Delaware | 1-36254 | 04-2977748 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Exhibit Number | Description |
99.1* | Press Release dated March 16, 2015 |
AVID TECHNOLOGY, INC. | |
(Registrant) | |
Date: March 16, 2015 | By: /s/ John W. Frederick Name: John W. Frederick Title: Executive Vice President, Chief Financial Officer and Chief Administrative Officer |
• | Bookings of $153 million, up 2% year-on-year, highest ongoing bookings since 2011 |
• | Free cash flow generation of $16 million, almost double Q4 2013, highest since 2012 |
• | Adjusted EBITDA of $14 million |
• | Added over 2,000 new Media Composer subscribers in Q4, representing a 65% increase in users from Q3 2014. |
• | Non-GAAP operating expense improved 8% over Q4 2013 |
• | Non-GAAP Net Income of $8.0 million or $0.20 per share |
• | Adjusted EBITDA of $72.3 million, at high-end of guidance |
• | Free cash flow generation of $12.7 million, more than double 2013 |
• | Bookings have stabilized in 2014 after declines in 2013 and 2012 |
• | Over 20,000 users on the Media Central platform as of the end of 2014 |
• | Non-GAAP operating expense improved 3% as compared to 2013 |
• | Non-GAAP Net Income of $51.1 million or $1.30 per share |
• | Adjusted EBITDA of $72 million to $78 million |
• | Annual bookings growth of 1% to 5% on constant dollar basis and based on recent exchange rates, reported growth could be 2 percentage points lower |
• | Free cash flow growth of $18 to $30 million or 42% to 136% year-on-year improvement |
AVID TECHNOLOGY, INC. | ||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||
(unaudited - in thousands, except per share data) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net revenues: | ||||||||||||||||
Products | $ | 91,412 | $ | 103,986 | $ | 378,627 | $ | 395,531 | ||||||||
Services | 36,784 | 43,117 | 151,624 | 167,881 | ||||||||||||
Total net revenues | 128,196 | 147,103 | 530,251 | 563,412 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Products | 35,867 | 43,664 | 143,765 | 159,264 | ||||||||||||
Services | 14,681 | 16,137 | 60,656 | 63,177 | ||||||||||||
Amortization of intangible assets | — | 158 | 50 | 1,468 | ||||||||||||
Total cost of revenues | 50,548 | 59,959 | 204,471 | 223,909 | ||||||||||||
Gross profit | 77,648 | 87,144 | 325,780 | 339,503 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 23,212 | 24,556 | 90,390 | 95,249 | ||||||||||||
Marketing and selling | 34,527 | 34,566 | 133,049 | 133,890 | ||||||||||||
General and administrative | 22,222 | 23,135 | 81,181 | 77,578 | ||||||||||||
Amortization of intangible assets | 375 | 667 | 1,626 | 2,648 | ||||||||||||
Restructuring costs (recoveries), net | — | 2,491 | (165 | ) | 5,370 | |||||||||||
Total operating expenses | 80,336 | 85,415 | 306,081 | 314,735 | ||||||||||||
Operating (loss) income | (2,688 | ) | 1,729 | 19,699 | 24,768 | |||||||||||
Interest and other expense, net | (1,620 | ) | 192 | (2,783 | ) | (676 | ) | |||||||||
Income before income taxes | (4,308 | ) | 1,921 | 16,916 | 24,092 | |||||||||||
Provision for income taxes, net | 761 | 792 | 2,188 | 2,939 | ||||||||||||
Net (loss) income | (5,069 | ) | 1,129 | 14,728 | 21,153 | |||||||||||
(Loss) income per share - basic and diluted | $ | (0.13 | ) | $ | 0.03 | $ | 0.38 | $ | 0.54 | |||||||
