Delaware | 1-36254 | 04-2977748 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Common Stock, $.01 par value | AVID | Nasdaq Global Select Market |
(a) | The Company held its annual meeting of stockholders on Thursday, May 2, 2019 at the Company’s headquarters at 75 Network Drive, Burlington, MA 01803 (the “2019 Annual Meeting”). Set forth below are the final voting results on each matter submitted to a vote of stockholders at the 2019 Annual Meeting. Each proposal is described in more detail in the Company’s proxy statement for the 2019 Annual Meeting (the “2019 proxy statement”), dated April 1, 2019. |
(b) | The final voting results of the 2019 Annual Meeting were as follows: |
Votes For | Votes Against | Votes Abstaining | Broker Non-Votes | |
Robert M. Bakish | 31,297,797 | 371,081 | 38,728 | 7,687,197 |
Paula E. Boggs | 30,825,264 | 844,750 | 37,592 | 7,687,197 |
Jeff Rosica | 30,823,690 | 846,757 | 37,159 | 7,687,197 |
• | Non-GAAP Gross Profit is defined as GAAP gross profit, excluding amortization of intangible assets and stock-based compensation expense. |
• | Non-GAAP Gross Margin is defined as GAAP gross margin, excluding amortization of intangible assets and stock-based compensation expense. |
• | Non-GAAP Operating Expenses are defined as GAAP operating expense excluding restructuring costs, stock-based compensation, amortization of intangible assets as well as other unusual items such as costs related to the restatement, M&A related activity, and efficiency program. |
• | Non-GAAP Operating Income (Loss) is defined as GAAP operating income (loss) excluding restructuring costs, stock-based compensation, amortization of intangible assets as well as other unusual items such as costs related to the restatement, M&A related activity, and efficiency program. |
• | Adjusted EBITDA is defined as non-GAAP Operating Income (Loss) excluding depreciation expense. |
• | Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by GAAP Net Revenues. |
• | Non-GAAP Net Income (Loss) is defined as non-GAAP Operating Income (Loss) excluding other expense and income, and income tax effect on non-GAAP items. |
• | Non-GAAP Earnings (Loss) Per Share is defined as non-GAAP Net Income (Loss) divided by weighted-average common shares outstanding. |
• | Free Cash Flow is defined as GAAP operating cash flow less capital expenditures. |
• | Cloud-enabled software subscriptions as of the end of a quarter represent the number of paid subscription licenses under an active contract as of that date, excluding any licenses that may be receiving service under an active contract but that are not paid for at that time by the customer, whether due to a promotion, cancellation or otherwise. For comparison purposes, subscription numbers for previous quarters have been adjusted from previously published numbers to (i) include multi-year and multi-seat licenses, and (ii) exclude certain terminated subscription licenses. |
• | Recurring Revenue is defined as the sum, without duplication, of subscription revenue, maintenance revenue and revenue under our long-term contractual agreements. |
• | LTM Recurring Revenue % is Recurring Revenue divided by Total Net Revenue for the most recent four quarters. |
• | Annual Contract Value is defined, as of a given date, as the sum, without duplication, of the following three components: (i) the annual value of all long-term contractual agreements in effect on such date, calculated by dividing the total value of each contract (excluding expected maintenance revenue included in (ii) below and expected subscription revenue included in (iii) below) divided by the total number of years of such contract, (ii) |
