8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): March 15, 2018

AVID TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	1-36254	04-2977748
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

75 Network Drive, Burlington, Massachusetts  01803

(Address of Principal Executive Offices)   (Zip Code)

(978) 640-6789

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

⎕ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⎕ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⎕ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⎕ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ⎕

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ⎕

Item 2.02. Results of Operations and Financial Condition.

On March 15, 2018, the Company issued a press release announcing its financial results for the fiscal quarter and full year ended December 31, 2017 (the “Press Release”). The full text of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 7.01 Regulation FD Disclosure.

The information contained in Item 2.02 is incorporated by reference herein.

Non-GAAP and Operational Measures. The attached Press Release includes the following non-GAAP financial measures: non-GAAP revenue, non-GAAP operating income (loss), non-GAAP operating expenses, non-GAAP gross margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Free Cash Flow, Free Cash Flow, and Adjusted Free Cash Flow conversion of Adjusted EBITDA. Non-GAAP operating income (loss), non-GAAP operating expenses, Adjusted EBITDA and Adjusted EBITDA margin exclude restructuring costs, stock-based compensation, amortization of intangibles as well as other unusual items such as costs related to the restatement, M&A related activity, efficiency program and impact of significant legal settlements. Avid defines non-GAAP revenue as GAAP revenue plus revenue eliminated through the application of purchase accounting, which requires acquired deferred revenue to be recorded at fair value rather than the amount paid by customers. Avid defines Adjusted EBITDA as non-GAAP operating income (loss) excluding depreciation expense. Avid defines Adjusted EBITDA margin as Adjusted EBITDA divided by non-GAAP revenue. Avid defines Adjusted Free Cash Flow conversion of Adjusted EBITDA as Adjusted Free Cash Flow divided by Adjusted EBITDA. Avid defines Adjusted Free Cash Flow as GAAP operating cash flow less capital expenditures and excludes from free cash flow payments or receipts related to M&A, significant legal settlements, restructuring, restatement or other non-operational or non-recurring events. Reconciliations of these non-GAAP financial measures to their most comparable GAAP measures are contained in the tables accompanying the Press Release. The attached Press Release also includes forward-looking non-GAAP financial measures, including Adjusted EBITDA and Free Cash Flow. Reconciliations of these forward-looking non-GAAP financial measures are not included in the attached Press Release due to the high variability and difficulty in making accurate forecasts and projections of some of the excluded information, together with some of the excluded information not being ascertainable or accessible at this time. As a result, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measure without unreasonable efforts.

These non-GAAP measures reflect how Avid manages its businesses internally. Avid’s non-GAAP measures may vary from how other companies present non-GAAP measures. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with, disclosures required by generally accepted accounting principles, or GAAP.  Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP.

The attached Press Release also includes operational measures, such as bookings, recurring revenue bookings and revenue backlog. Definitions of these measures are included in the supplemental financial and operational data sheet available on our investor relations webpage at ir.avid.com.

Limitation on Incorporation by Reference. The information furnished in Items 2.02 and 7.01, including the Press Release attached hereto as Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Cautionary Note Regarding Forward-Looking Statements. This Form 8-K, and the Press Release attached as Exhibit 99.1 contain forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. Please refer to the cautionary notes in the Press Release regarding these forward-looking statements.

Item 9.01  Financial Statements and Exhibits.

(d)                   Exhibits.

Exhibit Number	Description
99.1	Press Release announcing financial results, dated March 15, 2018

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AVID TECHNOLOGY, INC.
	(Registrant)
Date: March 15, 2018	By:/s/ Brian E. Agle Name: Brian E. Agle Title: Senior Vice President and CFO

EX-99.1

Exhibit 99.1

Avid Technology Announces Q4 and Full Year 2017 Results and

Issues Q1 and Full Year 2018 Guidance

Exceeded guidance for bookings and adjusted free cash flow, met guidance on all other metrics

Second consecutive quarter of sequential revenue and adjusted EBITDA growth

Positive free cash flow in 2017 and expect continued growth of free cash flow in 2018

BURLINGTON, Mass., March 15, 2018 Avid^® (NASDAQ:AVID) today announced its fourth quarter and full year 2017 financial results and provided guidance for its first quarter and full year 2018. The company posted its second consecutive quarter of sequential revenue and adjusted EBITDA growth and exceeded guidance for bookings and adjusted free cash flow while meeting guidance on all other metrics.

Highlights of Fourth Quarter 2017 Results

• Bookings excluding Greater China were $140.8 million and Constant Currency Bookings were $145.9 million, both above guidance.

