Avid® (NASDAQ: AVID), a leading technology provider that powers the
media and entertainment industry, today announced its financial
results for the first quarter of 2023, which ended on March 31,
2023.
Total revenue decreased (2.8%) year-over-year in
the first quarter, or (0.1%) at constant currency, largely
resulting from a decline in perpetual software revenue, which is
reported in integrated solutions and other revenue, partially
offset by strong growth in subscription revenue. Active Paid
Software Subscriptions reached 526,700 as of March 31, 2023, an
increase of 22.0% year-over-year. At March 31, 2023, Subscription
ARR was $150 million, an increase of 30.1% year-over-year, and
total ARR was $247 million, an increase of 8.1% year-over-year. At
constant currency, Subscription ARR increased 31.1% year-over-year
and total ARR increased 9.2% year-over-year.
In the first quarter, subscription revenue was
$39.4 million, up 19.5% year-over-year, or 21.2% at constant
currency, and subscription & maintenance revenue was $62.0
million, up 1.2% year-over-year, or 4.1% at constant currency.
Maintenance revenue was $22.6 million in the first quarter, down
20.0% year-over-year, primarily driven by enterprise customers
continuing to transition to subscription. Maintenance revenue is
expected to stabilize through the remainder of 2023, as a result of
an expected increase in shipments from the integrated solutions
backlog beginning in the second quarter of 2023, as well as
modifications to maintenance pricing. Integrated solutions revenue
was $28.7 million in the first quarter, up 1.8% year-over-year, as
demand continued to be healthy. However, supply chain constraints
continued to limit production capacity, resulting in $20 million of
unshipped contractually committed backlog at the end of the
quarter.
During the first quarter, Gross Margin was 63.6%
and Non-GAAP Gross Margin was 64.0%, down 280 basis points
year-over-year, as continuing supply chain challenges negatively
impacted audio hardware gross margin due to temporary higher
production costs as well as shipments from aged backlog at older
prices that do not reflect price increases during 2022. These
challenges in audio gross margin, which are expected to be
temporary, had a flow through impact on net income (loss), Adjusted
EBITDA and Free Cash Flow in the quarter. The Company is
proactively managing the associated costs and pricing for its audio
hardware and believes these measures will have a positive effect on
gross margin in the audio hardware business and the Company’s
overall gross margin for the remainder of 2023. Subscription and
maintenance gross margin remained strong at 85.5% during the first
quarter.
First Quarter 2023 Financial and Business
Highlights
- Active Paid Software Subscriptions
increased by approximately 20,700 during the quarter to
approximately 526,700 as of March 31, 2023, an increase of 22.0%
year-over-year.
- Subscription ARR was $150 million, an
increase of 30.1% year-over-year. At constant currency,
Subscription ARR increased 31.1% year-over-year.
- Total ARR was $247 million, an
increase of 8.1% year-over-year. At constant currency, ARR
increased 9.2% year-over-year.
- Subscription revenue was $39.4
million, an increase of 19.5% year-over-year. At constant currency,
subscription revenue increased 21.2% year-over-year.
- Subscription and maintenance revenue
was $62.0 million, an increase of 1.2% year-over-year. At constant
currency, subscription and maintenance revenue increased 4.1%
year-over-year.
- Total revenue was $97.8 million, a
decrease of (2.8%) year-over-year. At constant-currency, total
revenue decreased (0.1%) year-over-year.
- Gross margin was 63.6%, a decrease of
(270 basis points) year-over-year and Non-GAAP Gross Margin was
64.0%, a decrease of (280 basis points) year-over-year.
- Subscription and maintenance gross
margin was 85.5% in the first quarter, an increase of 330 basis
points year-over-year. Non-GAAP Subscription and Maintenance Gross
Margin was 85.9% in the first quarter, an increase of 320 basis
points year-over-year.
- Integrated solutions gross margin was
28.7% in the first quarter, a decrease of (1250 basis points)
year-over-year. Non-GAAP Integrated Solutions Gross Margin was
29.2% in the first quarter, a decrease of (1240 basis points)
year-over-year.
