Attached files
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| 8-K - FORM 8-K DATED OCTOBER 21, 2010 - AVID TECHNOLOGY, INC. | f8k_102110.htm |
EXHIBIT 99.1
| Contact: | Investor Contact: Tom Fitzsimmons, tom.fitzsimmons@avid.com, 978-640-3346 |
| Media Contact: Amy Peterson, amy.peterson@avid.com, 978-640-3448 |
Avid Announces Third Quarter 2010 Results,
Reports Revenue Growth and Profit Improvement
BURLINGTON, MA., October 21, 2010 — Avid® (NASDAQ: AVID) today reported revenues of $165.1 million for the three-month period ended September 30, 2010, compared to $152.1 million for the same period in 2009. The GAAP net loss for the third quarter was $10.0 million, or $0.26 per share, compared to a GAAP net loss of $17.2 million, or $0.46 per share, in the third quarter of 2009.
The GAAP net loss for the third quarter of 2010 included amortization of intangible assets, stock-based compensation, restructuring and other charges, a gain on asset sales, acquisition-related costs, a legal settlement and related tax adjustments collectively totaling $11.6 million. Excluding these items, the non-GAAP net income was $1.6 million for the third quarter, or $0.04 per share. The GAAP net loss for the third quarter of 2009 included $17.0 million of amortization of intangible assets, stock-based compensation, restructuring and other charges, loss on asset sales and related tax adjustments. Excluding these items, the non-GAAP net loss per share for the third quarter of 2009 was $0.01 per share
The GAAP operating loss for the third quarter was $7.1 million, including amortization of intangible assets, stock-based compensation, restructuring and other charges, a gain on asset sales, acquisition-related costs and a legal settlement collectively totaling $12.0 million. Excluding these items, the non-GAAP operating profit for the third quarter was $4.9 million. A reconciliation of GAAP to non-GAAP results is included in the tables attached to this release.
“We are pleased to report our strongest financial quarter since 2007 including a non-GAAP operating profit and strong year-over-year revenue growth,” said Gary Greenfield, chairman and CEO at Avid. “The steady revenue growth trend in both Avid’s business and our customers’ businesses is encouraging and we remain focused on improving our profit margin.”
Revenues for the nine-month period ended September 30, 2010 were $483.2 million, compared to revenues of $454.3 million for the same period in 2009. GAAP net loss for the first nine months of 2010 was $36.4 million, or $0.96 per share, compared to GAAP net loss of $50.4 million, or $1.35 per share, for the same period in 2009. GAAP net loss for the nine-month period ended September 30, 2010 included $31.4 million of amortization of intangible assets, stock-based compensation, restructuring and other charges, a gain on asset sales, acquisition-related costs, a legal settlement and related tax adjustments. Excluding these items, the non-GAAP net loss was $5.0 million for the first nine-months of 2010, or $0.13 per share. GAAP net loss for the nine-month period ended September 30, 2009 was $50.4 million and included $39.1 million of amortization of intangible assets, stock-based compensation, restructuring and other charges, loss on asset sales and related tax adjustments. Excluding these items, the non-GAAP net loss was $11.3 million for the first nine-months of 2009, or $0.30 per share.
Use of Non-GAAP Financial Measures
This press release contains “non-GAAP financial measures” under the rules of the U.S. Securities and Exchange Commission. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This 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. Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. The reconciliation of the GAAP to non-GAAP financial measures that we provide is in the tables attached to this press release.
We consider both GAAP and non-GAAP financial results in managing our business. Non-GAAP financial measures are used internally, for example, in establishing annual operating budgets, in assessing operating performance and for measuring performance under incentive compensation plans. Non-GAAP financial measures are also used in operating and financial decision-making because we believe these measures reflect our ongoing business and allow meaningful period-to-period comparisons. We believe it is useful for investors and others to also review both GAAP and non-GAAP measures in order to understand and evaluate our current operating performance and future prospects in the same manner as management and to compare in a consistent manner the company’s current financial results with past financial performance. The primary limitations associated with our use of non-GAAP financial measures are that they may not include all items of income and expense that affect our operations and that the non-GAAP financial measures we use may not be directly comparable to those reported by other companies. For example, the terms used in this press release, non-GAAP operating profit and non-GAAP net income, do not have standardized meanings. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. We seek to compensate for this limitation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in the tables attached to this press release.