• GAAP Revenue was $107.3 million, in line with guidance.

• GAAP Gross Margin was 54.5%. Non-GAAP Gross Margin was 56.0%.

• GAAP Operating Expenses were $53.7 million. Non-GAAP Operating Expenses were $48.2 million, in line with guidance.

• GAAP Net Loss was $881,000.

• Adjusted EBITDA was $15.0 million, in line with guidance.

• GAAP Net Cash Provided by Operating Activities was $2.8 million.

• Adjusted Free Cash Flow was $4.8 million, above guidance. This is the fifth consecutive quarter of positive Adjusted Free Cash Flow. For the full year 2017, Adjusted Free Cash Flow was up $59 million compared to 2016.

2017 Highlights

• Grew total revenue backlog to $536.1 million as of the end of 2017, up 25% from $429.3 million the year prior.

• Completed multi-year business transformation.

• Launched strategic alliance with Microsoft to develop and market cloud-based solutions and services for the media and entertainment industry.

• Generated positive free cash flow.

Avid Progressing on Strategic Growth Objectives

• Enterprise: During the fourth quarter, Avid signed several large multi-year commercial agreements. As of December 31, 2017, total licenses for the MediaCentral platform were approximately 53,700, up 26% year-over-year.

• Individual: Digital sales, primarily targeted at individual creative professionals, were up 24% year-over-year. Cloud-enabled software subscriptions are now over 93,500, up 54% year-over-year.

“Our strategy is yielding improved financial results as customers are embracing our products and solutions,” said Jeff Rosica, Chief Executive Officer and President of Avid. “Looking ahead, I’m excited about the opportunity before us and our plan to continue to improve business performance, while further leveraging the unique position we’ve established, including our ability to lead customers and the industry into the cloud.”

“We are pleased with our financial performance this year having met key objectives for 2017, including meeting or exceeding guidance on all metrics each quarter and delivering a substantial improvement in free cash flow generation,” said Brian E. Agle, Senior Vice President and Chief Financial Officer of Avid. “In the second half of 2017, our results showed improvement as we delivered two consecutive quarters of revenue and adjusted EBITDA growth, excluding the impact of pre-2011 amortization and elimination of implied PCS revenue. We look forward to building on this momentum in 2018, as we remain focused on growing revenue, managing expenses and further increasing free cash flow.”

First Quarter and Full Year 2018 Guidance

Avid’s first quarter and full year 2018 financial guidance is provided in the table below. This guidance reflects the expected estimated impact of the adoption of the new revenue recognition standard ASC 606 as of January 1, 2018. In 2018, the Company will be refining its guidance practices to focus only on Revenue, Adjusted EBITDA and Free Cash Flow. Annual Free Cash Flow guidance will replace the Adjusted Free Cash Flow guidance previously provided quarterly.

	Guidance under ASC 606
(in $ millions)	2018	Q1 2018
Revenue	$404 - $434	$95 - $105
Adjusted EBITDA	$39 - $51	$3 - $9
Free Cash Flow (Annual)	$2 - $14

The adoption of ASC 606 as of January 1, 2018 is estimated to unfavorably impact revenue and Adjusted EBITDA by $11 million and $2 million in 2018 and Q1 2018, respectively.

A reconciliation of guidance under the ASC 606 and ASC 605 standards is provided for comparison purposes in the supplemental tables included in this press release.

All guidance presented by the Company is inherently uncertain and subject to numerous risks and uncertainties. Avid’s actual future results of operations and cash flows could differ materially from those shown in the table above. For a discussion of some of the key assumptions underlying the guidance, as well as the key risks and uncertainties associated with these forward-looking statements, please see “Forward Looking Statements” below as well as the Avid Technology Q4 2017 Business Update presentation posted on Avid’s Investor Relations website.

Non-GAAP Financial Measures

Avid includes non-GAAP financial measures in this press release, including Adjusted EBITDA, Adjusted Free Cash Flow, Free Cash Flow, non-GAAP Operating Income (loss), non-GAAP Operating Expenses, non-GAAP Gross Margin, Adjusted EBITDA margin and Adjusted Free Cash Flow conversion of Adjusted EBITDA. The Company also includes the operational metrics of bookings, revenue backlog and recurring revenue bookings in this release. Avid believes the non-GAAP financial measures and operational metrics provided in this release provide helpful information to investors with respect to evaluating the Company’s performance. Unless noted, all financial information is reported based on

actual exchange rates. Definitions of the non-GAAP financial measures are included in our Form 8-K filed today. Reconciliations of the non-GAAP financial measures in this release to the Company's comparable GAAP financial measures for the periods presented are set forth below and are also included in the supplemental financial and operational data sheet available on our investor relations webpage at ir.avid.com, which also includes definitions of the operational metrics.

