Avid Finishes 2004 with Record Quarter and Year.TEWKSBURY Tewksbury, town (1990 pop. 27,266), Middlesex co., NE Mass.; settled 1637, set off from Billerica and inc. 1734. It was once the site of a Native American settlement. Primarily residential, the town has light manufacturing, including pharmaceuticals and computer equipment. , Mass. -- Avid Technology "Avid" redirects here. For the "Advancement Via Individual Determination" educational program, see AVID. Avid Technology, Inc NASDAQ: AVID is an American company specializing in video and audio production technology; specifically, digital non-linear media editing (NLE) , Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : AVID) today reported record revenues of $175.0 million for the three months ended December December: see month. 31, 2004 - a 37% increase over the $127.3 million generated in the corresponding quarter in 2003. For the year ended December 31, 2004, Avid reported record revenues of $589.6 million, up 25% from $471.9 million in 2003. This annual revenue growth rate is Avid's highest since 1995, the year it acquired Digidesign Digidesign is an American digital audio technology company. It was founded in 1984 by Peter Gotcher and Evan Brooks. The company began as a project to raise money for the founders' band, selling EPROM chips for drum machines. . "It's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have been a fantastic year across all of our major markets, with strong results in our video postproduction post·pro·duc·tion n. A final stage in the production of a film or a television program, occurring after the action has been filmed or videotaped and typically involving editing and the addition of soundtracks. , broadcast, and audio businesses contributing to Avid's highest annual revenue growth rate in nine years," said David Krall People named Krall:
DNA or deoxyribonucleic acid One of two types of nucleic acid (the other is RNA); a complex organic compound found in all living cells and many viruses. It is the chemical substance of genes. (TM) product line. We also had a solid quarter in broadcast, finishing the year with over 100 deals signed, bringing the total number of Avid(R) digital broadcast conversions either under way or completed to more than 250. Lastly, our fourth quarter audio revenues grew by 70% year over year, with Digidesign successfully expanding its professional audio mixing Audio mixing is used for sound recording, audio editing, and sound systems to balance the relative volume, frequency, and dynamical content of a number of sound sources. Typically, these sound sources are the different musical instruments in a band or vocalists, the sections of an business and entering the live sound market, and M-Audio M-Audio (formerly Midiman), a business unit of Avid Technology, is a manufacturer of a variety of digital audio workstation interfaces, keyboard MIDI controllers, condenser microphones, and studio monitors, among other products. delivering its first full quarter of results as a part of Avid in Q4." GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the fourth quarter of 2004 was $20.1 million compared to $14.9 million for the same quarter in 2003. GAAP net income for the quarter was $22.5 million, or $0.61 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to GAAP net income of $15.8 million, or $0.47 per diluted share, for the corresponding quarter in 2003. Excluding non-recurring tax benefits, acquisition-related stock-based compensation and amortization, restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. related to the impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma non-GAAP net income for the fourth quarter was $23.5 million, or $0.64 per diluted share, compared to pro forma non-GAAP net income of $16.9 million, or $.50 per diluted share, in the fourth quarter of 2003. GAAP operating profit for 2004 was $68.8 million, compared to $39.6 million in 2003. GAAP net income for 2004 was $71.7 million, or $2.05 per diluted share, compared to GAAP net income of $40.9 million, or $1.25 per diluted share, for 2003. Excluding non-recurring tax benefits, acquisition-related stock-based compensation and amortization, restructuring charges, expenses related to the settlement of a lawsuit lawsuit: see procedure; tort. and a non-cash charge related to the impairment of intangible assets, pro forma non-GAAP net income for 2004 was $74.9 million, or $2.14 per diluted share, compared to $44.9 million, or $1.37 per diluted share, for 2003. 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 ("SEC"). 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 Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with, disclosures required by generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting 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 fourth quarter 2004 financial results and the company's outlook for 2005 will be held today, February February: see month. 