Avid Reports Second Quarter Profit.Business/Technology Editors TEWKSBURY, Mass.--(BUSINESS WIRE)--July 18, 2002 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:AVID) today reported stronger-than-expected financial results for the second quarter ended June 30, 2002. Revenues for the quarter were $106.1 million versus $109.4 million in the corresponding quarter in 2001. Net income for the quarter was $152,000 or $.01 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 after including a $1 million charge to reduce the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of a previous equity investment to zero. For the second quarter of 2001, Avid reported a net loss of $14.8 million or $.58 per share. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the second quarter of 2002 were $52.1 million compared to $47.6 million for the prior quarter and $71.8 million in the second quarter in 2001. The increase from the first quarter of 2002 was largely due to planned marketing expenses related to Avid's participation in the National Association of Broadcasters convention and follow-up marketing programs 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 Europe. The decrease from the second quarter of 2001 reflects the completion of amortization related to the acquisition of Softimage Co. and aggressive cost control measures. For the six months ended June 30, 2002, revenues were $198.1 million compared to $227.6 million for the first half of 2001. Net loss for the six-month period in 2002 was $3.5 million or $.14 per share compared to a net loss of $25.3 million or $1.00 per share for the same period in 2001. Excluding acquisition-related amortization, and 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). and other costs, net, Avid would have reported a net loss of $3.3 million or $.12 per share for the first half of 2002 compared to net income of $509,000 or $.02 per diluted share for the first half of 2001. "Our stronger than expected results this quarter were due to improvements in all geographies and almost all product lines, when compared to our first quarter performance," said David Krall, Avid's president and chief executive officer. "Fueling sales at the high end of 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 is increased demand for high definition video content, including prime time television series, digital cinema, and on-location advertising using HD video. Strong growth in the low-cost market is resulting from the rapid proliferation proliferation /pro·lif·er·a·tion/ (pro-lif?er-a´shun) the reproduction or multiplication of similar forms, especially of cells.prolif´erativeprolif´erous pro·lif·er·a·tion n. of professionals using DV media. "Within our broadcast market, the conversion from analog to digital news production is continuing," added Krall. "Broadcasters recognize the many benefits of working in an all-digital production environment and, as a result, our pipeline of potential customers is expanding. During the quarter, we entered into contracts to build and supply solutions to stations within several new station groups, as we further solidified so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. our position as the leading provider of end-to-end digital newsroom solutions. "Our Digidesign division had a record revenue quarter driven by strong demand for our new flagship 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. , Pro Tools(R)|HD. Digidesign also saw strong demand for Mbox(TM), a low-cost portable "micro-studio" targeted for the home musician. "Next week, we will be participating in SIGGRAPH (Special Interest Group on Computer Graphics, www.siggraph.org) The arm of the ACM that specializes in computer graphics and interactive techniques. Providing publications, workshops and conferences, it has served technicians and researchers as well as the artist and business community , a premiere computer graphics trade show," concluded Krall. "We will be demonstrating the SOFTIMAGE(R)|XSI XSI - X/Open System Interface (R) version 3 system, the latest major release of our flagship 3-D 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. production environment, which is expected to ship later this year." Conference Call A conference call to discuss Avid's second quarter 2002 financial results will be held today at 5:00 p.m. ET. The call will be open to the public. The conference call can be accessed by dialing (719) 457-2649 and referencing confirmation code 600618. The call and subsequent replay will also be available for a limited time 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 at www.avid.com for complete details 10-15 minutes prior to the start of the conference call. The above 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 1996, including statements about products and functionality, and size and growth of existing markets. There are a number of factors that could cause actual events or results of operations to differ materially from those indicated by such forward-looking statements, such as market acceptance of Avid's products, further weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. of worldwide economic
