Avid Technology Announces Revaluation of Acquisition Charges; First Quarter 1999 Revenue Expected to be Approximately 6% - 10% Above Prior Year.TEWKSBURY, Mass.--(BUSINESS WIRE)--March 29, 1999--Avid Technology, 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 announced that it has completed its previously announced review of the acquisition-related charges taken in conjunction with its August 1998 acquisition of Softimage Inc. from Microsoft Corp. (NASDAQ:MSFT MSFT Microsoft (stock symbol)
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The Company recorded the acquisition of Softimage in the third quarter of 1998 based on an independent, third party valuation that reflected widely recognized appraisal practices being utilized at the time of the acquisition. Since that time, however, the Securities and Exchange Commission (SEC) has expressed views on valuation methods for purchased in-process research and development (IPR&D), which differ from prior industry practice and, in certain instances, has prescribed retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question.
A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a restatement of previously reported results. Considering these recent views, the Company has voluntarily adjusted the amount originally allocated to IPR&D and will restate its third quarter 1998 consolidated financial statements Consolidated Financial Statements
The combined financial statements of a parent company and its subsidiaries.
Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge accordingly. As a result, the third quarter pre-tax charge for acquired IPR&D was decreased from the $193.7 million amount previously recorded to the amount of $28.4 million. Correspondingly, the value of completed technologies recorded on the balance sheet was increased from $44.8 million to $76.2 million, and goodwill of $127.8 million was created, in addition to other minor changes. These adjustments to the purchase price allocation of Softimage have no effect upon the cash flows, financial condition or liquidity of the Company.
The Company plans to amortize the value of goodwill over three years and the values of completed technologies and other intangible assets Intangible Asset
An asset that is not physical in nature.
Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. over their estimated useful lives of two and three years, commencing as of August 1998. As a result of these changes, amortization of acquisition-related intangible assets in the third and fourth quarter of 1998 was $13.7 million and $20.5 million, respectively. Amortization of acquisition-related intangible assets during 1999 is expected to be $20.5 million per quarter and will continue at this level through the second quarter of 2000. Amortization will decline to $15.5 million in the third quarter of 2000, with a further decrease to $12.9 million for the fourth quarter 2000 through the second quarter 2001, and a final charge of $4.3 million in the third quarter 2001.
The impact of this restatement of the third quarter of 1998 is to reduce the previously recorded net loss of $144.3 million, or $5.97 per diluted share, to a net loss of $21.6 million, or $0.89 per diluted share. Excluding the one-time charge and the amortization associated with the acquisition, the Company's tax-effected net income for the third quarter remained at $8.0 million or $0.30 per diluted share, as previously announced. Excluding acquisition-related amortization, the Company's tax-effected net income for the fourth quarter remained at $15.2 million or $0.57 per diluted share, also as previously announced.
Additionally, the Company announced it anticipates revenues for the first quarter of 1999 to be approximately 6% - 10% above first quarter 1998 revenues of $108.7 million. As previously stated, the Company had expected a seasonal decline from the record fourth quarter 1998 revenues of $144.6 million. The Company plans to report results for the first quarter on April 22, 1999.
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, "Avid's first quarter revenues continue to reflect seasonally weak sales prior to the National Association of Broadcasters (NAB) show. We are also experiencing general sluggishness in the U.S. post-production and worldwide broadcast markets. Despite these factors, we remain confident moving forward as we maintain and expand our leadership position in film, video and audio and take aim at opportunities for growth in such markets as television finishing, digital news production, corporate and industrial editing, and 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 ."
The above 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. based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from those described herein, depending on the completion of the Company's financial statements for the first quarter 1999 and such factors as described under "Certain Factors That May Affect Future Results" in the Company's 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.
See 10-K. for 1997 and the Form 10-Q Form 10-Q
See 10-Q. for September 30, 1998, filed with the SEC.
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. 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 of Avid Technology, Inc., or its subsidiaries or divisions. All other trademarks contained herein are the property of their respective owners.