3 at 5:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . The call will be open to the public. The conference call can be accessed by dialing (719) 457-2649 and referencing confirmation code 8462916. 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , as defined by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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-Q Form 10-Q See 10-Q. for the quarter ended September September: see month. 30, 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 A system in which the output is not a uniform relationship to the input. nonlinear - (Scientific computation) A property of a system whose output is not proportional to its input. media creation, management and distribution solutions, enabling film, video, audio, animation animation Process of giving the illusion of movement to drawings, models, or inanimate objects. From the mid-1850s, such optical devices as the zoetrope produced the illusion of animation. Stop-action photography enabled the production of cartoon films. , games, and broadcast professionals to work more efficiently, productively, and creatively. For more information about the company's Oscar(R), Grammy Grammy award for musical achievement. [Am. Cult.: Misc.] See : Music Grammy awarded by the National Academy of Recording Arts and Sciences for the best in the recording field. [Am. Hist.: Misc.] See : Prize (R), and Emmy Emmy awarded annually for best achievements in television programing and performance. [TV: Misc.] See : Prize (R) award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" products and services, please visit: www.avid.com. (C) 2005 Avid Technology, Inc. All rights reserved. Avid, Avid DNA, Avid Xpress, Adrenaline, Film Composer, M-Audio, Media Composer, Digidesign, and Pro Tools are either registered trademarks or trademarks of Avid Technology, Inc. in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. 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 A digital audio workstation (DAW) is a system designed to record, edit and play back digital audio. A key feature of DAWs is the ability to freely manipulate recorded sounds, much like a word processor manipulates typed words. . Oscar is Oscar I, 1799–1859, king of Sweden and Norway (1844–59), son and successor of Charles XIV. His reign was one of social and economic advance. His book on the reform of criminal law and prisons had wide influence. Oscar was succeeded by his elder son, Charles XV. 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 The National Academy of Recording Arts & Sciences, Inc. is known variously as The Recording Academy or NARAS. Established in 1957, The Recording Academy is a U.S. , 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 and per share data)
------------------- -------------------
GAAP NON - GAAP
------------------- -------------------
Three Months Ended Three Months Ended
December 31, December 31st,
2004 2003 2004 2003
--------- --------- --------- ---------
Revenue
Product $158,590 $115,146 $158,590 $115,146
Service 16,381 12,182 16,381 12,182
--------- --------- --------- ---------
Total Revenue 174,971 127,328 174,971 127,328
--------- --------- --------- ---------
Cost of Revenue
Product 67,338 46,414 67,338 46,414
Service 9,807 7,340 9,807 7,340
Amortization of intangible
assets 281 - - -
--------- --------- --------- ---------
Total Cost of Revenue 77,426 53,754 77,145 53,754
--------- --------- --------- ---------
Gross Profit 97,545 73,574 97,826 73,574
--------- --------- --------- ---------
Operating Expenses
Research and development 25,812 21,719 25,812 21,719
Marketing and selling 38,435 28,733 38,435 28,733
General and administrative 9,469 6,576 9,469 6,576
Stock-based compensation
(Note A) 865 - - -
Restructuring and other
costs, net - 1,335 - -
Amortization of intangible
assets 1,665 341 - -
Impairment of intangible
assets 1,187 - - -
--------- --------- --------- ---------
Total Operating
Expense 77,433 58,704 73,716 57,028
--------- --------- --------- ---------
Operating income 20,112 14,870 24,110 16,546
Interest and other income, net 653 544 653 544
--------- --------- --------- ---------
Income before income taxes 20,765 15,414 24,763 17,090
Provision for income taxes 1,313 200 1,313 200
Non-recurring tax benefits (3,062) (550) - -
--------- --------- --------- ---------
Net Income $22,514 $15,764 $23,450 $16,890
========= ========= ========= =========
Net income per common share -
basic $0.66 $0.51 $0.68 $0.55
Net income per common share -
diluted $0.61 $0.47 $0.64 $0.50
Weighted average common shares
outstanding - basic 34,355 30,764 34,355 30,764
Weighted average common shares
outstanding - diluted 36,751 33,864 36,751 33,864
Note
-------------------------------
A. Stock based compensation relates primarily to stock options issued
as part of the acquisition of M-Audio.
