Avid Finishes 2005 with Solid Fourth Quarter Results.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 revenues of $245.0 million for the three months ended December December: see month. 31, 2005 compared to $175.0 million for the same period in 2004. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income for the quarter was $18.4 million, or $.43 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 $22.5 million, or $.61 per diluted share, in the fourth quarter of 2004. Non-GAAP net income for the fourth quarter of 2005 was $30.1 million, or $.69 per diluted share, compared to non-GAAP net income of $23.4 million, or $.64 per diluted share in the corresponding quarter of 2004. In order to calculate non-GAAP net income, which the company believes is a more meaningful measure of normalized operating performance and will assist investors in understanding results of operations on a comparative basis, the following items have been excluded from fourth quarter 2005 GAAP net income: --Non-cash acquisition-related amortization totaling $10.1 million. --Restructuring charges of $1.2 million related to vacating a facility and reducing headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. in Montreal Montreal (mŏn'trēôl`), Fr. Montréal (môNrāäl`), city (1991 pop. 1,017,666), S Que., Canada, on Montreal island, surrounded by St. Lawrence River and Rivière des Prairies. . --Acquisition-related stock-based compensation charges and net tax provisions, and other non-recurring tax benefits of $394,000. "We finished 2005 with a solid fourth quarter," said David Krall People named Krall:
The Italian operatic overture, called sinfonia, was standardized by Alessandro Scarlatti at the end of the 17th cent. (TM) Nitris(R) into the 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. market and Avid Unity ISIS Avid Unity ISIS is an industrial-strength media storage system developed for use in professional video postproduction. ISIS stands for Infinitely Scalable Intelligent S (TM) to our broadcast customers. Audio had a strong quarter, with record sales of Digidesign's Mbox(R) portable micro-studio, continuing demand for digital mixing consoles In professional audio, a Digital Mixing Console (DMC), is an electronic device for combining, routing, and changing the dynamics of digital audio samples. The digital audio samples are summed to produce a combined output. for both the studio and live sound markets and new product launches by 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. for the home studio. Finally, our consumer segment delivered a profitable quarter, as Pinnacle Studio Pinnacle Studio is a non-linear video editing software application manufactured by Pinnacle Systems, a division of Avid Technology. It is the consumer level counterpart to Pinnacle's former professional level software, Liquid Edition (now Avid Liquid). (TM) version 10 was available during the important holiday buying season." Revenues for the year ended December 31, 2005, were $775.4 million compared to revenues of $589.6 million for 2004. GAAP net income for 2005 was $34.0 million, or $.86 per diluted share, compared to GAAP net income of $71.7 million, or $2.05 per diluted share, for 2004. Non-GAAP net income for the year ended December 31, 2005, was $92.4 million, or $2.34 per diluted share, compared to $74.9 million, or $2.14 per diluted share, for 2004. Non-GAAP net income in 2005 excludes a $32.4 million in-process research and development charge related to the acquisition of Pinnacle Systems Pinnacle Systems, Inc. is a California-based American manufacturer of digital video hardware and software for the consumer and broadcast markets. It was founded in 1986. In 2002 Pinnacle purchased VOB Computersysteme GmbH (now pinnaclesys.de). , Inc. on August 9, 2005, $20.2 million of non-cash acquisition-related amortization, $3.2 million of restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs, $2.2 million of stock-based compensation, and $451,000 of non-recurring and other tax provisions. Use of Non-GAAP Financial Measures The non-GAAP operating results listed above are "non-GAAP financial measures" under the rules of the Securities and Exchange Commission. These results have been included because management believes they are a meaningful measure of normalized operating performance and will assist investors in understanding the company's results of operations on a comparative basis. This non-GAAP 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. Management uses this information internally to more accurately assess the ongoing nature of operations and to measure performance on a comparative basis. Conference Call A conference call to discuss Avid's fourth quarter 2005 financial results and the company's outlook for 2006 will be held today, January January: see month. 