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FINANCIAL INFORMATION (Notes)
6 Months Ended
Jun. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
FINANCIAL INFORMATION
FINANCIAL INFORMATION

The accompanying condensed consolidated financial statements include the accounts of Avid Technology, Inc. and its wholly owned subsidiaries (collectively, “Avid” or the “Company”). These financial statements are unaudited. However, in the opinion of management, the condensed consolidated financial statements reflect all normal and recurring adjustments necessary for their fair statement. Interim results are not necessarily indicative of results expected for any other interim period or a full year. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not include all information and footnotes necessary for a complete presentation of operations, comprehensive (loss) income, financial position and cash flows of the Company in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying condensed consolidated balance sheet as of December 31, 2014 was derived from the Company’s audited consolidated financial statements and does not include all disclosures required by U.S. GAAP for annual financial statements. The Company filed audited consolidated financial statements as of and for the year ended December 31, 2014 in its Annual Report on Form 10-K for the year ended December 31, 2014, which included all information and footnotes necessary for such presentation. The financial statements contained in this Form 10-Q should be read in conjunction with the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

The Company’s preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from the Company’s estimates.

Cash used in operating activities aggregated $26.2 million for the six months ended June 30, 2015, which was primarily attributable to the annual bonus payments and acquisition-related professional and consulting services. The Company’s cash requirements vary depending on factors such as the growth of the business, changes in working capital, capital expenditures, acquisitions of businesses or technologies and obligations under restructuring programs. On June 15, 2015, the Company issued $125.0 million aggregate principal amount of its 2.00% Convertible Senior Notes due 2020 (the “Notes”) pursuant to the terms of an indenture. The net proceeds from the offering were $120.6 million after deducting the initial purchasers’ discount and the estimated offering expenses. Of the net proceeds of this offering, the Company used $10.1 million to enter into a capped call derivative transaction with a third party (the “Capped Call”), which is described further in Note 12, Long-term Debt and Credit Agreement, and $66.0 million to fund the acquisition of Orad Hi-Tech Systems Ltd. (“Orad”) on June 23, 2015 (see Note 3, Acquisition). On June 22, 2015, the Company entered into a revolving credit facility (the “Credit Facility”) that allows the Company to borrow up to a maximum of $35.0 million. The Company may increase the total commitments under the Credit Facility by up to an additional $15.0 million, subject to certain conditions. Management expects to operate the business and execute its strategic initiatives principally with funds generated from operations, the proceeds from the Notes and available borrowings under the Credit Facility. Management anticipates that the Company will have sufficient internal and external sources of liquidity to fund operations and anticipated working capital and other expected cash needs for at least the next 12 months as well as for the foreseeable future.

On June 8, 2015, the Company’s Board of Directors approved a stock repurchase plan authorizing the Company to repurchase up to $9.0 million of common stock from time to time until September 6, 2015. The terms of the stock repurchase plan do not permit the Company to repurchase shares of common stock directly from directors or officers of the Company. Upon the repurchase of any shares of the Company’s common stock, such shares are held as treasury stock of the Company. The Company entered into a stock repurchase agreement, which authorized a third party financial institution to repurchase shares of the Company’s common stock, on the Company’s behalf, on the open market in an aggregate amount not to exceed $8.0 million. The Company repurchased 480,601 shares for $6.6 million during June 2015 and had $1.4 million available for additional stock repurchases as of June 30, 2015. The Company completed the stock repurchase in July 2015. In aggregate 586,825 shares have been repurchased under the plan. At June 30, 2015, the Company had not settled the payment of these purchases and $6.6 million was included in the caption “accrued expenses and other current liabilities” in the Company’s condensed consolidated balance sheet.

Recent Accounting Pronouncements to be Adopted

On May 28, 2014, the Financial Accounting Standards Board (the “FASB”) and the International Accounting Standards Board (the “IASB”) issued substantially converged final standards on revenue recognition. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new revenue recognition guidance becomes effective for the Company on January 1, 2018, and early adoption as of January 1, 2017 is permitted. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance in the Accounting Standards Update (“ASU”).  The Company has not yet selected a transition method and is evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.