$	—	$	19.5	$	19.6
Property and equipment		24.1			24.0		3.8		3.6
Goodwill		2.3			1.0		2.5		1.0
Other purchased intangible assets		14.5			7.8		13.9		7.4
Other assets		4.6			4.2		4.7		4.4
Accrued liabilities		18.5			19.1		17.3		17.4
Deferred revenue		7.8			8.3		8.2		8.5
Deferred tax liabilities		6.6			1.0		6.2		1.0
Minority interest		26.3			19.9		23.9		19.3
Accumulated other comprehensive income		(0.1	)		0.0		1.0		(0.3	)
Retained earnings	$	5.0		$	7.3	$	7.4	$	9.9