Avid Technology, Inc.
AVID TECHNOLOGY, INC. (Form: 8-K, Received: 08/03/2017 16:46:42)





        


UNITED STATES
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

Date of Report (Date of earliest event reported): August 3, 2017

AVID TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in Its Charter)

Delaware
 
1-36254
 
04-2977748
(State or Other Jurisdiction
of Incorporation)
 
(Commission File Number)
 
(I.R.S. Employer
Identification No.)

75 Network Drive, Burlington, Massachusetts  01803
(Address of Principal Executive Offices)   (Zip Code)

(978) 640-6789
(Registrant’s Telephone Number, Including Area Code)

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:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
 
Emerging growth company 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 





Item 2.02. Results of Operations and Financial Condition.

On August 3, 2017, the Company issued a press release announcing its financial results for the fiscal quarter ended June 30, 2017 (the “Press Release”). The full text of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 7.01 Regulation FD Disclosure.

The information contained in Item 2.02 is incorporated by reference herein.

Non-GAAP and Operational Measures.  The attached Press Release includes the following non-GAAP financial measures: non-GAAP operating income (loss), non-GAAP operating expenses, non-GAAP gross margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Free Cash Flow, and Adjusted Free Cash Flow conversion of Adjusted EBITDA. Non-GAAP operating income (loss), non-GAAP operating expenses, Adjusted EBITDA and Adjusted EBITDA margin exclude restructuring costs, stock-based compensation, amortization and impairment of intangibles as well as other unusual items such as costs related to the restatement, M&A related activity, efficiency program and impact of significant legal settlements. Avid defines non-GAAP revenue as GAAP revenue plus revenue eliminated through the application of purchase accounting which requires acquired deferred revenue to be recorded at fair value rather than the amount paid by customers. Avid defines Adjusted EBITDA as non-GAAP operating income (loss) excluding depreciation and all amortization expense. Avid defines Adjusted EBITDA margin as Adjusted EBITDA divided by non-GAAP revenue. Avid defines Adjusted Free Cash Flow conversion of Adjusted EBITDA as Adjusted Free Cash Flow divided by Adjusted EBITDA. Avid defines Adjusted Free Cash Flow as GAAP operating cash flow less capital expenditures and excludes from free cash flow payments or receipts related to M&A, significant legal settlements, restructuring, restatement or other non-operational or non-recurring events. Reconciliations of these non-GAAP financial measures to their most comparable GAAP measures are contained in the tables accompanying the Press Release. The attached Press Release also includes forward-looking non-GAAP financial measures, including Adjusted EBITDA, non-GAAP Operating Expenses and Adjusted Free Cash Flow. Reconciliations of these forward-looking non-GAAP financial measures were not included in the attached Press Release due to the high variability and difficulty in making accurate forecasts and projections of some of the excluded information, together with some of the excluded information not being ascertainable or accessible at this time. As a result, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measure without unreasonable efforts.

These non-GAAP measures reflect how Avid manages its businesses internally. Avid’s non-GAAP measures may vary from how other companies present non-GAAP measures. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. 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.  Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP.

The attached Press Release also includes operational measures, such as bookings, recurring revenue bookings and revenue backlog. Definitions of these measures are included in the supplemental financial and operational data sheet available on our investor relations webpage at ir.avid.com.

Limitation on Incorporation by Reference.  The information furnished in Items 2.02 and 7.01, including the Press Release attached hereto as Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Cautionary Note Regarding Forward-Looking Statements.  This Form 8-K, and the Press Release attached as Exhibit 99.1 contain forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. Please refer to the cautionary notes in the Press Release regarding these forward-looking statements.







Item 9.01  Financial Statements and Exhibits.

(d)                   Exhibits .
Exhibit
Number
Description
99.1
Press Release announcing financial results, dated August 3, 2017




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.



 
AVID TECHNOLOGY, INC.
 
