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 28, 2005
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 28, 2005, Avid Technology, Inc. announced its financial results
for the quarter ended March 31, 2005. The full text of the press release issued
in connection with the announcement 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 28, 2005.
2
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 28, 2005 AVID TECHNOLOGY, INC.
(Registrant)
By: /s/ Paul Milbury
----------------------------
Paul Milbury
Chief Financial Officer
(Principal Financial Officer)
3
EXHIBIT INDEX
Exhibit Description
- ------- -----------
99.1 Press release issued by the Registrant dated April 28, 2005.
4
Contact: Dean Ridlon, Investor Relations Director
Phone: 978.640.5309
Email: Investor_Relations@avid.com
Avid Reports Best-Ever First Quarter Revenues and Net Income
Tewksbury, MA - April 28, 2005 - Avid Technology, Inc. (NASDAQ: AVID) today
reported revenues of $166.0 million for the three months ended March 31, 2005 -
a 30% increase over the $127.4 million generated in the corresponding quarter in
2004. GAAP operating income for the first quarter of 2005 was $20.3 million,
compared to $14.8 million for the same quarter in 2004. GAAP net income for the
quarter was $19.7 million, or $.53 per diluted share, compared to GAAP net
income of $14.7 million, or $.44 per diluted share, for the corresponding
quarter in 2004. Excluding acquisition-related amortization and related tax
benefits, acquisition-related stock-based compensation, non-recurring tax
benefits, and expenses in the first quarter of 2004 related to the settlement of
a lawsuit, pro forma non-GAAP net income for the first quarter of 2005 was $22.2
million, or $.60 per diluted share, compared to pro forma non-GAAP net income of
$15.0 million, or $.45 per diluted share, in the first quarter of 2004.
"We've started 2005 with strong results from both our video and audio
businesses," said David Krall, Avid's president and chief executive officer.
"Video revenues grew by 14%, on the strength of our broadcast and postproduction
offerings - particularly the Avid DNA(TM) product family, which we recently
upgraded to support a wide range of HD formats and resolutions. Our audio
revenues were also up significantly, with a 74% increase over the first quarter
of 2004 reflecting solid performance from Digidesign and from M-Audio following
its addition to our audio business in the third quarter of 2004.
Krall added, "We just returned from the National Association of Broadcasters
convention in Las Vegas, where we had a great week. We made major announcements
across our postproduction, broadcast, shared storage, and audio businesses,
including the highly anticipated Avid(R) Symphony(TM) Nitris(R) finishing system
and the new Avid iNEWS(R) Instinct(TM) journalist editor, both of which were
recognized with awards at the show. All told, Avid won eleven industry awards,
making it our most-decorated show in recent years."
Use of Non-GAAP Financial Measures
The pro forma operating results listed above are "non-GAAP financial measures"
under the rules of the Securities and Exchange Commission. We have included this
information because we believe it is a meaningful measure of our normalized
operating performance and will assist investors in understanding our results of
operations on a comparative basis. This pro forma 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
use this information internally to help our management more accurately assess
the ongoing nature of our operations and measure our performance on a
comparative basis.
Conference Call
A conference call to discuss Avid's first quarter 2005 financial results and the
company's outlook for the balance of 2005 will be held today, April 28, at 5:00
p.m. EDT. The call will be open to the public. The conference call can be
accessed by dialing (719) 457-2665 and referencing confirmation code 6477695.
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-K for the year ended
December 31, 2004, and other filings with the SEC. 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(R), Grammy(R), and
Emmy(R) award-winning products and services, please visit: www.avid.com.
(C) 2005 Avid Technology, Inc. All rights reserved. Avid, Avid DNA, Digidesign,
Film Composer, Instinct, M-Audio, Nitris, Pro Tools and Symphony are either
registered trademarks or trademarks of Avid Technology, Inc. in the United
States and/or other countries. iNEWS is a registered trademark of iNews, LLC.
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.