26, 2006, 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, and can be accessed by dialing (913) 981-5509 and referencing confirmation code 2836084. The call and subsequent replay will also be available on Avid's web site. To listen via this alternative, go to the Investor Relations Investor relations The process by which the corporation communicates with its investors. page under the About Us menu at www.avid.com for complete details 10-15 minutes prior to the start of the conference call. The above release is subject to final audit and the completion and filing of our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . This release includes forward-looking statements 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 performance. 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 fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. 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 dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). 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 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) 2006 Avid Technology, Inc. All rights reserved. Avid, Avid Unity ISIS, 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. , Film Composer This article is about composers of music. For the HTML editor, see Mozilla Composer. A composer is a person who writes music. The term refers particularly to someone who writes music in some type of musical notation, thus allowing others to perform the music. , Mbox, Symphony, Nitris, Pinnacle Studio and Pro Tools are either registered trademarks or trademarks of Avid Technology, Inc. or its subsidiaries 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 per share data)
GAAP NON - GAAP
------------------- -------------------
Three Months Ended Three Months Ended
December 31, December 31,
2005 2004 2005 2004
--------- --------- --------- ---------
Revenues
Product $220,460 $159,060 $220,460 $159,060
Service 24,511 15,911 24,511 15,911
--------- --------- --------- ---------
Total Revenues 244,971 174,971 244,971 174,971
--------- --------- --------- ---------
Cost of Revenues
Product 104,112 67,338 104,112 67,338
Service 13,590 9,807 13,590 9,807
Amortization of intangible
assets 6,610 281 - -
--------- --------- --------- ---------
Total Cost of Revenues 124,312 77,426 117,702 77,145
--------- --------- --------- ---------
Gross Profit 120,659 97,545 127,269 97,826
--------- --------- --------- ---------
Operating Expenses
Research and development 32,080 25,831 32,080 25,831
Marketing and selling 49,782 36,519 49,782 36,519
General and administrative 13,992 11,413 13,992 11,413
Stock-based compensation
(Note A) 333 818 - -
Amortization of intangible
assets 3,465 1,665 - -
Impairment of intangible
assets - 1,187 - -
Restructuring charges 1,158 - - -
--------- --------- --------- ---------
Total Operating
Expenses 100,810 77,433 95,854 73,763
--------- --------- --------- ---------
Operating income 19,849 20,112 31,415 24,063
Interest and other income
(expense), net 1,851 653 1,851 653
--------- --------- --------- ---------
Income before income taxes 21,700 20,765 33,266 24,716
Provision for income taxes 3,214 1,313 3,214 1,313
Non-recurring and other tax
provisions (benefits) 61 (3,062) - -
--------- --------- --------- ---------
Net income $18,425 $22,514 $30,052 $23,403
========= ========= ========= =========
Net income per common share -
basic $0.44 $0.66 $0.72 $0.68
Net income per common share -
diluted $0.43 $0.61 $0.69 $0.64
Weighted average common shares
outstanding - basic 41,859 34,355 41,859 34,355
Weighted average common shares
outstanding - diluted 43,309 36,751 43,309 36,751
Note
----
A. For the three-month period ended 12/31/2005, stock based
compensation related to stock options issued as part of the
acquisition of M-Audio, is comprised of $29 of Research and
development expense, $110 of Marketing and selling expense, and
$194 of General and administrative expense, based on the
departmental classification of the option holders.
For the three-month period ended 12/31/2004, stock based
compensation related to stock options issued as part of the
acquisition of M-Audio is comprised of $14 of Research and
development expense, $249 of Marketing and selling expense, and
$555 of General and administrative expense, based on the
departmental classification of the option holders.