- Operating expenses were $58.7 million,
an increase of 9.7% year-over-year. Non-GAAP Operating Expenses
were $52.2 million, an increase of 5.0% year-over-year.
- Net loss was ($0.4 million), a
decrease of ($11.0 million) year-over-year. Net loss was (0.4%) of
revenue. Non-GAAP Net Income was $6.6 million, a decrease of ($8.2
million) year-over-year. Non-GAAP Net Income was 6.7% of
revenue.
- Adjusted EBITDA was $12.7 million, a
decrease of (33.9%) year-over-year. At constant-currency, Adjusted
EBITDA decreased (27.2%) year-over-year. Adjusted EBITDA Margin was
13.0%, a decrease of (620 basis points) year-over-year.
- Net loss per common share was ($0.01),
a decrease of ($0.24) year-over-year. Non-GAAP Earnings per Share
was $0.15, a decrease of ($0.18) year-over-year.
- Net cash (used in) operating
activities was ($2.6) million in the quarter, a decrease of ($10.5)
million compared to the first quarter of 2022.
- Free Cash Flow was ($6.5) million in
the quarter, a decrease of ($11.2) million compared to the first
quarter of 2022.
- LTM Recurring Revenue % was 85.0% of
the Company’s revenue for the 12 months ended March 31, 2023, up
from 79.1% for the 12 months ended March 31, 2022.
- The Company repurchased 15,706 shares
for $0.4 million during the first quarter. Through
March 31, 2023, the Company has repurchased 2.9 million shares for
$78.4 million under the $115 million share repurchase authorization
announced on September 9, 2021.
Jeff Rosica, Avid’s Chief Executive Officer and
President, stated, “We ended the first quarter with continued
strong subscription growth, as well as a continued favorable
bookings trend, which gives us confidence in our full-year 2023
outlook. Our customers continue to adopt both our enterprise
subscription and creative subscription offerings, resulting in
strong growth in Subscription ARR, which we believe is a key metric
in measuring the health of our business. In addition,
as we work through the resolution of the ongoing supply chain
issues, we did face some specific challenges and additional costs
in the quarter, related to our audio hardware products, that were
more significant than expected. This created
substantial and unexpected gross margin headwinds for audio
hardware, which impacted overall profitability and Free Cash Flow
in the quarter.” Mr. Rosica added, “We remain confident in our
growing subscription and SaaS business, which, combined with the
actions we are taking to improve our audio hardware margins and
proactively manage our cost structure, we believe, will enable us
to meet our 2023 guidance.”
Ken Gayron, Executive Vice President and Chief
Financial Officer of Avid, said, “As the media markets we serve
continue to invest in technology solutions such as ours to gain
efficiencies, we continue to focus our investments on our
subscription and cloud offerings.” Mr. Gayron added, “We believe
these investments will drive continued strong growth in our
subscription business and ARR as we look forward. We believe ARR is
a key metric for assessing the growth of our strategic recurring
revenue and normalizes the impact of accounting methodologies in a
given period. Additionally, the actions we are taking to realign
our cost structure to support our expanding subscription business
give me confidence in our 2023 guidance.”
Second Quarter and Full-Year 2023
Guidance
For the second quarter of 2023, Avid is providing
guidance for ARR, Revenue, Non-GAAP Earnings per Share and Adjusted
EBITDA. For the full year 2023, Avid is affirming its guidance for
ARR, Revenue, Subscription & Maintenance Revenue, Non-GAAP
Earnings per Share, Adjusted EBITDA and Free Cash Flow, as
adjusted, that was issued on March 1, 2023.
($ in millions, except per share amounts) |
Q2 2023 Guidance |
ARR, at end of period |
$246 - $251 |
Revenue |
$101 - $111 |
Non-GAAP Earnings per Share |
$0.15 - $0.30 |
Adjusted EBITDA |
$13 - $20 |
Q2 Non-GAAP Earnings per
Share assumes 44.1 million shares outstanding.