conditions and the other factors set forth under the caption
"Certain Factors That May Affect Future Results" in
Avid's Form 10-Q Form 10-QSee 10-Q. for the quarter ended March 31, 2002 and other filings with the Securities and Exchange Commission. In addition, any forward-looking statements contained herein represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any obligation to do so, even if our estimates change. About Avid Technology, Inc. Avid Technology, Inc. delivers the solutions that Make, Manage and Move Media(TM). As a recognized digital standard for professionals who Make the world's media -- from video, audio and film to animation, special effects special effects, in motion pictures, cinematographic techniques that create illusions in the audience's minds as well as the illusions created using these techniques. and streaming media See streaming audio, streaming video and digital media hub. -- Avid's products are used to make more television and news shows, commercials, music videos and CDs, corporate/industrial productions and major motion pictures combined than any other nonlinear editing See nonlinear video editing. manufacturer in the world. Building on its award-winning heritage, which includes several Emmy(R) awards as well as an Oscar(R) statuette representing the 1998 Scientific and Technical Award for the concept, design and engineering of the Avid Film Composer(R) systems for motion picture editing, Avid is extending its reach by redefining how digital media is shared, stored and distributed. To Manage today's increasingly rich collection of dynamic media, Avid provides powerful servers, networks and media tools to help customers search files, share media and collaborate on new productions, both locally and globally. Avid's solutions also empower users to easily Move media, whether on air, over cable or satellite or through the Internet. Like no other media company today, Avid's end-to-end solutions (jargon) end-to-end solution - (E2ES) A term that suggests that the supplier of an application program or system will provide all the hardware and/or software components and resouces to meet the customer's requirement and no other supplier need be involved. Compare: turn-key solution. span the continuum of media creation, management and distribution. The company's corporate headquarters are located in Tewksbury, MA. More information about the company is available at www.avid.com. (c) 2002 Avid Technology, Inc. All rights reserved. Avid, Pro Tools, SOFTIMAGE, XSI, Make, Manage and Move Media, and Film Composer are either registered trademarks or trademarks of Avid Technology, Inc. in the United States and/or other countries. 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 registered trademark and service mark of the Academy of Motion Picture Arts and Sciences. Emmy is a registered trademark of ATAS/NATAS. All other trademarks contained herein are the property of their respective owners.
AVID TECHNOLOGY, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Unaudited
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Net revenues $ 106,094 $ 109,434 $ 198,103 $ 227,567
Cost of revenues 52,591 53,516 100,306 110,029
Gross profit 53,503 55,918 97,797 117,538
Operating expenses:
Research and
development 20,411 21,882 40,229 45,155
Marketing and
selling 26,775 31,520 49,741 61,266
General and
administrative 5,018 5,432 9,531 12,399
Restructuring and
other costs, net (327) (118) (327) 246
Amortization of
acquisition-related
intangible assets 257 13,132 603 25,552
Total operating
expenses 52,134 71,848 99,777 144,618
Operating income (loss) 1,369 (15,930) (1,980) (27,080)
Interest and other
income (expense), net (717) 1,895 (452) 3,391
Income (loss) before
income taxes 652 (14,035) (2,432) (23,689)
Provision for
income taxes 500 800 1,100 1,600
Net income (loss) $ 152 ($ 14,835) ($ 3,532) ($ 25,289)
Net income (loss)
per common
share - basic $ 0.01 ($ 0.58) ($ 0.14) ($ 1.00)
Net income (loss)
per common
share - diluted $ 0.01 ($ 0.58) ($ 0.14) ($ 1.00)
Weighted average
common shares
outstanding - basic 26,161 25,440 26,095 25,395
Weighted average
common shares
outstanding - diluted 26,511 25,440 26,095 25,395
AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(in thousands)
June 30, December 31,
2002 2001
(unaudited)
ASSETS:
Current assets:
Cash and marketable securities $65,108 $72,961
Accounts receivable, net
of allowances of $11,787 and
$11,497 at June 30, 2002 and
December 31, 2001, respectively 77,619 78,010
Inventories 25,249 21,690
Prepaid and other current assets 11,413 10,857
Total current assets 179,389 183,518
Property and equipment, net 25,815 27,164
Acquisition-related
intangible assets 2,865 3,462
Other assets 676 1,662
Total assets 208,745 $215,806
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $28,498 $19,076
Accrued expenses 44,738 49,598
Deferred revenue and other
current liabilities 30,412 29,354
Total current liabilities 103,648 98,028
Long term liabilities,
less current portion - 13,020
Total stockholders' equity 105,097 104,758
Total liabilities and
stockholders' equity $208,745 $215,806
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