(Registrant)
 
 
 
 
Date: August 3 , 2017
By:   /s/ Brian E. Agle                       
Name: Brian E. Agle   
Title: Senior Vice President and CFO





Exhibit 99.1

Avid Technology Announces Q2 2017 Results and Issues Q3 2017 Guidance
Exceeded Guidance for Adjusted Free Cash Flow; In Line on All Other Metrics
Strong Revenue Backlog and Continued Expense Management Creates Better Visibility
Continued Execution Drives Positive Free Cash Flow and Improvement in Liquidity

BURLINGTON, Mass., August 3, 2017 Avid ® ( NASDAQ:AVID ) today announced its second quarter 2017 financial results, provided third quarter 2017 financial guidance and reaffirmed its guidance for the full year 2017.

Highlights of Second Quarter 2017 Results
GAAP Revenue was $102.4 million, in line with guidance.
GAAP Gross Margin was 58.4%, Non-GAAP Gross Margin was 60.7% .
GAAP Operating Expenses were $66.1 million, Non-GAAP Operating Expenses were $56.6 million, in line with guidance.
GAAP Net Loss was $10.8 million, Adjusted EBITDA was $8.9 million, in line with guidance .
GAAP Net Cash provided by Operating Activities was $2.5 million, Adjusted Free Cash Flow was $6.2 million, above the guidance range .
Bookings and Constant Currency Bookings were $98.1 million and $104.3 million, respectively, in line with the guidance range.

Avid Everywhere Momentum Continues
Increasing adoption of Avid’s cloud-enabled enterprise platform by large enterprise customers, with more than 48,000 enterprise users on the MediaCentral platform at the end of Q2 2017, representing a 27% increase year-over-year.
More than 78,000 paying individual, cloud-enabled subscribers, a substantial majority of whom are new customers to Avid in the quarter, were in place at the end of Q2 2017, representing a 91% increase year-over-year.
Reflecting the increase in both enterprise customers and subscriptions, bookings attributable to recurring revenue of $43 million represented 42% of total bookings in Q2 2017, up from 34% in Q2 2016, an increase of 19%.
Increasing recurring revenue is positively impacting Avid’s revenue backlog of $488 million, which grew $23 million year-over-year and is increasing visibility.
Further adoption of the shared services platform is helping to drive costs down and improve free cash flow.

“I am proud we have achieved a substantial milestone in Avid’s history, completing the transformation we began four years ago. We could not have done it without the support of our customers, partners and investors, but most of all our employees, who believed in Avid throughout this incredible journey,” said Louis Hernandez, Jr., Chairman and CEO of Avid. “The company has emerged from this transformation phase positioned for growth with a superior product suite, leaner cost structure and a more profitable business model driving positive adjusted free cash flow over the last three quarters.”






Mr. Hernandez continued, “Avid offers the only cloud-enabled enterprise platform specifically designed to address the challenges facing the media industry and this uniquely positions the company to capitalize on the opportunities ahead. I am excited by what Avid can achieve in the future as we work to accelerate growth.”


Financial Guidance
Avid’s third quarter 2017 financial guidance is provided in the table below.
“We’re pleased that our performance to date gives us the confidence to reaffirm our full-year 2017 guidance,” said Brian E. Agle, Senior Vice President and Chief Financial Officer of Avid. “The first half of 2017 reflects strong EBITDA to cash conversion, significant year-over-year reduction in non-GAAP operating expenses, expanding EBITDA margin, and increasing free cash flow.  As the company moves into its growth phase, we will remain focused on creating a more predictable, scalable and profitable financial model to further increase free cash flow and liquidity.”