($ in millions, except per share
amounts) |
Full Year 2023 Guidance |
ARR, at end of period |
$270 - $280 |
Revenue |
$447 - $472 |
Subscription & Maintenance Revenue |
$292 - $302 |
Non-GAAP Earnings per Share |
$1.53 - $1.75 |
Adjusted EBITDA |
$95 - $105 |
Free Cash Flow |
$50 - $60 |
2023 Non-GAAP Earnings
per Share assumes 44.0 million shares outstanding. Free Cash Flow,
as adjusted, excludes $7.0 million expected cash costs for
restructuring.
All guidance presented by the Company is inherently
uncertain and subject to numerous risks and uncertainties. Avid’s
actual future results of operations 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 Q1 2023 Earnings presentation posted on Avid’s Investor
Relations website at ir.Avid.com.
Conference Call to Discuss First Quarter
2023 Results on May 4, 2023
Avid will host a conference call to discuss its
financial results for the first quarter 2023 on Thursday, May 4,
2023, at 5:30 p.m. ET. Participants may join the
webcast in listen-only mode and access the presentation slides
using the link on the Avid Investor Relations website, which can be
found on the Events & Presentations tab at
ir.Avid.com. Please connect at least 5 minutes in
advance to ensure a timely connection to the call. A
replay of the call will also be available for a limited time and
can be accessed on the Events & Presentations tab of the Avid
Investor Relations website shortly after the completion of the
call.
Non-GAAP Financial Measures and Operational
Metrics
Avid includes non-GAAP financial measures in this
press release, including Adjusted EBITDA, Adjusted EBITDA Margin,
Free Cash Flow, Non-GAAP Gross Margin, Non-GAAP Subscription and
Maintenance Gross Margin, Non-GAAP Integrated Solutions Gross
Margin, Non-GAAP Operating Expenses, Non-GAAP Net Income, and
Non-GAAP Earnings per Share. The Company also includes the
operational metrics of Active Paid Software Subscriptions, Annual
Recurring Revenue (or ARR), Subscription ARR, Recurring Revenue,
and LTM Recurring Revenue % 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 and operating information is reported based on actual
exchange rates. Constant currency growth rates are calculated using
the current period budget exchange rates as of January 2023 for
both the historical and current periods. Definitions of the
non-GAAP financial measures and the operational metrics are
included in our Form 8-K filed today. Reconciliations of the
non-GAAP financial measures presented in this press release to the
Company's comparable GAAP financial measures for the periods
presented are set forth below and are included in the supplemental
financial and operational data sheet available on our Investor
Relations website at ir.Avid.com, which also includes definitions
of all operational metrics. This press release also
includes expectations for future Adjusted EBITDA, Non-GAAP Earnings
per Share and Free Cash Flow, as adjusted, which are
forward-looking non-GAAP financial measures. Reconciliations of
these forward-looking non-GAAP measures are not included in this
press release or elsewhere, due to the high variability and
difficulty in making accurate forecasts and projections of some of
the information excluded from the estimation of the non-GAAP
results, together with some of the excluded information not being
ascertainable or accessible at this time. As a result, we are
unable to quantify certain amounts that would be required to be
included in the most directly comparable GAAP financial measure
without unreasonable efforts.
Forward-Looking Statements
Certain information provided in this press release
includes forward-looking statements within the meaning of the
Securities Act of 1933 and the Securities Exchange Act of 1934,
which are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Examples of
forward-looking statements include statements regarding our future
financial performance or position, results of operations, business
strategy, plans and objectives of management for future operations,
and other statements that are not historical fact. You can identify
forward-looking statements by their use of forward-looking words
such as “may”, “will”, “anticipate”, “expect”, “believe”,
“estimate”, “intend”, “plan”, “should”, “seek”, or other comparable
terms.
Readers of this press release should understand
that these forward-looking statements are not guarantees of
performance or results. Forward-looking statements provide our
current expectations and beliefs concerning future events and are
subject to risks, uncertainties, and factors relating to our
business and operations, all of which are difficult to predict and
could cause our actual results to differ materially from the
expectations expressed in or implied by such forward-looking
statements.