The earnings release also includes forward-looking non-GAAP financial measures, including Adjusted EBITDA, and Free Cash Flow. Reconciliations of these forward-looking non-GAAP financial measures are not included in the earnings release due to the high variability and difficulty in making accurate forecasts and projections of some of the excluded information, together with some of the excluded information not being ascertainable or accessible at this time. As a result, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measure without unreasonable efforts.

Conference Call

Avid will host a conference call to discuss its financial results for the fourth quarter and full year 2017 on Thursday, March 15, 2018 at 5:00 p.m. ET. The call will be open to the public and can be accessed by dialing 323-994-2083 and referencing confirmation code 7939066. You may also listen to the call on the Avid Investor Relations website. To listen via the website, go to the events tab at ir.avid.com for complete details prior to the start of the conference call. A replay of the call will also be available on the Avid Investor Relations website shortly after the completion of the call.

Forward-Looking Statements

Certain information provided in this press release, including the tables attached hereto, include forward-looking statements that involve risks and uncertainties, including projections and statements about our anticipated plans, objectives, expectations and intentions. Among other things, this press release includes estimated results of operations for the year ending December 31, 2018 and first quarter ending March 31, 2018, which estimates are based on a variety of assumptions about key factors and metrics that will determine our future results of operations, including, for example, anticipated market uptake of new products, realization of identified efficiency programs and market-based cost inflation. Other forward-looking statements include, without limitation, statements based upon or otherwise incorporating judgments or estimates relating to future performance such as future operating results and expenses; earnings; backlog; revenue backlog conversion rate; product mix and free cash flow; our future strategy and business plans; our product plans, including products under development, such as cloud and subscription based offerings; our liquidity and ability to raise capital and our liquidity. The projected future results of operations, and the other forward-looking statements in this release, are based on current expectations as of the date of this release and subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including but not limited to the effect on our sales, operations and financial performance resulting from: our liquidity; our ability to execute our strategic plan, and meet customer needs; our ability to retain and hire key personnel; our ability to produce innovative products in response to changing market demand, particularly in the media industry; our ability to successfully accomplish our product development plans; competitive factors; history of losses; fluctuations in our revenue based on, among other things, our performance and risks in particular geographies or markets; our higher indebtedness and ability to service it and meet the obligations thereunder; restrictions in our credit facilities; our move to a subscription model and related effect on our revenues and ability to predict future revenues; elongated sales cycles; fluctuations in foreign currency exchange rates; seasonal factors; adverse changes in economic conditions; variances in our revenue backlog and the realization thereof; and the possibility of legal proceedings adverse to our company. Moreover, the

business may be adversely affected by future legislative, regulatory or changes, including tax law changes, as well as other economic, business and/or competitive factors. The risks included above are not exhaustive. Other factors that could adversely affect our business and prospects are set forth in our public filings with the SEC. Forward-looking statements contained herein are made only as to the date of this press release and we undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

About Avid

Through Avid Everywhere™, Avid delivers the most open and efficient media platform, connecting content creation with collaboration, asset protection, distribution, and consumption. Avid’s preeminent customer community uses Avid’s comprehensive tools and workflow solutions to create, distribute and monetize the most watched, loved and listened to media in the world-from prestigious and award-winning feature films to popular television shows, news programs and televised sporting events, and celebrated music recordings and live concerts. With the most flexible deployment and pricing options, Avid’s industry-leading solutions include Media Composer®, Pro Tools®, Avid NEXIS®, MediaCentral®, iNEWS®, AirSpeed®, Sibelius®, Avid VENUE™, Avid FastServe™, Maestro™, and PlayMaker™. For more information about Avid solutions and services, visit www.avid.com, connect with Avid on Facebook, Instagram, Twitter, YouTube, LinkedIn, or subscribe to Avid Blogs.

© 2018 Avid Technology, Inc. All rights reserved. Avid, the Avid logo, Avid Everywhere, Avid Artist | DNxIV, Avid NEXIS, Avid FastServe, AirSpeed, iNews, Maestro, MediaCentral, Media Composer, PlayMaker, Pro Tools, Avid VENUE, and Sibelius are trademarks or registered trademarks of Avid Technology, Inc. or its subsidiaries in the United States and/or other countries. All other trademarks are the property of their respective owners. Product features, specifications, system requirements and availability are subject to change without notice.

