View:
AVID TECHNOLOGY, INC.
Avid Technology Park
One Park West
Tewksbury, MA 01876
February 4, 1999
OFIS Filer Support
SEC Operations Center
6432 General Green Way
Alexandria, VA 22312-2413
Ladies and Gentlemen:
Pursuant to regulations of the Securities and Exchange Commission,
submitted herewith for filing on behalf of Avid Technology, Inc., is the
Company's Form 8-K dated the 4th day of February, 1999.
This filing is being effected by direct transmission to the Commission's
EDGAR System.
Very truly yours,
/s/ Frederic G. Hammond
Frederic G. Hammond
General Counsel
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
February 4, 1999
(Date of Report; Date of Earliest Event Reported)
AVID TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-21174 04-2977748
(Commission File Number) (IRS Employer Identification No.)
Avid Technology Park, One Park West, Tewksbury, MA 01876
(Address of principal executive offices) (Zip Code)
(978) 640-6789
(Registrant's telephone number, including area code)
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events:
On February 4, 1999, Avid Technology, Inc. issued a press release
relating to its results for the fourth quarter of 1998. A copy of the press
release is attached hereto as Exhibit 99.1.
Item 7. Exhibits:
EXHIBIT NO. DESCRIPTION
99.1 Press release issued February 4, 1999
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 thereunto duly authorized.
AVID TECHNOLOGY, INC.
By: /s/ William L. Flaherty
--------------------------
William L. Flaherty
Senior Vice President of
Finance, Chief Financial
Officer and Treasurer
Date: February 4, 1999
EXHIBIT INDEX
Exhibit Sequentially
NUMBER DESCRIPTION NUMBERED PAGE
99.1 Press Release 5
Contacts: Cheryl Reault, Director, Investor Relations 978/640-3563
Christine Mann, Vice President, Corporate Communications 978/640-5495
FOR IMMEDIATE RELEASE
AVID TECHNOLOGY ANNOUNCES RECORD REVENUE AND OPERATING
RESULTS FOR THE FOURTH QUARTER 1998
TAX-EFFECTED FOURTH QUARTER INCOME BEFORE ACQUISITION RELATED
CHARGES RISES 63% TO $15.2 MILLION OR $0.57 PER SHARE
TEWKSBURY, Mass. (February 4, 1999) -- Avid Technology, Inc. (NASDAQ: AVID)
today reported record revenues and operating results for the fourth quarter
ended December 31, 1998. Fourth quarter revenues were a record $144.6 million
compared to $123.7 million in the fourth quarter 1997. The Company recorded
tax-effected fourth quarter income of $15.2 million or $.57 per diluted share,
before acquisition related charges associated with the third quarter acquisition
of Softimage Inc., as compared to $9.3 million or $.37 per diluted share in the
fourth quarter of 1997.
For the year ended December 31, 1998, revenues were $482.4 million, also a
record, versus $471.3 million for 1997. The Company reported record tax-effected
1998 income of $40.1 million or $1.56 per diluted share, before acquisition
related charges associated with the Softimage acquisition, as compared to $26.4
million or $1.08 per diluted share for the year ended December 31, 1997.
William J. Miller, Avid's Chairman and CEO, commented, "I am pleased to report
record operating results for the fourth quarter. Our strong revenues reflected
favorable domestic and European demand for our film and video products and
included revenues from several key product releases. Our audio products also
experienced record revenue during the fourth quarter reflecting continuing
strong demand for our Pro Tools product line. Additionally, gross margin rose to
a record 62.5% in the quarter."
"We continued to strengthen our balance sheet," Miller added. "Cash and
investments increased by $13.5 million during the fourth quarter, to end the
year at $111.8 million. This largely reflected strong operating results partly
offset by $10.7 million used to buy back stock as part of our ongoing repurchase
program. We also reduced accounts receivable days sales outstanding to 56 days
and inventory levels to $11.1 million at year-end."
