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(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2011
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OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from __________ to __________
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Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
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04-2977748
(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Exchange on Which Registered
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Common Stock, $.01 Par Value
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NASDAQ Global Select Market
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Large Accelerated Filer
x
Non-accelerated Filer
¨
(Do not check if smaller reporting company)
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Accelerated Filer
¨
Smaller Reporting Company
¨
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DOCUMENTS INCORPORATED BY REFERENCE
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Document Description
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10-K Part
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Portions of the Registrant’s Proxy Statement for the 2012 Annual Meeting of Stockholders
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III
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Page
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8
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ITEM 9
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ITEM 9A
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ITEM 9B
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ITEM 10
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ITEM 11
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ITEM 12
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ITEM 13
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ITEM 14
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ITEM 15
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ITEM 1.
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BUSINESS
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Drive customer success
.
We are committed to making each and every customer successful. Period. It's that simple.
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From enthusiasts to the enterprise.
Whether performing live or telling a story to sharing a vision or broadcasting the news - we create products to support our customers at all stages.
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Fluid, dependable workflows
.
Reliability. Flexibility. Ease of Use. High Performance. We provide best-in-class workflows to make our customers more productive and competitive.
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Collaborative support
.
For the individual user, the workgroup, a community or the enterprise, we enable a collaborative environment for success.
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Avid optimized in an open ecosystem
.
Our products are innovative, reliable, integrated and best-of-breed. We work in partnership with a third-party community resulting in superior interoperability.
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Media Enterprises.
This market segment consists of broadcast, government, sports and other organizations that acquire, create, process, and/or distribute audio and video content to a large audience for communication, entertainment, analysis, and/or forensic purposes. Customers in this segment rely on workflows that span content acquisition, creation, editing, distribution, sales and redistribution, that utilize all content distribution platforms, including web, mobile, internet protocol television, cable, satellite, on-air, and various other proprietary platforms. For this market segment, we offer a wide range of innovative, open products and solutions including hardware- and software-based video- and audio-editing tools, collaborative workflow and asset management solutions, and graphics-creation and automation tools, as well as scalable media storage options. Our domain expertise also allows us to provide customers in this market segment with a broad range of professional and consulting services. We sell into this market segment through our direct sales force and resellers.
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•
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Professionals and Post
.
This market segment is made up of individual artists and entities that create audio and video media as a paid service, but who do not distribute media to end consumers on a large scale. This segment includes a wide-ranging target audience that includes: students and teachers in career technical education programs in high schools, colleges and universities, as well as in post-secondary vocational schools, that prepare students for professional media
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Creative Enthusiasts
.
This market segment is made up of individuals who are music, film or video enthusiasts with varying degrees of involvement in content creation, ranging from casual users to dedicated hobbyists, including amateur musicians, disc jockeys and “prosumers.” For customers in this market segment, we offer audio and video products and solutions at an affordable price. These products and solutions are specifically designed for the desktop or home studio and have rich feature sets similar to the post and professional products but with minimal learning curves. We sell into this market segment through storefront and on-line retailers, via specialized resellers and directly using e-commerce.
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For the Year Ended December 31,
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2011
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2010
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2009
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Video product revenues
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41.2
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%
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41.6
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%
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41.2
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%
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Audio product revenues
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39.4
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%
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40.9
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%
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39.8
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%
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Total product revenues
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80.6
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%
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82.5
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%
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81.0
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%
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Services revenues
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19.4
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%
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17.5
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%
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19.0
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%
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Total revenues
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100.0
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%
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100.0
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%
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100.0
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%
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•
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Media Enterprises: Bit Central Inc., Dalet S.A., Editshare LLC, EVS Corporation, Grass Valley, Harmonic Inc., Harris Corporation, Quantel Inc. and Vizrt Ltd., among others.
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•
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Professionals and Post: Autodesk Inc., Harman International Industries Inc. and Yamaha Corporation, among others.
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Creative Enthusiasts: Corel Corporation, Magix AG and Roland Corporation, among others.
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Endorse product stewardship by adopting and integrating Design for Environment practices to minimize environmental impact throughout the product lifecycle.
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Promote environmental responsibility in our supply chain.
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Adopt the principles of reduce, reuse, and recycle while promoting waste-reduction programs in our global operations.
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Continue compliance with global laws and directives affecting our products and operations.
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ITEM 1A.
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RISK FACTORS
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timing and market acceptance of new product introductions by us and our competitors;
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changes in customer demand for our products;
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competitive pressure on product pricing;
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changes in product, service or geographic mix;
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the timing of large or enterprise-wide sales and our ability to recognize revenues from such sales;
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length of sales cycles and associated costs;
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demand planning and logistics;
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global macroeconomic conditions;
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fluctuations in foreign currency exchange rates;
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reliance on third-party reseller and distribution channels;
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cost of third-party technology or components incorporated into or bundled with products sold;
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operational efficiency and effectiveness in a complex organization;
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changes in operating expenses;
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price protections and provisions for inventory obsolescence extended to resellers and distributors;
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seasonal factors, such as higher consumer demand at year-end;
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remedial costs and reputational harm associated with product defects or errors; and
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complex accounting rules for revenue recognition.
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the financial and administrative burdens associated with compliance with a myriad of environmental, tax and export laws, as well as other business regulations in foreign jurisdictions, including high compliance costs, inconsistencies among jurisdictions, and a lack of administrative or judicial interpretative guidance;
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reduced or varied protection for intellectual property rights in some countries;
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fluctuations in foreign currency exchange rates;
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longer collection cycles for accounts receivable payment cycles and difficulties in enforcing contracts;
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difficulties in managing and staffing international implementations and operations;
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potentially adverse tax consequences, including the complexities of foreign value added or other tax systems and restrictions on the repatriation of earnings;
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increased financial accounting and reporting burdens and complexities;
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regional economic downturns;
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difficulties in maintaining effective internal controls over financial reporting and disclosure controls;
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costs and delays associated with developing products in multiple languages; and
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economic, social and political instability abroad and international security concerns in general.
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cease selling or using products or services that incorporate the challenged intellectual property;
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make substantial payments for legal fees, settlement payments or other costs or damages;
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obtain a license, which may not be available on reasonable terms, to sell or use the relevant technology, which such license could require royalties that would significantly increase our cost of goods sold; or
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redesign products or services to avoid infringement, which such redesign could involve significant costs and result in delayed and/or reduced sales of the affected products.
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failure to realize anticipated returns on investment, cost savings and synergies;
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difficulty in assimilating the operations, policies and personnel of the acquired company;
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combining product offerings and entering into new markets in which we may not have experience;
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distraction of management's attention from normal business operations;
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potential loss of key employees of the acquired company;
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difficulty implementing effective internal controls over financial reporting and disclosure controls and procedures;
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impairment of relationships with customers or suppliers;
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possibility of incurring impairment losses related to goodwill and intangible assets; and
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unidentified issues not discovered in due diligence, which may include product quality issues or legal or other contingencies.
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period-to-period variations in our revenues or operating results;
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market reaction to significant corporate initiatives or announcements;
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our ability to innovate;
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our relative competitive position within our markets;
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shifts in markets or demand for our solutions;
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changes in our relationships with suppliers, resellers, distributors or customers;
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our failure to accurately forecast revenues or operating results;
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our commencement of, or involvement in, litigation;
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whether our results meet analysts' expectations;
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short sales, hedging or other derivative transactions involving shares of our common stock; and
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shifts in financial markets.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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2011
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2010
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High
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Low
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High
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Low
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First Quarter
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$23.35
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$16.32
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$14.84
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$12.26
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Second Quarter
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$22.95
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$16.15
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$17.99
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$12.26
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Third Quarter
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$20.38
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$7.72
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$13.82
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$11.04
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Fourth Quarter
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$9.05
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$5.76
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$18.83
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$12.23
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Period
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Total Number
of Shares
Repurchased(a)
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Average Price
Paid Per Share
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Total Number of Shares Repurchased as Part of the Publicly Announced
Program
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Dollar Value of
Shares That May
Yet be Purchased
Under the Program(b)
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October 1 – October 31, 2011
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—
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—
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—
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$80,325,905
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November 1 – November 30, 2011
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—
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—
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—
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$80,325,905
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December 1 – December 31, 2011
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2,606
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$8.04
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—
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$80,325,905
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2,606
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$8.04
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—
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$80,325,905
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(a)
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In December 2011, we acquired upon surrender 2,606 shares of restricted stock for $8.04 per share from an employee to pay required withholding taxes upon the vesting of restricted stock. The purchase price of a share of stock used for tax withholding is determined based on the market price of the stock on the date of vesting of the restricted stock.
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(b)
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A stock repurchase program was approved by our board of directors and publicly announced on April 26, 2007. The stock repurchase program authorized the repurchase of up to $200 million of our common stock through transactions on the open market, in block trades or otherwise. At December 31, 2011, $80.3 million remained available for future stock repurchases under the program. The stock repurchase program is funded through working capital and has no expiration date. The last repurchase of shares under this program was in March 2008.
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the NASDAQ Composite Index (all companies traded on NASDAQ Capital, Global or Global Select Markets),
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•
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the Old Peer Group Index (see note following the graph), and
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•
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the Avid Peer Group Index (see note following the graph).
