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 11, 2006
AVID TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 0-21174 04-2977748
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation or Organization) Identification No.)
Avid Technology Park, One Park West, Tewksbury, MA 01876
(Address of Principal Executive Offices) (zip code)
Registrant's telephone number, including area code: (978) 640-6789
---------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
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):
/ / 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))
Item 2.02 Results of Operations and Financial Condition
On April 11, 2006, Avid Technology, Inc. issued a press release
regarding its preliminary financial results for the quarter ended March 31,
2006. The full text of the press release issued is attached as Exhibit 99.1
to this Current Report on Form 8-K.
The information in this Form 8-K and the Exhibit attached hereto shall
not be deemed "filed" for purposes of the Securities Exchange Act of 1934 (the
"Exchange Act"), 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.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
The following exhibit relating to Item 2.02 shall be deemed to be
furnished, and not filed:
99.1 Press Release issued by the Registrant on April 11, 2006.
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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.
Date: April 11, 2006 AVID TECHNOLOGY, INC.
(Registrant)
By: /s/ Carol E. Kazmer
--------------------
Carol E. Kazmer
Vice President and General Counsel
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EXHIBIT INDEX
Exhibit Description
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99.1 Press release issued by the Registrant dated April 11, 2006.
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Contact: Dean Ridlon, Investor Relations Director
Phone: 978.640.5309
Email: Investor_Relations@avid.com
Avid Provides Preliminary First Quarter 2006 Results
Tewksbury, MA - April 11, 2006 - Avid Technology, Inc. (Nasdaq: AVID) today
provided its preliminary first quarter financial results. Total revenues for the
quarter ended March 31, 2006, are estimated to be between $216 and $218 million.
First quarter revenues were negatively impacted by lower-than expected sales of
playout servers and on-air graphics, add-on and local storage, and European
consumer products. At this revenue range, Avid's first quarter GAAP net income
is expected to be in the range of $700,000 to $2.0 million, or $.02 to $.05 per
diluted share. Excluding acquisition-related charges, related tax benefits,
stock-based compensation and restructuring charges, first quarter non-GAAP net
income is expected to be in the range of $15.2 to $16.5 million, or $.35 to $.38
per diluted share. These projected results are subject to the normal quarter-end
accounting review.
While the company is still in the process of closing its books and reviewing its
first quarter results of operations, preliminary analysis indicates that full
year 2006 revenues are expected to be between $940 million and $970 million,
reflecting lower expectations for the professional video and consumer segments.
The company's audio segment revenue expectations for the balance of 2006 are
unchanged.
The primary drivers for the lower full-year revenue estimate include lower
storage revenues in part due to a delay in add-on storage sales as customers
transition to the new Avid Unity ISIS solution. In addition, lower broadcast
revenue is anticipated due to lower demand for playout servers and on-air
graphics products. The company also now anticipates a higher proportion of
larger broadcast bookings in 2006 that will not be fully recognized until 2007,
as the installation and acceptance of these transactions occurs. For consumer
video, the company anticipates a continuing shortfall for the remainder of the
year resulting from initial quality issues surrounding the introduction of
Pinnacle Studio(TM) version 10.
"While we are clearly disappointed with our preliminary results for Q1, and we
have made what we believe are appropriate adjustments to our 2006 outlook and
expense plan, we remain positive about the longer-term prospects for our company
and our markets, " said David Krall, Avid's president and chief executive
officer. "We are anticipating a strong showing at this year's National
Association of Broadcasters convention, and will discuss the results from this
trade show as well as from Q1 on our next scheduled earnings conference call on
May 4th."
Full-year 2006 GAAP earnings per share are now expected to be between $0.95 and
$1.20 and non-GAAP earnings per share are expected to be between $2.15 and
$2.40. Avid expects to announce its first quarter results and provide a detailed
update to its 2006 outlook on Thursday, May 4, 2006, after the close of the
market.
Use of Non-GAAP Financial Measures
The non-GAAP operating results and expected non-GAAP earnings per share listed
above are "non-GAAP financial measures" under the rules of the 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. We believe it is useful
for ourselves and investors to review both GAAP and non-GAAP measures in order
to assess our performance and our planning and forecasting in subsequent
periods. We also believe these non-GAAP financial measures are a meaningful
measure of our operating performance and will assist investors in understanding
our results of operations on a comparative basis. Specifically, in addition to
the reasons stated above, we exclude stock-based compensation from our non-GAAP
measures based on our desire to offer consistent information that is comparable
to previous information that we have publicly disclosed.
The above release includes forward-looking statements, as defined by the Private
Securities Litigation Reform Act of 1995, about Avid's expected financial
results. There are a number of factors that could cause actual events or results
to differ materially from that indicated by such forward-looking statements,
such as competitive factors, including pricing pressures, fluctuating currency
exchange rates, delays in product shipments, market acceptance of Avid's
existing and new products, Avid's ability to anticipate customer needs and the
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 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 these forward-looking
statements 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(R), Grammy(R), and
Emmy(R) award-winning products and services, please visit: www.avid.com.
(C) 2006 Avid Technology, Inc. All rights reserved. Avid, Digidesign, Film
Composer, Nitris, Pro Tools and Symphony 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(R)
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(R) 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.
Reconciliation of projected GAAP net income to projected non-GAAP net income
Three months ended March 31, 2006 (in thousands, except per share data)
Low High
--- ----
GAAP net income $ 700 $ 2,000
Stock-based compensation 4,400 4,400
Amortization of intangible assets 8,800 8,800
Restructuring charges 1,100 1,100
In-process research and development 300 300
Non-recurring and other tax benefits (100) (100)
---- ----
Non-GAAP net income $ 15,200 $ 16,500
GAAP EPS $0.02 $0.05
Non-GAAP EPS $0.35 $0.38
Reconciliation of projected GAAP net income to projected non-GAAP net income
Twelve months ended December 31, 2006 (in thousands, except per share data)
Low High
--- ----
GAAP net income $ 40,900 $ 51,800
Stock-based compensation 17,400 17,400
Amortization of intangible assets 34,400 34,400
Restructuring charges 1,100 1,100
In-process research and development 300 300
Non-recurring and other tax benefits 500 500
--- ---
Non-GAAP net income $ 94,600 $ 105,500
GAAP EPS $0.95 $1.20
Non-GAAP EPS $2.15 $2.40