• | Revenue Backlog consists of firm orders received and includes both (i) orders where the customer has paid in advance of our performance obligations being fulfilled and (ii) orders for future product deliveries or services that have not yet been invoiced by us. |
Exhibit Number | Description |
99.1 |
AVID TECHNOLOGY, INC. | |
(Registrant) | |
Date: May 6, 2019 | By: /s/ Kenneth Gayron Name: Kenneth Gayron Title: Executive Vice President and CFO |
• | Revenue was $103.3 million, the second consecutive quarter of 5% year-over-year growth. |
• | Gross margin was 59.3%, up 240 basis points year-over-year. Non-GAAP Gross Margin was 61.3%, up 240 basis points year-over-year. |
• | Operating expenses were $55.9 million, a decrease of 5% year-over-year. Non-GAAP Operating Expenses were $53.1 million, a decrease of 3% year over year. |
• | Operating income was $5.4 million, up from operating loss of ($3.3) million in Q1 2018. Non-GAAP Operating Income was $10.2 million, an increase of $7.2 million year-over-year. |
• | Adjusted EBITDA was $12.6 million, an increase of 99% year-over-year. Adjusted EBITDA Margin was 12.2%, up 570 basis points year-over-year. |
• | GAAP net loss per common share was ($0.01), up from net loss per common share of ($0.22) in Q1 2018. Non-GAAP Earnings per Share was $0.11, up from Non-GAAP Loss per Share of ($0.06) in Q1 2018. |
• | Net cash provided by operating activities was $6.4 million, up from $5.4 million in Q1 2018. |
• | Free Cash Flow was $4.6 million, up from $3.3 million in Q1 2018. |
• | Software revenue from subscriptions increased 10% year-over-year with approximately 137,000 cloud-enabled software subscriptions at the end of Q1 2019. |
• | Revenue through the Company’s e-commerce activities was up 33% year-over-year. |
• | Recurring Revenue was 57% of the Company’s revenue in the twelve months ending March 2019, up from 50% in the twelve months ending March 2018. |
• | Annual Contract Value was $237 million at the end of Q1 2019, up from $222 million at the end of Q1 2018. |
(in $ millions) | Q2 2019 | Full Year 2019 |
Revenue | $97.0 - $105.0 | $420.0 - $430.0 |
Adjusted EBITDA | $8.5 - $13.5 | $60.0 - $65.0 |
Free Cash Flow | $12.0 - $17.0 |
Investor Contact: | PR Contact: | |
Whit Rappole | Jim Sheehan | |
Avid | Avid | |
ir@avid.com | jim.sheehan@avid.com | |
(978) 275-2032 | (978) 640-3152 |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
Net revenues: | |||||||
Products | $ | 54,396 | $ | 46,410 | |||
Services | 48,923 | 51,527 | |||||
Total net revenues | 103,319 | 97,937 | |||||
Cost of revenues: | |||||||
Products | 27,600 | 26,295 | |||||
Services | 12,487 | 13,985 | |||||
Amortization of intangible assets | 1,950 | 1,950 | |||||
Total cost of revenues | 42,037 | 42,230 | |||||
Gross profit | 61,282 | 55,707 | |||||
Operating expenses: | |||||||
Research and development | 16,285 | 15,685 | |||||
Marketing and selling | 24,878 | 26,132 | |||||
General and administrative | 13,788 | 13,955 | |||||
Amortization of intangible assets | 363 | 363 | |||||
Restructuring costs, net | 558 | 2,907 | |||||
Total operating expenses | 55,872 | 59,042 | |||||
Operating income (loss) | 5,410 | (3,335 | ) | ||||
Interest and other expense, net | (5,185 | ) | (5,359 | ) | |||
Income (loss) before income taxes | 225 | (8,694 | ) | ||||
Provision for income taxes | 438 | 255 | |||||
Net loss | $ | (213 | ) | $ | (8,949 | ) | |
Net loss per common share – basic and diluted | $ | (0.01 | ) | $ | (0.22 | ) | |
Weighted-average common shares outstanding – basic and diluted | 42,046 | 41,404 |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
GAAP revenue | |||||||
