Avid Reports Strong Third 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 $204.4 million for the three months ended September September: see month. 30, 2005 compared to $147.4 million for the same period in 2004. Reflecting various non-cash charges 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. primarily associated with the closing of 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, GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net loss for the quarter was $17.8 million, or $.46 per share compared to GAAP net income of $19.0 million, or $.54 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, in the third quarter of 2004. Non-GAAP net income for the third quarter of 2005 was $24.2 million, or $.60 per diluted share, compared to non-GAAP net income of $20.4 million, or $.58 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 third quarter 2005 GAAP net loss: --A non-recurring in-process research and development charge of $32.4 million related to the Pinnacle pinnacle (pĭn`ĭkəl), minor architectural motif of vertical tapering shape, usually crowning a pier, buttress, or gable. Although sometimes it appears in Renaissance design, as in the Certosa di Pavia, it is almost exclusively a medieval acquisition. --Non-cash acquisition-related amortization charges of $6.4 million. --Restructuring costs of $2 million reflecting a revised estimate Revised estimate The third estimate of GDP released about three months after the measurement period. of a loss on a facility vacated by Avid in 1999. --A Pinnacle acquisition-related tax charge of $1.2 million, offset by $468,000 of tax benefits related to 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). . --Stock-based compensation charges of $458,000 related to the acquisition of 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. in August 2004. "We had a strong third quarter with all segments performing well," said David Krall People named Krall:
Contraction of we are. we're we are looking forward to offering our broadcast customers an even more complete solution than we have in the past. Audio also had a strong quarter, with 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. benefiting from the release of the Mbox(R) 2 portable micro-studio and continuing demand for its 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. . Finally, our new Pinnacle consumer segment delivered a solid quarter, driven by the release of 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." Revenues for the nine months ended September 30, 2005, were $530.5 million compared to revenues of $414.6 million for the same period in 2004. GAAP net income for the first nine months of 2005 was $15.6 million, or $.41 per diluted share, compared to GAAP net income of $49.2 million, or $1.43 per diluted share, for the same period in 2004. Excluding the in-process research and development charge, acquisition-related amortization, stock-based compensation, the Pinnacle acquisition-related tax charge, the tax benefit related to amortization, restructuring costs, and non-recurring expenses in the first quarter of 2004 related to the settlement of a lawsuit lawsuit: see procedure; tort. , non-GAAP net income for the nine months ended September 30, 2005, was $62.3 million, or $1.63 per diluted share, compared to $51.4 million, or $1.50 per diluted share, for the first nine months of 2004. 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 third quarter 2005 financial results and the company's outlook for the fourth quarter of 2005 and the full year 2006 will be held today, October October: see month. 27, at 5:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . The call will be open to the public, and can be accessed by dialing (913) 981-5509 and referencing confirmation code 6447118. 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 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 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 statements, such as the competitive market in which Avid operates, market acceptance of Avid's existing and new products, Avid's ability to anticipate customer 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 June June: see month. 30, 2005, and other filings with the SEC. 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) 2005 Avid Technology, Inc. All rights reserved. Avid, Digidesign, 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. , M-Audio, Mbox, 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
September 30th, September 30th,
2005 2004 2005 2004
--------- --------- --------- ---------
Revenue
Product $183,515 $131,550 $183,515 $131,550
Service 20,905 15,824 20,905 15,824
--------- --------- --------- ---------
Total Revenue 204,420 147,374 204,420 147,374
--------- --------- --------- ---------
Cost of Revenue
Product 82,133 54,242 82,133 54,242
Service 11,587 8,603 11,587 8,603
Amortization of intangible
assets 3,854 127 - -
--------- --------- --------- ---------
Total Cost of Revenue 97,574 62,972 93,720 62,845
--------- --------- --------- ---------
Gross Profit 106,846 84,402 110,700 84,529
--------- --------- --------- ---------
Operating Expenses
Research and development 29,600 23,781 29,600 23,781
Marketing and selling 44,464 31,855 44,464 31,855
General and administrative 11,903 8,966 11,903 8,966
Stock-based compensation
(Note A) 458 553 - -
In-process research &
development 32,390 - - -
Amortization of intangible
assets 2,544 988 - -
Restructuring 1,997 - - -
--------- --------- --------- ---------
Total Operating
Expenses 123,356 66,143 85,967 64,602
--------- --------- --------- ---------
Operating income (loss) (16,510) 18,259 24,733 19,927
Interest and other income
(expense), net 1,719 651 1,719 651
--------- --------- --------- ---------
Income (loss) before income
taxes (14,791) 18,910 26,452 20,578
Provision for income taxes 2,231 181 2,231 181
GAAP tax adjustment provision
(benefit), net 735 (244) - -
--------- --------- --------- ---------
Net income (loss) ($17,757) $18,973 $24,221 $20,397
========= ========= ========= =========
Net income per common share -
basic ($0.46) $0.58 $0.62 $0.62
Net income per common share -
diluted ($0.46) $0.54 $0.60 $0.58
Weighted average common shares
outstanding - basic 38,935 32,737 38,935 32,737
Weighted average common shares
outstanding - diluted 38,935 35,033 40,264 35,033
Note
----------------------------------------------------------------------
A. For the three month period ended 9/30/2005, stock based
compensation related to stock options issued as part of the
acquisition of M-Audio is comprised of $36 of Research and
development expense, $137 of Marketing and selling expense, and
$285 of General and administrative expense, based on the
departmental classification of the option holders.