Third Quarter 2017 Guidance
(in $ millions)
 
Bookings (Constant Currency)
$95 - $109
Bookings
$87 - $101
Revenue
$94 - $104
Non-GAAP Operating Expenses
$52 - $56
Adjusted EBITDA
$8 - $14
Adjusted Free Cash Flow
($7) - $1

All guidance presented by the Company is inherently uncertain and subject to numerous risks and uncertainties. Avid’s actual future results of operations and cash flows could differ materially from those shown in the tables above. For a discussion of some of the key assumptions underlying the guidance, as well as the key risks and uncertainties associated with these forward-looking statements, please see “Forward Looking Statements” below as well as the Avid Technology Second Quarter and Full Year 2017 Business Update presentation posted on Avid’s investor relations website.

Avid includes non-GAAP financial measures in this press release, including Adjusted EBITDA, Adjusted Free Cash Flow, non-GAAP Operating Income (loss), non-GAAP Operating Expenses, non-GAAP Gross Margin, Adjusted EBITDA margin and Adjusted Free Cash Flow conversion of Adjusted EBITDA. The Company also includes the operational metrics of bookings, revenue backlog and recurring revenue bookings in this release. Avid believes the non-GAAP financial measures and operational metrics provided in this release provide helpful information to investors with respect to evaluating the Company’s performance. Unless noted, all financial information is reported based on actual exchange rates. Definitions of the non-GAAP financial measures are included in our Form 8-K filed today. Reconciliations of the non-GAAP financial measures in this release to the Company's comparable GAAP financial measures for the periods presented are set forth below and are also included in the supplemental financial and operational data sheet available on our investor relations webpage at ir.avid.com, which also includes definitions of the operational metrics.






The earnings release also includes forward-looking non-GAAP financial measures, including Adjusted EBITDA, non-GAAP Operating Expenses and Adjusted Free Cash Flow. Reconciliations of these forward-looking non-GAAP financial measures were not included in the earnings release due to the high variability and difficulty in making accurate forecasts and projections of some of the excluded information, together with some of the excluded information not being ascertainable or accessible at this time. As a result, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measure without unreasonable efforts.

Conference Call

A conference call to discuss Avid's financial results for the second quarter 2017 will be held on Thursday, August 3, 2017 at 5:00 p.m. ET. The call will be open to the public and can be accessed by dialing 719-325-2278 and referencing confirmation code 2768857. You may also listen to the call on the Avid Investor Relations website. To listen via the website, go to the events tab at ir.avid.com for complete details prior to the start of the conference call. A replay of the call will also be available on the Avid Investor Relations website shortly after the completion of the call.

Forward-Looking Statements

Certain information provided in this press release, including the tables attached hereto, include forward-looking statements that involve risks and uncertainties, including projections and statements about our anticipated plans, objectives, expectations and intentions. Among other things, this press release includes estimated results of operations for the quarter ending September 30, 2017 for which estimates are based on a variety of assumptions about key factors and metrics that will determine our future results of operations, including, for example, anticipated market uptake of new products, realization of identified efficiency programs and market based cost inflation. Other forward-looking statements include, without limitation, statements based upon or otherwise incorporating judgments or estimates relating to future performance such as future operating results and expenses; earnings; bookings; backlog; revenue backlog conversion rate; product mix and free cash flow; our long-term and recent cost savings initiatives and the anticipated benefits therefrom; our future strategy and business plans; our product plans, including products under development, such as cloud and subscription based offerings; our liquidity and ability to raise capital and our liquidity. The projected future results of operations, and the other forward-looking statements in this release are based on current expectations as of the date of this release and subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including but not limited to the effect on our sales, operations and financial performance resulting from: our liquidity; our ability to execute our strategic plan, including cost savings initiatives, and meet customer needs; our ability to retain and hire key personnel; our ability to produce innovative products in response to changing market demand, particularly in the media industry; our ability to successfully accomplish our product development plans; competitive factors; history of losses; fluctuations in our revenue, based on, among other things, our performance and risks in particular geographies or markets; our higher indebtedness and ability to service it and meet the obligations thereunder; restrictions in our credit facilities; our move to a subscription model and related effect on our revenues and ability to predict future revenues; elongated sales cycles; fluctuations in foreign currency exchange rates; seasonal factors; adverse changes in economic conditions; variances in our revenue backlog and the realization thereof; the identified material weaknesses in our internal control over financial reporting; and the possibility of legal proceedings adverse to our company. Moreover, the business may be adversely affected by future legislative, regulatory or changes, including tax law changes, as well as other economic, business and/or competitive factors. The risks included above are not exhaustive.





