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Avid Announces Second Quarter 2009 Results
TEWKSBURY, MA, Jul 23, 2009 (MARKETWIRE via COMTEX News Network) -- Avid(R) (NASDAQ: AVID) today reported revenues of $150.5 million for the three-month period ended June 30, 2009, compared to $222.9 million for the same period in 2008. The GAAP net loss for the quarter was $15.9 million, or $.43 per share, compared to a GAAP net loss of $10.4 million, or $.28 per share, in the second quarter of 2008.
The GAAP net loss for the second quarter of 2009 included amortization of intangibles, stock-based compensation, restructuring charges and related tax adjustments, collectively totaling $10.4 million. Excluding these items, the non-GAAP net loss was $5.5 million for the second quarter, or $.15 per share.
"We made a number of strategic and operational improvements in the first half of 2009, which have resulted in gross margin improvement and reduced operating costs on a sequential and annual basis," said Gary Greenfield, Avid's chairman and CEO. "While ongoing macroeconomic issues continue to affect our revenue results, we remain confident that our continued efforts to improve our operations have positioned us to take advantage of growth opportunities when the economy improves."
Revenues for the six-month period ended June 30, 2009 were $302.2 million, compared to revenues of $421.1 million for the same period in 2008. GAAP net loss for the first six months of 2009 was $33.2 million, or $.89 per share, compared to GAAP net loss of $31.5 million, or $.83 per share, for the same period in 2008. GAAP net loss for the six-month period ended June 30, 2009 included $22.1 million of amortization, stock-based compensation, restructuring charges and related tax adjustments. Excluding these items, the non-GAAP net loss per share was $.30 for the first half of 2009. GAAP net loss for the six-month period ended June 30, 2008 included $19.9 million of amortization, stock-based compensation, restructuring charges and related tax adjustments. Excluding these items, the non-GAAP net loss per share was $.30 for the first half of 2008.
The company's cash balance on June 30, 2009 was $118.6 million, or approximately $3.18 per share. The company paid out approximately $6.8 million in cash in the second quarter related to restructuring activities.
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 (loss) and earnings (loss) per share for the three- and six-month periods ended June 30, 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 second quarter 2009 financial results will be held today, July 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(R), Pro Tools(R), Avid Unity(TM), Interplay(R), Oxygen 8, Sibelius(R) and Pinnacle Studio(TM). 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.
Copyright 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)
Three Months Ended Six Months Ended
June 30, June 30,
--------- --------- --------- ---------
2009 2008 2009 2008
--------- --------- --------- ---------
Net revenues:
Products $ 121,912 $ 189,115 $ 245,553 $ 357,291
Services 28,631 33,748 56,619 63,838
--------- --------- --------- ---------
Total net revenues 150,543 222,863 302,172 421,129
--------- --------- --------- ---------
Cost of revenues:
Products 58,429 92,628 119,677 177,701
Services 14,090 19,629 29,929 37,016
Amortization of intangible
assets 426 2,270 946 5,524
Restructuring costs - - 799 -
--------- --------- --------- ---------
Total cost of revenues 72,945 114,527 151,351 220,241
--------- --------- --------- ---------
Gross profit 77,598 108,336 150,821 200,888
--------- --------- --------- ---------
Operating expenses:
Research and development 30,661 38,972 61,712 77,482
Marketing and selling 41,994 55,259 82,775 105,586
General and administrative 12,559 19,492 27,672 41,435
Amortization of intangible
assets 2,622 3,323 4,997 6,710
Restructuring costs, net 5,019 937 9,241 2,000
--------- --------- --------- ---------
Total operating expenses 92,855 117,983 186,397 233,213
--------- --------- --------- ---------
Operating loss (15,257) (9,647) (35,576) (32,325)
Interest and other income
(expense), net 58 617 211 2,098
--------- --------- --------- ---------
Loss before income taxes (15,199) (9,030) (35,365) (30,227)
Provision for (benefit from)
income taxes, net 750 1,355 (2,139) 1,306
--------- --------- --------- ---------
Net loss $ (15,949) $ (10,385) $ (33,226) $ (31,533)
========= ========= ========= =========
Net loss per common share -
basic and diluted $ (0.43) $ (0.28) $ (0.89) $ (0.83)
Weighted-average common shares
outstanding - basic and