Reconciliation of Non-GAAP
net income to GAAP net income: Three months ended December 31,
2004 2003
--------- ---------
Non-GAAP net income $23,450 $16,890
Stock-based compensation (865) -
Restructuring and other
costs, net - (1,335)
Amortization of intangible
assets (1,946) (341)
Impairment of intangible
assets (1,187) -
Tax refunds and benefits 3,062 550
--------- ---------
GAAP net income $22,514 $15,764
========= =========
AVID TECHNOLOGY, INC
Condensed Consolidated Statements of Operations
(unaudited - in thousands, except for share and per share data)
------------------- -------------------
GAAP NON - GAAP
------------------- -------------------
Twelve Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
--------- --------- --------- ---------
Revenue
Product $528,463 $425,403 $528,463 $425,403
Service 61,142 46,509 61,142 46,509
--------- --------- --------- ---------
Total Revenue 589,605 471,912 589,605 471,912
--------- --------- --------- ---------
Cost of Revenue
Product 220,246 183,304 220,246 183,304
Service 34,842 26,069 34,842 26,069
Amortization of intangible
assets 408 - - -
--------- --------- --------- ---------
Total Cost of Revenue 255,496 209,373 255,088 209,373
--------- --------- --------- ---------
Gross Profit 334,109 262,539 334,517 262,539
--------- --------- --------- ---------
Operating Expenses
Research and development 94,808 85,552 94,808 85,552
Marketing and selling 135,380 109,704 135,380 109,704
General and administrative 28,925 23,208 28,925 23,208
Stock-based compensation
(Note A) 1,418 - - -
Restructuring and other
costs, net - 3,194 - -
Amortization of intangible
assets 3,641 1,316 - -
Impairment of intangible
assets 1,187 - - -
--------- --------- --------- ---------
Total Operating Expense 265,359 222,974 259,113 218,464
--------- --------- --------- ---------
Operating income 68,750 39,565 75,404 44,075
Interest and other income, net 2,389 1,874 2,389 1,874
Legal settlement (1,050) - - -
--------- --------- --------- ---------
Income before income taxes 70,089 41,439 77,793 45,949
Provision for income taxes 2,894 1,100 2,894 1,100
Non-recurring tax benefits (4,506) (550) - -
--------- --------- --------- ---------
Net Income $71,701 $40,889 $74,899 $44,849
========= ========= ========= =========
Net income per common share -
basic $2.21 $1.40 $2.31 $1.54
Net income per common share -
diluted $2.05 $1.25 $2.14 $1.37
Weighted average common shares
outstanding - basic 32,485 29,192 32,485 29,192
Weighted average common shares
outstanding - diluted 35,003 32,653 35,003 32,653
Note
-------------------------------
A. Stock based compensation relates primarily to stock options issued
as part of the acquisition of M-Audio.
Reconciliation of Non-GAAP
net income to GAAP net income: Year ended December 31,
2004 2003
--------- ---------
Non-GAAP net income $74,899 $44,849
Stock-based compensation (1,418) -
Restructuring and other
costs, net - (3,194)
Amortization of intangible
assets (4,049) (1,316)
Impairment of intangible
assets (1,187) -
Tax refunds and benefits 4,506 550
Legal settlement (1,050) -
--------- ----------
GAAP net income $71,701 $40,889
========= ==========
AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)
December 31, December 31,
2004 2003
------------- ------------
ASSETS:
Current assets:
Cash and marketable securities $ 155,419 $ 196,309
Accounts receivable, net of allowances
of $9,334 and $9,161 at December 31,
2004 and 2003, respectively 97,536 69,230
Inventories 53,946 38,292
Prepaid and other current assets 19,407 13,181
------------- ------------
Total current assets 326,308 317,012
Property and equipment, net 29,092 23,223
Acquisition-related intangible assets,
net 46,884 1,815
Goodwill 165,803 3,335
Other assets 7,384 2,734
------------- ------------
Total assets $ 575,471 $ 348,119
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 26,517 $ 15,755
Accrued expenses and other current
liabilities 74,727 59,709
Deferred revenue and deposits 48,680 44,943
------------- ------------
Total current liabilities 149,924 120,407
Long term liabilities, less current
portion 926 607
------------- ------------
Total liabilities 150,850 121,014
Total stockholders' equity 424,621 227,105
------------- ------------
Total liabilities and stockholders'
equity $ 575,471 $ 348,119
============= ============
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