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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 23, 2009
AVID TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
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Delaware |
0-21174 |
04-2977748 | |||
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
This Current Report on Form 8-K contains a number of forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, about the performance of Avid Technology, Inc. (the “Company”). For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects” and similar expressions are intended to identify forward-looking statements. There are a number of factors that could cause actual events or results to differ materially from those indicated by such forward-looking statements, many of which are beyond the Company’s control, including the risk factors disclosed previously and from time to time in the Company’s filings with the U.S. Securities and Exchange Commission. In addition, the forward-looking statements contained herein represent the Company’s estimate only as of the date of this filing and should not be relied upon as representing the Company’s estimate as of any subsequent date. While the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements.
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Item 2.02. |
Results of Operations and Financial Condition. |
On April 23, 2009, the Company announced its financial results for the quarter ended March 31, 2009. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information contained in Item 2.02 of this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
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Item 9.01. |
Financial Statements and Exhibits. |
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(d) |
Exhibits. |
The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:
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99.1 |
Press Release issued by the Company on April 23, 2009. |
SIGNATURE
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 hereunto duly authorized.
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Date: April 23, 2009 |
AVID TECHNOLOGY, INC. | |
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EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1 |
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Press release issued by the Company dated April 23, 2009. |
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EXHIBIT 99.1
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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 First Quarter 2009 Results
TEWKSBURY, Mass., April 23, 2009 — Avid® (NASDAQ: AVID) today reported revenues of $151.6 million for the three-month period ended March 31, 2009, compared to $198.3 million for the same period in 2008. The GAAP net loss for the quarter was $17.3 million, or $.47 per share, compared to a GAAP net loss of $21.1 million, or $.54 per share, in the first quarter of 2008.
The GAAP net loss for the first quarter of 2009 included amortization of intangibles, stock-based compensation, restructuring costs and related tax adjustments, collectively totaling $11.7 million. Excluding these items, the non-GAAP net loss was $5.6 million for the first quarter, or $.15 per share.
“The economic climate continues to be a challenge, however we are making solid progress executing our strategy to transform Avid,” said Gary Greenfield, Avid’s chairman and CEO. “The steps we’ve taken to integrate our business have enabled us to begin cultivating deeper partnerships with our customers – from home enthusiasts to large media enterprises – helping us to better understand their needs in terms of interoperability, openness, collaborative production and workflow. When the economy enters a period of recovery, we will be well positioned to take advantage of the many opportunities that exist in our markets.”
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 net income and earnings per share for the three-month periods ended March 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 first quarter 2009 financial results will be held today, April 23, 2009 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 Quarterly Report on Form 10-Q. This release includes forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, 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®, Avid Unity™, Interplay®, Oxygen 8, Sibelius® 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.
© 2009 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, Symphony, Nitris, ISIS 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)
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Three Months Ended |
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March 31, |
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2009 |
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2008 |
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Net revenues: |
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Products |
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$ |
123,641 |
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$ |
168,176 |
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Services |
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27,988 |
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30,090 |
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Total net revenues |
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151,629 |
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198,266 |
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Cost of revenues: |
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Products |
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61,248 |
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85,073 |
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Services |
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15,839 |
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17,387 |
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Amortization of intangible assets |
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520 |
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3,254 |
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Restructuring costs |
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799 |
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— |
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Total cost of revenues |
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78,406 |
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105,714 |
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Gross profit |
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73,223 |
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92,552 |
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Operating expenses: |
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Research and development |
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31,051 |
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38,510 |
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Marketing and selling |
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40,781 |
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50,327 |
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General and administrative |
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15,113 |
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21,943 |
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Amortization of intangible assets |
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2,375 |
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3,387 |
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Restructuring costs, net |
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4,222 |
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1,063 |
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Total operating expenses |
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93,542 |
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115,230 |
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Operating loss |
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(20,319 |
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(22,678 |
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Interest and other income (expense), net |
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153 |
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1,481 |
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Loss before income taxes |
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(20,166 |
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(21,197 |
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Benefit from income taxes, net |
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(2,889 |
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(49 |
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Net loss |
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$ |
(17,277 |
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$ |
(21,148 |
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Net loss per common share – basic and diluted |
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$ |
(0.47 |
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$ |
(0.54 |
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Weighted-average common shares outstanding – basic and diluted |
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37,130 |
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39,362 |
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AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Change in Financial Presentation
Beginning this quarter, we have 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. Our 2008 comparative results 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:
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Three Months Ended |
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2009 |
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2008 |
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Revenues: |
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Video |
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$ |
87,502 |
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$ |
125,027 |
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Audio |
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64,127 |
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73,239 |
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Total revenues (a) |
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$ |
151,629 |
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$ |
198,266 |
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Contribution Margin |
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Video |
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$ |
21,280 |
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$ |
28,470 |
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Audio |
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22,730 |