Investor Contact:

Dean Ridlon

Avid

dean.ridlon@avid.com

(978) 640-3379

PR Contact:

Jim Sheehan

Avid

jim.sheehan@avid.com

(978) 640-3152

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,
	2017			2016			2017			2016
Net revenues:
Products	$	56,481		$	59,269		$	209,461		$	283,110
Services	50,777			56,026			209,542			228,820
Total net revenues	107,258			115,295			419,003			511,930
Cost of revenues:
Products	32,128			29,174			112,606			111,579
Services	14,734			14,702			56,481			59,828
Amortization of intangible assets	1,950			1,950			7,800			7,800
Total cost of revenues	48,812			45,826			176,887			179,207
Gross profit	58,446			69,469			242,116			332,723
Operating expenses:
Research and development	16,308			18,773			68,212			81,564
Marketing and selling	25,776			21,311			106,257			110,338
General and administrative	10,624			13,112			53,892			61,471
Amortization of intangible assets	362			363			1,450			2,498
Restructuring costs, net	595			4,959			7,059			12,837
Total operating expenses	53,665			58,518			236,870			268,708
Operating income	4,781			10,951			5,246			64,015
Interest and other expense, net	(5,203		)	(4,622		)	(18,668		)	(18,671		)
(Loss) income before income taxes	(422		)	6,329			(13,422		)	45,344
Provision for (benefit from) income taxes	459			1,108			133			(2,875		)
Net (loss) income	$	(881	)	$	5,221		$	(13,555	)	$	48,219
Net (loss) income per common share – basic and diluted	$	(0.02	)	$	0.13		$	(0.33	)	$	1.20
Weighted-average common shares outstanding – basic	41,216			40,637			41,020			40,021
Weighted-average common shares outstanding – diluted	41,216			40,746			41,020			40,176

AVID TECHNOLOGY, INC.

Reconciliations of GAAP financial measures to Non-GAAP financial measures

(unaudited - in thousands)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2017			2016			2017			2016
Non-GAAP revenue
GAAP revenue	$	107,258		$	115,295		$	419,003		$	511,930
Amortization of acquired deferred revenue	—			—			—			594
Non-GAAP revenue	107,258			115,295			419,003			512,524
Pre-2011 Revenue	78			2,268			985			24,772
Elim PCS	—			8,100			1,700			52,900
Non-GAAP Revenue w/o Pre-2011 and Elim	107,180			104,927			416,318			434,852
Non-GAAP gross profit
GAAP gross profit	58,446			69,469			242,116			332,723
Amortization of acquired deferred revenue	—			—			—			594
Amortization of intangible assets	1,950			1,950			7,800			7,800
Stock-based compensation	(305		)	(48		)	242			440
Non-GAAP gross profit	60,091			71,371			250,158			341,557
Pre-2011 Revenue	78			2,268			985			24,772
Elim PCS	—			8,100			1,700			52,900
Non-GAAP gross profit w/o Pre-2011 and Elim	60,013			61,003			247,473			263,885
Non-GAAP operating expenses
GAAP operating expenses	53,665			58,518			236,870			268,708
Less Amortization of intangible assets	(362		)	(363		)	(1,450		)	(2,498		)
Less Stock-based compensation	(2,741		)	(1,847		)	(8,069		)	(7,475		)
Less Restructuring costs, net	(595		)	(4,959		)	(7,059		)	(12,837		)
Less Restatement costs	(558		)	(109		)	(1,284		)	(295		)
Less Acquisition, integration and other costs	(266		)	(129		)	(163		)	(587		)
Less Efficiency program costs	(931		)	(967		)	(3,985		)	(4,305		)
Non-GAAP operating expenses	48,212			50,144			214,860			240,711
Non-GAAP operating income
GAAP operating income	4,781			10,951			5,246			64,015
Amortization of acquired deferred revenue	—			—			—			594
Amortization of intangible assets	2,312			2,313			9,250			10,298
Stock-based compensation	2,436			1,799			8,311			7,915
Restructuring costs, net	595			4,959			7,059			12,837
Restatement costs	558			109			1,284			295
Acquisition, integration and other costs	266			129			163			587
Efficiency program costs	931			967			3,985			4,305
Non-GAAP operating income	11,879			21,227			35,298			100,846