For the three month period ended 9/30/2004, stock based
compensation related to stock options issued as part of the
acquisition of M-Audio is comprised of $99 of Research and
development expense, $154 of Marketing and selling expense,
and $300 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 Sept. 30,
2005 2004
--------- --------
Non-GAAP net income $24,221 $20,397
Stock-based compensation (458) (553)
In-process research & development (32,390) -
Amortization of intangible assets (6,398) (1,115)
Restructuring (1,997) -
GAAP tax adjustment provision/(benefit), net (735) 244
--------- --------
GAAP net income (loss) $(17,757) $18,973
========= ========
AVID TECHNOLOGY, INC
Condensed Consolidated Statements of Operations
(unaudited - in thousands, except per share data)
------------------ -------------------
GAAP NON - GAAP
------------------ -------------------
Nine Months Ended Nine Months Ended
September 30th, September 30th,
2005 2004 2005 2004
--------- --------- --------- ---------
Revenue
Product $472,327 $369,403 $472,327 $369,403
Service 58,145 45,231 58,145 45,231
--------- --------- --------- ---------
Total Revenue 530,472 414,634 530,472 414,634
--------- --------- --------- ---------
Cost of Revenue
Product 204,274 152,907 204,274 152,907
Service 31,684 25,036 31,684 25,036
Amortization of intangible
assets 4,417 127 - -
--------- --------- --------- ---------
Total Cost of Revenue 240,375 178,070 235,958 177,943
--------- --------- --------- ---------
Gross Profit 290,097 236,564 294,514 236,691
--------- --------- --------- ---------
Operating Expenses
Research and development 79,096 68,997 79,096 68,997
Marketing and selling 120,403 93,200 120,403 93,200
General and administrative 31,752 23,200 31,752 23,200
Stock-based compensation
(Note A) 1,830 553 - -
In-process research &
development 32,390 - - -
Amortization of intangible
assets 5,729 1,976 - -
Restructuring 1,997 - - -
--------- --------- --------- ---------
Total Operating
Expenses 273,197 187,926 231,251 185,397
--------- --------- --------- ---------
Operating income 16,900 48,638 63,263 51,294
Interest and other income
(expense), net 3,735 1,736 3,735 1,736
Legal settlement - (1,050) - -
--------- --------- --------- ---------
Income before income taxes 20,635 49,324 66,998 53,030
Provision for income taxes 4,690 1,581 4,690 1,581
GAAP tax adjustment provision
(benefit), net 390 (1,444) - -
--------- --------- --------- ---------
Net Income $15,555 $49,187 $62,308 $51,449
========= ========= ========= =========
Net income per common share -
basic $0.43 $1.54 $1.71 $1.61
Net income per common share -
diluted $0.41 $1.43 $1.63 $1.50
Weighted average common shares
outstanding - basic 36,381 31,857 36,381 31,857
-
Weighted average common shares
outstanding - diluted 38,217 34,374 38,217 34,374
Note
----------------------------------------------------------------------
A.For the nine month period ended 9/30/2005, stock based compensation
related to stock options issued as part of the acquisition of
M-Audio is comprised of $129 of Research and development expense,
$492 of Marketing and selling expense, and $1,209 of General and
administrative expense, based on the departmental classification
of the option holders.
For the nine month period ended 9/30/2004, stock based
compensation related to stock options issued as part of the
acquisition of M-Audio is comprised of $99 of Research and
development expense, $154 of Marketing and selling expense,
and $300 of General and administrative expense, based on the
departmental classification of the option holders.
Reconciliation of Non-GAAP net
income to GAAP net income: Nine months ended
September 30,
2005 2004
-------- --------
Non-GAAP net income $62,308 $51,449
Stock-based compensation (1,830) (553)
In-process research & development (32,390) -
Amortization of intangible assets (10,146) (2,103)
Restructuring (1,997) -
GAAP tax adjustment provision/(benefit), net (390) 1,444
Legal settlement - (1,050)
-----------------
GAAP net income $15,555 $49,187
=================
AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)
September December
30, 31,
2005 2004
----------- ---------
ASSETS:
Current assets:
Cash and marketable securities $228,639 $155,419
Accounts receivable, net of allowances of
$21,399 and $9,334 at September 30, 2005
and December 31, 2004, respectively 127,743 97,536
Inventories 93,219 53,946
Prepaid and other current assets 24,356 19,407
----------- ---------
Total current assets 473,957 326,308
Property and equipment, net 39,237 29,092
Goodwill 395,832 165,803
Other intangible assets, net 128,751 46,884
Other assets 9,546 8,147
----------- ---------
Total assets $1,047,323 $576,234
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $38,335 $26,517
Accrued expenses and other current
liabilities 113,137 74,727
Deferred revenues 70,514 48,680
----------- ---------
Total current liabilities 221,986 149,924
Long term liabilities, less current portion 11,736 1,689
----------- ---------
Total liabilities 233,722 151,613
----------- ---------
Stockholders' equity:
Common stock 417 348
Additional paid-in capital 920,596 546,849
Accumulated deficit (107,223) (122,775)
Deferred compensation (2,308) (4,392)
Accumulated other comprehensive income 2,119 4,591
----------- ---------
Total stockholders' equity 813,600 424,621
----------- ---------
Total liabilities and stockholders'
equity $1,047,323 $576,234
=========== =========
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