Total net revenues | $ | 103,319 | $ | 97,937 | |||
Non-GAAP Gross Profit | |||||||
GAAP gross profit | 61,282 | 55,707 | |||||
Amortization of intangible assets | 1,950 | 1,950 | |||||
Stock-based compensation | 69 | 53 | |||||
Non-GAAP Gross Profit | $ | 63,301 | $ | 57,710 | |||
Non-GAAP Gross Margin | 61.3 | % | 58.9 | % | |||
Non-GAAP Operating Expenses | |||||||
GAAP operating expenses | 55,872 | 59,042 | |||||
Less Amortization of intangible assets | (363 | ) | (363 | ) | |||
Less Stock-based compensation | (1,669 | ) | (650 | ) | |||
Less Restructuring costs, net | (558 | ) | (2,907 | ) | |||
Less Restatement costs | 8 | (227 | ) | ||||
Less Acquisition, integration and other costs | (151 | ) | (82 | ) | |||
Less Efficiency program costs | (3 | ) | (75 | ) | |||
Non-GAAP Operating Expenses | $ | 53,136 | $ | 54,738 | |||
Non-GAAP Operating Income | |||||||
GAAP operating income (loss) | 5,410 | (3,335 | ) | ||||
Amortization of intangible assets | 2,313 | 2,313 | |||||
Stock-based compensation | 1,738 | 703 | |||||
Restructuring costs, net | 558 | 2,907 | |||||
Restatement costs | (8 | ) | 227 | ||||
Acquisition, integration and other costs | 151 | 82 | |||||
Efficiency program costs | 3 | 75 | |||||
Non-GAAP Operating Income | $ | 10,165 | $ | 2,972 |
Adjusted EBITDA | |||||||
Non-GAAP Operating Income (from above) | $ | 10,165 | $ | 2,972 | |||
Depreciation | 2,428 | 3,361 | |||||
Adjusted EBITDA | $ | 12,593 | $ | 6,333 | |||
Adjusted EBITDA Margin | 12.2 | % | 6.5 | % | |||
Non-GAAP Net Income (Loss) | |||||||
Non-GAAP Operating Income (from above) | 10,165 | 2,972 | |||||
Less: Other income (expense) | (5,185 | ) | (5,359 | ) | |||
Less: income tax impact of Non-GAAP adjustments | (476 | ) | (294 | ) | |||
Non-GAAP Net Income (Loss) | $ | 4,504 | $ | (2,681 | ) | ||
Weighted-average common share outstanding - diluted | 42,585 | 41,404 | |||||
Non-GAAP Earnings (Loss) Per Share | $ | 0.11 | $ | (0.06 | ) | ||
Free Cash Flow | |||||||
GAAP net cash provided by operating activities | 6,376 | 5,370 | |||||
Capital expenditures | (1,767 | ) | (2,080 | ) | |||
Free Cash Flow | $ | 4,609 | $ | 3,290 | |||
Free Cash Flow conversion of Adjusted EBITDA | 36.6 | % | 52.0 | % | |||
March 31, | December 31, | ||||||
2019 | 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 55,326 | $ | 56,103 | |||
Restricted cash | 9,020 | 8,500 | |||||
Accounts receivable, net of allowances of $1,339 and $1,339 at March 31, 2019 and December 31, 2018, respectively. | 61,318 | 67,754 | |||||
Inventories | 34,328 | 32,956 | |||||
Prepaid expenses | 11,985 | 8,853 | |||||
Contract assets | 18,677 | 16,513 | |||||
Other current assets | 6,685 | 5,917 | |||||
Total current assets | 197,339 | 196,596 | |||||
Property and equipment, net | 20,918 | 21,582 | |||||
Intangible assets, net | 2,120 | 4,432 | |||||
Goodwill | 32,643 | 32,643 | |||||
Right of use assets | 36,031 | — | |||||
Long-term deferred tax assets, net | 1,163 | 1,158 | |||||
Other long-term assets | 9,456 | 9,432 | |||||
Total assets | $ | 299,670 | $ | 265,843 | |||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 38,438 | $ | 39,239 | |||
Accrued compensation and benefits | 24,727 | 21,967 | |||||
Accrued expenses and other current liabilities | 41,402 | 37,547 | |||||
Income taxes payable | 2,088 | 1,853 | |||||
Short-term debt | 1,405 | 1,405 | |||||
Deferred revenue | 87,927 | 85,662 | |||||
Total current liabilities | 195,987 | 187,673 | |||||
Long-term debt | 218,201 | 220,590 | |||||
Long-term deferred revenue | 13,361 | 13,939 | |||||
Long-term lease liabilities | 33,817 | — | |||||
Other long-term liabilities | 5,391 | 10,302 | |||||
Total liabilities | 466,757 | 432,504 | |||||
