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Avid Announces Third Quarter 2010 Results, Reports Revenue Growth and Profit Improvement
BURLINGTON, MA, Oct 21, 2010 (MARKETWIRE via COMTEX News Network) -- Avid(R) (NASDAQ: AVID) today reported revenues of $165.1 million for the three-month period ended September 30, 2010, compared to $152.1 million for the same period in 2009. The GAAP net loss for the third quarter was $10.0 million, or $0.26 per share, compared to a GAAP net loss of $17.2 million, or $0.46 per share, in the third quarter of 2009.
The GAAP net loss for the third quarter of 2010 included amortization of intangible assets, stock-based compensation, restructuring and other charges, a gain on asset sales, acquisition-related costs, a legal settlement and related tax adjustments collectively totaling $11.6 million. Excluding these items, the non-GAAP net income was $1.6 million for the third quarter, or $0.04 per share. The GAAP net loss for the third quarter of 2009 included $17.0 million of amortization of intangible assets, stock-based compensation, restructuring and other charges, loss on asset sales and related tax adjustments. Excluding these items, the non-GAAP net loss per share for the third quarter of 2009 was $0.01 per share.
The GAAP operating loss for the third quarter was $7.1 million, including amortization of intangible assets, stock-based compensation, restructuring and other charges, a gain on asset sales, acquisition-related costs and a legal settlement collectively totaling $12.0 million. Excluding these items, the non-GAAP operating profit for the third quarter was $4.9 million. A reconciliation of GAAP to non-GAAP results is included in the tables attached to this release.
"We are pleased to report our strongest financial quarter since 2007 including a non-GAAP operating profit and strong year-over-year revenue growth," said Gary Greenfield, chairman and CEO at Avid. "The steady revenue growth trend in both Avid's business and our customers' businesses is encouraging and we remain focused on improving our profit margin."
Revenues for the nine-month period ended September 30, 2010 were $483.2 million, compared to revenues of $454.3 million for the same period in 2009. GAAP net loss for the first nine months of 2010 was $36.4 million, or $0.96 per share, compared to GAAP net loss of $50.4 million, or $1.35 per share, for the same period in 2009. GAAP net loss for the nine-month period ended September 30, 2010 included $31.4 million of amortization of intangible assets, stock-based compensation, restructuring and other charges, a gain on asset sales, acquisition-related costs, a legal settlement and related tax adjustments. Excluding these items, the non-GAAP net loss was $5.0 million for the first nine months of 2010, or $0.13 per share. GAAP net loss for the nine-month period ended September 30, 2009 was $50.4 million and included $39.1 million of amortization of intangible assets, stock-based compensation, restructuring and other charges, loss on asset sales and related tax adjustments. Excluding these items, the non-GAAP net loss was $11.3 million for the first nine-months of 2009, or $0.30 per share.
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. 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 reconciliation of the GAAP to non-GAAP financial measures that we provide is in the tables attached to this press release.
We consider both GAAP and non-GAAP financial results in managing our business. Non-GAAP financial measures are used internally, for example, in establishing annual operating budgets, in assessing operating performance and for measuring performance under incentive compensation plans. Non-GAAP financial measures are also used in operating and financial decision-making because we believe these measures reflect our ongoing business and allow meaningful period-to-period comparisons. We believe it is useful for investors and others to also review both GAAP and non-GAAP measures in order to understand and evaluate our current operating performance and future prospects in the same manner as management and to compare in a consistent manner the company's current financial results with past financial performance. The primary limitations associated with our use of non-GAAP financial measures are that they may not include all items of income and expense that affect our operations and that the non-GAAP financial measures we use may not be directly comparable to those reported by other companies. For example, the terms used in this press release, non-GAAP operating profit and non-GAAP net income, do not have standardized meanings. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. We seek to compensate for this limitation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in the tables attached to this press release.