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26,325 |
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Segment contribution margin |
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44,010 |
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54,795 |
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Less unallocated costs and expenses: |
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Research and development expenses |
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(1,754 |
) |
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(1,770 |
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Marketing and selling expenses |
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(37,515 |
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(46,468 |
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General and administrative expenses |
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(12,996 |
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(19,386 |
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Amortization of acquisition-related intangible assets |
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(2,895 |
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(6,641 |
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Stock-based compensation |
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(4,148 |
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(2,145 |
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Restructuring costs, net |
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(5,021 |
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(1,063 |
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Consolidated operating loss |
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$ |
(20,319 |
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$ |
(22,678 |
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(a) Includes revenues from non-core product lines of: |
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$ |
949 |
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$ |
18,452 |
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Reconciliation of GAAP net income (loss) to Non-GAAP net income (loss):
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Three Months Ended |
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2009 |
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2008 |
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GAAP net loss |
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$ |
(17,277 |
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$ |
(21,148 |
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Adjustments to reconcile to Non-GAAP net income: |
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Amortization of intangible assets |
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2,895 |
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6,641 |
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Stock-based compensation |
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4,148 |
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2,145 |
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Restructuring costs, net |
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5,021 |
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1,063 |
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Related tax adjustments |
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(354 |
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(434 |
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Non-GAAP net loss |
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$ |
(5,567 |
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$ |
(11,733 |
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Weighted-average common shares outstanding – diluted |
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37,130 |
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39,362 |
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Non-GAAP net loss per common share – diluted |
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$ |
(0.15 |
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$ |
(0.30 |
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Stock-based compensation included in: |
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Three Months Ended |
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2009 |
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2008 |
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Cost of products revenues |
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$ |
350 |
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$ |
132 |
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Cost of services revenues |
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390 |
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98 |
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Research and development expenses |
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470 |
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363 |
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Marketing and selling expenses |
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821 |
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529 |
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General and administrative expenses |
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2,117 |
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1,023 |
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$ |
4,148 |
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$ |
2,145 |
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CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited - in thousands)
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March 31, |
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December 31, |
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2009 |
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2008 |
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ASSETS |
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Current assets: |
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Cash, cash equivalents and marketable securities |
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$ |
131,666 |
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$ |
147,694 |
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Accounts receivable, net of allowances of $18,414 and $23,182 |
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at March 31, 2009 and December 31, 2008, respectively |
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80,253 |
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103,527 |
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Inventories |
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95,284 |
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95,755 |
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Prepaid and other current assets |
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35,748 |
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43,969 |
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Total current assets |
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342,951 |
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390,945 |
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Property and equipment, net |
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36,985 |
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38,321 |
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Intangible assets, net |
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35,248 |
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38,143 |
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Goodwill |
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225,375 |
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225,375 |
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Other assets |
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10,732 |
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10,801 |
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Total assets |
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$ |
651,291 |
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$ |
703,585 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
23,931 |
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$ |
29,419 |
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Accrued expenses and other current liabilities |
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76,567 |
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101,107 |
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Deferred revenues |
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64,512 |
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68,581 |
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Total current liabilities |
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165,010 |
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199,107 |
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Long-term liabilities |
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11,318 |
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|
11,823 |
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Total liabilities |
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176,328 |
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210,930 |
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Stockholders’ equity: |
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Common stock |
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423 |
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423 |
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Additional paid-in capital |
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983,859 |
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|
980,563 |
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Accumulated deficit |
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(389,432 |
) |
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(365,431 |
) |
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Treasury stock at cost, net of reissuances |
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(117,877 |
) |
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(124,852 |
) |
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Accumulated other comprehensive income |
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(2,010 |
) |
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|
1,952 |
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Total stockholders’ equity |
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474,963 |
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|
492,655 |
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Total liabilities and stockholders’ equity |
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$ |
651,291 |
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$ |
703,585 |
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