Adjusted EBITDA
Non-GAAP operating income (from above)	11,879			21,227			35,298			100,846
Depreciation	3,093			3,997			13,087			15,181
Adjusted EBITDA	14,972			25,224			48,385			116,027
Adjusted EBITDA margin	14		%	22		%	12		%	23		%
Pre-2011 Revenue	78			2,268			985			24,772
Elim PCS	—			8,100			1,700			52,900
Adjusted EBITDA w/o Pre-2011 and Elim	14,894			14,856			45,700			38,355
Adjusted EBITDA w/o Pre-2011 and Elim margin	14		%	14		%	11		%	9		%
Adjusted free cash flow
GAAP net cash provided by (used in) operating activities	2,833			(270		)	8,936			(49,195		)
Capital expenditures	(1,752		)	(1,322		)	(7,877		)	(11,003		)
Free Cash Flow	1,081			(1,592		)	1,059			(60,198		)
Non-Operational / One-time Items
Restructuring payments	2,599			1,959			12,139			10,940
Restatement payments	455			153			834			153
Acquisition, integration and other payments	120			24			313			1,841
Efficiency program payments	500			1,412			3,863			6,942
Sub-Total Non-Operational / One-Time Items	3,674			3,548			17,149			19,876
Adjusted free cash flow	$	4,755		$	1,956		$	18,208		$	(40,322	)
Adjusted free cash flow conversion of adjusted EBITDA	32		%	8		%	38		%	(35		)%

These non-GAAP measures reflect how Avid manages its businesses internally. Avid’s non-GAAP measures may vary from how other companies present non-GAAP measures. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with, disclosures required by generally accepted accounting principles, or GAAP.  Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP.

AVID TECHNOLOGY, INC.

Condensed Consolidated Balance Sheets

(unaudited - in thousands)

	December 31,			December 31,
	2017			2016
ASSETS
Current assets:
Cash and cash equivalents	$	57,223		$	44,948
Accounts receivable, net of allowances of $11,142 and $8,618 at December 31, 2017 and 2016, respectively	40,134			43,520
Inventories	38,421			50,701
Prepaid expenses	8,208			6,031
Other current assets	10,341			5,805
Total current assets	154,327			151,005
Property and equipment, net	21,903			30,146
Intangible assets, net	13,682			22,932
Goodwill	32,643			32,643
Long-term deferred tax assets, net	1,318			1,245
Other long-term assets	10,811			11,610
Total assets	$	234,684		$	249,581
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	30,160		$	26,435
Accrued compensation and benefits	25,466			25,387
Accrued expenses and other current liabilities	31,549			34,088
Income taxes payable	1,815			1,012
Short-term debt	5,906			5,000
Deferred revenues	121,184			146,014
Total current liabilities	216,080			237,936
Long-term debt	204,498			188,795
Long-term deferred tax liabilities, net	—			913
Long-term deferred revenues	73,429			79,670
Other long-term liabilities	9,247			12,178
Total liabilities	503,254			519,492
Stockholders’ deficit:
Preferred stock, $0.01 par value, 1,000 shares authorized; no shares issued or outstanding	—			—
Common stock, $0.01 par value, 100,000 shares authorized; 42,339 shares issued, and 41,356 shares and 40,727 shares outstanding at December 31, 2017 and 2016, respectively	423			423
Additional paid-in capital	1,035,808			1,043,063
Accumulated deficit	(1,284,703		)	(1,271,148		)
Treasury stock at cost, net of reissuances, 983 shares and 1,612 shares at December 31, 2017 and 2016, respectively	(17,672		)	(32,353		)
Accumulated other comprehensive loss	(2,426		)	(9,896		)
Total stockholders’ deficit	$	(268,570	)	$	(269,911	)
	$	234,684		$	249,581

AVID TECHNOLOGY, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited - in thousands)