Conference Call
A conference call to discuss Avid’s third quarter 2010 financial results will be held today, October 21, 2010 at 4:30 p.m. EDT. The call will be open to the public and can be accessed by dialing 719.457.2617 and referencing confirmation code 4569475. The call and subsequent replay will also be available on Avid’s website. To listen via this alternative, go to the Investors tab at www.avid.com for complete details prior to the start of the conference call.
Use of Forward-Looking Statements
The above release is subject to the completion and filing of our Quarterly Report on Form 10-Q. This release includes forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995. This release also makes forward-looking statements about Avid’s performance. There are a number of factors that could cause actual events or results to differ materially from those indicated by such forward-looking statements, such as Avid’s ability to execute on its corporate strategy and meet customer needs, general economic conditions, competitive factors, pricing pressures, delays in product shipments and other important events and factors disclosed previously and from time to time in Avid’s filings with the U.S. Securities and Exchange Commission. In addition, the forward-looking statements contained herein represent Avid’s estimates only as of today and should not be relied upon as representing the company’s estimates as of any subsequent date. While Avid may elect to update these forward-looking statements at some point in the future, Avid specifically disclaims any obligation to do so, even if the estimates change.
About Avid
Avid creates the digital audio and video technology used to make the most listened to, most watched and most loved media in the world – from the most prestigious and award-winning feature films, music recordings, television shows, live concert tours and news broadcasts, to music and movies made at home. Some of Avid’s most influential and pioneering solutions include Media Composer®, Pro Tools®, Interplay®, ISIS®, VENUE, Oxygen 8, Sibelius®, System 5, and Pinnacle Studio™. For more information about Avid solutions and services, visit www.avid.com, del.icio.us, Flickr, Twitter and YouTube; connect with Avid on Facebook; or subscribe to Avid Industry Buzz.
© 2010 Avid Technology, Inc. All rights reserved. Avid, the Avid Logo, Interplay, ISIS, Media Composer, Pinnacle Studio, Pro Tools and Sibelius are trademarks or registered trademarks of Avid Technology, Inc. or its subsidiaries in the United States and/or other countries. The Interplay name is used with the permission of Interplay Entertainment Corp., which bears no responsibility for Avid products. 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 |
|
Nine Months Ended | |||||||
| September 30, | September 30, | ||||||||
|
2010
|
2009
|
2010
|
2009
|
||||||
|
Net revenues:
|
|||||||||
|
Products
|
$134,231
|
$123,522
|
$397,044
|
$369,075
|
|||||
|
Services
|
30,828
|
28,597
|
86,131
|
85,216
|
|||||
|
Total net revenues