Weighted-average common shares outstanding - basic | 39,234 | 39,080 | 39,147 | 39,044 | ||||||||||||
Weighted-average common shares outstanding - diluted | 39,966 | 39,111 | 39,267 | 39,070 |
AVID TECHNOLOGY, INC. | |||||||||||||||
Reconciliations of GAAP financial measures to Non-GAAP financial measures | |||||||||||||||
(unaudited - in thousands, except per share data) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
GAAP | |||||||||||||||
Net Revenues | $ | 128,196 | $ | 147,103 | $ | 530,251 | $ | 563,412 | |||||||
Cost of revenues | 50,548 | 59,959 | 204,471 | 223,909 | |||||||||||
Gross profit | 77,648 | 87,144 | 325,780 | 339,503 | |||||||||||
Operating expenses | 80,336 | 85,415 | 306,081 | 314,735 | |||||||||||
Operating (loss) income | (2,688 | ) | 1,729 | 19,699 | 24,768 | ||||||||||
Interest and other expense, net | (1,620 | ) | 192 | (2,783 | ) | (676 | ) | ||||||||
Provision for income taxes, net | 761 | 792 | 2,188 | 2,939 | |||||||||||
Net (loss) income | $ | (5,069 | ) | $ | 1,129 | $ | 14,728 | $ | 21,153 | ||||||
Weighted-average common shares outstanding - diluted | 39,966 | 39,111 | 39,267 | 39,070 | |||||||||||
Net (loss) income per share - diluted | $ | (0.13 | ) | $ | 0.03 | $ | 0.38 | $ | 0.54 | ||||||
Adjustments to GAAP Results | |||||||||||||||
Cost of Revenues | |||||||||||||||
Amortization of intangible assets | — | 158 | 50 | 1,468 | |||||||||||
Stock-based compensation | 282 | 173 | 675 | 796 | |||||||||||
Operating Expenses | |||||||||||||||
Amortization of intangible assets | 375 | 667 | 1,626 | 2,648 | |||||||||||
Restructuring costs (recoveries), net | — | 2,491 | (165 | ) | 5,370 | ||||||||||
Restatement costs | 3,919 | 8,162 | 23,327 | 20,591 | |||||||||||
Gain on sale of assets | — | — | — | (125 | ) | ||||||||||
Stock-based compensation | |||||||||||||||
R&D | 166 | 127 | 502 | 581 | |||||||||||
Sales & Marketing | 2,472 | 329 | 3,658 | 1,786 | |||||||||||
G&A | 5,875 | 572 | 6,677 | 3,752 | |||||||||||
Other | |||||||||||||||
Tax adjustment | (5 | ) | (215 | ) | (12 | ) | (860 | ) | |||||||
Non-GAAP | |||||||||||||||
Net revenues | 128,196 | 147,103 | 530,251 | 563,412 | |||||||||||
Cost of revenues | 50,266 | 59,628 | 203,746 | 221,645 | |||||||||||
Gross Profit | 77,930 | 87,475 | 326,505 | 341,767 | |||||||||||
Operating Expenses | 67,529 | 73,067 | 270,456 | 280,132 | |||||||||||
Operating Income | 10,401 | 14,408 | 56,049 | 61,635 | |||||||||||
Interest and other expense, net | (1,620 | ) | 192 | (2,783 | ) | (676 | ) | ||||||||
Provision for income taxes, net | 766 | 1,007 | 2,200 | 3,799 | |||||||||||
Net income | 8,015 | 13,593 | 51,066 | 57,160 |
Net income per share - diluted | $ | 0.20 | $ | 0.35 | $ | 1.30 | $ | 1.46 | |||||||
Adjusted EBITDA | |||||||||||||||
Non-GAAP Operating Income (from above) | 10,401 | 14,408 | 56,049 | 61,635 | |||||||||||
Depreciation | 3,847 | 4,386 | 16,140 | 17,837 | |||||||||||
Amortization of capitalized software development costs | 11 | 586 | 138 | 815 | |||||||||||
Adjusted EBITDA | 14,259 | 19,380 | 72,327 | 80,287 | |||||||||||
Free Cash Flow | |||||||||||||||
GAAP net cash provided by (used in) operating activities | 10,933 | 883 | (9,897 | ) | (9,145 | ) | |||||||||
Capital Expenditures | (1,632 | ) | (2,627 | ) | (13,292 | ) | (11,625 | ) | |||||||