Conference Call
A conference call to discuss Avid's third quarter 2010 financial results will be held today, October 21, 2010 at 4:30 p.m. EDT. 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. This release also makes forward-looking statements 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), Interplay(R), ISIS(R), VENUE, Oxygen 8, Sibelius(R), System 5, 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 2010 Avid Technology, Inc. All rights reserved. Avid, the Avid Logo, Interplay, ISIS, Media Composer, Pinnacle Studio, Pro Tools 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 Nine Months Ended
September 30, September 30,
-------------------- --------------------
2010 2009 2010 2009
--------- --------- --------- ---------
Net revenues:
Products $ 134,231 $ 123,522 $ 397,044 $ 369,075
Services 30,828 28,597 86,131 85,216
--------- --------- --------- ---------
Total net revenues 165,059 152,119 483,175 454,291
--------- --------- --------- ---------
Cost of revenues:
Products 64,421 57,097 193,527 176,774
Services 14,194 13,586 41,373 43,515
Amortization of intangible
assets 745 519 2,657 1,465
Restructuring costs - - - 799
--------- --------- --------- ---------
Total cost of revenues 79,360 71,202 237,557 222,553
--------- --------- --------- ---------
Gross profit 85,699 80,917 245,618 231,738
--------- --------- --------- ---------
Operating expenses:
Research and development 28,929 29,262 89,348 90,974
Marketing and selling 43,199 44,705 129,419 127,480
General and administrative 19,698 12,093 48,179 39,765
Amortization of intangible
assets 2,283 2,782 7,557 7,779
Restructuring and other costs,
net 185 7,891 5,532 17,132
(Gain) loss on sales of assets (1,527) 3,398 (1,527) 3,398
--------- --------- --------- ---------
Total operating expenses 92,767 100,131 278,508 286,528
--------- --------- --------- ---------
Operating loss (7,068) (19,214) (32,890) (54,790)
Interest and other income
(expense), net (30) (240) (132) (29)
--------- --------- --------- ---------
Loss before income taxes (7,098) (19,454) (33,022) (54,819)
Provision for (benefit from)
income taxes, net 2,897 (2,246) 3,361 (4,385)
--------- --------- --------- ---------
Net loss ($ 9,995) ($ 17,208) ($ 36,383) ($ 50,434)
========= ========= ========= =========
Net loss per common share -
basic and diluted ($ 0.26) ($ 0.46) ($ 0.96) ($ 1.35)
========= ========= ========= =========
Weighted-average common shares
outstanding - basic and
diluted 38,045 37,341 37,826 37,251
AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Change in Financial Presentation
Beginning January 1, 2010, we are reporting based on a single reporting
segment. Comparative results for the 2009
periods have been updated to reflect this new business structure.
Reconciliations of GAAP financial measures to Non-GAAP financial measures:
Three Months Ended September 30, 2010
Operating Net
Gross Operating (Loss) Tax (Loss)
Profit Expenses Income Provision Income
---------- --------- --------- ---------- ---------
GAAP $ 85,699 $ 92,767 ($ 7,068) $ 2,897 ($ 9,995)
Amortization of
intangible
assets 745 (2,283) 3,028 3,028
Restructuring and
other costs, net (185) 185 185
Acquisition-rela-
ted costs (a) (56) 56 56
Legal settlement
(a) (5,600) 5,600 5,600
Gain on sales of
assets 527 (527) (527)
Tax adjustment 399 (399)
Stock-based
compensation
included in:
Cost of
products
revenues 176 176 176
Cost of
services
revenues 287 287 287
Research and
development
expenses (506) 506 506
Marketing and
selling
expenses (1,078) 1,078 1,078
General and
administrative
expenses (1,581) 1,581 1,581
---------- --------- --------- ---------- ---------
Non-GAAP $ 86,907 $ 82,005 $ 4,902 $ 3,296 $ 1,576
Weighted-average
shares outstanding
- diluted 38,065
Non-GAAP net income
per share - diluted $ 0.04
(a) Represents costs included in general and administrative expenses
Three Months Ended September 30, 2009
Gross Operating Operating Tax Net
Profit Expenses Loss Benefit Loss
---------- --------- --------- --------- ---------
GAAP $ 80,917 $ 100,131 ($ 19,214) ($ 2,246) ($ 17,208)
Amortization of
intangible
assets 519 (2,782) 3,301 3,301
Restructuring and
other costs, net (7,891) 7,891 7,891
Loss on sales of
assets (3,398) 3,398 3,398
Tax adjustment 463 (463)
Stock-based
compensation
included in:
Cost of
products
revenues 163 163 163
Cost of
services
revenues 247 247 247