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For the Year Ended December 31,
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2011
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2010
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2009
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2008
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2007
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Net revenues
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$
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677,936
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$
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678,522
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$
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628,970
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$
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844,901
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$
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929,570
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Cost of revenues
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320,910
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327,774
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305,948
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452,476
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480,427
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Gross profit
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357,026
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350,748
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323,022
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392,425
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449,143
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Operating expenses:
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||||||||||
Research and development
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118,108
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120,229
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120,989
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148,598
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150,707
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Marketing and selling
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183,865
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177,178
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173,601
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208,735
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210,456
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General and administrative
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57,851
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64,345
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61,087
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78,591
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77,463
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Amortization of intangible assets
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8,528
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9,743
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10,511
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12,854
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13,726
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|||||
Impairment of goodwill and intangible assets
|
—
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—
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—
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129,972
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—
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|||||
Restructuring and other costs, net
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8,858
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20,450
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26,873
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25,412
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9,410
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Loss (gain) on sales of assets
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597
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(5,029
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)
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(155
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)
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(13,287
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)
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|
—
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|||||
Total operating expenses
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377,807
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386,916
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392,906
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590,875
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461,762
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Operating loss
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(20,781
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)
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(36,168
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)
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(69,884
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)
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(198,450
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)
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(12,619
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)
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Interest and other income (expense), net
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(2,068
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)
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(390
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)
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(123
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)
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|
2,936
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|
7,637
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|||||
Loss before income taxes
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(22,849
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)
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(36,558
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)
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(70,007
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)
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(195,514
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)
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(4,982
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)
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Provision for (benefit from) income taxes
|
942
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|
|
396
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(1,652
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)
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2,663
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2,997
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|||||
Net loss
|
$
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(23,791
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)
|
|
$
|
(36,954
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)
|
|
$
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(68,355
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)
|
|
$
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(198,177
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)
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|
$
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(7,979
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)
|
Net loss per common share – basic and diluted
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$
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(0.62
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)
|
|
$
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(0.98
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)
|
|
$
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(1.83
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)
|
|
$
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(5.28
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)
|
|
$
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(0.19
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)
|
Weighted-average common shares outstanding – basic and diluted
|
38,435
|
|
|
37,895
|
|
|
37,293
|
|
|
37,556
|
|
|
40,974
|
|
|
As of December 31,
|
||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
||||||||||
Cash, cash equivalents and marketable securities
|
$
|
32,855
|
|
|
$
|
42,782
|
|
|
$
|
108,877
|
|
|
$
|
147,694
|
|
|
$
|
224,460
|
|
Working capital
|
114,911
|
|
|
101,481
|
|
|
143,499
|
|
|
191,838
|
|
|
308,589
|
|
|||||
Total assets
|
602,611
|
|
|
626,571
|
|
|
611,038
|
|
|
703,585
|
|
|
1,005,953
|
|
|||||
Long-term liabilities
|
27,885
|
|
|
24,675
|
|
|
14,483
|
|
|
11,823
|
|
|
17,495
|
|
|||||
Total stockholders' equity
|
417,003
|
|
|
426,610
|
|
|
443,118
|
|
|
492,655
|
|
|
779,783
|
|
ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
For the Year Ended December 31,
|
|||||||
|
2011
|
|
2010
|
|
2009
|
|||
Net revenues:
|
|
|
|
|
|
|||
Product revenues
|
80.6
|
%
|
|
82.5
|
%
|
|
81.0
|
%
|
Services revenues
|
19.4
|
%
|
|
17.5
|
%
|
|
19.0
|
%
|
Total net revenues
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of revenues
|
47.3
|
%
|
|
48.3
|
%
|
|
48.6
|
%
|
Gross margin
|
52.7
|
%
|
|
51.7
|
%
|
|
51.4
|
%
|
Operating expenses:
|
|
|
|
|
|
|||
Research and development
|
17.4
|
%
|
|
17.7
|
%
|
|
19.2
|
%
|
Marketing and selling
|
27.1
|
%
|
|
26.1
|
%
|
|
27.6
|
%
|
General and administrative
|
8.5
|
%
|
|
9.5
|
%
|
|
9.7
|
%
|
Amortization of intangible assets
|
1.3
|
%
|
|
1.4
|
%
|
|
1.7
|
%
|
Restructuring and other costs, net
|
1.3
|
%
|
|
3.0
|
%
|
|
4.3
|
%
|
Loss (gain) on sales of assets
|
0.1
|
%
|
|
(0.7
|
)%
|
|
—
|
%
|
Total operating expenses
|
55.7
|
%
|
|
57.0
|
%
|
|
62.5
|
%
|
Operating loss
|
(3.0
|
)%
|
|
(5.3
|
)%
|
|
(11.1
|
)%
|
Interest and other income (expense), net
|
(0.3
|
)%
|
|
—
|
%
|
|
—
|
%
|
Loss before income taxes
|
(3.3
|
)%
|
|
(5.3
|
)%
|
|
(11.1
|
)%
|
Provision for (benefit from) income taxes
|
0.1
|
%
|
|
0.1
|
%
|
|
(0.2
|
)%
|
Net loss
|
(3.4
|
)%
|
|
(5.4
|
)%
|
|
(10.9
|
)%
|
|
For the Year Ended December 31,
|
||||
|
2011
|
|
2010
|
|
2009
|
Americas
|
49%
|
|
49%
|
|
48%
|
Europe, Middle East and Africa
|
38%
|
|
37%
|
|
40%
|
Asia-Pacific
|
13%
|
|
14%
|
|
12%
|
•
|
We utilize a pricing model for our products to capture the right value given the product and market context. The model considers such factors as: (i) competitive reference prices for products that are similar but not functionally equivalent, (ii) differential value based on specific feature sets, (iii) geographic regions where the products are sold, (iv) customer price sensitivity, (v) price-cost-volume tradeoffs, and (vi) volume based pricing. Management approval ensures that all of our selling prices are consistent and within an acceptable range for use with the relative selling price method.