These risks, uncertainties, and factors include,
but are not limited to: the effect of the continuing worldwide
macroeconomic uncertainty and its impacts, including inflation,
market volatility and fluctuations in foreign currency exchange and
interest rates on our business and results of operations, including
impacts related to acts of war, armed conflict, and cyber conflict,
such as for example, the Russian invasion of Ukraine, and related
international sanctions and reprisals; risks related to the
availability and prices of raw materials, including any negative
effects caused by inflation, armed conflict and related sanctions,
weather conditions, or health pandemics; disruptions,
inefficiencies, and/or complications in our operations and/or
dynamic and unpredictable global supply chain, including cost
increases, interruptions, delays, complications, and other impacts
related to armed conflict and/or cyber conflict and related
international sanctions and reprisals; economic, social, and
political instability, security concerns, and the risk of war,
armed conflict and/or cyber conflict, particularly originating in,
and complicated by, areas of heightened geopolitical tension and
open conflict such as Ukraine, where we have outsourced research
and development activities, Russia, and bordering territories; our
liquidity; our ability to execute our strategic plan including our
cost saving strategies, and to 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; the
impact of changes in accounting treatment interpretations over
time; our higher indebtedness and ability to service it and meet
the obligations thereunder; our ability to mitigate and remediate
material weaknesses in our internal controls; restrictions in our
credit facilities; our move to a subscription model and related
effect on our revenues and ability to predict future revenues;
fluctuations in subscription and maintenance renewal rates;
elongated sales cycles; seasonal factors; other adverse changes in
external economic conditions; variances in our revenue backlog and
the realization thereof; the costs, disruption, and diversion of
management's attention due to armed conflict and/or cyber conflict
and related international sanctions and reprisals; the possibility
of legal proceedings adverse to our Company; and other risks
described in our reports filed from time to time with the U.S.
Securities and Exchange Commission. Moreover, the
business may be adversely affected by future legislative,
regulatory or other changes, including tax law changes, as well as
other economic, business and/or competitive factors.
The risks included above are not exhaustive. We caution
readers not to place undue reliance on any forward-looking
statements included in this press release which speak only as to
the date of this press release. We undertake no
responsibility to update or revise any forward-looking statements,
except as required by law.
Avid Powers Greater Creators
People who create media for a living become greater
creators with Avid’s award-winning technology solutions to make,
manage and monetize today’s most celebrated video and audio
content—from iconic movies and bingeworthy TV series, to network
news and sports, to recorded music and the live stage. What began
more than 35 years ago with our invention of nonlinear digital
video editing has led to individual artists, creative teams and
organizations everywhere subscribing to our powerful tools and
collaborating securely in the cloud. We continue to re-imagine the
many ways editors, musicians, producers, journalists and other
content creators will bring their stories to life. Discover the
possibilities at avid.com and join the conversation on social media
with the multitude of brilliant creative people who choose Avid for
a lifetime of success.
© 2023 Avid Technology, Inc., Avid and its logo are
property of Avid. All rights reserved. Other trademarks are
property of their respective owners.