Research and
development
expenses (655) 655 655
Marketing and
selling
expenses (895) 895 895
General and
administrative
expenses (906) 906 906
---------- --------- --------- --------- ---------
Non-GAAP $ 81,846 $ 83,604 ($ 1,758) ($ 1,783) ($ 215)
Weighted-average
shares outstanding
- diluted 37,341
Non-GAAP net loss
per share - diluted ($ 0.01)
AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Reconciliations of GAAP financial measures to Non-GAAP financial measures:
Nine Months Ended September 30, 2010
Gross Operating Operating Tax Net
Profit Expenses Loss Provision Loss
---------- --------- --------- ---------- ---------
GAAP $ 245,618 $ 278,508 ($ 32,890) $ 3,361 ($ 36,383)
Amortization of
intangible
assets 2,657 (7,557) 10,214 10,214
Restructuring and
other costs, net
(a) (5,532) 5,532 5,532
Acquisition-
related costs (b) (825) 825 825
Legal settlement
(b) (5,600) 5,600 5,600
Gain on sales of
assets 527 (527) (527)
Tax adjustment 854 (854)
Stock-based
compensation
included in:
Cost of
products
revenues 562 562 562
Cost of
services
revenues 822 822 822
Research and
development
expenses (1,704) 1,704 1,704
Marketing and
selling
expenses (3,153) 3,153 3,153
General and
administrative
expenses (4,373) 4,373 4,373
---------- --------- --------- ---------- ---------
Non-GAAP $ 249,659 $ 250,291 ($ 632) $ 4,215 ($ 4,979)
Weighted-average
shares outstanding
- diluted 37,826
Non-GAAP net loss
per share - diluted ($ 0.13)
(a) Includes costs of $3.7 million related to exiting our former
Tewksbury, Massachusetts headquarters lease
(b) Represents costs included in general and administrative expenses
Nine Months Ended September 30, 2009
Gross Operating Operating Tax Net
Profit Expenses Loss Benefit Loss
---------- --------- --------- --------- ---------
GAAP $ 231,738 $ 286,528 ($ 54,790) ($ 4,385) ($ 50,434)
Amortization of
intangible
assets 1,465 (7,779) 9,244 9,244
Restructuring and
other costs, net 799 (17,132) 17,931 17,931
Loss on sales of
assets (3,398) 3,398 3,398
Tax adjustment 1,357 (1,357)
Stock-based
compensation
included in:
Cost of
products
revenues 666 666 666
Cost of
services
revenues 868 868 868
Research and
development
expenses (1,737) 1,737 1,737
Marketing and
selling
expenses (2,522) 2,522 2,522
General and
administrative
expenses (4,115) 4,115 4,115
---------- --------- --------- --------- ---------
Non-GAAP $ 235,536 $ 249,845 ($ 14,309) ($ 3,028) ($ 11,310)
Weighted-average
shares outstanding
- diluted 37,251
Non-GAAP net loss
per share - diluted ($ 0.30)
Revenue Summary:
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
Video revenues $ 100,186 $ 92,617 $ 278,060 $ 268,818
Audio revenues 64,873 59,502 205,115 185,473
---------- ---------- ---------- ----------
Total net revenues $ 165,059 $ 152,119 $ 483,175 $ 454,291
========== ========== ========== ==========
AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)
September 30, December 31,
2010 2009
------------ ------------
ASSETS:
Current assets:
Cash, cash equivalents and marketable
securities $ 34,361 $ 108,877
Accounts receivable, net of allowances of
$15,733 and $16,347 at September 30, 2010
and December 31, 2009, respectively 89,674 79,741
Inventories 96,306 77,243
Prepaid and other current assets 27,782 31,075
------------ ------------
Total current assets 248,123 296,936
Property and equipment, net 65,088 37,217
Intangible assets, net 32,564 29,235
Goodwill 244,282 227,195
Other assets 9,859 20,455
------------ ------------
Total assets $ 599,916 $ 611,038
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable 45,250 30,230
Accrued expenses and other current
liabilities 66,770 84,100
Deferred revenues 46,822 39,107
------------ ------------
Total current liabilities 158,842 153,437
Long-term liabilities 22,116 14,483
------------ ------------
Total liabilities 180,958 167,920
------------ ------------
Stockholders' equity:
Common stock 423 423
Additional paid-in capital 1,001,891 992,489
Accumulated deficit (494,927) (444,661)
Treasury stock at cost, net of reissuances (92,355) (112,389)
Accumulated other comprehensive income 3,926 7,256
------------ ------------
Total stockholders' equity 418,958 443,118
------------ ------------
Total liabilities and stockholders'
equity $ 599,916 $ 611,038
============ ============
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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