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Avid Technology, Inc.: Avid Files Annual Report on Form 10-K

^{Published on 2009-03-16 15:56:59, Last Modified on 2009-03-16 15:59:40 - Market Wire}
 

TEWKSBURY, MA--(Marketwire - March 16, 2009) - Avid Technology, Inc. (NASDAQ: [ AVID ]) today announced the filing of its Annual Report on Form 10-K with the Securities and Exchange Commission.

The preliminary financial results announced on January 29, 2009 have been finalized upon review of the company's impairment analysis. The analysis resulted in an additional non-cash impairment charge of $69.1 million for 2008, bringing the total charges for impairment of intangible assets and goodwill to $78.7 million for the fourth quarter and $130.0 million for the full year. The company also reduced its previously reported restructuring charge for the fourth quarter by $0.8 million based on a refinement of the estimate.

The non-GAAP results for the company were not affected by these changes.

Use of Non-GAAP Financial Measures

This press release contains a reference to "non-GAAP financial measures" under the rules of the U.S. Securities and Exchange Commission. Non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with, disclosures required by generally accepted accounting principles, or GAAP. The reconciliation for net income and earnings per share for the three- and twelve-month periods ended December 31, 2008 and 2007 are in the tables attached to this press release.

The company uses non-GAAP financial measures internally to manage its business, for example, in establishing its annual operating budget, in assessing segment operating performance and for measuring performance under employee incentive compensation plans. Non-GAAP financial measures are used by management in its operating and financial decision-making because management believes these measures reflect the company's ongoing business in a manner that allows meaningful period-to-period comparisons. Accordingly, the company believes it is useful for investors and others to review both GAAP and non-GAAP measures in order to (a) understand and evaluate the company's current operating performance and future prospects in the same manner as management does and (b) compare in a consistent manner the company's current financial results with past financial results. The primary limitations associated with the company's use of non-GAAP financial measures are that these measures may not be directly comparable to the amounts reported by other companies and they do not include all items of income and expense that affect the company's operations. The company's management compensates for these limitations by considering the company's financial results as determined in accordance with GAAP and by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in its press releases.

About Avid Technology, Inc.

Avid is a worldwide leader in tools for film, video, audio and broadcast professionals -- as well as for home audio and video enthusiasts. Avid professional and consumer brands include Avid®, Digidesign®, M-Audio®, Pinnacle Systems® Sibelius® and Sundance Digital. The vast majority of primetime television shows, feature films, commercials and chart-topping music hits are made using one or more Avid products. Whether used by seasoned professionals or beginning students, Avid's products and services enable customers to work more efficiently, productively and creatively. Avid received an Oscar® statuette representing the 1998 Scientific and Technical Award for the concept, design and engineering of the Avid Film Composer® system for motion picture editing. For more information about the company's Oscar, Grammy® and Emmy® award-winning products and services, visit [ www.avid.com ], [ del.icio.us ], [ Flickr ], [ twitter ] and [ YouTube ]; connect with Avid on [ Facebook ] or subscribe to [ Avid Industry Buzz. ]

© 2009 Avid Technology, Inc. All rights reserved. Avid, Digidesign, Film Composer, M-Audio, Pinnacle Systems, Sibelius and Sundance Digital are trademarks or registered trademarks of Avid Technology, Inc. or its subsidiaries in the United States and/or other countries. Emmy is a registered trademark of ATAS/NATAS. Oscar is a trademark and service mark of the Academy of Motion Picture Arts and Sciences. Grammy is a trademark of the National Academy of Recording Arts and Sciences, Inc. All other trademarks are the property of their respective owners.