Other factors that could adversely affect our business and prospects are set forth in our public filings with the SEC. Forward-looking statements contained herein are made only as to the date of this press release and we undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

About Avid
Through   Avid Everywhere™ , Avid delivers the most open and efficient media platform, connecting content creation with collaboration, asset protection, distribution and consumption. Avid’s preeminent customer community uses Avid’s comprehensive tools and workflow solutions to create, distribute and monetize the most watched, loved and listened to media in the world-from prestigious and award-winning feature films, to popular television shows, news programs and televised sporting events, and celebrated music recordings and live concerts. With the most flexible deployment and pricing options, Avid’s industry-leading solutions include Pro Tools®, Media Composer®, Avid NEXIS™, Interplay®, ProSet™ and RealSet™, Maestro™, PlayMaker™, and Sibelius®. For more information about Avid solutions and services, visit  www.avid.com , connect with Avid on  Facebook Instagram , Twitter , YouTube LinkedIn , or subscribe to  Avid Blogs .

© 2017 Avid Technology, Inc. All rights reserved. Avid, the Avid logo, Avid Everywhere, Avid NEXIS, Interplay, Maestro, Media Composer, Pro Tools, ProSet, RealSet 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 the Interplay Entertainment Corp. which bears no responsibility for Avid products. Product features, specifications, system requirements and availability are subject to change without notice.


PR Contact:
Jim Sheehan
Avid
jim.sheehan@avid.com
(978) 640-3152

Investor Contact:
Robert Roose
Avid
robert.roose@avid.com














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,
 
2017
 
2016
 
2017
 
2016
Net revenues:
 
 
 
 
 
 
 
Products
$
47,655

 
$
75,592

 
$
98,661

 
$
160,101

Services
54,718

 
58,477

 
107,819

 
117,515

Total net revenues
102,373

 
134,069

 
206,480

 
277,616

 
 
 
 
 
 
 
 
Cost of revenues:
 
 
 
 
 
 
 
Products
26,489

 
28,488

 
50,993

 
55,612

Services
14,181

 
15,832

 
28,275

 
30,241

Amortization of intangible assets
1,950

 
1,950

 
3,900

 
3,900

Total cost of revenues
42,620

 
46,270

 
83,168

 
89,753

Gross profit
59,753

 
87,799

 
123,312

 
187,863

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Research and development
16,991

 
21,433

 
35,879

 
42,838

Marketing and selling
29,018

 
30,177

 
54,829

 
61,796

General and administrative
13,644

 
16,818

 
28,075

 
34,537

Amortization of intangible assets
363

 
782

 
726

 
1,568

Restructuring costs, net
6,063

 
(213
)
 
7,046

 
2,564

Total operating expenses
66,079

 
68,997

 
126,555

 
143,303

 
 
 
 
 
 
 
 
Operating (loss) income
(6,326
)
 
18,802

 
(3,243
)
 
44,560

 
 
 
 
 
 
 
 
Interest and other expense, net
(3,918
)
 
(5,159
)
 
(8,764
)
 
(9,342
)
(Loss) income before income taxes
(10,244
)
 
13,643

 
(12,007
)
 
35,218

Provision for income taxes
587

 
703

 
739

 
1,338

Net (loss) income
$
(10,831
)
 
$
12,940

 
$
(12,746
)
 
$
33,880

 
 
 
 
 
 
 
 
Net (loss) income per common share – basic
$
(0.26
)
 
