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Avid Announces Fourth Quarter 2009 Results
TEWKSBURY, MA, Jan 28, 2010 (MARKETWIRE via COMTEX News Network) -- Avid(R) (NASDAQ: AVID) today reported revenues of $174.7 million for the three-month period ended December 31, 2009, compared to $206.7 million for the same period in 2008. The GAAP net loss for the quarter was $17.9 million, or $0.48 per share, compared to a GAAP net loss of $100.3 million, or $2.71 per share, in the fourth quarter of 2008.
The GAAP net loss for the fourth quarter of 2009 included amortization of intangibles, stock-based compensation, restructuring charges, acquisition related costs, net gains from divested product lines and related tax adjustments, collectively totaling $16.5 million. Excluding these items, the non-GAAP net loss was $1.4 million for the fourth quarter, or $0.04 per share.
The GAAP operating loss for the fourth quarter was $15.1 million, including amortization of intangibles, stock-based compensation, restructuring charges, acquisition related costs and net gains from divested product lines collectively totaling $17.1 million. Excluding these items, the non-GAAP operating profit was $2.0 million for the fourth quarter.
"Avid has made good progress this quarter. Our revenues were up sequentially and we believe our markets are stabilizing with some signs of recovery," said Gary Greenfield, chairman and CEO at Avid. "We reported a non-GAAP operating profit for the quarter and with the majority of our cost structure transformation complete we feel we are well positioned for margin expansion."
Revenues for the year ended December 31, 2009 were $629.0 million, compared to revenues of $844.9 million for 2008. GAAP net loss for 2009 was $68.4 million, or $1.83 per share, compared to GAAP net loss of $198.2 million, or $5.28 per share for 2008. GAAP net loss for 2009 included $55.7 million of amortization, stock-based compensation, restructuring charges, acquisition related costs, net gains from divested product lines and related tax adjustments. Excluding these items, the non-GAAP net loss was $12.7 million or $0.34 per share for 2009. GAAP net loss for 2008 included $172.9 million of amortization, stock-based compensation, restructuring charges, net gains from divested product lines, impairment charges and related tax adjustments. Excluding these items, the non-GAAP net loss was $25.2 million or $0.67 per share for 2008.
The company's cash balance on December 31, 2009 was $109 million, or approximately $2.91 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. 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. The reconciliation for operating income (loss), net income (loss) and earnings (loss) per share for the three- and twelve-month periods ended December 31, 2009 and 2008 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 this press release.
Conference Call
A conference call to discuss Avid's fourth quarter 2009 financial results will be held today, January 28, 2010 at 4:30 p.m. ET. 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 Annual Report on Form 10-K. 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(R), Pro Tools(R), Avid Unity(TM), Interplay(R), Oxygen 8, Sibelius(R) and Pinnacle Studio(TM). 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.
Copyright 2010 Avid Technology, Inc. All rights reserved. Product features, specifications, systems requirements and availability are subject to change without notice. Avid, Pinnacle Studio, Avid Unity, Interplay, Media Composer, 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 Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Net revenues:
Products $ 140,140 $ 173,255 $ 509,215 $ 714,232
Services 34,539 33,451 119,755 130,669
---------- ---------- ---------- ----------
Total net revenues 174,679 206,706 628,970 844,901
---------- ---------- ---------- ----------
Cost of revenues:
Products 66,588 97,182 243,362 369,186
Services 16,239 18,128 59,754 73,888
Amortization of
intangible assets 568 753 2,033 7,526
Restructuring costs - 1,876 799 1,876
---------- ---------- ---------- ----------
Total cost of revenues 83,395 117,939 305,948 452,476
---------- ---------- ---------- ----------
Gross profit 91,284 88,767 323,022 392,425
---------- ---------- ---------- ----------
Operating expenses:
Research and development 30,015 33,291 120,989 148,598
Marketing and selling 50,279 49,511 177,759 208,735
General and
administrative 17,164 17,422 56,929 78,591
Amortization of
intangible assets 2,732 2,837 10,511 12,854
Impairment of goodwill
and intangible assets - 78,715 - 129,972
Restructuring costs, net 9,741 21,305 26,873 25,412
Gain on sales of assets (3,553) (13,287) (155) (13,287)
---------- ---------- ---------- ----------
Total operating
expenses 106,378 189,794 392,906 590,875
---------- ---------- ---------- ----------
Operating loss (15,094) (101,027) (69,884) (198,450)
Interest and other income
(expense), net (94) 331 (123) 2,936
---------- ---------- ---------- ----------
Loss before income taxes (15,188) (100,696) (70,007) (195,514)
Provision for (benefit
from) income taxes, net 2,733 (443) (1,652) 2,663
---------- ---------- ---------- ----------
Net loss $ (17,921) $ (100,253) $ (68,355) $ (198,177)
========== ========== ========== ==========
Net loss per common share -
basic and diluted $ (0.48) $ (2.71) $ (1.83) $ (5.28)
Weighted-average common
shares outstanding - basic
and diluted 37,415 37,012 37,293 37,556
AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Change in Financial Presentation
Beginning January 1, 2009, we combined our professional video and consumer
video businesses into a single reporting segment. We will now consequently
report on two business segments: Audio and Video. Please note that the
segment contribution margin calculation has also changed from last year.
Segment contribution margin is now calculated as segment gross margin less
the research and development and product management expenses directly
attributable to the segment. Comparative results for the 2008 periods have
been updated to reflect our new business structure.
