Avid Technology Announces Record Revenue and Operating Results for the Fourth Quarter 1998.TEWKSBURY, Mass.--(BUSINESS WIRE)--Feb. 4, 1999-- Tax-effected Fourth Quarter Income Before Acquisition Related Charges Rises 63% to $15.2 Million or $0.57 Per Share 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 and operating results for the fourth quarter ended December 31, 1998. Fourth quarter revenues were a record $144.6 million compared to $123.7 million in the fourth quarter 1997. The Company recorded tax-effected fourth quarter income of $15.2 million or $.57 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, before acquisition related charges associated with the third quarter acquisition of Softimage Inc., as compared to $9.3 million or $.37 per diluted share in the fourth quarter of 1997. For the year ended December 31, 1998, revenues were $482.4 million, also a record, versus $471.3 million for 1997. The Company reported record tax-effected 1998 income of $40.1 million or $1.56 per diluted share, before acquisition related charges associated with the Softimage acquisition, as compared to $26.4 million or $1.08 per diluted share for the year ended December 31, 1997. William J. Miller William Jennings Miller (March 12, 1899 - November 22, 1950) was a U.S. Representative from Connecticut. Born in North Andover, Massachusetts, Miller attended the public schools. He was graduated from Cannon's Commercial College, Lawrence, Massachusetts, in 1917. , Avid's Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , commented, "I am pleased to report record operating results for the fourth quarter. Our strong revenues reflected favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. domestic and European demand for our film and video products and included revenues from several key product releases. Our audio products also experienced record revenue during the fourth quarter reflecting continuing strong demand for our Pro Tools product line. Additionally, gross margin rose to a record 62.5% in the quarter." "We continued to strengthen our balance sheet," Miller added. "Cash and investments increased by $13.5 million during the fourth quarter, to end the year at $111.8 million. This largely reflected strong operating results partly offset by $10.7 million used to buy back stock as part of our ongoing repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. program. We also reduced accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). to 56 days and inventory levels to $11.1 million at year-end." "This year reflects significant accomplishments which are critical to Avid's future success. The acquisition of Softimage Inc. brought us both 3-D animation technology and SOFTIMAGE|DS, a product and architecture for television finishing, which is central to our future. We also formed a strategic alliance with Tektronix, Inc. to provide broadcasters with integrated 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. as the industry migrates to digital production. Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , we successfully completed the most comprehensive introduction of new products in Avid's history. During the later part of 1998, we launched major new products, including Avid Symphony, SOFTIMAGE|DS 2.1, NewsCutter DV, Avid Xpress for Windows NT (Windows New Technology) A 32-bit operating system from Microsoft for Intel x86 CPUs. NT is the core technology in Windows 2000 and Windows XP (see Windows). Available in separate client and server versions, it includes built-in networking and preemptive multitasking. and ProTools|24 MIX, in all of our key strategic markets. Avid is now a truly multi-platform company with products to address the full range of customer needs from the consumer to the high-end production studio," Miller concluded. The Company stated that it is not reporting net income at this time because it is continuing to evaluate the need for possible adjustments to the in-process research and development ("IPR&D") charge taken in the third quarter of 1998. At that time, the Company recorded a one-time pre-tax charge of $193.7 million for purchased IPR&D in its operating results. This one-time charge was recorded in accordance with U.S. 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 and established industry practice, and was supported by an independent third party valuation. Since that time, however, the Securities and Exchange Commission ("SEC") has expressed views on valuation methods for purchased IPR&D which differ from prior industry practice. The Company is working closely with its independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. to make a determination as to the application of the SEC's recent views to the Company's IPR&D valuation and the resulting effect on the charge taken in the third quarter as well as on the amortization 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. . Any application of the methodology now supported by the SEC would likely result in a significantly lower IPR&D charge for the third quarter of 1998 and the creation of goodwill which would be amortized against earnings beginning with the third quarter. An adjustment to the IPR&D valuation, if any, would have no effect upon the financial condition or liquidity of the Company. The Company will issue a press release announcing its final determination and any resulting accounting adjustments. The Company said its fourth quarter and fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. 1998 operating results before acquisition related charges are final and will not change. Avid Technology, Inc. is an international, industry-leading provider of digital audio and video tools for creating content for information and entertainment applications. The company's products are used by customers ranging from corporate communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. professionals to film, television and interactive content producers to broadcast news organizations. For more information, visit Avid's World Wide Web site at www.avid.com. Avid and Softimage are registered trademarks and Symphony, NewsCutter, SOFTIMAGE|DS, Pro Tools and Avid Xpress are trademarks of Avid Technology, Inc., or its subsidiaries or divisions. -0-
AVID TECHNOLOGY, INC.
Condensed Consolidated Statements of Operations, before acquisition
related charges
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
Dec. 31, Dec. 31,
1998 1997 1998 1997
(unaudited)(unaudited)(unaudited)
Net revenues $144,598 $123,735 $482,377 $471,338
Cost of revenues 54,256 54,062 190,249 221,553
Gross profit 90,342 69,673 292,128 249,785
Operating expenses:
Research and development 25,102 20,160 88,787 73,470
Marketing and selling 36,035 31,301 125,280 120,394
General and administrative 8,618 6,977 28,549 25,808
Total operating expenses 69,755 58,438 242,616 219,672
Operating income before
acquisition related charges 20,587 11,235 49,512 30,113
Interest and other income, net 1,371 2,244 8,636 8,125
Income before acquisition related
charges and income taxes 21,958 13,479 58,148 38,238
Provision for income taxes,
excluding the effect of
acquisition related charges 6,807 4,178 18,026 11,854
Tax-effected income before
acquisition related charges $ 15,151 $ 9,301 $ 40,122 $ 26,384
Tax-effected income before
acquisition related charges
per common share - diluted $ 0.57 $ 0.37 $ 1.56 $ 1.08
Weighted average common shares
outstanding - diluted 26,703 25,231 25,704 24,325
-0- The results above do not include the effects of the third-quarter 1998 pre-tax charge for IPR&D of $193.7 million or the amortization of acquired intangible assets related to the Company's purchase of Softimage Inc. See attached press release for further details. |
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