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Avid Announces Results for First Quarter
Reports 5th Consecutive Quarter of Year-on-Year Revenue Growth
The GAAP net loss for the first quarter of 2010 and 2011 included
amortization of intangible assets, stock-based compensation,
restructuring and other charges and related tax adjustments collectively
totaling
"We are building on the momentum we established throughout the past
year," said
The GAAP operating loss for the first quarter of 2011 was
A reconciliation of GAAP to non-GAAP results is included in the tables attached to this release.
Conference Call
A conference call to discuss Avid's first quarter 2011 financial results
will be held today,
Use of Non-GAAP Financial Measures
This press release contains "non-GAAP financial measures" under the
rules of the
Management considers 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, such as non-GAAP net loss, 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.
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.
© 2011
AVID TECHNOLOGY, INC. | ||||||||
Condensed Consolidated Statements of Operations | ||||||||
(unaudited - in thousands, except per share data) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Net revenues: | ||||||||
Products | $ | 137,335 | $ | 128,679 | ||||
Services | 28,988 | 27,277 | ||||||
Total net revenues | 166,323 | 155,956 | ||||||
Cost of revenues: | ||||||||
Products | 64,651 | 63,269 | ||||||
Services | 14,387 | 14,040 | ||||||
Amortization of intangible assets | 666 | 966 | ||||||
Total cost of revenues | 79,704 | 78,275 | ||||||
Gross profit | 86,619 | 77,681 | ||||||
Operating expenses: | ||||||||
Research and development | 29,973 | 30,151 | ||||||
Marketing and selling | 44,810 | 41,746 | ||||||
General and administrative | 15,298 | 14,602 | ||||||
Amortization of intangible assets | 2,145 | 2,857 | ||||||
Restructuring (recoveries) costs, net | (2,216 | ) | 1,340 | |||||
Total operating expenses | 90,010 | 90,696 | ||||||
Operating loss | (3,391 | ) | (13,015 | ) | ||||
Interest and other income (expense), net | (300 | ) | - | |||||
Loss before income taxes | (3,691 | ) | (13,015 | ) | ||||
Provision for income taxes, net | 1,426 | 467 | ||||||
Net loss | ($5,117 | ) | ($13,482 | ) | ||||
Net loss per common share - basic and diluted | ($0.13 | ) | ($0.36 | ) | ||||
Weighted-average common shares outstanding - basic and diluted | 38,228 | 37,516 | ||||||
AVID TECHNOLOGY, INC. | |||||||||||||||||
(unaudited - in thousands, except per share data) | |||||||||||||||||
Reconciliations of GAAP financial measures to Non-GAAP financial measures: | |||||||||||||||||
Three Months Ended March 31, 2011 | |||||||||||||||||
Gross |
Operating |
Operating |
Tax |
Net |
|||||||||||||
GAAP | $ | 86,619 | $ | 90,010 | ($3,391 | ) | $ | 1,426 | ($5,117 | ) | |||||||
Amortization of intangible assets | 666 | (2,145 | ) | 2,811 | 2,811 | ||||||||||||
Restructuring recoveries, net | 2,216 | (2,216 | ) | (2,216 | ) | ||||||||||||
Tax adjustment | 55 | (55 | ) | ||||||||||||||
Stock-based compensation included in: | |||||||||||||||||
Cost of products revenues | 139 | 139 | 139 | ||||||||||||||
Cost of services revenues | 268 | 268 | 268 | ||||||||||||||
Research and development expenses | (472 | ) | 472 | 472 | |||||||||||||
Marketing and selling expenses | (1,218 | ) | 1,218 | 1,218 | |||||||||||||
General and administrative expenses | (1,640 | ) | 1,640 | 1,640 | |||||||||||||
Non-GAAP | $ | 87,692 | $ | 86,751 | $ | 941 | $ | 1,481 | ($840 | ) | |||||||
Weighted-average shares outstanding - diluted | 38,228 | ||||||||||||||||
Non-GAAP net income per share - diluted | ($0.02 | ) | |||||||||||||||
Three Months Ended March 31, 2010 | |||||||||||||||||
Gross |
Operating |
Operating |
Tax |
Net |
|||||||||||||
GAAP | $ | 77,681 | $ | 90,696 | ($13,015 | ) | $ | 467 | ($13,482 | ) | |||||||
Amortization of intangible assets | 966 | (2,857 | ) | 3,823 | 3,823 | ||||||||||||
Restructuring costs, net | (1,340 | ) | 1,340 | 1,340 | |||||||||||||
Acquisition-related costs (a) | (686 | ) | 686 | 686 | |||||||||||||
Tax adjustment | 284 | (284 | ) | ||||||||||||||
Stock-based compensation included in: | |||||||||||||||||
Cost of products revenues | 189 | 189 | 189 | ||||||||||||||
Cost of services revenues | 253 | 253 | 253 | ||||||||||||||
Research and development expenses | (651 | ) | 651 | 651 | |||||||||||||
Marketing and selling expenses | (968 | ) | 968 | 968 | |||||||||||||
General and administrative expenses | (1,261 | ) | 1,261 | 1,261 | |||||||||||||
Non-GAAP | $ | 79,089 | $ | 82,933 | ($3,844 | ) | $ | 751 | ($4,595 | ) | |||||||