|
|
Contacts |
|
|
|
Investor contact: |
PR contact: |
Whit Rappole |
Jim Sheehan |
Avid |
Avid |
ir@Avid.com |
jim.sheehan@Avid.com |
|
AVID
TECHNOLOGY, INC.Consolidated Statements of
Operations(unaudited - in thousands except per share
data) |
|
|
Three Months Ended |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
|
Net revenues: |
|
|
|
Subscription |
$ |
39,385 |
|
|
$ |
32,954 |
|
Maintenance |
|
22,650 |
|
|
|
28,327 |
|
Integrated solutions & other |
|
35,776 |
|
|
|
39,368 |
|
Total net revenues |
|
97,811 |
|
|
|
100,649 |
|
|
|
|
|
Cost of revenues: |
|
|
|
Subscription |
|
4,264 |
|
|
|
5,602 |
|
Maintenance |
|
4,747 |
|
|
|
5,277 |
|
Integrated solutions & other |
|
26,607 |
|
|
|
23,006 |
|
Total cost of revenues |
|
35,618 |
|
|
|
33,885 |
|
Gross profit |
|
62,193 |
|
|
|
66,764 |
|
|
|
|
|
Operating expenses: |
|
|
|
Research and development |
|
19,426 |
|
|
|
16,736 |
|
Marketing and selling |
|
22,657 |
|
|
|
21,927 |
|
General and administrative |
|
16,614 |
|
|
|
14,811 |
|
Restructuring costs, net |
|
— |
|
|
|
15 |
|
Total operating expenses |
|
58,697 |
|
|
|
53,489 |
|
|
|
|
|
Operating income |
|
3,496 |
|
|
|
13,275 |
|
|
|
|
|
Interest expense, net |
|
(3,715 |
) |
|
|
(1,476 |
) |
Other income (expense), net |
|
147 |
|
|
|
(87 |
) |
(Loss) income before income taxes |
|
(72 |
) |
|
|
11,712 |
|
Provision for income taxes |
|
309 |
|
|
|
1,126 |
|
Net (loss) income |
$ |
(381 |
) |
|
$ |
10,586 |
|
|
|
|
|
Net (loss) income per common share – basic |
$ |
(0.01 |
) |
|
$ |
0.24 |
|
Net (loss) income per common share – diluted |
$ |
(0.01 |
) |
|
$ |
0.23 |
|
|
|
|
|
Weighted-average common shares outstanding – basic |
|
43,813 |
|
|
|
44,817 |
|
Weighted-average common shares outstanding – diluted |
|
43,813 |
|
|
|
45,408 |
|
|
AVID
TECHNOLOGY, INC.Reconciliations of GAAP financial
measures to Non-GAAP financial measures(unaudited - in
thousands except per share data) |
|
|
Three Months Ended |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
|
GAAP revenue |
|
|
|
GAAP revenue |
$ |
97,811 |
|
|
$ |
100,649 |
|
|
|
|
|
Non-GAAP Gross Profit |
|
|
|
GAAP gross profit |
$ |
62,193 |
|
|
$ |
66,764 |
|
Stock-based compensation |
|
429 |
|
|
|
426 |
|
Non-GAAP Gross Profit |
$ |
62,622 |
|
|
$ |
67,190 |
|
GAAP Gross Margin |
|
63.6 |
% |
|
|
66.3 |
% |
Non-GAAP Gross Margin |
|
64.0 |
% |
|
|
66.8 |
% |
|
|
|
|
Non-GAAP Operating Expenses |
|
|
|
GAAP operating expenses |
$ |
58,697 |
|
|
$ |
53,489 |
|
Less Amortization of intangible assets |
|
(37 |
) |
|
|
(58 |
) |
Less Stock-based compensation |
|
(4,664 |
) |
|
|
(2,996 |
) |
Less Restructuring costs, net |
|
— |
|
|
|
(15 |
) |
Less Early Retirement Program |
|
(1,202 |
) |
|
|
— |
|
Less Acquisition, integration and other costs |
|
(315 |
) |
|
|
(459 |
) |
Less Digital Transformation costs |
|
(297 |
) |
|
|
(243 |
) |
Non-GAAP Operating Expenses |
$ |
52,182 |
|
|
$ |
49,718 |
|
|
|
|
|
Non-GAAP Operating Income and Adjusted EBITDA |
|
|
|