Stockholders’ deficit: | |||||||
Common stock | 423 | 423 | |||||
Additional paid-in capital | 1,024,028 | 1,028,924 | |||||
Accumulated deficit | (1,187,223 | ) | (1,187,010 | ) | |||
Treasury stock at cost | — | (5,231 | ) | ||||
Accumulated other comprehensive loss | (4,315 | ) | (3,767 | ) | |||
Total stockholders’ deficit | (167,087 | ) | (166,661 | ) | |||
Total liabilities and stockholders’ deficit | $ | 299,670 | $ | 265,843 |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (213 | ) | $ | (8,949 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 4,740 | 5,674 | |||||
(Recovery from) provision for doubtful accounts | (9 | ) | 57 | ||||
Stock-based compensation expense | 1,738 | 703 | |||||
Non-cash interest expense | 3,359 | 3,546 | |||||
Unrealized foreign currency transaction (gains) losses | (586 | ) | 1,323 | ||||
Benefit from deferred taxes | (1 | ) | (2 | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 6,444 | 8,596 | |||||
Inventories | (1,372 | ) | (482 | ) | |||
Prepaid expenses and other assets | (3,861 | ) | (396 | ) | |||
Accounts payable | (810 | ) | (2,112 | ) | |||
Accrued expenses, compensation and benefits and other liabilities | (2,837 | ) | (1,355 | ) | |||
Income taxes payable | 261 | 190 | |||||
Deferred revenue and contract assets | (477 | ) | (1,423 | ) | |||
Net cash provided by operating activities | 6,376 | 5,370 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (1,767 | ) | (2,080 | ) | |||
Increase in other long-term assets | — | (8 | ) | ||||
Net cash used in investing activities | (1,767 | ) | (2,088 | ) | |||
Cash flows from financing activities: | |||||||
Repayment of debt | (3,928 | ) | (3,212 | ) | |||
Proceeds from the issuance of common stock under employee stock plans | 309 | 6 | |||||
Common stock repurchases for tax withholdings for net settlement of equity awards | (1,690 | ) | (497 | ) | |||
Partial retirement of the Notes conversion feature and capped call option unwind | (22 | ) | (20 | ) | |||
Net cash used in financing activities | (5,331 | ) | (3,723 | ) | |||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (55 | ) | 15 | ||||
Net decrease in cash, cash equivalents and restricted cash | (777 | ) | (426 | ) | |||
Cash, cash equivalents and restricted cash at beginning of period | 68,094 | 60,433 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 67,317 | $ | 60,007 | |||
Supplemental information: | |||||||
Cash and cash equivalents | $ | 55,326 | $ | 48,016 | |||
Restricted cash | 9,020 | 8,500 | |||||
Restricted cash included in other long-term assets | 2,971 | 3,491 | |||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ | 67,317 | $ | 60,007 |
Backlog Disclosure for Quarter Ended March 31, 2019 | ||||||||||||||||||
March 31, | December 31, | March 31, | ||||||||||||||||
2019 | 2018 | 2018 | ||||||||||||||||
Revenue Backlog* | ||||||||||||||||||
Deferred Revenue | $101.3 | $99.6 | $106.4 | |||||||||||||||
Other Backlog | 358.4 | 357.2 | 328.6 | |||||||||||||||
Total Revenue Backlog | $459.7 | $456.8 | $435.0 | |||||||||||||||
The expected timing of recognition of revenue backlog as of March 31, 2019 is as follows: | ||||||||||||||||||
2019 | 2020 | 2021 | Thereafter | Total | ||||||||||||||
Deferred Revenue | $72.8 | $18.2 | $7.1 | $3.2 | $101.3 | |||||||||||||
Other Backlog | 111.5 | 65.1 | 61.7 | 120.1 | 358.4 | |||||||||||||
Total Revenue Backlog | $184.3 | $83.3 | $68.8 | $123.3 | $459.7 | |||||||||||||
*A definition of Revenue Backlog is included in our Form 8-K filed today and the supplemental financial and operational data sheet available on our investor relations webpage at ir.avid.com. | ||||||||||||||||||