|
•
|
While the pricing model currently in use captures all critical variables, unforeseen changes due to external market forces may result in the revision of some of our inputs. These modifications may result in consideration allocation in future periods that differs from the one presently in use. Absent a significant change in the pricing inputs, future
|
Net Revenues for the Years Ended December 31, 2011 and 2010
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2011
|
|
Change
|
|
2010
|
||||||||
|
Net Revenues
|
|
$
|
|
%
|
|
Net Revenues
|
||||||
Video products revenues
|
$
|
278,979
|
|
|
$
|
(3,284
|
)
|
|
(1.2)%
|
|
$
|
282,263
|
|
Audio products revenues
|
267,392
|
|
|
(10,252
|
)
|
|
(3.7)%
|
|
277,644
|
|
|||
Products revenues
|
546,371
|
|
|
(13,536
|
)
|
|
(2.4)%
|
|
559,907
|
|
|||
Services revenues
|
131,565
|
|
|
12,950
|
|
|
10.9%
|
|
118,615
|
|
|||
Total net revenues
|
$
|
677,936
|
|
|
$
|
(586
|
)
|
|
(0.1)%
|
|
$
|
678,522
|
|
Net Revenues for the Year Ended December 31, 2010 and 2009
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2010
|
|
Change
|
|
2009
|
||||||||
|
Net Revenues
|
|
$
|
|
%
|
|
Net Revenues
|
||||||
Video products revenues
|
$
|
282,263
|
|
|
$
|
23,112
|
|
|
8.9%
|
|
$
|
259,151
|
|
Audio products revenues
|
277,644
|
|
|
27,580
|
|
|
11.0%
|
|
250,064
|
|
|||
Products revenues
|
559,907
|
|
|
50,692
|
|
|
10.0%
|
|
509,215
|
|
|||
Services revenues
|
118,615
|
|
|
(1,140
|
)
|
|
(1.0)%
|
|
119,755
|
|
|||
Total net revenues
|
$
|
678,522
|
|
|
$
|
49,552
|
|
|
7.9%
|
|
$
|
628,970
|
|
•
|
the procurement of components;
|
•
|
the assembly, testing and distribution of finished products;
|
•
|
warehousing;
|
•
|
customer support costs related to maintenance contract revenues and other services;
|
•
|
royalties for third-party software and hardware included in our products
|
•
|
amortization of technology; and
|
•
|
providing professional services and training.
|
Costs of Revenues for the Year Ended December 31, 2011 and 2010
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2011
|
|
Change
|
|
2010
|
||||||||
|
Costs
|
|
$
|
|
%
|
|
Costs
|
||||||
Cost of products revenues
|
$
|
255,735
|
|
|
$
|
(12,250
|
)
|
|
(4.6)%
|
|
$
|
267,985
|
|
Cost of services revenues
|
62,482
|
|
|
5,992
|
|
|
10.6%
|
|
56,490
|
|
|||
Amortization of intangible assets
|
2,693
|
|
|
(606
|
)
|
|
(18.4)%
|
|
3,299
|
|
|||
Total cost of revenues
|
320,910
|
|
|
(6,864
|
)
|
|
(2.1)%
|
|
327,774
|
|
|||
|
|
|
|
|
|
|
|
||||||
Gross profit
|
$
|
357,026
|
|
|
$
|
6,278
|
|
|
1.8%
|
|
$
|
350,748
|
|
Costs of Revenues for the Year Ended December 31, 2010 and 2009
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2010
|
|
Change
|
|
2009
|
||||||||
|
Costs
|
|
$
|
|
%
|
|
Costs
|
||||||
Cost of products revenues
|
$
|
267,985
|
|
|
$
|
24,623
|
|
|
10.1%
|
|
$
|
243,362
|
|
Cost of services revenues
|
56,490
|
|
|
(3,264
|
)
|
|
(5.5)%
|
|
59,754
|
|
|||
Amortization of intangible assets
|
3,299
|
|
|
1,266
|
|
|
62.3%
|
|
2,033
|
|
|||
Restructuring costs
|
—
|
|
|
(799
|
)
|
|
(100.0)%
|
|
799
|
|
|||
Total cost of revenues
|
327,774
|
|
|
21,826
|
|
|
7.1%
|
|
305,948
|
|
|||
|
|
|
|
|
|
|
|
||||||
Gross profit
|
$
|
350,748
|
|
|
$
|
27,726
|
|
|
8.6%
|
|
$
|
323,022
|
|
Operating Expenses and Operating Loss for the Years Ended December 31, 2011 and 2010
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2011
|
|
Change
|
|
2010
|
||||||||
|
Expenses
|
|
$
|
|
%
|
|
Expenses
|
||||||
Research and development expenses
|
$
|
118,108
|
|
|
$
|
(2,121
|
)
|
|
(1.8)%
|
|
$
|
120,229
|
|
Marketing and selling expenses
|
183,865
|
|
|
6,687
|
|
|
3.8%
|
|
177,178
|
|
|||
General and administrative expenses
|
57,851
|
|
|
(6,494
|
)
|
|
(10.1)%
|
|
64,345
|
|
|||
Amortization of intangible assets
|
8,528
|
|
|
(1,215
|
)
|
|
(12.5)%
|
|
9,743
|
|
|||
Restructuring and other costs, net
|
8,858
|
|
|
(11,592
|
)
|
|
(56.7)%
|
|
20,450
|
|
|||
Loss (gain) on sales of assets
|
597
|
|
|
5,626
|
|
|
n/m
|
|
(5,029
|
)
|
|||
Total operating expenses
|
$
|
377,807
|
|
|
$
|
(9,109
|
)
|
|
(2.4)%
|
|
$
|
386,916
|
|
|
|
|
|
|
|
|
|
||||||
Operating loss
|
$
|
(20,781
|
)
|
|
$
|
15,387
|
|
|
(42.5)%
|
|
$
|
(36,168
|
)
|
Operating Expenses and Operating Loss for the Years Ended December 31, 2010 and 2009
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2010
|
|
Change
|
|
2009
|
||||||||
|
Expenses
|
|
$
|
|
%
|
|
Expenses
|
||||||
Research and development expenses
|
$
|
120,229
|
|
|
$
|
(760
|
)
|
|
(0.6)%
|
|
$
|
120,989
|
|
Marketing and selling expenses
|
177,178
|
|
|
3,577
|
|
|
2.1%
|
|
173,601
|
|
|||
General and administrative expenses
|
64,345
|
|
|
3,258
|
|
|
5.3%
|
|
61,087
|
|
|||
Amortization of intangible assets
|
9,743
|
|
|
(768
|
)
|
|
(7.3)%
|
|
10,511
|
|
|||
Restructuring and other costs, net
|
20,450
|
|
|
(6,423
|
)
|
|
(23.9)%
|
|
26,873
|
|
|||
Gain on sales of assets
|
(5,029
|
)
|
|
(4,874
|
)
|
|
n/m
|
|
(155
|
)
|
|||
Total operating expenses
|
$
|
386,916
|
|
|
$
|
(5,990
|
)
|
|
(1.5)%
|
|
$
|
392,906
|
|
|
|
|
|
|
|
|
|
||||||
Operating loss
|
$
|
(36,168
|
)
|
|
$
|
33,716
|
|
|
(48.2)%
|
|
$
|
(69,884
|
)
|
Year-Over-Year Change in Research and Development Expenses for the Years Ended December 31, 2011 and 2010
|
|||||||||||
(dollars in thousands)
|
|||||||||||
|
2011 (Decrease)
Increase
From 2010
|
|
2010 (Decrease)
Increase
From 2009
|
||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||
Personnel-related expenses
|
$
|
(6,696
|
)
|
|
(8.6)%
|
|
$
|
(3,599
|
)
|
|
(4.5)%
|
Consulting and outside services expenses
|
2,109
|
|
|
13.9%
|
|
5,538
|
|
|
57.2%
|
||
Computer hardware and supplies expenses
|
1,382
|
|
|
41.6%
|
|
(314
|
)
|
|
(8.6)%
|
||
Facilities and information technology expenses
|
1,121
|
|
|
6.1%
|
|
(1,751
|
)
|
|
(8.7)%
|
||
Other expenses
|
(37
|
)
|
|
(0.7)%
|
|
(634
|
)
|
|
(9.4)%
|
||
Total research and development expenses decrease
|
$
|
(2,121
|
)
|
|
(1.8)%
|
|
$
|
(760
|
)
|
|
(0.6)%
|
Year-Over-Year Change in General and Administrative Expenses for the Years Ended December 31, 2011 and 2010
|
|||||||||||
(dollars in thousands)
|
|||||||||||
|
2011 (Decrease)
Increase
From 2010
|
|
2010 Increase
(Decrease)
From 2009
|
||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||
Legal settlement costs
|
$
|
(5,208
|
)
|
|
(93.0)%
|
|
$
|
5,600
|
|
|
n/m
|
Mergers and acquisitions costs
|
(661
|
)
|
|
(80.1)%
|
|
(3,334
|
)
|
|
(80.2)%
|
||
Facilities and information infrastructure costs
|
(620
|
)
|
|
(5.3)%
|
|
774
|
|
|
7.1%
|
||
Personnel-related expenses
|
(72
|
)
|
|
(0.2)%
|
|
3,465
|
|
|
12.2%
|
||
Consulting and outside services expenses
|
264
|
|
|
10.2%
|
|
(2,385
|
)
|
|
(48.0)%
|
||
Other expenses
|
(197
|
)
|
|
(1.7)%
|
|
(862
|
)
|
|
(6.9)%
|
||
Total general and administrative expenses (decrease) increase
|
$
|
(6,494
|
)
|
|
(10.1)%
|
|
$
|
3,258
|
|
|
5.3%
|
|
2011
|
|
2010
|
|
2009
|
||||||
Non-acquisition related restructuring charges
|
$
|
8,747
|
|
|
$
|
14,947
|
|
|
$
|
27,719
|
|
Acquisition-related restructuring charges
|
111
|
|
|
1,755
|
|
|
(47
|
)
|
|||
Tewksbury facility exit costs
|
—
|
|
|
3,748
|
|
|
—
|
|
|||
Restructuring and other costs, net
|
$
|
8,858
|
|
|
$
|
20,450
|
|
|
$
|
27,672
|
|
Interest and Other Income (Expense) for the Years Ended December 31, 2011 and 2010
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2011
|
|
Change
|
|
2010
|
||||||||
|
Income
(Expense)
|
|
$
|
|
%
|
|
Income
(Expense)
|
||||||
Interest income
|
$
|
144
|
|
|
$
|
(29
|
)
|
|
(16.8)%
|
|
$
|
173
|
|
Interest expense
|
(2,053
|
)
|
|
(1,189
|
)
|
|
137.6%
|
|
(864
|
)
|
|||
Other income (expense), net
|
(159
|
)
|
|
(460
|
)
|
|
(152.8)%
|
|
301
|
|
|||
Total interest and other income (expense), net
|
$
|
(2,068
|
)
|
|
$
|
(1,678
|
)
|
|
(430.3)%
|
|
$
|
(390
|
)
|
Interest and Other Income (Expense) for the Years Ended December 31, 2010 and 2009
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2010
|
|
Change
|
|
2009
|
||||||||
|
Income
(Expense)
|
|
$
|
|
%
|
|
Income
(Expense)
|
||||||
Interest income
|
$
|
173
|
|
|
$
|
(675
|
)
|
|
(79.6)%
|
|
$
|
848
|
|
Interest expense
|
(864
|
)
|
|
42
|
|
|
(4.6)%
|
|
(906
|
)
|
|||
Other income (expense), net
|
301
|
|
|
366
|
|
|
563.1%
|
|
(65
|
)
|
|||
Total interest and other income (expense), net
|
$
|
(390
|
)
|
|
$
|
(267
|
)
|
|
(217.1)%
|
|
$
|
(123
|
)
|
Provision for Income Taxes, Net for the Years Ended December 31, 2011 and 2010
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2011
|
|
Change
|
|
2010
|
||||||||
|
Provision
|
|
$
|
|
%
|
|
Provision
|
||||||
Provision for income taxes, net
|
$
|
942
|
|
|
$
|
546
|
|
|
137.9%
|
|
$
|
396
|
|
Provision for (Benefit from) Income Taxes, Net for the Years Ended December 31, 2010 and 2009
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2010
|
|
Change
|
|
2009
|
||||||||
|
Provision
|
|
$
|
|
%
|
|
Benefit
|
||||||
Provision for (benefit from) income taxes, net
|
$
|
396
|
|
|
$
|
2,048
|
|
|
124.0%
|
|
$
|
(1,652
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Net cash provided by (used in) operating activities
|
$
|
864
|
|
|
$
|
(12,671
|
)
|
|
$
|
(13,471
|
)
|
Net cash used in investing activities
|
(11,870
|
)
|
|
(34,566
|
)
|
|
(19,955
|
)
|
|||
Net cash provided by (used in) financing activities
|
2,026
|
|
|
(396
|
)
|
|
120
|
|
|||
Effect of foreign currency exchange rates on cash and cash equivalents
|
(947
|
)
|
|
(1,102
|
)
|
|
3,031
|
|
|||
Net decrease in cash and cash equivalents
|
$
|
(9,927
|
)
|
|
$
|
(48,735
|
)
|
|
$
|
(30,275
|
)
|
|
Total
|
|
Less than
1 Year
|
|
1 – 3 Years
|
|
3 – 5 Years
|
|
After
5 Years
|
||||||||||
Operating leases
|
$
|
119,171
|
|
|
$
|
22,312
|
|
|
$
|
36,754
|
|
|
$
|
24,239
|
|
|
$
|
35,866
|
|
Unconditional purchase obligations
|
58,261
|
|
|
58,261
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
177,432
|
|
|
$
|
80,573
|
|
|
$
|
36,754
|
|
|
$
|
24,239
|
|
|
$
|
35,866
|
|
|
Total
|
|
Less than
1 Year
|
|
1 – 3 Years
|
|
3 – 5 Years
|
|
After
5 Years
|
|
Other (a)
|
||||||||||||
Transactions with recourse
|
$
|
409
|
|
|
$
|
409
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unrecognized tax positions and related interest
|
854
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
854
|
|
||||||
Stand-by letters of credit
|
6,897
|
|
|
3,244
|
|
|
1,087
|
|
|
—
|
|
|
2,566
|
|
|
—
|
|
||||||
|
$
|
8,160
|
|
|
$
|
3,653
|
|
|
$
|
1,087
|
|
|
$
|
—
|
|
|
$
|
2,566
|
|
|
$
|
854
|
|
(a)
|
At December 31, 2011, liability related to unrecognized tax positions and related interest was
$12.9 million
, of which
$0.9 million
would result in cash payments. We are unable to reasonably estimate the timing of the liability in individual years due to uncertainties in the timing of the effective settlement of the positions.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL INFORMATION
|
|
Page
|
CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN ITEM 8:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED FINANCIAL STATEMENT SCHEDULE INCLUDED IN ITEM 15(d):
|
|
|
|
|
|
Schedules other than those listed above have been omitted since the required information is not present, or not present in amounts sufficient to require submission of the schedule, or because the information is included in the consolidated financial statements or the notes thereto.