|
165,059
|
152,119
|
483,175
|
454,291
|
|||||
|
Cost of revenues:
|
|||||||||
|
Products
|
64,421
|
57,097
|
193,527
|
176,774
|
|||||
|
Services
|
14,194
|
13,586
|
41,373
|
43,515
|
|||||
|
Amortization of intangible assets
|
745
|
519
|
2,657
|
1,465
|
|||||
|
Restructuring costs
|
-
|
-
|
-
|
799
|
|||||
|
Total cost of revenues
|
79,360
|
71,202
|
237,557
|
222,553
|
|||||
|
Gross profit
|
85,699
|
80,917
|
245,618
|
231,738
|
|||||
|
Operating expenses:
|
|||||||||
|
Research and development
|
28,929
|
29,262
|
89,348
|
90,974
|
|||||
|
Marketing and selling
|
43,199
|
44,705
|
129,419
|
127,480
|
|||||
|
General and administrative
|
19,698
|
12,093
|
48,179
|
39,765
|
|||||
|
Amortization of intangible assets
|
2,283
|
2,782
|
7,557
|
7,779
|
|||||
|
Restructuring and other costs, net
|
185
|
7,891
|
|
5,532
|
17,132
|
||||
|
(Gain) loss on sales of assets
|
(1,527)
|
3,398
|
(1,527)
|
3,398
|
|||||
|
Total operating expenses
|
92,767
|
100,131
|
278,508
|
286,528
|
|||||
|
Operating loss
|
(7,068)
|
(19,214)
|
(32,890)
|
(54,790)
|
|||||
|
Interest and other income (expense), net
|
(30)
|
(240)
|
(132)
|
(29)
|
|||||
|
Loss before income taxes
|
(7,098)
|
(19,454)
|
(33,022)
|
(54,819)
|
|||||
|
Provision for (benefit from) income taxes, net
|
2,897
|
(2,246)
|
3,361
|
(4,385)
|
|||||
|
Net loss
|
($9,995)
|
($17,208)
|
($36,383)
|
($50,434)
|
|||||
|
Net loss per common share - basic and diluted
|
($0.26)
|
($0.46)
|
($0.96)
|
($1.35)
|
|||||
|
Weighted-average common shares outstanding - basic and diluted
|
38,045
|
37,341
|
37,826
|
37,251
|
|||||
|
AVID TECHNOLOGY, INC.
|
|||||||||||
|
(unaudited - in thousands, except per share data)
|
|||||||||||
|
Change in Financial Presentation
|
|||||||||||
|
Beginning January 1, 2010, we are reporting based on a single reporting segment. Comparative results for the 2009
|
|||||||||||
|
periods have been updated to reflect this new business structure.
|
|||||||||||
|
Reconciliations of GAAP financial measures to Non-GAAP financial measures:
|
|||||||||||
| Three Months Ended September 30, 2010 | |||||||||||
|
Gross
|
Operating
|
Operating
|
Tax
|
Net
|
|||||||
|
Profit
|
Expenses |
|
(Loss) Income | Provision |
|
(Loss) Income
|
|||||
|
GAAP
|
$85,699
|
$92,767
|
($7,068)
|
$2,897
|
($9,995)
|
||||||
|
Amortization of intangible assets
|
745
|
(2,283)
|
3,028
|
3,028
|
|||||||
|
Restructuring and other costs, net
|
(185)
|
185
|
185
|
||||||||
|
Acquisition-related costs (a)
|
(56)
|
56
|
56
|
||||||||
|
Legal settlement (a)
|
(5,600)
|
5,600
|
5,600
|
||||||||
|
Gain on sales of assets
|
527
|
(527)
|
(527)
|
||||||||
|
Tax adjustment
|
399
|
(399)
|
|||||||||
|
Stock-based compensation included in:
|
|||||||||||
|
Cost of products revenues
|
176
|
176
|
176
|
||||||||
|
Cost of services revenues
|
287
|
287
|
287
|
||||||||
|
Research and development expenses
|
(506)
|
506
|
506
|
||||||||
|
Marketing and selling expenses
|
(1,078)
|
1,078
|
1,078
|
||||||||
|
General and administrative expenses
|
(1,581)
|
1,581
|