GAAP net (loss) income |
$ |
(381 |
) |
|
$ |
10,586 |
|
Interest and other expense |
|
3,568 |
|
|
|
1,563 |
|
Provision for income taxes |
|
309 |
|
|
|
1,126 |
|
GAAP operating income |
$ |
3,496 |
|
|
$ |
13,275 |
|
Amortization of intangible assets |
|
37 |
|
|
|
58 |
|
Stock-based compensation |
|
5,093 |
|
|
|
3,422 |
|
Restructuring costs, net |
|
— |
|
|
|
15 |
|
Early Retirement Program |
|
1,202 |
|
|
|
— |
|
Acquisition, integration and other costs |
|
315 |
|
|
|
459 |
|
Digital Transformation costs |
|
297 |
|
|
|
243 |
|
Non-GAAP Operating Income |
$ |
10,440 |
|
|
$ |
17,472 |
|
Depreciation |
|
2,297 |
|
|
|
1,803 |
|
Adjusted EBITDA |
$ |
12,737 |
|
|
$ |
19,275 |
|
GAAP net income margin |
|
(0.4 |
)% |
|
|
10.5 |
% |
Adjusted EBITDA Margin |
|
13.0 |
% |
|
|
19.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income |
|
|
|
GAAP net (loss) income |
$ |
(381 |
) |
|
$ |
10,586 |
|
Amortization of intangible assets |
|
37 |
|
|
|
58 |
|
Stock-based compensation |
|
5,093 |
|
|
|
3,422 |
|
Restructuring costs, net |
|
— |
|
|
|
15 |
|
Early Retirement Program |
|
1,202 |
|
|
|
— |
|
Acquisition, integration and other costs |
|
315 |
|
|
|
459 |
|
Digital Transformation costs |
|
297 |
|
|
|
243 |
|
Tax impact of non-GAAP adjustments |
|
— |
|
|
|
(3 |
) |
Non-GAAP Net Income |
$ |
6,563 |
|
|
$ |
14,780 |
|
Weighted-average common shares outstanding -
basic |
|
43,813 |
|
|
|
44,817 |
|
Weighted-average common shares outstanding -
diluted |
|
43,813 |
|
|
|
45,408 |
|
GAAP net (loss) income Per Share - basic |
$ |
(0.01 |
) |
|
$ |
0.24 |
|
GAAP net (loss) income Per Share - diluted |
$ |
(0.01 |
) |
|
$ |
0.23 |
|
Non-GAAP Earnings Per Share - basic |
$ |
0.15 |
|
|
$ |
0.33 |
|
Non-GAAP Earnings Per Share - diluted |
$ |
0.15 |
|
|
$ |
0.33 |
|
|
|
|
|
Free Cash Flow |
|
|
|
GAAP net cash provided by operating
activities |
$ |
(2,556 |
) |
|
$ |
7,916 |
|
Capital expenditures |
|
(3,931 |
) |
|
|
(3,244 |
) |
Free Cash Flow |
$ |
(6,487 |
) |
|
$ |
4,672 |
|
Free Cash Flow conversion of Adjusted EBITDA |
|
(50.9 |
)% |
|
|
24.2 |
% |
|
|
|
|
Non-GAAP Gross Profit by Revenue Type |
|
|
|
Subscription Revenue |
|
39,385 |
|
|
|
32,954 |
|
Maintenance Revenue |
|
22,650 |
|
|
|
28,327 |
|
Subscription & Maintenance Revenue |
|
62,035 |
|
|
|
61,281 |
|
|
|
|
|
Subscription Cost of Revenues |
|
4,264 |
|
|
|
5,602 |
|
Maintenance Cost of Revenues |
|
4,747 |
|
|
|
5,277 |
|
Subscription & Maintenance Cost of Revenues |
|
9,011 |
|
|
|
10,879 |
|
Subscription & Maintenance Stock-based compensation |
|
295 |
|
|
|
301 |
|
Non-GAAP Subscription & Maintenance Cost of Revenues |
|
8,716 |
|
|
|
10,578 |
|
Subscription & Maintenance Gross Margin |
|
85.5% |
|
|
|
82.2% |
|
Non-GAAP Subscription & Maintenance Gross Margin |
|
85.9% |
|
|
|
82.7% |
|
|
|
|
|
Integrated Solutions Revenue |
|
28,710 |
|
|
|
28,210 |
|
Integrated Solutions Cost of Revenues |
|
20,457 |
|
|
|
16,599 |
|
Integrated Solutions Stock-based compensation |
|
135 |