Restructuring/Other Payments | 1,127 | 2,536 | 7,212 | 13,151 | |||||||||||
Restatement Payments | 5,756 | 7,728 | 28,658 | 13,161 | |||||||||||
Free Cash Flow | $ | 16,184 | $ | 8,520 | $ | 12,681 | $ | 5,542 |
AVID TECHNOLOGY, INC. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(unaudited - in thousands) | |||||||
December 31, | December 31, | ||||||
2014 | 2013 | ||||||
ASSETS: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 25,056 | $ | 48,203 | |||
Accounts receivable, net of allowances of $10,692 and $13,963 | |||||||
at December 31, 2014 and 2013, respectively | 54,655 | 56,770 | |||||
Inventories | 48,001 | 60,122 | |||||
Deferred tax assets, net | 322 | 522 | |||||
Prepaid expenses | 6,892 | 7,778 | |||||
Other current assets | 17,932 | 17,493 | |||||
Total current assets | 152,858 | 190,888 | |||||
Property and equipment, net | 32,136 | 35,186 | |||||
Intangible assets, net | 2,445 | 4,260 | |||||
Long-term deferred tax assets, net | 1,886 | 2,415 | |||||
Other long-term assets | 2,274 | 2,393 | |||||
Total assets | $ | 191,599 | $ | 235,142 | |||
LIABILITIES AND STOCKHOLDERS' DEFICIT: | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 32,951 | $ | 33,990 | |||
Accrued compensation and benefits | 32,636 | 30,342 | |||||
Accrued expenses and other current liabilities | 32,353 | 41,273 | |||||
Income taxes payable | 5,480 | 6,875 | |||||
Deferred tax liabilities, net | — | 14 | |||||
Deferred revenues | 206,608 | 211,403 | |||||
Total current liabilities | 310,028 | 323,897 | |||||
Long-term deferred tax liabilities, net | 136 | 565 | |||||
Long-term deferred revenues | 208,232 | 255,429 | |||||
Other long-term liabilities | 14,273 | 14,586 | |||||
Total liabilities | 532,669 | 594,477 | |||||
Stockholders' deficit: | |||||||
Common stock. $0.01 par value, 100,000 shares authorized; 42,339 shares | |||||||
and 42,339 shares issued and 39,294 shares and 39,082 shares outstanding | |||||||
at December 31, 2014 and 2013, respecitvely | 423 | 423 | |||||
Additional paid-in capital | 1,049,969 | 1,043,384 | |||||
Accumulated deficit | (1,321,798 | ) | (1,336,526 | ) | |||
Treasury stock at cost, net of reissuances, 3,045 shares | |||||||
and 3,257 shares at December 31, 2014 and 2013, respectively | (68,051 | ) | (72,543 | ) |
Accumulated other comprehensive income | (1,613 | ) | 5,927 | ||||
Total stockholders' deficit | (341,070 | ) | (359,335 | ) | |||
Total liabilities and stockholders' deficit | $ | 191,599 | $ | 235,142 |
AVID TECHNOLOGY, INC. | |||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||
(unaudited - in thousands) | |||||||||||
Twelve Months Ended | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 14,728 | $ | 21,153 | |||||||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
Depreciation and amortization | 17,954 | 22,767 | |||||||||
(Recovery) expense from doubtful accounts | (143 | ) | 157 | ||||||||
Gain on sale of assets | — | (125 | ) | ||||||||
Stock-based compensation expense | 11,513 | 6,917 | |||||||||
Non-cash interest expense | 220 | 294 | |||||||||
Unrealized foreign currency transaction gains | (6,730 | ) | (10 | ) | |||||||
Provision for deferred taxes | 69 | 730 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 2,258 | 11,030 | |||||||||