Weighted-average shares outstanding - diluted | 37,516 | ||||||||||||||||
Non-GAAP net loss per share - diluted | ($0.12 | ) | |||||||||||||||
(a)Represents costs included in general and administrative expenses | |||||||||||||||||
Revenue Summary: | |||||||||||||||||
Three Months Ended March 31, |
|||||||||||||||||
2011 | 2010 | ||||||||||||||||
Video revenues | $ | 94,651 | $ | 84,353 | |||||||||||||
Audio revenues | 71,672 | 71,603 | |||||||||||||||
Total net revenues | $ | 166,323 | $ | 155,956 | |||||||||||||
AVID TECHNOLOGY, INC. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(unaudited - in thousands) | ||||||||
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
ASSETS: | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 33,220 | $ | 42,782 | ||||
Accounts receivable, net of allowances of $18,442 and $17,149 at March 31, 2011 and December 31, 2010, respectively |
||||||||
95,881 | 101,171 | |||||||
Inventories | 125,100 | 108,357 | ||||||
Deferred tax assets, net | 1,114 | 1,068 | ||||||
Prepaid expenses | 9,381 | 7,688 | ||||||
Other current assets | 16,818 | 16,130 | ||||||
Total current assets | 281,514 | 277,196 | ||||||
Property and equipment, net | 61,351 | 62,519 | ||||||
Intangible assets, net | 27,340 | 29,750 | ||||||
Goodwill | 247,315 | 246,997 | ||||||
Other assets | 11,007 | 10,109 | ||||||
Total assets | $ | 628,527 | $ | 626,571 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 47,493 | $ | 47,340 | ||||
Accrued compensation and benefits | 27,346 | 41,101 | ||||||
Accrued expenses and other current liabilities | 41,431 | 40,986 | ||||||
Income taxes payable | 4,183 | 4,640 | ||||||
Deferred revenues | 51,399 | 40,585 | ||||||
Total current liabilities | 171,852 | 174,652 | ||||||
Long-term liabilities | 25,892 | 25,309 | ||||||
Total liabilities | 197,744 | 199,961 | ||||||
Stockholders' equity: | ||||||||
Common stock | 423 | 423 | ||||||
Additional paid-in capital | 1,007,853 | 1,005,198 | ||||||
Accumulated deficit | (502,965 | ) | (495,254 | ) | ||||
Treasury stock at cost, net of reissuances | (87,188 | ) | (91,025 | ) | ||||
Accumulated other comprehensive income | 12,660 | 7,268 | ||||||
Total stockholders' equity | 430,783 | 426,610 | ||||||
Total liabilities and stockholders' equity | $ | 628,527 | $ | 626,571 | ||||
AVID TECHNOLOGY, INC. | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(unaudited - in thousands) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | ($5,117 | ) | ($13,482 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 7,972 | 8,303 | ||||||
Provision for (recoveries of) doubtful accounts | 144 | (170 | ) | |||||
Non-cash provision for restructuring | 125 | - | ||||||
Gain on disposal of fixed assets | (5 | ) | (13 | ) | ||||
Compensation expense from stock grants and options | 3,737 | 3,322 | ||||||
Changes in operating assets and liabilities, excluding initial effects of acquisitions: | ||||||||
Accounts receivable | 9,613 | (4,605 | ) | |||||
Inventories | (16,743 | ) | 5,703 | |||||
Prepaid expenses and other current assets | (3,300 | ) | (690 | ) | ||||
Accounts payable | 107 | 2,803 | ||||||
Accrued expenses, compensation and benefits and other liabilities | (13,936 | ) | (15,453 | ) | ||||
Income taxes payable | (604 | ) | 205 | |||||
Deferred revenues | 11,143 | 7,560 | ||||||
Net cash used in operating activities | (6,864 | ) | (6,517 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (3,544 | ) | (10,009 | ) | ||||
Decrease in other long-term assets | 190 | 281 | ||||||
Payments for business acquisitions, net of cash acquired | - | (16,087 | ) | |||||
Purchases of marketable securities | - | (1,750 | ) | |||||
Proceeds from sales of marketable securities | - | 18,605 | ||||||
Net cash used in investing activities | (3,354 | ) | (8,960 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from (payments related to) the issuance of common stock under employee stock plans, net | 127 | (727 | ) | |||||
Proceeds from revolving credit facilities | 8,000 | - | ||||||
Payments on revolving credit facilities | (8,000 | ) | - | |||||
Net cash provided by (used in) financing activities | 127 | (727 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 529 | (1,578 | ) | |||||
Net decrease in cash and cash equivalents | (9,562 | ) | (17,782 | ) | ||||
Cash and cash equivalents at beginning of period | 42,782 | 91,517 | ||||||
Cash and cash equivalents at end of period | $ | 33,220 | $ | 73,735 | ||||
Investor Contact:
tom.fitzsimmons@avid.com
or
Media
Contact:
Avid
carter.holland@avid.com
Source: Avid
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