|
|
|
125 |
|
Non-GAAP Integrated Solutions Cost of Revenues |
|
20,322 |
|
|
|
16,474 |
|
Integrated Solutions Gross Margin |
|
28.7% |
|
|
|
41.2% |
|
Non-GAAP Integrated Solutions Gross Margin |
|
29.2% |
|
|
|
41.6% |
|
|
|
|
|
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.Consolidated Balance
Sheets(unaudited - in thousands, except per share
data) |
|
|
March 31, |
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
20,855 |
|
|
$ |
35,247 |
|
Restricted cash |
|
2,463 |
|
|
|
2,413 |
|
Accounts receivable, net of allowances of $559 and $601 at March
31, 2023 and December 31, 2022, respectively |
|
62,855 |
|
|
|
76,849 |
|
Inventories |
|
26,371 |
|
|
|
20,981 |
|
Prepaid expenses |
|
9,247 |
|
|
|
8,360 |
|
Contract assets |
|
31,966 |
|
|
|
32,295 |
|
Other current assets |
|
2,538 |
|
|
|
2,826 |
|
Total current assets |
|
156,295 |
|
|
|
178,971 |
|
Property and equipment, net |
|
25,586 |
|
|
|
23,684 |
|
Goodwill |
|
32,643 |
|
|
|
32,643 |
|
Right of use assets |
|
21,905 |
|
|
|
21,395 |
|
Deferred tax assets, net |
|
16,118 |
|
|
|
15,859 |
|
Other long-term assets |
|
21,364 |
|
|
|
14,901 |
|
Total assets |
$ |
273,911 |
|
|
$ |
287,453 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
50,081 |
|
|
$ |
45,904 |
|
Accrued compensation and benefits |
|
21,526 |
|
|
|
22,602 |
|
Accrued expenses and other current liabilities |
|
32,696 |
|
|
|
36,031 |
|
Income taxes payable |
|
217 |
|
|
|
62 |
|
Short-term debt |
|
9,716 |
|
|
|
9,710 |
|
Deferred revenue |
|
62,717 |
|
|
|
76,308 |
|
Total current liabilities |
|
176,953 |
|
|
|
190,617 |
|
Long-term debt |
|
170,690 |
|
|
|
172,958 |
|
Long-term deferred revenue |
|
19,734 |
|
|
|
17,842 |
|
Long-term lease liabilities |
|
21,025 |
|
|
|
20,470 |
|
Other long-term liabilities |
|
4,245 |
|
|
|
4,348 |
|
Total liabilities |
|
392,647 |
|
|
|
406,235 |
|
|
|
|
|
Stockholders’ deficit: |
|
|
|
Common stock |
|
464 |
|
|
|
462 |
|
Treasury stock |
|
(78,353 |
) |
|
|
(77,933 |
) |
Additional paid-in capital |
|
1,036,538 |
|
|
|
1,036,287 |
|
Accumulated deficit |
|
(1,072,099 |
) |
|
|
(1,071,718 |
) |
Accumulated other comprehensive loss |
|
(5,286 |
) |
|
|
(5,880 |
) |
Total stockholders’ deficit |
|
(118,736 |
) |
|
|
(118,782 |
) |
Total liabilities and stockholders’ deficit |
$ |
273,911 |
|
|
$ |
287,453 |
|
|
AVID
TECHNOLOGY, INC.Consolidated Statements of Cash
Flows(unaudited - in thousands) |
|
|
Three Months Ended |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
Net (loss) income |
$ |
(381 |
) |
|
$ |
10,586 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
|
2,297 |
|
|
|
1,803 |
|
Recovery for doubtful accounts |
|
(42 |
) |
|
|
(135 |
) |
Stock-based compensation expense |
|
5,093 |
|
|
|
3,422 |
|
Non-cash provision for restructuring |
|
— |
|
|
|
15 |
|
Non-cash interest expense |
|
149 |
|
|
|
126 |
|
Loss on disposal of fixed assets |
|
— |
|
|
|
548 |
|
Unrealized foreign currency transaction gains |
|
675 |
|
|
|
(128 |
) |