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
|
|
For the Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Net revenues:
|
|
|
|
|
|
||||||
Products
|
$
|
546,371
|
|
|
$
|
559,907
|
|
|
$
|
509,215
|
|
Services
|
131,565
|
|
|
118,615
|
|
|
119,755
|
|
|||
Total net revenues
|
677,936
|
|
|
678,522
|
|
|
628,970
|
|
|||
|
|
|
|
|
|
||||||
Cost of revenues:
|
|
|
|
|
|
||||||
Products
|
255,735
|
|
|
267,985
|
|
|
243,362
|
|
|||
Services
|
62,482
|
|
|
56,490
|
|
|
59,754
|
|
|||
Amortization of intangible assets
|
2,693
|
|
|
3,299
|
|
|
2,033
|
|
|||
Restructuring costs
|
—
|
|
|
—
|
|
|
799
|
|
|||
Total cost of revenues
|
320,910
|
|
|
327,774
|
|
|
305,948
|
|
|||
Gross profit
|
357,026
|
|
|
350,748
|
|
|
323,022
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
118,108
|
|
|
120,229
|
|
|
120,989
|
|
|||
Marketing and selling
|
183,865
|
|
|
177,178
|
|
|
173,601
|
|
|||
General and administrative
|
57,851
|
|
|
64,345
|
|
|
61,087
|
|
|||
Amortization of intangible assets
|
8,528
|
|
|
9,743
|
|
|
10,511
|
|
|||
Restructuring and other costs, net
|
8,858
|
|
|
20,450
|
|
|
26,873
|
|
|||
Loss (gain) on sales of assets
|
597
|
|
|
(5,029
|
)
|
|
(155
|
)
|
|||
Total operating expenses
|
377,807
|
|
|
386,916
|
|
|
392,906
|
|
|||
|
|
|
|
|
|
||||||
Operating loss
|
(20,781
|
)
|
|
(36,168
|
)
|
|
(69,884
|
)
|
|||
|
|
|
|
|
|
||||||
Interest income
|
144
|
|
|
173
|
|
|
848
|
|
|||
Interest expense
|
(2,053
|
)
|
|
(864
|
)
|
|
(906
|
)
|
|||
Other income (expense), net
|
(159
|
)
|
|
301
|
|
|
(65
|
)
|
|||
Loss before income taxes
|
(22,849
|
)
|
|
(36,558
|
)
|
|
(70,007
|
)
|
|||
Provision for (benefit from) income taxes, net
|
942
|
|
|
396
|
|
|
(1,652
|
)
|
|||
Net loss
|
$
|
(23,791
|
)
|
|
$
|
(36,954
|
)
|
|
$
|
(68,355
|
)
|
|
|
|
|
|
|
||||||
Net loss per common share – basic and diluted
|
$
|
(0.62
|
)
|
|
$
|
(0.98
|
)
|
|
$
|
(1.83
|
)
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding – basic and diluted
|
38,435
|
|
|
37,895
|
|
|
37,293
|
|
|
December 31,
2011 |
|
December 31,
2010 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
32,855
|
|
|
$
|
42,782
|
|
Accounts receivable, net of allowances of $15,985 and $17,149 at December 31, 2011 and 2010, respectively
|
104,305
|
|
|
101,171
|
|
||
Inventories
|
111,833
|
|
|
108,357
|
|
||
Deferred tax assets, net
|
1,480
|
|
|
1,068
|
|
||
Prepaid expenses
|
7,652
|
|
|
7,688
|
|
||
Other current assets
|
14,509
|
|
|
15,701
|
|
||
Total current assets
|
272,634
|
|
|
276,767
|
|
||
Property and equipment, net
|
53,487
|
|
|
62,519
|
|
||
Intangible assets, net
|
18,524
|
|
|
29,750
|
|
||
Goodwill
|
246,398
|
|
|
246,997
|
|
||
Other assets
|
11,568
|
|
|
10,538
|
|
||
Total assets
|
$
|
602,611
|
|
|
$
|
626,571
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
42,533
|
|
|
$
|
47,340
|
|
Accrued compensation and benefits
|
31,350
|
|
|
38,686
|
|
||
Accrued expenses and other current liabilities
|
34,174
|
|
|
40,986
|
|
||
Income taxes payable
|
3,898
|
|
|
4,640
|
|
||
Deferred revenues
|
45,768
|
|
|
43,634
|
|
||
Total current liabilities
|
157,723
|
|
|
175,286
|
|
||
Long-term liabilities
|
27,885
|
|
|
24,675
|
|
||
Total liabilities
|
185,608
|
|
|
199,961
|
|
||
|
|
|
|
||||
Commitments and contingencies (Notes M and P)
|
|
|
|
||||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
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 and 42,339 shares issued and 38,605 and 38,175 outstanding at December 31, 2011 and 2010, respectively
|
423
|
|
|
423
|
|
||
Additional paid-in capital
|
1,018,604
|
|
|
1,005,198
|
|
||
Accumulated deficit
|
(524,530
|
)
|
|
(495,254
|
)
|
||
Treasury stock at cost, net of reissuances, 3,734 shares and 4,164 shares at December 31, 2011 and 2010, respectively
|
(82,301
|
)
|
|
(91,025
|
)
|
||
Accumulated other comprehensive income
|
4,807
|
|
|
7,268
|
|
||
Total stockholders’ equity
|
417,003
|
|
|
426,610
|
|
||
Total liabilities and stockholders’ equity
|
$
|
602,611
|
|
|
$
|
626,571
|
|
|
Shares of
Common Stock
|
|
|
|
Additional
|
|
|
|
|
|
Accumulated
Other
|
|
Total
|
||||||||||
|
Issued
|
|
In
Treasury
|
|
Common
Stock
|
|
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Treasury
Stock
|
|
Comprehensive
Income
|
|
Stockholders’
Equity
|
||||||||
Balances at December 31, 2008
|
42,339
|
|
|
(5,208
|
)
|
|
423
|
|
|
980,563
|
|
|
(365,431
|
)
|
|
(124,852
|
)
|
|
1,952
|
|
|
492,655
|
|
Stock issued pursuant to employee stock plans
|
|
|
369
|
|
|
|
|
(942
|
)
|
|
(10,875
|
)
|
|
12,635
|
|
|
|
|
818
|
|
|||
Stock-based compensation
|
|
|
|
|
|
|
13,394
|
|
|
|
|
|
|
|
|
13,394
|
|
||||||
Stock option purchase
|
|
|
|
|
|
|
(526
|
)
|
|
|
|
|
|
|
|
(526
|
)
|
||||||
Stock recovery for payment of withholding tax
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
(172
|
)
|
|
|
|
(172
|
)
|
|||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
|
|
|
|
|
|
|
|
(68,355
|
)
|
|
|
|
|
|
(68,355
|
)
|
||||||
Net change in unrealized gains (losses) on defined benefit plan and marketable securities
|
|
|
|
|
|
|
|
|
|
|
|
|
31
|
|
|
31
|
|
||||||
Translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
5,273
|
|
|
5,273
|
|
||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,304
|
|
|||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(63,051
|
)
|
|||||||
Balances at December 31, 2009
|
42,339
|
|
|
(4,853
|
)
|
|
423
|
|
|
992,489
|
|
|
(444,661
|
)
|
|
(112,389
|
)
|
|
7,256
|
|
|
443,118
|
|
Stock issued pursuant to employee stock plans
|
|
|
370
|
|
|
|
|
(1,212
|
)
|
|
(8,807
|
)
|
|
10,872
|
|
|
|
|
853
|
|
|||
Stock-based compensation
|
|
|
|
|
|
|
13,921
|
|
|
|
|
|
|
|
|
13,921
|
|
||||||
Issuance of common stock in connection with acquisitions
|
|
|
327
|
|
|
|
|
|
|
(4,832
|
)
|
|
10,608
|
|
|
|
|
5,776
|
|
||||
Stock recovery for payment of withholding tax
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
(116
|
)
|
|
|
|
(116
|
)
|
|||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
|
|
|
|
|
|
|
|
(36,954
|
)
|
|
|
|
|
|
(36,954
|
)
|
||||||
Net change in unrealized gains (losses) on defined benefit plan and marketable securities
|
|
|
|
|
|
|
|
|
|
|
|
|
(85
|
)
|
|
(85
|
)
|
||||||
Translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
97
|
|
|
97
|
|
||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(36,942
|
)
|
|||||||
Balances at December 31, 2010
|
42,339
|
|
|
(4,164
|
)
|
|
423
|
|
|
1,005,198
|
|
|
(495,254
|
)
|
|
(91,025
|
)
|
|
7,268
|
|
|
426,610
|
|
Stock issued pursuant to employee stock plans
|
|
|
440
|
|
|
|
|
(1,213
|
)
|
|
(5,485
|
)
|
|
8,858
|
|
|
|
|
2,160
|
|
|||
Stock-based compensation
|
|
|
|
|
|
|
14,619
|
|
|
|
|
|
|
|
|
14,619
|
|
||||||
Stock recovery for payment of withholding tax
|
|
|
(10
|
)
|
|
|
|
|
|
|
|
(134
|
)
|
|
|
|
(134
|
)
|
|||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
|
|
|
|
|
|
|
|
(23,791
|
)
|
|
|
|
|
|
(23,791
|
)
|
||||||
Net change in unrealized gains (losses) on defined benefit plan
|
|
|
|
|
|
|
|
|
|
|
|
|
449
|
|
|
449
|
|
||||||
Translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,910
|
)
|
|
(2,910
|
)
|
||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,461
|
)
|
|||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(26,252
|
)
|
|||||||
Balances at December 31, 2011
|
42,339
|
|
|
(3,734
|
)
|
|
423
|
|
|
1,018,604
|
|
|
(524,530
|
)
|
|
(82,301
|
)
|
|
4,807
|
|
|
417,003
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(23,791
|
)
|
|
$
|
(36,954
|
)
|
|
$
|
(68,355
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
31,983
|
|
|
33,480
|
|
|
32,130
|
|
|||
Provision for doubtful accounts
|
1,561
|
|
|
194
|
|
|
1,930
|
|
|||
Non-cash provision for restructuring
|
326
|
|
|
417
|
|
|
3,140
|
|
|||
Loss (gain) on sales of assets
|
597
|
|
|
(5,029
|
)
|
|
(155
|
)
|
|||
(Gain) loss on disposal of fixed assets
|
(24
|
)
|
|
(78
|
)
|
|
43
|
|
|||
Compensation expense from stock grants and options
|
14,619
|
|
|
13,921
|
|
|
13,394
|
|
|||
Non-cash interest expense
|
301
|
|
|
52
|
|
|
—
|
|
|||
Unrealized foreign currency transaction (gains) losses
|
(135
|
)
|
|
1,078
|
|
|
2,656
|
|
|||
Changes in deferred tax assets and liabilities, excluding initial effects of acquisitions
|
(1,658
|
)
|
|
(1,160
|
)
|
|
(1,634
|
)
|
|||
Changes in operating assets and liabilities, excluding initial effects of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(4,904
|
)
|
|
(19,313
|
)
|
|
22,660
|
|
|||
Inventories
|
(3,475
|
)
|
|
(27,672
|
)
|
|
17,766
|
|
|||
Prepaid expenses and other current assets
|
(298
|
)
|
|
9,251
|
|
|
8,980
|
|
|||
Accounts payable
|
(4,769
|
)
|
|
15,941
|
|
|
739
|
|
|||
Accrued expenses, compensation and benefits and other liabilities
|
(14,323
|
)
|
|
716
|
|
|
(14,062
|
)
|
|||
Income taxes payable
|
(757
|
)
|
|
1,669
|
|
|
(6,330
|
)
|
|||
Deferred revenues
|
5,611
|
|
|
816
|
|
|
(26,373
|
)
|
|||
Net cash provided by (used in) operating activities
|
864
|
|
|
(12,671
|
)
|
|
(13,471
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of property and equipment, net
|
(10,771
|
)
|
|
(28,892
|
)
|
|
(18,689
|
)
|
|||
Increase in other long-term assets
|
(1,099
|
)
|
|
(523
|
)
|
|
(11,432
|
)
|
|||
Payments for business acquisitions, net of cash acquired
|
—
|
|
|
(27,008
|
)
|
|
(4,413
|
)
|
|||
Proceeds from sales of assets, net
|
—
|
|
|
4,502
|
|
|
3,502
|
|
|||
Proceeds from notes receivable
|
—
|
|
|
—
|
|
|
2,500
|
|
|||
Purchases of marketable securities
|
—
|
|
|
(2,250
|
)
|
|
(55,741
|
)
|
|||
Proceeds from sales of marketable securities
|
—
|
|
|
19,605
|
|
|
64,318
|
|
|||
Net cash used in investing activities
|
(11,870
|
)
|
|
(34,566
|
)
|
|
(19,955
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Payments related to stock option purchase
|
—
|
|
|
—
|
|
|
(526
|
)
|
|||
Proceeds from issuance of common stock under employee stock plans, net
|
2,026
|
|
|
736
|
|
|
646
|
|
|||
Proceeds from revolving credit facilities
|
21,000
|
|
|
5,000
|
|
|
—
|
|
|||
Payments on revolving credit facilities
|
(21,000
|
)
|
|
(5,000
|
)
|
|
—
|
|
|||
Payments for credit facility issuance costs
|
—
|
|
|
(1,132
|
)
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
2,026
|
|
|
(396
|
)
|
|
120
|
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
(947
|
)
|
|
(1,102
|
)
|
|
3,031
|
|
|||
Net decrease in cash and cash equivalents
|
(9,927
|
)
|
|
(48,735
|
)
|
|
(30,275
|
)
|
|||
Cash and cash equivalents at beginning of period
|
42,782
|
|
|
91,517
|
|
|
121,792
|
|
|||
Cash and cash equivalents at end of period
|
$
|
32,855
|
|
|
$
|
42,782
|
|
|
$
|
91,517
|
|
A.