AVID TECHNOLOGY, INC
Condensed Consolidated Statements of Operations
(unaudited - in thousands, except for share data)
---------------------------- ---------------------------
GAAP NON - GAAP
---------------------------- ---------------------------
Three Months Ended Three Months Ended
March 31st, March 31st,
2005 2004 2005 2004
------------ ------------ ------------ -----------
Revenue
Product $147,378 $113,584 $147,378 $113,584
Service 18,623 13,790 18,623 13,790
------------ ------------ ------------ -----------
Total Revenue 166,001 127,374 166,001 127,374
Cost of Revenue
Product 60,897 46,514 60,897 46,514
Service 10,070 7,589 10,070 7,589
Amortization of intangible assets 281
------------ ------------ ------------ -----------
Total Cost of Revenue 71,248 54,103 70,967 54,103
------------ ------------ ------------ -----------
Gross Profit 94,753 73,271 95,034 73,271
------------ ------------ ------------ -----------
Operating Expenses
Research and development 24,624 22,292 24,624 22,292
Marketing and selling 39,455 29,854 39,455 29,854
General and administrative 7,973 5,886 7,973 5,886
Stock-based compensation (Note A) 771
Amortization of intangible assets 1,592 439
------------ ------------ ------------ -----------
Total Operating Expense 74,415 58,471 72,052 58,032
Operating income 20,338 14,800 22,982 15,239
Interest and other (expense) income, net 837 490 837 490
Legal Settlement (1,050)
------------ ------------ ------------ -----------
Income before income taxes 21,175 14,240 23,819 15,729
Provision for income taxes 1,602 700 1,602 700
Non-recurring tax benefits (173) (1,200)
------------ ------------ ------------ -----------
Net Income $19,746 $14,740 $22,217 $15,029
============ ============ ============ ===========
Net income per common share - basic $0.56 $0.47 $0.64 $0.48
Net income per common share - diluted $0.53 $0.44 $0.60 $0.45
Weighted average common shares outstanding - basic 34,987 31,202 34,987 31,202
Weighted average common shares outstanding - diluted 37,263 33,740 37,263 33,740
Note
- ----
A. Stock based compensation, related to stock options issued as part of the
acquisition of M-Audio is comprised of $55 of Research and development
expense, $192 of Marketing and selling expense, and $524 of General and
administrative expense, based on the departmental classification of the
option holders.
Reconciliation of Non-GAAP net income to GAAP net income: Three months ended March 31,
2005 2004
------------ ------------
Non-GAAP net income $22,217 $15,029
Stock-based compensation (771) -
Amortization of intangible assets (1,873) (439)
Non-recurring tax benefit - 1,200
Tax benefit related to amortization 173 -
Legal settlement - (1,050)
------------ ------------
GAAP net income $19,746 $14,740
============ ============
AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited in thousands)
March 31, December 31,
2005 2004
--------------- ---------------
ASSETS:
Current assets:
Cash and marketable securities $ 176,191 $ 155,419
Accounts receivable, net of allowances of $8,860 and $9,334
at March 31, 2005 and December 31, 2004, respectively 97,182 97,536
Inventories 55,150 53,946
Prepaid and other current assets 16,439 19,407
--------------- ---------------
Total current assets 344,962 326,308
Property and equipment, net 29,523 29,092
Goodwill 166,473 165,803
Other intangible assets 45,010 46,884
Other assets 8,450 8,147
--------------- ---------------
Total assets $ 594,418 $ 576,234
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 25,877 $ 26,517
Accrued expenses and other current liabilities 61,572 74,727
Deferred revenue and deposits 55,742 48,680
--------------- ---------------
Total current liabilities 143,191 149,924
Long term liabilities, less current portion 1,569 1,689
--------------- ---------------
Total liabilities 144,760 151,613
Stockholders' equity:
Common stock 351 348
Additional paid-in capital 552,494 546,849
Accumulated deficit (103,030) (122,775)
Deferred compensation (3,547) (4,392)
Accumulated other comprehensive income 3,390 4,591
--------------- ---------------
Total stockholders' equity 449,658 424,621
--------------- ---------------
Total liabilities and stockholders' equity $ 594,418 $ 576,234
=============== ===============