$
0.33

 
$
(0.31
)
 
$
0.86

Net (loss) income per common share – diluted
(0.26
)
 
$
0.33

 
$
(0.31
)
 
$
0.85

 
 
 
 
 
 
 
 
Weighted-average common shares outstanding – basic
40,953

 
39,678

 
40,863

 
39,622

Weighted-average common shares outstanding – diluted
40,953

 
39,734

 
40,863

 
39,691








AVID TECHNOLOGY, INC.
Reconciliations of GAAP financial measures to Non-GAAP financial measures
(unaudited - in thousands)
 
Three Months Ended
 
 
Six Months Ended
 
June 30,
 
 
June 30,
 
2017

 
2016
 
2017
 
2016
Non-GAAP revenue
 
 
 
 
 
 
 
GAAP revenue
$
102,373

 
$
134,069

 
$
206,480

 
$
277,616

Amortization of acquired deferred revenue

 
325

 

 
594

Non-GAAP revenue
102,373

 
134,394

 
206,480

 
278,210

Pre-2011 Revenue
360

 
7,798

 
765

 
17,136

Elim PCS

 
15,200

 
1,700

 
32,800

Non-GAAP Revenue w/o Pre-2011 and Elim
102,013

 
111,396

 
204,015

 
228,274

 
 
 
 
 
 
 
 
Non-GAAP gross profit
 
 
 
 
 
 
 
GAAP gross profit
59,753

 
87,799

 
123,312

 
187,863

Amortization of acquired deferred revenue

 
325

 

 
594

Amortization of intangible assets
1,950

 
1,950

 
3,900

 
3,900

Stock-based compensation
420

 
152

 
484

 
332

Non-GAAP gross profit
62,123

 
90,226

 
127,696

 
192,689

Pre-2011 Revenue
360

 
7,798

 
765

 
17,136

Elim PCS

 
15,200

 
1,700

 
32,800

Non-GAAP gross profit w/o Pre-2011 and Elim
61,763

 
67,228

 
125,231

 
142,753

 
 
 
 
 
 
 
 
Non-GAAP operating expenses
 
 
 
 
 
 
 
GAAP operating expenses
66,079

 
68,997

 
126,555

 
143,303

Less Amortization of intangible assets
(363
)
 
(782
)
 
(726
)
 
(1,568
)
Less Stock-based compensation
(1,563
)
 
(2,149
)
 
(2,909
)
 
(4,056
)
Less Restructuring costs, net
(6,063
)
 
213

 
(7,046
)
 
(2,564
)
Less Restatement costs
(320
)
 
(68
)
 
(442
)
 
(148
)
Less Acquisition, integration and other costs
(138
)
 
(279
)
 
(140
)
 
(794
)
Less Efficiency program costs
(1,049
)
 
(1,286
)
 
(2,571
)
 
(2,001
)
Non-GAAP operating expenses
56,583

 
64,646

 
112,721

 
132,172

 
 
 
 
 
 
 
 
Non-GAAP operating income
 
 
 
 
 
 
 
GAAP operating (loss) income
(6,326
)
 
18,802

 
(3,243
)
 
44,560

Amortization of acquired deferred revenue

 
325

 

 
594

Amortization of intangible assets
2,313

 
2,732

 
4,626

 
5,468

Stock-based compensation
1,983

 
2,301

 
3,393

 
4,388

Restructuring costs, net
6,063

 
(213
)
 
7,046

 
2,564

Restatement costs
320

 
68

 
442

 
148

Acquisition, integration and other costs
138

 
279

 
140

 
794

Efficiency program costs
1,049

 
1,286

 
2,571

 
2,001

Non-GAAP operating income
5,540

 
25,580

 
14,975

 
60,517

 
 
 
 
 
 
 
 





Adjusted EBITDA
 
 
 
 
 
 
 