"This year reflects significant accomplishments which are critical to Avid's
future success. The acquisition of Softimage Inc. brought us both 3-D animation
technology and SOFTIMAGE|DS, a product and architecture for television
finishing, which is central to our future. We also formed a strategic alliance
with Tektronix, Inc. to provide broadcasters with integrated end-to-end
solutions as the industry migrates to digital production. Most importantly, we
successfully completed the most comprehensive introduction of new products in
Avid's history. During the later part of 1998, we launched major new products,
including Avid Symphony, SOFTIMAGE|DS 2.1, NewsCutter DV, Avid Xpress for
Windows NT and ProTools|24 MIX, in all of our key strategic markets. Avid is now
a truly multi-platform company with products to address the full range of
customer needs from the consumer to the high-end production studio," Miller
concluded.
The Company stated that it is not reporting net income at this time because it
is continuing to evaluate the need for possible adjustments to the in-process
research and development ("IPR&D") charge taken in the third quarter of 1998. At
that time, the Company recorded a one-time pre-tax charge of $193.7 million for
purchased IPR&D in its operating results. This one-time charge was recorded in
accordance with U.S. generally accepted accounting principles and established
industry practice, and was supported by an independent third party valuation.
Since that time, however, the Securities and Exchange Commission ("SEC") has
expressed views on valuation methods for purchased IPR&D which differ from prior
industry practice. The Company is working closely with its independent auditors
to make a determination as to the application of the SEC's recent views to the
Company's IPR&D valuation and the resulting effect on the charge taken in the
third quarter as well as on the amortization of intangible assets. Any
application of the methodology now supported by the SEC would likely result in a
significantly lower IPR&D charge for the third quarter of 1998 and the creation
of goodwill which would be amortized against earnings beginning with the third
quarter. An adjustment to the IPR&D valuation, if any, would have no effect upon
the financial condition or liquidity of the Company. The Company will issue a
press release announcing its final determination and any resulting accounting
adjustments. The Company said its fourth quarter and fiscal year-end 1998
operating results before acquisition related charges are final and will not
change.
* * * *
Avid Technology, Inc. is an international, industry-leading provider of digital
audio and video tools for creating content for information and entertainment
applications. The company's products are used by customers ranging from
corporate communications professionals to film, television and interactive
content producers to broadcast news organizations. For more information, visit
Avid's World Wide Web site at www.avid.com.
Avid and Softimage are registered trademarks and Symphony, NewsCutter,
SOFTIMAGE|DS, Pro Tools and Avid Xpress are trademarks of Avid Technology, Inc.,
or its subsidiaries or divisions.
AVID TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS,
BEFORE ACQUISITION RELATED CHARGES
(in thousands, except per share data)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
--------------------- ------------------------
1998 1997 1998 1997
--------------------- ------------------------
(unaudited)(unaudited) (unaudited)
Net revenues $144,598 $123,735 $482,377 $471,338
Cost of revenues 54,256 54,062 190,249 221,553
--------------------- ------------------------
Gross profit 90,342 69,673 292,128 249,785
--------------------- ------------------------
Operating expenses:
Research and development 25,102 20,160 88,787 73,470
Marketing and selling 36,035 31,301 125,280 120,394
General and administrative 8,618 6,977 28,549 25,808
--------------------- ------------------------
Total operating expenses 69,755 58,438 242,616 219,672
Operating income before acquisition
related charges 20,587 11,235 49,512 30,113
Interest and other income, net 1,371 2,244 8,636 8,125
--------------------- ------------------------
Income before acquisition related
charges and income taxes 21,958 13,479 58,148 38,238
Provision for income taxes, excluding
the effect of acquisition related
charges 6,807 4,178 18,026 11,854
--------------------- ------------------------
Tax-effected income before acquisition
related charges $15,151 $9,301 $40,122 $26,384
===================== ========================
Tax-effected income before
acquisition related charges per
common share - diluted $0.57 $0.37 $1.56 $1.08
===================== ========================
Weighted average common shares
outstanding - diluted 26,703 25,231 25,704 24,325
===================== ========================
The results above do not include the effects of the third-quarter 1998 pre-tax
charge for IPR&D of $193.7 million or the amortization of acquired intangible
assets related to the Company's purchase of Softimage Inc. See attached press
release for further details.