1,581
|
||||||||
|
Non-GAAP
|
$86,907
|
$82,005
|
$4,902
|
$3,296
|
$1,576
|
||||||
|
Weighted-average shares outstanding - diluted
|
38,065
|
||||||||||
|
Non-GAAP net income per share - diluted
|
$0.04
|
||||||||||
|
(a)
|
Represents costs included in general and administrative expenses
|
||||||||||
| Three Months Ended September 30, 2009 | |||||||||||
|
Gross
|
Operating
|
Operating
|
Tax
|
Net
|
|||||||
|
Profit
|
Expenses |
|
Loss
|
Benefit
|
Loss
|
||||||
|
GAAP
|
$80,917
|
$100,131
|
($19,214)
|
($2,246)
|
($17,208)
|
||||||
|
Amortization of intangible assets
|
519
|
(2,782)
|
3,301
|
3,301
|
|||||||
|
Restructuring and other costs, net
|
(7,891)
|
7,891
|
7,891
|
||||||||
|
Loss on sales of assets
|
(3,398)
|
3,398
|
3,398
|
||||||||
|
Tax adjustment
|
463
|
(463)
|
|||||||||
|
Stock-based compensation included in:
|
|||||||||||
|
Cost of products revenues
|
163
|
163
|
163
|
||||||||
|
Cost of services revenues
|
247
|
247
|
247
|
||||||||
|
Research and development expenses
|
(655)
|
655
|
655
|
||||||||
|
Marketing and selling expenses
|
(895)
|
895
|
895
|
||||||||
|
General and administrative expenses
|
(906)
|
906
|
906
|
||||||||
|
Non-GAAP
|
$81,846
|
$83,604
|
($1,758)
|
($1,783)
|
($215)
|
||||||
|
Weighted-average shares outstanding - diluted
|
37,341
|
||||||||||
|
Non-GAAP net loss per share - diluted
|
($0.01)
|
||||||||||
|
AVID TECHNOLOGY, INC.
|
|||||||||||
|
(unaudited - in thousands, except per share data)
|
|||||||||||
|
Reconciliations of GAAP financial measures to Non-GAAP financial measures:
|
|||||||||||
| Nine Months Ended September 30, 2010 | |||||||||||
|
Gross
|
Operating
|
|
Operating
|
Tax
|
Net
|
||||||
|
Profit
|
Expenses |
Loss
|
Provision |
Loss
|
|||||||
|
GAAP
|
$245,618
|
$278,508
|
($32,890)
|
$3,361
|
($36,383)
|
||||||
|
Amortization of intangible assets
|
2,657
|
(7,557)
|
10,214
|
10,214
|
|||||||
|
Restructuring and other costs, net (a)
|
(5,532)
|
5,532
|
5,532
|
||||||||
|
Acquisition-related costs (b)
|
(825)
|
825
|
825
|
||||||||
|
Legal settlement (b)
|
(5,600)
|
5,600
|
5,600
|
||||||||
|
Gain on sales of assets
|
527
|
(527)
|
(527)
|
||||||||
|
Tax adjustment
|
854
|
(854)
|
|||||||||
|
Stock-based compensation included in:
|
|||||||||||
|
Cost of products revenues
|
562
|
562
|
562
|
||||||||
|
Cost of services revenues
|
822
|
822
|
822
|
||||||||
|
Research and development expenses
|
(1,704)
|
1,704
|
1,704
|
||||||||
|
Marketing and selling expenses
|
(3,153)
|
3,153
|
3,153
|
||||||||
|
General and administrative expenses
|
(4,373)
|
4,373
|
4,373
|
||||||||
|
Non-GAAP
|
$249,659
|
$250,291
|
($632)
|
$4,215
|
($4,979)
|
||||||
|
Weighted-average shares outstanding - diluted
|
37,826
|
||||||||||
|
Non-GAAP net loss per share - diluted
|
($0.13)
|
||||||||||
|
(a)
|
Includes costs of $3.7 million related to exiting our former Tewksbury, Massachusetts headquarters lease
|
||||||||||
|
(b)
|
Represents costs included in general and administrative expenses
|
||||||||||
| Nine Months Ended September 30, 2009 | |||||||||||