Non-GAAP operating income (from above)
5,540

 
25,580

 
14,975

 
60,517

Depreciation
3,335

 
3,811

 
6,906

 
7,422

Adjusted EBITDA
8,875

 
29,391

 
21,881

 
67,939

Adjusted EBITDA margin
9
%
 
22
 %
 
11
%
 
24
 %
Pre-2011 Revenue
360

 
7,798

 
765

 
17,136

Elim PCS

 
15,200

 
1,700

 
32,800

Adjusted EBITDA w/o Pre-2011 and Elim
8,515

 
6,393

 
19,416

 
18,003

 
 
 
 
 
 
 
 
Adjusted free cash flow
 
 
 
 
 
 
 
GAAP net cash provided by (used in) operating activities
2,538

 
(33,806
)
 
6,072

 
(45,016
)
Capital expenditures
(1,379
)
 
(2,803
)
 
(3,108
)
 
(7,321
)
Free Cash Flow
1,159

 
(36,609
)
 
2,964

 
(52,337
)
 
 
 
 
 
 
 
 
Non-Operational / One-time Items
 
 
 
 
 
 
 
Restructuring payments
3,700

 
3,952

 
6,994

 
7,485

Restatement payments
151

 

 
210

 

Acquisition, integration and other payments
4

 
848

 
19

 
1,621

Efficiency program payments
1,144

 
1,602

 
2,729

 
3,583

Sub-Total Non-Operational / One-Time Items
4,999

 
6,402

 
9,952

 
12,689

 
 
 
 
 
 
 
 
Adjusted free cash flow
$
6,158

 
$
(30,207
)
 
$
12,916

 
$
(39,648
)
Adjusted free cash flow conversion of adjusted EBITDA
69
%
 
(103
)%
 
59
%
 
(58
)%

These non-GAAP measures reflect how Avid manages its businesses internally. Avid’s non-GAAP measures may vary from how other companies present non-GAAP measures. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. 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.  Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP.








AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)
 
June 30,
 
December 31,
 
2017
 
2016
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
47,434

 
$
44,948

Accounts receivable, net of allowances of $8,445 and $8,618 at June 30, 2017 and December 31, 2016, respectively
34,433

 
43,520

Inventories
41,219

 
50,701

Prepaid expenses
10,058

 
6,031

Other current assets
4,920

 
5,805

Total current assets
138,064

 
151,005

Property and equipment, net
23,977

 
30,146

Intangible assets, net
18,307

 
22,932

Goodwill
32,643

 
32,643

Long-term deferred tax assets, net
1,319

 
1,245

Other long-term assets
10,427

 
11,610

Total assets
$
224,737

 
$
249,581

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
27,495

 
$
26,435

Accrued compensation and benefits
29,141

 
25,387

Accrued expenses and other current liabilities
30,130

 
34,088

Income taxes payable
1,958

 
1,012

Short-term debt
5,000

 
5,000

Deferred revenues
129,858

 
146,014

Total current liabilities
223,582

 
237,936

Long-term debt
189,857

 
188,795

Long-term deferred tax liabilities, net
173

 
913

Long-term deferred revenues
74,181

 
79,670

Other long-term liabilities
11,699

 
12,178

Total liabilities
499,492

 
519,492

 
 
 
 
Stockholders’ deficit:
 
 
 
Common stock
423

 
423

Additional paid-in capital
1,038,093

 
1,043,063

Accumulated deficit
(1,283,894
)
 
(1,271,148
)
Treasury stock at cost
(24,270
)
 
(32,353
)
Accumulated other comprehensive loss
(5,107
)
 
(9,896
)
Total stockholders’ deficit
(274,755
)
 
(269,911
)
Total liabilities and stockholders’ deficit
$
224,737

 
$
249,581








AVID TECHNOLOGY, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited - in thousands)
 
Six Months Ended
 
June 30,
 
2017
 
2016
Cash flows from operating activities:
 
 
 