	Twelve Months Ended
	December 31,
	2017			2016
Cash flows from operating activities:
Net (loss) income	$	(13,555	)	$	48,219
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization	22,337			25,479
(Recovery) provision for doubtful accounts	(340		)	886
Stock-based compensation expense	8,311			7,916
Non-cash provision for restructuring	3,191			1,137
Non-cash interest expense	8,951			9,620
Unrealized foreign currency transaction losses (gains)	7,336			(2,599		)
Benefit from deferred taxes	(873		)	(1,842		)
Changes in operating assets and liabilities:
Accounts receivable	3,800			14,321
Inventories	12,280			(2,628		)
Prepaid expenses and other assets	(7,567		)	(1,839		)
Accounts payable	3,606			(18,959		)
Accrued expenses, compensation and benefits and other liabilities	(8,189		)	(6,280		)
Income taxes payable	800			(9		)
Deferred revenues	(31,152		)	(122,617		)
Net cash provided by (used in) operating activities	8,936			(49,195		)
Cash flows from investing activities:
Purchases of property and equipment	(7,877		)	(11,003		)
Increase in other long-term assets	(36		)	(30		)
Decrease (increase) in restricted cash	1,790			(4,544		)
Net cash used in investing activities	(6,123		)	(15,577		)
Cash flows from financing activities:
Proceeds from long-term debt	16,694			100,000
Repayment of debt	(6,735		)	(3,750		)
Proceeds from the issuance of common stock under employee stock plans	445			6,184
Common stock repurchases for tax withholdings for net settlement of equity awards	(1,329		)	(941		)
Proceeds from revolving credit facilities	—			25,000
Payments on revolving credit facilities	—			(30,000		)
Payments for credit facility issuance costs	(700		)	(5,041		)
Net cash provided by financing activities	8,375			91,452
Effect of exchange rate changes on cash and cash equivalents	1,087			366
Net increase in cash and cash equivalents	12,275			27,046
Cash and cash equivalents at beginning of year	44,948			17,902
Cash and cash equivalents at end of year	$	57,223		$	44,948

AVID TECHNOLOGY, INC.

Supplemental Revenue Information

(unaudited - in thousands)

	December 31,		September 30,		December 31,
Revenue Backlog*	2017		2017		2016
Pre-2011	$	112	$	190	$	1,095
Post-2010	$	194,501	$	194,376	$	224,589
Deferred Revenue	$	194,613	$	194,566	$	225,684
Other Backlog	$	341,475	$	293,387	$	203,625
Total Revenue Backlog	$	536,088	$	487,953	$	429,309
The expected timing of recognition of revenue backlog as of December 31, 2017 is as follows:
	2018		2019		2020		Thereafter		Total
Orders executed prior to January 1, 2011	$	112	$	—	$	—	$	—	$	112
Orders executed or materially modified on or	$	95,028	$	36,713	$	25,310	$	37,450	$	194,501
after January 1, 2011
Other Backlog	$	147,550	$	67,301	$	40,427	$	86,197	$	341,475
Total Revenue Backlog	$	242,690	$	104,014	$	65,737	$	123,647	$	536,088
*A definition of Revenue Backlog is included in the supplemental financial and operational data sheet available on our investor relations webpage at ir.avid.com.
Note: current estimates could change based on a number of factors, including (i) the timing of delivery of products and services, (ii) customer cancellations or change order, (iii) changes in the estimated period of time Implied Maintenance Release PCS is provided to customers, including as a result of changes in business practices.
In connection with the adoption of ASU No. 2014-09, Revenue from Contracts with Customers, on January 1, 2018, which will require more of our product sales to be recognized as revenue upon delivery rather than over an extended period of time, we expect approximately $105 million of the deferred revenue component of revenue backlog recorded as of December 31, 2017 will be eliminated.

AVID TECHNOLOGY, INC.

Supplemental Information Related to Guidance

(unaudited - in millions)

2018 Guidance
				ASC 605
	2018 Guidance		ASC 606	2018 Comparison		Actual
($M)	Low	High	Add Back	Low	High	2017
Revenue	$404	$434	$11	$415	$445	$419
Revenue excl. Pre-2011 & Elim PCS	404	434	11	415	445	416
Pre-2011 & Elim PCS	0	0		0	0	3
Adjusted EBITDA	39	51	11	50	62	48
Adj EBITDA excl. Pre-2011 & Elim PCS	39	51	11	50	62	46
Free Cash Flow	$2	$14	$0	$2	$14	$1
Q1 2018 Guidance
	Q1 2018			ASC 605
	Guidance		ASC 606	Q1'18 Comparison		Actual
($M)	Low	High	Add Back	Low	High	Q1 2017	Q4 2017
Revenue	$95	$105	$2	$97	$107	$104	$107
Revenue excl. Pre-2011 & Elim PCS	95	105	2	97	107	102	107
Pre-2011 & Elim PCS	0	0	0	0	0	2	0
Adjusted EBITDA	3	9	2	5	11	13	15
Adj EBITDA excl. Pre-2011 & Elim PCS	$3	$9	$2	$5	$11	$11	$15

PR Contact

Jim Sheehan

Avid

jim.sheehan@avid.com

978.640.3152

Investor Contact

Dean Ridlon

Avid

dean.ridlon@avid.com

978.640.3379