Summary of the Company's revenues and contribution margin by reportable
segment and a reconciliation of segment contribution margin to consolidated
operating loss:
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Revenues:
Video (a) $ 106,192 $ 134,296 $ 375,010 $ 551,706
Audio 68,487 72,410 253,960 293,195
---------- ---------- ---------- ----------
Total revenues $ 174,679 $ 206,706 $ 628,970 $ 844,901
========== ========== ========== ==========
Contribution Margin:
Video $ 35,815 $ 31,762 $ 113,524 $ 144,639
Audio 26,090 25,211 91,534 101,489
---------- ---------- ---------- ----------
Segment contribution margin 61,905 56,973 205,058 246,128
---------- ---------- ---------- ----------
Less unallocated costs
and expenses:
Research and
development expenses (1,694) (1,779) (6,918) (7,170)
Marketing and selling
expenses (42,224) (45,929) (158,812) (191,948)
General and
administrative
expenses (15,948) (14,982) (51,598) (66,906)
Amortization of
acquisition-related
intangible assets (3,300) (3,590) (12,544) (20,380)
Impairment of goodwill
and intangible assets - (78,715) - (129,972)
Stock-based
compensation (3,486) (3,111) (13,394) (14,201)
Restructuring costs,
net (9,741) (23,181) (27,672) (27,288)
Other costs (4,159) - (4,159) -
Gain on sales of assets 3,553 13,287 155 13,287
---------- ---------- ---------- ----------
Consolidated operating loss $ (15,094) $ (101,027) $ (69,884) $ (198,450)
========== ========== ========== ==========
(a) Includes revenues from
non-core product lines of: $ 19 $ 11,294 $ 1,893 $ 61,508
Reconciliation of GAAP
operating loss to Non-GAAP
operating income (loss):
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
GAAP operating loss $ (15,094) $ (101,027) $ (69,884) $ (198,450)
Adjustments to reconcile to
Non-GAAP operating income
(loss):
Amortization of
intangible assets 3,300 3,590 12,544 20,380
Impairment of goodwill
and intangible assets - 78,715 - 129,972
Stock-based compensation 3,486 3,111 13,394 14,201
Restructuring costs, net 9,741 23,181 27,672 27,288
Other costs 4,159 - 4,159 -
Gain on sales of assets (3,553) (13,287) (155) (13,287)
---------- ---------- ---------- ----------
Non-GAAP operating income
(loss): $ 2,039 $ (5,717) $ (12,270) $ (19,896)
========== ========== ========== ==========
AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Reconciliation of GAAP net
loss to Non-GAAP net loss:
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
GAAP net loss $ (17,921) $ (100,253) $ (68,355) $ (198,177)
Adjustments to reconcile to
Non-GAAP net loss:
Amortization of
intangible assets 3,300 3,590 12,544 20,380
Impairment of goodwill
and intangible assets - 78,715 - 129,972
Stock-based compensation 3,486 3,111 13,394 14,201
Restructuring costs, net 9,741 23,181 27,672 27,288
Other costs 4,159 - 4,159 -
Gain on sales of assets (3,553) (13,287) (155) (13,287)
Related tax adjustments (585) (4,331) (1,942) (5,619)
---------- ---------- ---------- ----------
Non-GAAP net loss: $ (1,373) $ (9,274) $ (12,683) $ (25,242)
========== ========== ========== ==========
Weighted-average common
shares outstanding -
diluted 37,415 37,012 37,293 37,556
Non-GAAP net loss per
common share - diluted $ (0.04) $ (0.25) $ (0.34) $ (0.67)
Stock-based compensation Three Months Ended Twelve Months Ended
included in: December 31, December 31,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Cost of products revenues $ 193 $ 136 $ 859 $ 616
Cost of services revenues 286 131 1,154 539
Research and development
expenses 717 605 2,454 2,820
Marketing and selling
expenses 1,074 897 3,596 4,005
General and
administrative expenses 1,216 1,342 5,331 6,221
---------- ---------- ---------- ----------
$ 3,486 $ 3,111 $ 13,394 $ 14,201
========== ========== ========== ==========
AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)
December 31, December 31,
2009 2008
------------ ------------
ASSETS:
Current assets:
Cash, cash equivalents and marketable
securities $ 108,877 $ 147,694
Accounts receivable, net of allowances of
$16,347 and $23,182 at December 31, 2009
and 2008, respectively 79,741 103,527
Inventories 77,243 95,755
Prepaid and other current assets 29,913 43,969
------------ ------------
Total current assets 295,774 390,945
Property and equipment, net 37,217 38,321
Intangible assets, net 29,235 38,143
Goodwill 227,195 225,375
Other assets 20,455 10,801
------------ ------------
Total assets $ 609,876 $ 703,585
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 30,230 $ 29,419
Accrued expenses and other current
liabilities 82,938 101,107
Deferred revenues 39,107 68,581
------------ ------------
Total current liabilities 152,275 199,107
Long-term liabilities 14,483 11,823
------------ ------------
Total liabilities 166,758 210,930
------------ ------------
Stockholders' equity:
Common stock 423 423
Additional paid-in capital 992,489 980,563
Accumulated deficit (444,661) (365,431)
Treasury stock at cost, net of reissuances (112,389) (124,852)
Accumulated other comprehensive income 7,256 1,952
------------ ------------
Total stockholders' equity 443,118 492,655
------------ ------------
Total liabilities and stockholders' equity $ 609,876 $ 703,585
============ ============
Contact: Investor Contact: Tom Fitzsimmons Email Contact 978-640-3346 Media Contact: Amy Peterson Email Contact 978-640-3448
SOURCE: Avid
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