diluted 37,282 36,904 37,206 38,133
AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Change in Financial Presentation
Beginning January 1, 2009, we 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. Comparative results for the 2008 periods 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:
Three Months Ended Six Months Ended
June 30, June 30,
--------- --------- --------- ---------
2009 2008 2009 2008
--------- --------- --------- ---------
Revenues:
Video (a) $ 88,699 $ 147,548 $ 176,201 $ 272,575
Audio 61,844 75,315 125,971 148,554
--------- --------- --------- ---------
Total revenues $ 150,543 $ 222,863 $ 302,172 $ 421,129
========= ========= ========= =========
Contribution Margin:
Video $ 25,233 $ 43,616 $ 46,513 $ 72,086
Audio 21,831 26,460 44,561 52,785
--------- --------- --------- ---------
Segment contribution margin 47,064 70,076 91,074 124,871
--------- --------- --------- ---------
Less unallocated costs and
expenses:
Research and development
expenses (1,837) (1,731) (3,591) (3,501)
Marketing and selling
expenses (38,056) (50,710) (75,571) (97,178)
General and
administrative expenses (11,467) (16,164) (24,463) (35,550)
Amortization of
acquisition-related
intangible assets (3,048) (5,593) (5,943) (12,234)
Stock-based compensation (2,894) (4,588) (7,042) (6,733)
Restructuring costs, net (5,019) (937) (10,040) (2,000)
--------- --------- --------- ---------
Consolidated operating loss $ (15,257) $ (9,647) $ (35,576) $ (32,325)
========= ========= ========= =========
(a) Includes revenues from
non-core product lines of: $ 808 $ 16,641 $ 1,757 $ 35,093
Reconciliation of GAAP net loss
to Non-GAAP net income (loss):
Three Months Ended Six Months Ended
June 30, June 30,
--------- --------- --------- ---------
2009 2008 2009 2008
--------- --------- --------- ---------
GAAP net loss $ (15,949) $ (10,385) $ (33,226) $ (31,533)
Adjustments to reconcile to
Non-GAAP net (loss) income:
Amortization of intangible
assets 3,048 5,593 5,943 12,234
Stock-based compensation 2,894 4,588 7,042 6,733
Restructuring costs, net 5,019 937 10,040 2,000
Related tax adjustments (540) (614) (894) (1,048)
--------- --------- --------- ---------
Non-GAAP net (loss) income: $ (5,528) $ 119 $ (11,095) $ (11,614)
========= ========= ========= =========
Weighted-average common shares
outstanding - diluted 37,282 37,056 37,206 38,133
Non-GAAP net (loss) income per
common share - diluted $ (0.15) $ 0.00 $ (0.30) $ (0.30)
Stock-based compensation Three Months Ended Six Months Ended
included in: June 30, June 30,
--------- --------- --------- ---------
2009 2008 2009 2008
--------- --------- --------- ---------
Cost of products revenues $ 153 $ 171 $ 503 $ 303
Cost of services revenues 231 166 621 264
Research and development
expenses 612 1,089 1,082 1,452
Marketing and selling expenses 806 1,109 1,627 1,638
General and administrative
expenses 1,092 2,053 3,209 3,076
--------- --------- --------- ---------
$ 2,894 $ 4,588 $ 7,042 $ 6,733
========= ========= ========= =========
AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)
June 30, December 31,
2009 2008
------------ ------------
ASSETS:
Current assets:
Cash, cash equivalents and marketable
securities $ 118,588 $ 147,694
Accounts receivable, net of allowances of
$16,631 and $23,182 at June 30, 2009 and
December 31, 2008, respectively 85,192 103,527
Inventories 93,399 95,755
Prepaid and other current assets 36,532 43,969
------------ ------------
Total current assets 333,711 390,945
Property and equipment, net 35,643 38,321
Intangible assets, net 32,200 38,143
Goodwill 225,375 225,375
Other assets 11,221 10,801
------------ ------------
Total assets $ 638,150 $ 703,585
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 27,785 $ 29,419
Accrued expenses and other current
liabilities 69,097 101,107
Deferred revenues 61,566 68,581
------------ ------------
Total current liabilities 158,448 199,107
Long-term liabilities 12,705 11,823
------------ ------------
Total liabilities 171,153 210,930
------------ ------------
Stockholders' equity:
Common stock 423 423
Additional paid-in capital 986,197 980,563
Accumulated deficit (406,679) (365,431)
Treasury stock at cost, net of reissuances (116,224) (124,852)
Accumulated other comprehensive income 3,280 1,952
------------ ------------
Total stockholders' equity 466,997 492,655
------------ ------------
Total liabilities and stockholders'
equity $ 638,150 $ 703,585
============ ============
Contact: Investor Contact: Tom Fitzsimmons Email Contact 978-640-3346 Media Contact: Amy Peterson Email Contact 978-640-3448
SOURCE: Avid
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