Net (loss) income
$
(12,746
)
 
$
33,880

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
11,531

 
12,890

(Recovery) provision for doubtful accounts
(214
)
 
367

Stock-based compensation expense
3,393

 
4,388

Non-cash provision for restructuring
2,477

 

Non-cash interest expense
5,214

 
5,394

Unrealized foreign currency transaction losses
4,763

 
1,578

Benefit from deferred taxes
(746
)
 
(1,365
)
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
9,343

 
13,683

Inventories
9,482

 
(5,829
)
Prepaid expenses and other assets
(3,287
)
 
(3,994
)
Accounts payable
980

 
(10,373
)
Accrued expenses, compensation and benefits and other liabilities
(3,419
)
 
(13,910
)
Income taxes payable
991

 
(510
)
Deferred revenues
(21,690
)
 
(81,215
)
Net cash provided by (used in) operating activities
6,072

 
(45,016
)
 
 
 
 
Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(3,108
)
 
(7,321
)
Increase in other long-term assets
(23
)
 
(12
)
Decrease (increase) in restricted cash
1,700

 
(4,544
)
Net cash used in investing activities
(1,431
)
 
(11,877
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Proceeds from long-term debt

 
100,000

Repayment of debt
(2,500
)
 
(1,250
)
Proceeds from the issuance of common stock under employee stock plans
217

 
285

Common stock repurchases for tax withholdings for net settlement of equity awards
(497
)
 
(441
)
Proceeds from revolving credit facilities

 
25,000

Payments on revolving credit facilities

 
(30,000
)
Payments for credit facility issuance costs

 
(4,971
)
Net cash (used in) provided by financing activities
(2,780
)
 
88,623

 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
625

 
733

Net increase in cash and cash equivalents
2,486

 
32,463

Cash and cash equivalents at beginning of period
44,948

 
17,902

Cash and cash equivalents at end of period
$
47,434

 
$
50,365






AVID TECHNOLOGY, INC.
Supplemental Revenue Information
(unaudited - in thousands)
 
 
June 30,
March 31,
June 30,
 
 
 
Revenue Backlog*
2017
2017
2016
 
 
 
 
 
 
 
 
 
 
Pre-2011
$
331

$
691

$
8,732

 
 
 
Post-2010
$
203,708

$
222,342

$
258,420

 
 
 
Deferred Revenue
$
204,039

$
223,033

$
267,152

 
 
 
Other Backlog
$
283,765

$
271,184

$
197,591

 
 
 
  Total Revenue Backlog
$
487,804

$
494,217

$
464,743

 
 
 
 
 
 
 
 
 
 
The expected timing of recognition of revenue backlog as of June 30, 2017 is as follows:
 
 
 
 
 
 
 
 
 
 
2017
2018
2019
Thereafter
Total
 
Orders executed prior to January 1, 2011
$
220

$
112

$

$

$
331

 
Orders executed or materially modified on or
$
73,221

$
55,460

$
30,583

$
44,444

$
203,708

 
after January 1, 2011










 
Other Backlog
$
76,862

$
91,361

$
55,156

$
60,385

$
283,765

 
  Total Revenue Backlog
$
150,303

$
146,933

$
85,739

$
104,829

$
487,804

 
 
 
 
 
 
 
 
*A definition of Revenue Backlog is included in the supplemental financial and operational data sheet available on our investor relations webpage at ir.avid.com.
 
 
 
 
 
 
 
 
Note: current estimates could change based on a number of factors, including (i) the timing of delivery of products and services, (ii) customer cancellations or change order, (iii) changes in the estimated period of time Implied Maintenance Release PCS is provided to customers, including as a result of changes in business practices.


PR Contact                 
Jim Sheehan                 
Avid                     
978.640.3152                 
jim.sheehan@avid.com             

Investor Contact
Robert Roose
Avid
978.640.3375
robert.roose@avid.com