|
ORGANIZATION AND OPERATIONS
|
B.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
•
|
The Company utilizes a pricing model for its products to capture the right value given the product and market context. The model considers such factors as: (i) competitive reference prices for products that are similar but not functionally equivalent, (ii) differential value based on specific feature sets, (iii) geographic regions where the products are sold, (iv) customer price sensitivity, (v) price-cost-volume tradeoffs, and (vi) volume based pricing. Management approval ensures that all of the Company's selling prices are consistent and within an acceptable range for use with the relative selling price method.
|
•
|
While the pricing model currently in use captures all critical variables, unforeseen changes due to external market forces may result in the revision of some of the Company's inputs. These modifications may result in consideration allocation in future periods that differs from the one presently in use. Absent a significant change in the pricing inputs, future changes in the pricing model are not expected to materially impact the Company's allocation of arrangement consideration.
|
|
|
Depreciable Life (years)
|
||
|
|
Minimum
|
|
Maximum
|
Computer and video equipment and software
|
|
2
|
|
5
|
Manufacturing tooling and testbeds
|
|
3
|
|
5
|
Office equipment
|
|
3
|
|
5
|
Furniture, fixtures and other
|
|
3
|
|
8
|
|
2011
|
|
2010
|
||||
Cumulative translation adjustments
|
$
|
4,807
|
|
|
$
|
7,717
|
|
Net unrealized losses on defined benefit plan and marketable securities
|
—
|
|
|
(449
|
)
|
||
Accumulated other comprehensive income
|
$
|
4,807
|
|
|
$
|
7,268
|
|
C.
|
NET LOSS PER SHARE
|
|
2011
|
|
2010
|
|
2009
|
|||
Options
|
5,987
|
|
|
5,008
|
|
|
4,308
|
|
Non-vested restricted stock and restricted stock units
|
494
|
|
|
186
|
|
|
707
|
|
Anti-dilutive potential common shares
|
6,481
|
|
|
5,194
|
|
|
5,015
|
|
|
2011
|
|
2010
|
|
2009
|
|||
Options
|
21
|
|
|
13
|
|
|
12
|
|
Non-vested restricted stock and restricted stock units
|
78
|
|
|
55
|
|
|
15
|
|
Total anti-dilutive common stock equivalents
|
99
|
|
|
68
|
|
|
27
|
|
D.
|
FOREIGN CURRENCY FORWARD CONTRACTS
|
Derivatives Designated as Hedging
Instruments under ASC Topic 815
|
|
Amount of Loss Reclassified from Accumulated Other
Comprehensive Income (Loss) into Revenues (Effective Portion)
|
Foreign currency forward contracts
|
|
$(1,761)
|
Derivatives Not Designated as Hedging
Instruments under ASC Topic 815
|
|
Balance Sheet Location
|
|
Fair Value at
December 31, 2011
|
|
Fair Value at
December 31, 2010
|
Financial assets:
|
|
|
|
|
|
|
Foreign currency forward contracts
|
|
Other current assets
|
|
—
|
|
$389
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
Foreign currency forward contracts
|
|
Accrued expenses and other current liabilities
|
|
$1,430
|
|
$1
|
Derivatives Not Designated as Hedging
Instruments under ASC Topic 815
|
|
Net Gain (Loss) Recorded in Marketing and Selling Expenses
|
||||
|
2011
|
|
2010
|
|
2009
|
|
Foreign currency forward contracts
|
|
$464
|
|
$(880)
|
|
$1,416
|
E.
|
FAIR VALUE MEASUREMENTS
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
December 31,
2011 |
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
|
Significant
Other
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Financial Assets:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation assets
|
$
|
1,549
|
|
|
$
|
1,018
|
|
|
$
|
531
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation obligations
|
$
|
3,920
|
|
|
$
|
1,018
|
|
|
$
|
2,902
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
1,430
|
|
|
—
|
|
|
1,430
|
|
|
—
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
December 31,
2010 |
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
|
Significant
Other
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Financial Assets:
|
|
|
|
|
|
|
|
||||||||
Benefit plan and deferred compensation assets
|
$
|
1,795
|
|
|
$
|
998
|
|
|
$
|
797
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
389
|
|
|
—
|
|
|
389
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
||||||||
Benefit plan and deferred compensation obligations
|
$
|
4,226
|
|
|
$
|
998
|
|
|
$
|
3,228
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
|
|
Fair Value Measurements Using
|
|
|
||||||||||||||
|
Year Ended December 31, 2011
|
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
|
Significant
Other
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
Related
Expenses
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Facilities-related restructuring accruals
|
$
|
3,996
|
|
|
$
|
—
|
|
|
$
|
3,996
|
|
|
$
|
—
|
|
|
$
|
3,996
|
|
|
|
|
Fair Value Measurements Using
|
|
|
||||||||||||||
|
Year Ended December 31, 2010
|
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
|
Significant
Other
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
Related
Expenses
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Facilities-related restructuring accruals
|
$
|
4,718
|
|
|
$
|
—
|
|
|
$
|
4,718
|
|
|
$
|
—
|
|
|
$
|
4,718
|
|
•
|
Goodwill:
The Company estimates the fair value of goodwill using a weighted combination of market and income approaches. Since the Company has one reporting unit, it believes that the direct market capitalization approach, which considers the Company's market capitalization including an implied control premium, is the most relevant measure and is weighted most heavily. The Company also uses other market approaches including the guideline public company market approach, under which the Company identifies similar public companies and derives estimated market multiples of revenue and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and applies those multiples to the Company's historical and forecasted results to estimate the fair value of its single reporting unit, and the guideline transaction market approach, under which the Company identifies recent sale transactions involving similar companies and derives estimated transaction multiples of revenue and EBITDA and applies those multiples to the Company's historical and forecasted results to estimate the fair value of its single reporting unit. The income approaches, specifically discounted cash flow methodologies, include assumptions for, among others, forecasted revenues, gross profit margins, operating profit margins, working capital cash flows, capital expenditures, growth rates, income tax rates, expected tax benefits, terminal values and long term discount rates, all of which require significant judgments by management. If the estimated fair value of the Company's single reporting is less that its carrying value, an impairment exists.
|
•
|
Identifiable Intangible and Other Long-Lived Assets:
When performing an intangible asset impairment test, the Company estimates the fair value of the asset using a discounted cash flow methodology, which includes assumptions for, among other things, budgets and economic projections, market trends, product development cycles and long-term discount rates. If the estimated fair value of the asset is less that its carrying value, an impairment exists.
|
•
|
Facilities-Related Restructuring Accruals:
During the years ended
December 31, 2011
and
2010
, the Company recorded restructuring accruals associated with exiting all or portions of certain leased facilities and for revised estimates related to previously exited facilities. The Company estimates the fair value of such liabilities using an income approach based on observable inputs, including the remaining payments required under the existing lease agreements, utilities costs based on recent invoice amounts, and potential sublease receipts based on quoted market prices for similar sublease arrangements. The liabilities are discounted to net present value based on the Company's current borrowing rate. See Note Q for further information on the Company's restructuring activities.
|
F.
|
ACCOUNTS RECEIVABLE
|
|
2011
|
|
2010
|
||||
Accounts receivable
|
$
|
120,290
|
|
|
$
|
118,320
|
|
Less:
|
|
|
|
||||
Allowance for doubtful accounts
|
(2,342
|
)
|
|
(3,051
|
)
|
||
Allowance for sales returns and rebates
|
(13,643
|
)
|
|
(14,098
|
)
|
||
|
$
|
104,305
|
|
|
$
|
101,171
|
|
G.
|
INVENTORIES
|
|
2011
|
|
2010
|
||||
Raw materials
|
$
|
11,306
|
|
|
$
|
12,147
|
|
Work in process
|
415
|
|
|
411
|
|
||
Finished goods
|
100,112
|
|
|
95,799
|
|
||
|
$
|
111,833
|
|
|
$
|
108,357
|
|
H.
|
PROPERTY AND EQUIPMENT
|
|
|
2011
|
|
2010
|
||||
Computer and video equipment and software
|
|
$
|
132,022
|
|
|
$
|
125,690
|
|
Manufacturing tooling and testbeds
|
|
6,407
|
|
|
6,234
|
|
||
Office equipment
|
|
4,709
|
|
|
4,785
|
|
||
Furniture, fixtures and other
|
|
11,819
|
|
|
12,745
|
|
||
Leasehold improvements
|
|
34,786
|
|
|
37,002
|
|
||
|
|
189,743
|
|
|
186,456
|
|
||
Less accumulated depreciation and amortization
|
|
136,256
|
|
|
123,937
|
|
||
|
|
$
|
53,487
|
|
|
$
|
62,519
|
|
I.