|
Gross
|
Operating |
|
Operating |
Tax
|
Net
|
||||||
|
Profit
|
Expenses |
Loss
|
Benefit
|
Loss
|
|||||||
|
GAAP
|
$231,738
|
$286,528
|
($54,790)
|
($4,385)
|
($50,434)
|
||||||
|
Amortization of intangible assets
|
1,465
|
(7,779)
|
9,244
|
9,244
|
|||||||
|
Restructuring and other costs, net
|
799
|
(17,132)
|
17,931
|
17,931
|
|||||||
|
Loss on sales of assets
|
(3,398)
|
3,398
|
3,398
|
||||||||
|
Tax adjustment
|
1,357
|
(1,357)
|
|||||||||
|
Stock-based compensation included in:
|
|||||||||||
|
Cost of products revenues
|
666
|
666
|
666
|
||||||||
|
Cost of services revenues
|
868
|
868
|
868
|
||||||||
|
Research and development expenses
|
(1,737)
|
1,737
|
1,737
|
||||||||
|
Marketing and selling expenses
|
(2,522)
|
2,522
|
2,522
|
||||||||
|
General and administrative expenses
|
(4,115)
|
4,115
|
4,115
|
||||||||
|
Non-GAAP
|
$235,536
|
$249,845
|
($14,309)
|
($3,028)
|
($11,310)
|
||||||
|
Weighted-average shares outstanding - diluted
|
37,251
|
||||||||||
|
Non-GAAP net loss per share - diluted
|
($0.30)
|
||||||||||
| Revenue Summary: | Three Months Ended |
Nine Months Ended
|
|||||||||
| September 30, |
September 30,
|
|
|||||||||
|
2010
|
2009
|
2010
|
2009
|
||||||||
|
Video revenues
|
$100,186
|
$92,617
|
$278,060
|
$268,818
|
|||||||
|
Audio revenues
|
64,873
|
59,502
|
205,115
|
185,473
|
|||||||
|
Total net revenues
|
$165,059
|
$152,119
|
$483,175
|
$454,291
|
|||||||
|
AVID TECHNOLOGY, INC.
|
||||
|
Condensed Consolidated Balance Sheets
|
||||
|
(unaudited - in thousands)
|
||||
|
September 30,
|
December 31,
|
|||
|
2010
|
2009
|
|||
|
ASSETS:
|
||||
|
Current assets:
|
||||
|
Cash, cash equivalents and marketable securities
|
$34,361
|
$108,877
|
||
|
Accounts receivable, net of allowances of $15,733 and $16,347
|
||||
|
at September 30, 2010 and December 31, 2009, respectively
|
89,674
|
79,741
|
||
|
Inventories
|
96,306
|
77,243
|
||
|
Prepaid and other current assets
|
27,782
|
31,075
|
||
|
Total current assets
|
248,123
|
296,936
|
||
|
Property and equipment, net
|
65,088
|
37,217
|
||
|
Intangible assets, net
|
32,564
|
29,235
|
||
|
Goodwill
|
244,282
|
227,195
|
||
|
Other assets
|
9,859
|
20,455
|
||
|
Total assets
|
$599,916
|
$611,038
|
||
|
LIABILITIES AND STOCKHOLDERS' EQUITY:
|
||||
|
Current liabilities:
|
||||
|
Accounts payable
|
45,250
|
$30,230
|
||
|
Accrued expenses and other current liabilities
|
66,770
|
84,100
|
||
|
Deferred revenues
|
46,822
|
39,107
|
||
|
Total current liabilities
|
158,842
|
153,437
|
||
|
Long-term liabilities
|
22,116
|
14,483
|
||
|
Total liabilities
|
180,958
|
167,920
|
||
|
Stockholders' equity:
|
||||
|
Common stock
|
423
|
423
|
||
|
Additional paid-in capital
|
1,001,891
|
992,489
|
||
|
Accumulated deficit
|
(494,927)
|
(444,661)
|
||
|
Treasury stock at cost, net of reissuances
|
(92,355)
|
(112,389)
|
||
|
Accumulated other comprehensive income
|
3,926
|
7,256
|
||
|
Total stockholders' equity
|
418,958
|
443,118
|
||
|
Total liabilities and stockholders' equity
|
$599,916
|
$611,038
|
||