(Provision for) benefit from deferred taxes |
|
(259 |
) |
|
|
1,055 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
14,036 |
|
|
|
19,770 |
|
Inventories |
|
(5,390 |
) |
|
|
2,105 |
|
Prepaid expenses and other assets |
|
(3,688 |
) |
|
|
(2,067 |
) |
Accounts payable |
|
4,177 |
|
|
|
(5,473 |
) |
Accrued expenses, compensation and benefits and other
liabilities |
|
(4,570 |
) |
|
|
(9,993 |
) |
Income taxes payable |
|
155 |
|
|
|
(723 |
) |
Deferred revenue and contract assets |
|
(14,808 |
) |
|
|
(12,995 |
) |
Net cash (used in) provided by operating
activities |
|
(2,556 |
) |
|
|
7,916 |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
Purchases of property and equipment |
|
(3,931 |
) |
|
|
(3,244 |
) |
Net cash used in investing activities |
|
(3,931 |
) |
|
|
(3,244 |
) |
|
|
|
|
Cash flows from financing activities: |
|
|
|
Repayment of debt principal |
|
(2,410 |
) |
|
|
(53 |
) |
Payments for repurchase of common stock |
|
(572 |
) |
|
|
(10,562 |
) |
Common stock repurchases for tax withholdings for net settlement of
equity awards |
|
(4,840 |
) |
|
|
(8,936 |
) |
Payments for credit facility issuance costs |
|
— |
|
|
|
(440 |
) |
Net cash used in financing activities |
|
(7,822 |
) |
|
|
(19,991 |
) |
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
(83 |
) |
|
|
(254 |
) |
Net decrease in cash, cash equivalents and restricted cash |
|
(14,392 |
) |
|
|
(15,573 |
) |
Cash, cash equivalents and restricted cash at beginning of
period |
|
38,852 |
|
|
|
60,556 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
24,460 |
|
|
$ |
44,983 |
|
Supplemental information: |
|
|
|
Cash and cash equivalents |
$ |
20,855 |
|
|
$ |
41,245 |
|
Restricted cash |
$ |
2,463 |
|
|
$ |
2,013 |
|
Restricted cash included in other long-term assets |
$ |
1,142 |
|
|
$ |
1,725 |
|
Total cash, cash equivalents and restricted cash shown in the
statement of cash flows |
$ |
24,460 |
|
|
$ |
44,983 |
|
|
AVID TECHNOLOGY, INC.Supplemental Revenue
Information(unaudited - in millions) |
|
Backlog Disclosure for Quarter Ended March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
March 31, |
December 31, |
March 31, |
|
|
|
|
2023 |
|
2022 |
|
2022 |
|
|
Revenue Backlog* |
|
|
|
|
|
|
|
|
|
|
|
Deferred Revenue |
$82.5 |
$94.2 |
$92.3 |
|
|
Other Backlog |
|
259.1 |
|
288.6 |
|
283.0 |
|
|
Total Revenue Backlog |
$341.6 |
$382.8 |
$375.3 |
|
|
|
|
|
|
|
|
The expected timing of recognition of revenue backlog as of March
31, 2023 is as follows: |
|
|
|
|
|
|
|
|
|
2023 |
|
2024 |
|
2025 |
Thereafter |
Total |
|
|
|
|
|
|
Deferred Revenue |
$62.7 |
$8.9 |
$7.0 |
$3.9 |
$82.5 |
Other Backlog |
|
140.1 |
|
52.0 |
|
40.5 |
|
26.5 |
|
259.1 |
Total Revenue Backlog |
$202.8 |
$60.9 |
$47.5 |
$30.4 |
$341.6 |
|
|
|
|
|
|
*A definition of Revenue Backlog is included in our Form 10-K and
the supplemental financial and operational data sheet available on
our investor relations webpage at ir.avid.com. |
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