 AVID TECHNOLOGY, INC. Condensed Consolidated Statements of Operations (unaudited - in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, -------------------- --------------------- 2008 2007 2008 2007 ---------- --------- ---------- --------- Net revenues: Products $ 173,255 $ 222,473 $ 714,232 $ 806,103 Services 33,451 36,047 130,669 123,467 ---------- --------- ---------- --------- Total net revenues 206,706 258,520 844,901 929,570 ---------- --------- ---------- --------- Cost of revenues: Products 97,182 111,625 369,186 390,725 Services 18,128 19,042 73,888 68,529 Amortization of intangible assets 753 3,566 7,526 16,895 Restructuring costs 1,876 1,481 1,876 4,278 ---------- --------- ---------- --------- Total cost of revenues 117,939 135,714 452,476 480,427 ---------- --------- ---------- --------- Gross profit 88,767 122,806 392,425 449,143 ---------- --------- ---------- --------- Operating expenses: Research and development 33,291 38,050 148,598 150,707 Marketing and selling 49,511 53,425 208,735 210,456 General and administrative 17,422 21,399 78,591 77,463 Amortization of intangible assets 2,837 3,431 12,854 13,726 Impairment of goodwill and intangible assets 78,715 - 129,972 - Restructuring costs, net 21,305 1,338 25,412 9,410 Gain on sale of assets (13,287) - (13,287) - ---------- --------- ---------- --------- Total operating expenses 189,794 117,643 590,875 461,762 ---------- --------- ---------- --------- Operating income (loss) (101,027) 5,163 (198,450) (12,619) Interest and other income (expense), net 331 1,739 2,936 7,637 ---------- --------- ---------- --------- Income (loss) before income taxes (100,696) 6,902 (195,514) (4,982) Provision for (benefit from) income taxes, net (443) 3,049 2,663 2,997 ---------- --------- ---------- --------- Net income (loss) $ (100,253) $ 3,853 $ (198,177) $ (7,979) ========== ========= ========== ========= Net income (loss) per common share - basic $ (2.71) $ 0.09 $ (5.28) $ (0.19) Net income (loss) per common share - diluted $ (2.71) $ 0.09 $ (5.28) $ (0.19) Weighted-average common shares outstanding - basic 37,012 41,008 37,556 40,974 Weighted-average common shares outstanding - diluted 37,012 41,253 37,556 40,974 AVID TECHNOLOGY, INC. (unaudited - in thousands, except per share data) Summary of the Company's revenues and contribution margin by reportable segment and a reconciliation of segment contribution margin to consolidated operating income (loss): Three Months Ended Twelve Months Ended December 31, December 31, --------------------- --------------------- 2008 2007 2008 2007 ---------- --------- ---------- --------- Revenues: Professional Video $ 111,230 $ 133,342 $ 438,420 $ 485,186 Audio 72,410 85,987 293,195 318,993 Consumer Video 23,066 39,191 113,286 125,391 ---------- --------- ---------- --------- Total revenues (a) $ 206,706 $ 258,520 $ 844,901 $ 929,570 ========== ========= ========== ========= Contribution Margin: Professional Video $ 16,822 $ 22,018 $ 40,917 $ 66,502 Audio 10,926 16,121 40,541 55,710 Consumer Video (11,904) 2,799 (16,135) 6,552 ---------- --------- ---------- --------- Segment contribution margin 15,844 40,938 65,323 128,764 ---------- --------- ---------- --------- Less: Unallocated costs and expenses: Common costs and operating expenses (21,561) (21,874) (85,219) (79,523) Amortization of acquisition-related intangible assets (3,590) (6,997) (20,380) (30,621) Impairment of goodwill and intangible asset (78,715) - (129,972) - Stock-based compensation (3,111) (3,858) (14,201) (15,949) Restructuring costs, net (23,181) (2,819) (27,288) (13,688) Gain on sale of assets 13,287 - 13,287 - Other costs - (227) - (1,602) ---------- --------- ---------- --------- Consolidated operating income (loss) $ (101,027) $ 5,163 $ (198,450) $ (12,619) ========== ========= ========== ========= (a) Includes revenues from divestitures and discontinued product lines of: $ 11,294 $ 19,899 $ 61,508 $ 68,692 Reconciliation of GAAP net income (loss) to Non-GAAP net income (loss): Three Months Ended Twelve Months Ended December 31, December 31, --------------------- --------------------- 2008 2007 2008 2007 ---------- --------- ---------- --------- GAAP net income (loss) $ (100,253) $ 3,853 $ (198,177) $ (7,979) Adjustments to reconcile to Non-GAAP net income: Amortization of intangible assets 3,590 6,997 20,380 30,621 Impairment of goodwill and intangible asset 78,715 - 129,972 - Stock-based compensation 3,111 3,858 14,201 15,949 Restructuring costs, net 23,181 2,819 27,288 13,688 Gain on sale of assets (13,287) - (13,287) - Other costs - 227 - 1,602 Related tax adjustments (4,331) (600) (5,619) (2,740) ---------- --------- ---------- --------- Non-GAAP net income (loss) $ (9,274) $ 17,154 $ (25,242) $ 51,141 ========== ========= ========== ========= Weighted-average common shares outstanding - diluted 37,012 41,253 37,556 41,450 Non-GAAP net income (loss) per common share - diluted $ (0.25) $ 0.42 $ (0.67) $ 1.23 Stock-based compensation Three Months Ended Twelve Months Ended included in: December 31, December 31, --------------------- --------------------- 2008 2007 2008 2007 ---------- --------- ---------- --------- Cost of products revenues $ 136 $ 174 $ 616 $ 679 Cost of services revenues 131 133 539 829 Research and development expenses 605 1,106 2,820 4,521 Marketing and selling expenses 897 1,242 4,005 4,470 General and administrative expenses 1,342 1,203 6,221 5,450 ---------- --------- ---------- --------- $ 3,111 $ 3,858 $ 14,201 $ 15,949 ========== ========= ========== ========= AVID TECHNOLOGY, INC. Condensed Consolidated Balance Sheets (unaudited - in thousands) December 31, December 31, 2008 2007 ------------ ------------ ASSETS: Current assets: Cash, cash equivalents and marketable securities $ 147,694 $ 224,460 Accounts receivable, net of allowances of $23,182 and $20,784 at December 31, 2008 and 2007, respectively 103,527 138,692 Inventories 95,755 117,324 Prepaid and other current assets 43,969 36,788 ------------ ------------ Total current assets 390,945 517,264 Property and equipment, net 38,321 46,160 Intangible assets, net 38,143 71,427 Goodwill 225,375 360,584 Other assets 10,801 10,518 ------------ ------------ Total assets $ 703,585 $ 1,005,953 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $ 29,419 $ 34,992 Accrued expenses and other current liabilities 101,107 93,912 Deferred revenues 68,581 79,771 ------------ ------------ Total current liabilities 199,107 208,675 Long-term liabilities 11,823 17,495 ------------ ------------ Total liabilities 210,930 226,170 ------------ ------------ Stockholders' equity: Common stock 423 423 Additional paid-in capital 980,563 968,339 Accumulated deficit (365,431) (155,722) Treasury stock at cost, net of reissuances (124,852) (45,823) Accumulated other comprehensive income 1,952 12,566 ------------ ------------ Total stockholders' equity 492,655 779,783 ------------ ------------ Total liabilities and stockholders' equity $ 703,585 $ 1,005,953 ============ ============