|
ACQUISITIONS
|
Tangible assets acquired, net
|
$
|
2,008
|
|
Identifiable intangible assets:
|
|
||
Developed technology
|
2,200
|
|
|
Customer relationships
|
1,700
|
|
|
Trademarks and trade name
|
700
|
|
|
Non-compete agreement
|
200
|
|
|
Goodwill
|
10,349
|
|
|
Deferred tax liabilities, net
|
(460
|
)
|
|
Total assets acquired
|
$
|
16,697
|
|
Tangible liabilities assumed, net
|
$
|
(2,375
|
)
|
Identifiable intangible assets:
|
|
||
Core technology
|
4,597
|
|
|
Customer relationships
|
3,160
|
|
|
Non-compete agreements
|
1,293
|
|
|
Trademarks and trade name
|
287
|
|
|
Goodwill
|
9,711
|
|
|
Deferred tax liabilities, net
|
(586
|
)
|
|
Total assets acquired
|
$
|
16,087
|
|
J.
|
DIVESTITURES
|
K.
|
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS
|
|
2011
|
|
2010
|
|
2009
|
||||||
Goodwill acquired
|
$
|
418,298
|
|
|
$
|
418,897
|
|
|
$
|
399,095
|
|
Accumulated impairment losses
|
(171,900
|
)
|
|
(171,900
|
)
|
|
(171,900
|
)
|
|||
Goodwill
|
$
|
246,398
|
|
|
$
|
246,997
|
|
|
$
|
227,195
|
|
|
Total
|
||
Goodwill balance at December 31, 2009
|
$
|
227,195
|
|
Blue Order acquisition purchase accounting allocation
|
9,816
|
|
|
Euphonix acquisition purchase accounting allocation
|
10,525
|
|
|
Foreign exchange and other adjustments
|
(539
|
)
|
|
Goodwill balance at December 31, 2010
|
246,997
|
|
|
Blue Order acquisition purchase accounting allocation adjustment
|
(105
|
)
|
|
Euphonix acquisition purchase accounting allocation adjustment
|
(176
|
)
|
|
Foreign exchange adjustments
|
(318
|
)
|
|
Goodwill balance at December 31, 2011
|
$
|
246,398
|
|
|
2011
|
|
2010
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Completed technologies and patents (a)
|
$
|
74,624
|
|
|
$
|
(70,536
|
)
|
|
$
|
4,088
|
|
|
$
|
74,820
|
|
|
$
|
(68,026
|
)
|
|
$
|
6,794
|
|
Customer relationships (a)
|
68,226
|
|
|
(54,396
|
)
|
|
13,830
|
|
|
68,330
|
|
|
(47,344
|
)
|
|
20,986
|
|
||||||
Trade names (a)
|
14,763
|
|
|
(14,577
|
)
|
|
186
|
|
|
14,772
|
|
|
(13,737
|
)
|
|
1,035
|
|
||||||
License agreements (a)
|
560
|
|
|
(560
|
)
|
|
—
|
|
|
560
|
|
|
(560
|
)
|
|
—
|
|
||||||
Non-compete covenants (a) (b)
|
1,368
|
|
|
(948
|
)
|
|
420
|
|
|
1,576
|
|
|
(641
|
)
|
|
935
|
|
||||||
|
$
|
159,541
|
|
|
$
|
(141,017
|
)
|
|
$
|
18,524
|
|
|
$
|
160,058
|
|
|
$
|
(130,308
|
)
|
|
$
|
29,750
|
|
(a)
|
The
December 31, 2011
net amounts include immaterial foreign currency translation changes from the
December 31, 2010
amounts.
|
(b)
|
During
2011
, the Company wrote-off a fully amortized non-compete agreement with a gross value of approximately
$0.2 million
.
|
|
2011
|
|
2010
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Capitalized software costs (a)
|
$
|
6,876
|
|
|
$
|
(4,730
|
)
|
|
$
|
2,146
|
|
|
$
|
7,285
|
|
|
$
|
(5,644
|
)
|
|
$
|
1,641
|
|
(a)
|
During
2011
, the Company wrote-off fully amortized capitalized software costs with gross values of approximately
$2.1 million
.
|
L.
|
LONG-TERM LIABILITIES
|
|
2011
|
|
2010
|
||||
Long-term deferred tax liabilities, net
|
$
|
1,754
|
|
|
$
|
2,154
|
|
Long-term deferred revenue
|
9,378
|
|
|
5,874
|
|
||
Long-term deferred rent
|
10,666
|
|
|
11,094
|
|
||
Long-term accrued restructuring
|
3,185
|
|
|
3,138
|
|
||
Long-term deferred compensation
|
2,902
|
|
|
2,415
|
|
||
|
$
|
27,885
|
|
|
$
|
24,675
|
|
M.
|
COMMITMENTS AND CONTINGENCIES
|
Year
|
|
||
2012
|
$
|
22,312
|
|
2013
|
19,749
|
|
|
2014
|
17,005
|
|
|
2015
|
12,096
|
|
|
2016
|
12,143
|
|
|
Thereafter
|
35,866
|
|
|
Total
|
$
|
119,171
|
|
Accrual balance at December 31, 2009
|
$
|
4,454
|
|
Acquired product warranty
|
339
|
|
|
Accruals for product warranties
|
5,046
|
|
|
Cost of warranty claims
|
(5,347
|
)
|
|
Accrual balance at December 31, 2010
|
4,492
|
|
|
Accruals for product warranties
|
7,023
|
|
|
Cost of warranty claims
|
(6,094
|
)
|
|
Accrual balance at December 31, 2011
|
$
|
5,421
|
|
N.
|
CAPITAL STOCK
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term (years)
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|
Options outstanding at December 31, 2010
|
5,241,898
|
|
|
$19.76
|
|
|
|
|
Granted (a)
|
1,156,200
|
|
|
$20.04
|
|
|
|
|
Exercised
|
(165,992
|
)
|
|
$13.05
|
|
|
|
|
Forfeited or canceled
|
(864,961
|
)
|
|
$19.88
|
|
|
|
|
Options outstanding at December 31, 2011 (b)
|
5,367,145
|
|
|
$20.01
|
|
4.47
|
|
$26
|
Options vested at December 31, 2011 or expected to vest
|
4,640,363
|
|
|
$19.98
|
|
4.43
|
|
$21
|
Options exercisable at December 31, 2011
|
1,992,345
|
|
|
$21.42
|
|
3.65
|
|
$1
|
(a)
|
Options granted during the year ended
December 31, 2011
included
191,000
options that had vesting based on either market conditions or a combination of performance or market conditions.
|
(b)
|
Options outstanding at
December 31, 2011
included
1,668,655
options that had vesting based on either market conditions or a combination of performance or market conditions.
|
|
|
2011
|
|
2010
|
|
2009
|
Expected dividend yield
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
Risk-free interest rate
|
|
2.03%
|
|
1.89%
|
|
2.21%
|
Expected volatility
|
|
41.4%
|
|
45.9%
|
|
55.3%
|
Expected life (in years)
|
|
4.48
|
|
4.42
|
|
4.38
|
Weighted-average fair value of options granted (per share)
|
|
$7.54
|
|
$5.55
|
|
$5.92
|
|
Non-Vested Restricted Stock Units
|
|||||||
|
Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|
Weighted-
Average
Remaining
Contractual
Term (years)
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|
Non-vested at December 31, 2010
|
573,264
|
|
|
$18.15
|
|
|
|
|
Granted (a)
|
567,000
|
|
|
$21.36
|
|
|
|
|
Vested
|
(216,068
|
)
|
|
$25.02
|
|
|
|
|
Forfeited
|
(102,163
|
)
|
|
$17.93
|
|
|
|
|
Non-vested at December 31, 2011 (b)
|
822,033
|
|
|
$19.45
|
|
1.90
|
|
$7,004
|
Expected to vest
|
677,954
|
|
|
$19.63
|
|
1.77
|
|
$5,776
|
(a)
|
Restricted stock units granted during the
December 31, 2011
included
262,500
units that had vesting based on either market conditions or a combination of performance or market conditions.
|
(b)
|
Non-vested restricted stock units at
December 31, 2011
included
438,500
units that had vesting based on either market conditions or a combination of performance or market conditions.
|
|
Non-Vested Restricted Stock
|
|||||||
|
Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|
Weighted-
Average
Remaining
Contractual Term (years)
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|
Non-vested at December 31, 2010
|
25,000
|
|
|
$25.41
|
|
|
|
|
Granted
|
—
|
|
|
—
|
|
|
|
|
Vested
|
(25,000
|
)
|
|
$25.41
|
|
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
|
|
Non-vested at December 31, 2011
|
—
|
|
|
—
|
|
—
|
|
—
|
|
2011
|
|
2010
|
|
2009
|
Shares issued under the ESPP
|
124,219
|
|
107,748
|
|
129,949
|
Average price of shares issued
|
$9.71
|
|
$11.17
|
|
$9.70
|
|
2011
|
|
2010
|
|
2009
|
||||||
Cost of products revenues
|
$
|
419
|
|
|
$
|
724
|
|
|
$
|
859
|
|
Cost of services revenues
|
764
|
|
|
1,054
|
|
|
1,154
|
|
|||
Research and development expenses
|
1,634
|
|
|
2,227
|
|
|
2,454
|
|
|||
Marketing and selling expenses
|
4,730
|
|
|
4,109
|
|
|
3,596
|
|
|||
General and administrative expenses
|
7,072
|
|
|
5,807
|
|
|
5,331
|
|
|||
|
$
|
14,619
|
|
|
$
|
13,921
|
|
|
$
|
13,394
|
|
O.
|
EMPLOYEE BENEFIT PLANS
|
P.