Reconciliation of Non-GAAP net income to GAAP net income (loss):
Three months ended
December 31,
2005 2004
----------- ----------
Non-GAAP net income $30,052 $23,403
Stock-based compensation (333) (818)
Amortization of intangible assets (10,075) (1,946)
Impairment of intangible assets - (1,187)
Restructuring charges (1,158) -
Non-recurring and other tax provisions
(benefits) (61) 3,062
----------- ----------
GAAP net income $18,425 $22,514
=========== ==========
AVID TECHNOLOGY, INC
Condensed Consolidated Statements of Operations
(unaudited - in thousands, except per share data)
------------------- -------------------
GAAP NON - GAAP
------------------- -------------------
Year Ended Year Ended
December 31, December 31,
2005 2004 2005 2004
--------- --------- --------- ---------
Revenues
Product $692,787 $528,463 $692,787 $528,463
Service 82,656 61,142 82,656 61,142
--------- --------- --------- ---------
Total Revenues 775,443 589,605 775,443 589,605
--------- --------- --------- ---------
Cost of Revenues
Product 308,386 220,246 308,386 220,246
Service 45,274 34,842 45,274 34,842
Amortization of intangible
assets 11,027 408 - -
--------- --------- --------- ---------
Total Cost of Revenues 364,687 255,496 353,660 255,088
--------- --------- --------- ---------
Gross Profit 410,756 334,109 421,783 334,517
--------- --------- --------- ---------
Operating Expenses
Research and development 111,176 94,827 111,176 94,827
Marketing and selling 170,185 129,720 170,185 129,720
General and administrative 45,744 34,613 45,744 34,613
Stock-based compensation
(Note A) 2,163 1,371 - -
In-process research and
development 32,390 - - -
Amortization of intangible
assets 9,194 3,641 - -
Impairment of intangible
assets - 1,187 - -
Restructuring charges 3,155 - - -
--------- --------- --------- ---------
Total Operating
Expenses 374,007 265,359 327,105 259,160
--------- --------- --------- ---------
Operating income 36,749 68,750 94,678 75,357
Interest and other income
(expense), net 5,586 2,389 5,586 2,389
Legal settlement - (1,050) - -
--------- --------- --------- ---------
Income before income taxes 42,335 70,089 100,264 77,746
Provision for income taxes 7,904 2,894 7,904 2,894
Non-recurring and other tax
provisions (benefits) 451 (4,506) - -
--------- --------- --------- ---------
Net Income $33,980 $71,701 $92,360 $74,852
========= ========= ========= =========
Net income per common share -
basic $0.90 $2.21 $2.45 $2.30
Net income per common share -
diluted $0.86 $2.05 $2.34 $2.14
Weighted average common shares
outstanding - basic 37,762 32,485 37,762 32,485
Weighted average common shares
outstanding - diluted 39,517 35,003 39,517 35,003
Note
----
A. For the year ended 12/31/2005, stock based compensation related to
stock options issued as part of the acquisition of M-Audio, is
comprised of $158 of Research and development expense, $602 of
Marketing and selling expense, and $1,403 of General and
administrative expense, based on the departmental classification
of the option holders.
For the twelve month period ended 12/31/2004, stock based
compensation related to stock options issued as part of the
acquisition of M-Audio is comprised of $113 of Research and
development expense, $403 of Marketing and selling expense, and
$855 of General and administrative expense, based on the
departmental classification of the option holders.
Reconciliation of Non-GAAP net income to GAAP net income:
Year ended
December 31,
2005 2004
----------- ----------
Non-GAAP net income $92,360 $74,852
Stock-based compensation (2,163) (1,371)
In-process research & development (32,390) -
Amortization of intangible assets (20,221) (4,049)
Impairment of intangible assets - (1,187)
Restructuring charges (3,155) -
Legal settlement - (1,050)
Non-recurring and other tax provisions
(benefits) (451) 4,506
----------------------
GAAP net income $33,980 $71,701
======================
AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)
December 31, December 31,
2005 2004
-------------- -------------
ASSETS:
Current assets:
Cash and marketable securities $238,431 $155,419
Accounts receivable, net of allowances
of $22,232 and $9,334 at December 31,
2005 and 2004, respectively 140,668 97,536
Inventories 96,845 53,946
Prepaid and other current assets 25,733 19,407
-------------- -------------
Total current assets 501,677 326,308
Property and equipment, net 38,563 29,092
Goodwill 396,902 165,803
Other intangible assets, net 118,676 46,884
Other assets 6,228 8,147
-------------- -------------
Total assets $1,062,046 $576,234
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $43,227 $26,517
Accrued expenses and other current
liabilities 103,816 74,727
Deferred revenues and deposits 66,034 48,680
-------------- -------------
Total current liabilities 213,077 149,924
Long term liabilities, less current
portion 9,372 1,689
-------------- -------------
Total liabilities 222,449 151,613
-------------- -------------
Stockholders' equity:
Common stock 421 348
Additional paid-in capital 928,703 546,849
Accumulated deficit (88,795) (122,775)
Deferred compensation (1,830) (4,392)
Accumulated other comprehensive income 1,098 4,591
-------------- -------------
Total stockholders' equity 839,597 424,621
-------------- -------------
Total liabilities and
stockholders' equity $1,062,046 $576,234
============== =============
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