Inventories | 12,122 | 9,021 | |||||||||
Prepaid expenses and other current assets | (2,130 | ) | 4,393 | ||||||||
Accounts payable | (947 | ) | (1,416 | ) | |||||||
Accrued expenses, compensation and benefits and other liabilities | (5,758 | ) | 8,932 | ||||||||
Income taxes payable | (1,090 | ) | (1,324 | ) | |||||||
Deferred revenues | (51,963 | ) | (91,664 | ) | |||||||
Net cash used in operating activities | (9,897 | ) | (9,145 | ) | |||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | (13,292 | ) | (11,625 | ) | |||||||
Change in other long-term assets | (8 | ) | (36 | ) | |||||||
Proceeds from divestiture of consumer business | 1,500 | — | |||||||||
Proceeds from sale of assets | — | 125 | |||||||||
Net cash used in investing activities | (11,800 | ) | (11,536 | ) | |||||||
Cash flows from financing activities: | |||||||||||
Proceeds from the issuance of common stock under employee stock plans | 252 | 177 | |||||||||
Common stock repurchases for tax withholdings for net settlement of equity awards | (688 | ) | (273 | ) | |||||||
Proceeds from revolving credit facilities | 25,500 | — | |||||||||
Payments on revolving credit facilities | (25,500 | ) | — | ||||||||
Net cash used in financing activities | (436 | ) | (96 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | (1,014 | ) | (1,410 | ) | |||||||
Net decrease in cash and cash equivalents | (23,147 | ) | (22,187 | ) | |||||||
Cash and cash equivalents at beginning of period | 48,203 | 70,390 | |||||||||
Cash and cash equivalents at end of period | $ | 25,056 | $ | 48,203 |
AVID TECHNOLOGY, INC. | |||||||||||||||||||||
Revenue Backlog Schedule | |||||||||||||||||||||
(unaudited - in thousands) | |||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||||
Revenue Backlog | 2014 | 2014 | 2014 | 2014 | 2013 | YoY | |||||||||||||||
$ | % | ||||||||||||||||||||
Orders executed prior to January 1, 2011 | $ | 84,597 | $ | 104,629 | $ | 126,171 | $ | 150,000 | $ | 176,102 | $ | (91,505 | ) | -52 | % | ||||||
Orders executed or materially modified on or after January 1, 2011 | $ | 330,243 | $ | 314,700 | $ | 303,780 | $ | 301,812 | $ | 290,730 | $ | 39,513 | 14 | % | |||||||
Deferred Revenue | $ | 414,840 | $ | 419,329 | $ | 429,951 | $ | 451,812 | $ | 466,832 | $ | (51,992 | ) | -11 | % | ||||||
Backlog | $ | 124,670 | $ | 119,850 | $ | 113,175 | $ | 97,177 | $ | 92,225 | $ | 32,445 | 35 | % | |||||||
Total Revenue Backlog | $ | 539,510 | $ | 539,179 | $ | 543,126 | $ | 548,989 | $ | 559,057 | $ | (19,547 | ) | -3 | % | ||||||
The expected timing of recognition of revenue backlog as of December 31, 2014 is as follows: | |||||||||||||||||||||
Twelve Months Ended December 31, | |||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | Total | |||||||||||||||
Orders executed prior to January 1, 2011 | $ | 58,543 | $ | 24,954 | $ | 955 | $ | 145 | $ | — | $ | — | $ | 84,597 | |||||||
Orders executed or materially modified on or after January 1, 2011 | $ | 147,477 | $ | 97,523 | $ | 49,697 | $ | 24,704 | $ | 10,785 | $ | 56 | $ | 330,242 | |||||||
Backlog | $ | 82,532 | $ | 28,385 | $ | 11,547 | $ | 1,424 | $ | 509 | $ | 274 | $ | 124,671 | |||||||
Total Revenue Backlog | $ | 288,552 | $ | 150,862 | $ | 62,199 | $ | 26,273 | $ | 11,294 | $ | 330 | $ | 539,510 |