|
INCOME TAXES
|
|
2011
|
|
2010
|
|
2009
|
||||||
Income (loss) before income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
(31,809
|
)
|
|
$
|
1,825
|
|
|
$
|
(91,090
|
)
|
Foreign
|
8,960
|
|
|
(38,383
|
)
|
|
21,083
|
|
|||
Total loss before income taxes
|
$
|
(22,849
|
)
|
|
$
|
(36,558
|
)
|
|
$
|
(70,007
|
)
|
Provision for (benefit from) income taxes:
|
|
|
|
|
|
||||||
Current tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
627
|
|
|
$
|
(56
|
)
|
|
$
|
(1,490
|
)
|
State
|
48
|
|
|
188
|
|
|
89
|
|
|||
Foreign benefit of net operating losses
|
(629
|
)
|
|
(4,211
|
)
|
|
(636
|
)
|
|||
Other foreign
|
2,890
|
|
|
6,161
|
|
|
1,940
|
|
|||
Total current tax expense (benefit)
|
2,936
|
|
|
2,082
|
|
|
(97
|
)
|
|||
Deferred tax benefit:
|
|
|
|
|
|
||||||
Federal
|
—
|
|
|
(767
|
)
|
|
(7
|
)
|
|||
Other foreign
|
(1,994
|
)
|
|
(919
|
)
|
|
(1,548
|
)
|
|||
Total deferred tax benefit
|
(1,994
|
)
|
|
(1,686
|
)
|
|
(1,555
|
)
|
|||
Total provision for (benefit from) income taxes
|
$
|
942
|
|
|
$
|
396
|
|
|
$
|
(1,652
|
)
|
|
2011
|
|
2010
|
||||
Deferred tax assets:
|
|
|
|
||||
Tax credit and net operating loss carryforwards
|
$
|
137,981
|
|
|
$
|
129,832
|
|
Allowances for bad debts
|
1,309
|
|
|
1,564
|
|
||
Difference in accounting for:
|
|
|
|
||||
Revenue
|
2,576
|
|
|
4,973
|
|
||
Costs and expenses
|
56,204
|
|
|
65,942
|
|
||
Inventories
|
9,989
|
|
|
7,186
|
|
||
Acquired intangible assets
|
18,522
|
|
|
24,344
|
|
||
Gross deferred tax assets
|
226,581
|
|
|
233,841
|
|
||
Valuation allowance
|
(215,317
|
)
|
|
(217,897
|
)
|
||
Deferred tax assets after valuation allowance
|
11,264
|
|
|
15,944
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Difference in accounting for:
|
|
|
|
||||
Costs and expenses
|
(729
|
)
|
|
(2,760
|
)
|
||
Acquired intangible assets
|
(6,864
|
)
|
|
(10,813
|
)
|
||
Other
|
—
|
|
|
(311
|
)
|
||
Gross deferred tax liabilities
|
(7,593
|
)
|
|
(13,884
|
)
|
||
Net deferred tax assets
|
$
|
3,671
|
|
|
$
|
2,060
|
|
Recorded as:
|
|
|
|
||||
Current deferred tax assets, net
|
1,480
|
|
|
1,068
|
|
||
Long-term deferred tax assets, net (in other assets)
|
3,996
|
|
|
3,460
|
|
||
Current deferred tax liabilities, net (in accrued expenses and other current liabilities)
|
(51
|
)
|
|
(314
|
)
|
||
Long-term deferred tax liabilities, net
|
(1,754
|
)
|
|
(2,154
|
)
|
||
Net deferred tax assets
|
$
|
3,671
|
|
|
$
|
2,060
|
|
|
2011
|
|
2010
|
|
2009
|
|||
Statutory rate
|
(35
|
)%
|
|
(35
|
)%
|
|
(35
|
)%
|
Tax credits
|
(9
|
)%
|
|
(9
|
)%
|
|
(7
|
)%
|
Foreign operations
|
1
|
%
|
|
32
|
%
|
|
5
|
%
|
Non-deductible expenses and other
|
10
|
%
|
|
3
|
%
|
|
2
|
%
|
Increase in valuation allowance
|
37
|
%
|
|
10
|
%
|
|
33
|
%
|
Effective tax rate
|
4
|
%
|
|
1
|
%
|
|
(2
|
)%
|
Unrecognized tax benefits at January 1, 2009
|
$
|
3,100
|
|
Increases for tax positions taken during a prior period
|
2,000
|
|
|
Increases for tax positions taken during the current period
|
—
|
|
|
Decreases for tax positions taken during a prior period
|
(2,600
|
)
|
|
Decreases related to settlements
|
(200
|
)
|
|
Decreases related to the lapse of applicable statutes of limitations
|
(300
|
)
|
|
Unrecognized tax benefits at December 31, 2009
|
2,000
|
|
|
Increases for tax positions taken during a prior period
|
—
|
|
|
Increases for tax positions taken during the current period
|
—
|
|
|
Decreases for tax positions taken during a prior period
|
(100
|
)
|
|
Decreases related to settlements
|
(100
|
)
|
|
Decreases related to the lapse of applicable statutes of limitations
|
(400
|
)
|
|
Unrecognized tax benefits at December 31, 2010
|
1,400
|
|
|
Increases for tax positions taken during a prior period
|
13,400
|
|
|
Increases for tax positions taken during the current period
|
—
|
|
|
Decreases for tax positions taken during a prior period
|
(700
|
)
|
|
Decreases related to settlements
|
(900
|
)
|
|
Decreases related to the lapse of applicable statutes of limitations
|
(400
|
)
|
|
Unrecognized tax benefits at December 31, 2011
|
$
|
12,800
|
|
Q.
|
RESTRUCTURING COSTS AND ACCRUALS
|
|
2011
|
|
2010
|
|
2009
|
||||||
Non-acquisition related restructuring charges
|
$
|
8,747
|
|
|
$
|
14,947
|
|
|
$
|
27,719
|
|
Acquisition-related restructuring charges
|
111
|
|
|
1,755
|
|
|
(47
|
)
|
|||
Tewksbury facility exit costs
|
—
|
|
|
3,748
|
|
|
—
|
|
|||
Restructuring and other costs, net
|
$
|
8,858
|
|
|
$
|
20,450
|
|
|
$
|
27,672
|
|
|
Non-Acquisition-Related
Restructuring
Liabilities
|
|
Acquisition-Related
Restructuring
Liabilities
|
|
|
||||||||||||||
|
Employee-
Related
|
|
Facilities-
Related
& Other
|
|
Employee-
Related
|
|
Facilities-
Related
|
|
Total
|
||||||||||
Accrual balance at December 31, 2008
|
$
|
15,089
|
|
|
$
|
2,199
|
|
|
$
|
—
|
|
|
$
|
829
|
|
|
$
|
18,117
|
|
New restructuring charges – operating expenses
|
14,835
|
|
|
11,496
|
|
|
—
|
|
|
—
|
|
|
26,331
|
|
|||||
New restructuring charges – cost of revenues
|
—
|
|
|
799
|
|
|
—
|
|
|
—
|
|
|
799
|
|
|||||
Revisions of estimated liabilities
|
593
|
|
|
(4
|
)
|
|
—
|
|
|
(47
|
)
|
|
542
|
|
|||||
Accretion
|
—
|
|
|
239
|
|
|
—
|
|
|
38
|
|
|
277
|
|
|||||
Cash payments for employee-related charges
|
(20,726
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,726
|
)
|
|||||
Cash payments for facilities, net of sublease income
|
—
|
|
|
(4,611
|
)
|
|
—
|
|
|
(425
|
)
|
|
(5,036
|
)
|
|||||
Non-cash write-offs
|
—
|
|
|
(3,140
|
)
|
|
—
|
|
|
—
|
|
|
(3,140
|
)
|
|||||
Foreign exchange impact on ending balance
|
(557
|
)
|
|
283
|
|
|
—
|
|
|
77
|
|
|
(197
|
)
|
|||||
Accrual balance at December 31, 2009
|
9,234
|
|
|
7,261
|
|
|
—
|
|
|
472
|
|
|
16,967
|
|
|||||
New restructuring charges – operating expenses
|
11,664
|
|
|
2,190
|
|
|
725
|
|
|
1,064
|
|
|
15,643
|
|
|||||
Revisions of estimated liabilities
|
(405
|
)
|
|
1,498
|
|
|
—
|
|
|
(34
|
)
|
|
1,059
|
|
|||||
Accretion
|
—
|
|
|
210
|
|
|
—
|
|
|
10
|
|
|
220
|
|
|||||
Cash payments for employee-related charges
|
(8,591
|
)
|
|
—
|
|
|
(531
|
)
|
|
—
|
|
|
(9,122
|
)
|
|||||
Cash payments for facilities, net of sublease income
|
—
|
|
|
(4,772
|
)
|
|
—
|
|
|
(510
|
)
|
|
(5,282
|
)
|
|||||
Non-cash write-offs
|
—
|
|
|
(327
|
)
|
|
—
|
|
|
(90
|
)
|
|
(417
|
)
|
|||||
Foreign exchange impact on ending balance
|
(67
|
)
|
|
(18
|
)
|
|
8
|
|
|
(29
|
)
|
|
(106
|
)
|
|||||
Accrual balance at December 31, 2010
|
11,835
|
|
|
6,042
|
|
|
202
|
|
|
883
|
|
|
18,962
|
|
|||||
New restructuring charges – operating expenses
|
8,883
|
|
|
1,474
|
|
|
—
|
|
|
—
|
|
|
10,357
|
|
|||||
Revisions of estimated liabilities
|
(3,991
|
)
|
|
2,381
|
|
|
(30
|
)
|
|
141
|
|
|
(1,499
|
)
|
|||||
Accretion
|
—
|
|
|
230
|
|
|
—
|
|
|
—
|
|
|
230
|
|
|||||
Cash payments for employee-related charges
|
(12,892
|
)
|
|
—
|
|
|
(178
|
)
|
|
—
|
|
|
(13,070
|
)
|
|||||
Cash payments for facilities, net of sublease income
|
—
|
|
|
(3,400
|
)
|
|
—
|
|
|
(430
|
)
|
|
(3,830
|
)
|
|||||
Non-cash write-offs
|
—
|
|
|
(201
|
)
|
|
—
|
|
|
(125
|
)
|
|
(326
|
)
|
|||||
Foreign exchange impact on ending balance
|
347
|
|
|
(81
|
)
|
|
6
|
|
|
1
|
|
|
273
|
|
|||||
Accrual balance at December 31, 2011
|
$
|
4,182
|
|
|
$
|
6,445
|
|
|
$
|
—
|
|
|
$
|
470
|
|
|
$
|
11,097
|
|
R.
|
SEGMENT INFORMATION
|
|
2011
|
|
2010
|
|
2009
|
||||||
Video product revenues
|
$
|
278,979
|
|
|
$
|
282,263
|
|
|
$
|
259,151
|
|
Audio product revenues
|
267,392
|
|
|
277,644
|
|
|
250,064
|
|
|||
|
546,371
|
|
|
559,907
|
|
|
509,215
|
|
|||
Services revenues
|
131,565
|
|
|
118,615
|
|
|
119,755
|
|
|||
Total net revenues
|
$
|
677,936
|
|
|
$
|
678,522
|
|
|
$
|
628,970
|
|
|
2011
|
|
2010
|
|
2009
|
||||||
Revenues:
|
|
|
|
|
|
||||||
United States
|
$
|
277,615
|
|
|
$
|
283,854
|
|
|
$
|
252,474
|
|
Other countries
|
400,321
|
|
|
394,668
|
|
|
376,496
|
|
|||
Total revenues
|
$
|
677,936
|
|
|
$
|
678,522
|
|
|
$
|
628,970
|
|
|
2011
|
|
2010
|
|
2009
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Americas
|
$
|
330,378
|
|
|
$
|
334,849
|
|
|
$
|
300,073
|
|
Europe, Middle East and Africa
|
257,215
|
|
|
248,507
|
|
|
251,148
|
|
|||
Asia-Pacific
|
90,343
|
|
|
95,166
|
|
|
77,749
|
|
|||
Total revenues
|
$
|
677,936
|
|
|
$
|
678,522
|
|
|
$
|
628,970
|
|
|
2011
|
|
2010
|
||||
Long-lived assets:
|
|
|
|
||||
United States
|
$
|
48,433
|
|
|
$
|
59,587
|
|
Other countries
|
12,626
|
|
|
10,010
|
|
||
Total long-lived assets
|
$
|
61,059
|
|
|
$
|
69,597
|
|
S.
