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Avid Reports Record Second Quarter Revenues and Net Income
Net income for the six months ended June 30, 2004 was $30.2 million, or $0.89 per diluted share, on revenues of $267.3 million. This compares to net income of $13.3 million, or $0.43 per diluted share, on revenues of $225.5 million for the first half of 2003.
Gross margin for the second quarter was 56.4%, up 1.1 percentage points from the same quarter last year. As expected, operating expenses rose sequentially to $63.3 million including costs associated with the company's participation in the National Association of Broadcasters trade show in April.
"We continue to achieve strong results from each of our segments," said David Krall, Avid's president and chief executive officer. "Revenues in our video segment grew by 25% year over year, driven by solid performance in both our postproduction and broadcast businesses. Our audio segment revenues increased 21% year-over-year, boosted by the initial shipments of the D-Control tactile work surface that is part of the Digidesign® ICON integrated audio production environment.
"Avid's strategic plan in digital content creation, management and distribution is right on track," continued Krall. "We've posted double-digit, year-over-year revenue growth for the last four quarters, and record revenues for the past two quarters, and we're looking forward to growing Avid's business in our core markets and the new areas that we've targeted for expansion."
Conference Call
A conference call to discuss Avid's second quarter 2004 financial results and the company's outlook for the balance of 2004 will be held today, July 22 at 5:00 p.m. EDT. The call will be open to the public. The conference call can be accessed by dialing (719) 457-2637 and referencing confirmation code 576792. The call and subsequent replay will also be available on Avid's Web site. To listen via this alternative, go to the Investors page under the Company menu at www.avid.com for complete details 10-15 minutes prior to the start of the conference call.
The above release includes a forward-looking statement, as defined by the Private Securities Litigation Reform Act of 1995, about Avid's future performance. There are a number of factors that could cause actual events or results to differ materially from that indicated by such forward-looking statement, such as the competitive market in which Avid operates, market acceptance of Avid's existing and new products, Avid's ability to anticipate customers' needs and the other factors set forth under the caption "Certain Factors That May Affect Future Results" in Avid's Form 10-Q for the quarter ended March 31, 2004, and other filings with the Securities and Exchange Commission. In addition, the forward-looking statement contained herein represents Avid's estimate only as of today and should not be relied upon as representing the company's estimate as of any subsequent date. While Avid may elect to update this forward-looking statement at some point in the future, Avid specifically disclaims any obligation to do so, even if the estimate changes.
About Avid Technology, Inc.
Avid Technology, Inc. is the world leader in digital nonlinear media creation, management and distribution solutions, enabling film, video, audio, animation, games, and broadcast professionals to work more efficiently, productively, and creatively. For more information about the company's Oscar®, Grammy®, and Emmy® award-winning products and services, please visit: www.avid.com.
© 2004 Avid Technology, Inc. All rights reserved. Avid, D-Control, Digidesign, Film Composer, and Pro Tools are either registered trademarks or trademarks of Avid Technology, Inc. in the United States and/or other countries. Avid received an Oscar statuette representing the 1998 Scientific and Technical Award for the concept, design, and engineering of the Avid® Film Composer® system for motion picture editing. Digidesign, Avid's audio division, received an Oscar statuette representing the 2003 Scientific and Technical Award for the design, development, and implementation of its Pro Tools® digital audio workstation. Oscar is a trademark and service mark of the Academy of Motion Picture Arts and Sciences. Emmy is a registered trademark of ATAS/NATAS. Grammy is a trademark of the National Academy of Recording Arts and Sciences, Inc. All other trademarks contained herein 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 Six Months Ended
June 30, June 30,
---------------------- ----------------------
2004 2003 2004 2003
----------- ---------- ---------- -----------
Net revenues $139,886 $113,317 $267,260 $225,494
Cost of revenues 60,995 50,608 115,098 102,835
----------- ---------- ---------- -----------
Gross profit 78,891 62,709 152,162 122,659
----------- ---------- ---------- -----------
Operating expenses:
Research and
development 22,924 21,428 45,216 43,127
Marketing and selling 33,656 27,748 63,510 53,012
General and
administrative 6,184 5,617 12,070 10,962
Restructuring and
other costs, net -- -- -- 1,783
Amortization of
intangible assets 549 341 988 634
----------- ---------- ---------- -----------
Total operating
expenses 63,313 55,134 121,784 109,518
Operating income 15,578 7,575 30,378 13,141
Interest and other
income, net 595 507 35 738
----------- ---------- ---------- -----------
Income before income
taxes 16,173 8,082 30,413 13,879
Provision for income
taxes 700 300 200 600
----------- ---------- ---------- -----------
Net income $15,473 $7,782 $30,213 $13,279
=========== ========== ========== ===========
Net income per common
share - basic $0.49 $0.27 $0.96 $0.47
=========== ========== ========== ===========
Net income per common
share - diluted $0.45 $0.25 $0.89 $0.43
=========== ========== ========== ===========
Weighted average common
shares outstanding -
basic 31,623 28,494 31,413 28,052
=========== ========== ========== ===========
Weighted average common
shares outstanding -
diluted 34,134 31,673 33,912 30,904
=========== ========== ========== ===========
AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)
June 30, Dec. 31,
2004 2003
----------- ---------
ASSETS:
Current assets:
Cash and marketable securities $190,697 $196,309
Accounts receivable, net of allowances of
$8,816 and $9,161 at June 30, 2004
and December 31, 2003,
respectively 78,702 69,230
Inventories 34,475 38,292
Prepaid and other current assets 13,922 13,181
----------- ---------
Total current assets 317,796 317,012
Property and equipment, net 24,441 23,223
Acquisition-related intangible assets 49,719 5,150
Other assets 5,887 2,734
----------- ---------
Total assets $397,843 $348,119
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $19,953 $15,755
Accrued expenses and other current
liabilities 55,497 59,709
Deferred revenue and deposits 54,546 44,943
----------- ---------
Total current liabilities 129,996 120,407
Long term liabilities, less current portion 351 607
Total stockholders' equity 267,496 227,105
----------- ---------
Total liabilities and stockholders'
equity $397,843 $348,119
=========== =========
CONTACT: Avid Technology, Inc.
Dean Ridlon, 978-640-5309
Investor_Relations@avid.com
SOURCE: Avid Technology, Inc.