|
CREDIT AGREEMENT
|
T.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
2010
|
|
2009
|
||||
Fair value of:
|
|
|
|
||||
Assets acquired and goodwill
|
$
|
48,598
|
|
|
$
|
7,332
|
|
Liabilities assumed
|
(14,228
|
)
|
|
(2,152
|
)
|
||
Total consideration
|
34,370
|
|
|
5,180
|
|
||
Less: cash acquired
|
(1,586
|
)
|
|
(767
|
)
|
||
Less: equity consideration
|
(5,776
|
)
|
|
—
|
|
||
Net cash paid for acquisitions
|
$
|
27,008
|
|
|
$
|
4,413
|
|
U.
|
QUARTERLY RESULTS (UNAUDITED)
|
|
Quarters Ended
|
||||||||||||||||||||||||||||||
(In thousands, except per share data and stock prices)
|
2011
|
|
2010
|
||||||||||||||||||||||||||||
|
Dec. 31
|
|
Sept. 30
|
|
June 30
|
|
Mar. 31
|
|
Dec. 31
|
|
Sept. 30
|
|
June 30
|
|
Mar. 31
|
||||||||||||||||
Net revenues
|
$
|
185,304
|
|
|
$
|
164,965
|
|
|
$
|
161,344
|
|
|
$
|
166,323
|
|
|
$
|
195,347
|
|
|
$
|
165,059
|
|
|
$
|
162,160
|
|
|
$
|
155,956
|
|
Cost of revenues
|
84,358
|
|
|
76,545
|
|
|
78,276
|
|
|
79,038
|
|
|
89,575
|
|
|
78,615
|
|
|
78,976
|
|
|
77,309
|
|
||||||||
Amortization of intangible assets
|
657
|
|
|
685
|
|
|
685
|
|
|
666
|
|
|
642
|
|
|
745
|
|
|
946
|
|
|
966
|
|
||||||||
Gross profit
|
100,289
|
|
|
87,735
|
|
|
82,383
|
|
|
86,619
|
|
|
105,130
|
|
|
85,699
|
|
|
82,238
|
|
|
77,681
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Research and development
|
28,722
|
|
|
28,960
|
|
|
30,453
|
|
|
29,973
|
|
|
30,881
|
|
|
28,929
|
|
|
30,268
|
|
|
30,151
|
|
||||||||
Marketing and selling
|
47,592
|
|
|
45,411
|
|
|
46,052
|
|
|
44,810
|
|
|
47,759
|
|
|
43,199
|
|
|
44,474
|
|
|
41,746
|
|
||||||||
General and administrative (a)
|
14,393
|
|
|
13,240
|
|
|
14,920
|
|
|
15,298
|
|
|
16,166
|
|
|
19,698
|
|
|
13,879
|
|
|
14,602
|
|
||||||||
Amortization of intangible assets
|
2,063
|
|
|
2,159
|
|
|
2,161
|
|
|
2,145
|
|
|
2,186
|
|
|
2,283
|
|
|
2,417
|
|
|
2,857
|
|
||||||||
Restructuring and other costs (recoveries), net
|
8,530
|
|
|
2,707
|
|
|
(163
|
)
|
|
(2,216
|
)
|
|
14,918
|
|
|
185
|
|
|
4,007
|
|
|
1,340
|
|
||||||||
Loss (gain) on sale of assets
|
—
|
|
|
—
|
|
|
597
|
|
|
—
|
|
|
(3,502
|
)
|
|
(1,527
|
)
|
|
—
|
|
|
—
|
|
||||||||
Total operating expenses
|
101,300
|
|
|
92,477
|
|
|
94,020
|
|
|
90,010
|
|
|
108,408
|
|
|
92,767
|
|
|
95,045
|
|
|
90,696
|
|
||||||||
Operating loss
|
(1,011
|
)
|
|
(4,742
|
)
|
|
(11,637
|
)
|
|
(3,391
|
)
|
|
(3,278
|
)
|
|
(7,068
|
)
|
|
(12,807
|
)
|
|
(13,015
|
)
|
||||||||
Other income (expense), net
|
(497
|
)
|
|
(503
|
)
|
|
(768
|
)
|
|
(300
|
)
|
|
(258
|
)
|
|
(30
|
)
|
|
(102
|
)
|
|
—
|
|
||||||||
Loss before income taxes
|
(1,508
|
)
|
|
(5,245
|
)
|
|
(12,405
|
)
|
|
(3,691
|
)
|
|
(3,536
|
)
|
|
(7,098
|
)
|
|
(12,909
|
)
|
|
(13,015
|
)
|
||||||||
(Benefit from) provision for income taxes, net (b)
|
(2,715
|
)
|
|
2,774
|
|
|
(543
|
)
|
|
1,426
|
|
|
(2,965
|
)
|
|
2,897
|
|
|
(3
|
)
|
|
467
|
|
||||||||
Net income (loss)
|
$
|
1,207
|
|
|
$
|
(8,019
|
)
|
|
$
|
(11,862
|
)
|
|
$
|
(5,117
|
)
|
|
$
|
(571
|
)
|
|
$
|
(9,995
|
)
|
|
$
|
(12,906
|
)
|
|
$
|
(13,482
|
)
|
Net income (loss) per share – basic
|
$
|
0.03
|
|
|
$
|
(0.21
|
)
|
|
$
|
(0.31
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
(0.36
|
)
|
Net income (loss) per share – diluted
|
$
|
0.03
|
|
|
$
|
(0.21
|
)
|
|
$
|
(0.31
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
(0.36
|
)
|
Weighted-average common shares outstanding – basic
|
38,580
|
|
|
38,511
|
|
|
38,413
|
|
|
38,228
|
|
|
38,101
|
|
|
38,045
|
|
|
37,909
|
|
|
37,516
|
|
||||||||
Weighted-average common shares outstanding – diluted
|
38,584
|
|
|
38,511
|
|
|
38,413
|
|
|
38,228
|
|
|
38,101
|
|
|
38,045
|
|
|
37,909
|
|
|
37,516
|
|
||||||||
High common stock price
|
$
|
9.05
|
|
|
$
|
20.38
|
|
|
$
|
22.95
|
|
|
$
|
23.35
|
|
|
$
|
18.83
|
|
|
$
|
13.82
|
|
|
$
|
17.99
|
|
|
$
|
14.84
|
|
Low common stock price
|
$
|
5.76
|
|
|
$
|
7.72
|
|
|
$
|
16.15
|
|
|
$
|
16.32
|
|
|
$
|
12.23
|
|
|
$
|
11.04
|
|
|
$
|
12.26
|
|
|
$
|
12.26
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a) 1.
|
FINANCIAL STATEMENTS
|
(a) 2.
|
FINANCIAL STATEMENT SCHEDULE
|
(a) 3.
|
LISTING OF EXHIBITS. The list of exhibits, which are filed or furnished with this report or which are incorporated herein by reference, is set forth in the Exhibit Index immediately preceding the exhibits and is incorporated herein by reference.
|
By:
|
/s/ Gary G. Greenfield
|
|
Gary G. Greenfield
Chairman of the Board of Directors,
Chief Executive Officer and President
(Principal Executive Officer)
|
|
|
Date:
|
February 29, 2012
|
By:
|
/s/ Gary G. Greenfield
|
|
By:
|
/s/ Ken Sexton
|
|
By:
|
/s/ Jason Burke
|
|
|
Gary G. Greenfield
Chairman of the Board of Directors, Chief Executive Officer and President
(Principal Executive Officer)
|
|
|
Ken Sexton
Executive Vice President, Chief Financial Officer and Chief Administrative Officer
(Principal Financial Officer)
|
|
|
Jason Burke
Vice President of Finance
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
Date:
|
February 29, 2012
|
|
Date:
|
February 29, 2012
|
|
Date:
|
February 29, 2012
|
|
NAME
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/ Gary G. Greenfield
|
|
|
|
|
Gary G. Greenfield
|
|
Director
|
|
February 29, 2012
|
|
|
|
|
|
/s/ Robert M. Bakish
|
|
|
|
|
Robert M. Bakish
|
|
Director
|
|
February 29, 2012
|
|
|
|
|
|
/s/ George H. Billings
|
|
|
|
|
George H. Billings
|
|
Director
|
|
February 29, 2012
|
|
|
|
|
|
/s/ Elizabeth M. Daley
|
|
|
|
|
Elizabeth M. Daley
|
|
Director
|
|
February 29, 2012
|
|
|
|
|
|
/s/ Nancy Hawthorne
|
|
|
|
|
Nancy Hawthorne
|
|
Director
|
|
February 29, 2012
|
|
|
|
|
|
/s/ Louis Hernandez, Jr.
|
|
|
|
|
Louis Hernandez, Jr.
|
|
Director
|
|
February 29, 2012
|
|
|
|
|
|
/s/ Youngme E. Moon
|
|
|
|
|
Youngme E. Moon
|
|
Director
|
|
February 29, 2012
|
|
|
|
|
|
/s/ David B. Mullen
|
|
|
|
|
David B. Mullen
|
|
Director
|
|
February 29, 2012
|
|
|
|
|
Additions (Deductions)
|
|
|
|
|
||||||||||||
Description
|
|
Balance at
beginning of
period
|
|
Charged to
costs and
expenses
|
|
Charged to
other
accounts
|
|
(Deductions) Recoveries Against Allowance
|
|
Balance at
end of
period
|
||||||||||
Allowance for doubtful accounts
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2011
|
|
$
|
3,051
|
|
|
$
|
1,790
|
|
|
—
|
|
|
$
|
(2,499
|
)
|
(a)
|
$
|
2,342
|
|
|
December 31, 2010
|
|
3,219
|
|
|
489
|
|
|
—
|
|
|
(657
|
)
|
(a)
|
3,051
|
|
|||||
December 31, 2009
|
|
3,504
|
|
|
1,359
|
|
|
—
|
|
|
(1,644
|
)
|
(a)
|
3,219
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales returns and allowances
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2011
|
|
$
|
14,098
|
|
|
—
|
|
|
$
|
28,197
|
|
(b)
|
$
|
(28,652
|
)
|
(c)
|
$
|
13,643
|
|
|
December 31, 2010
|
|
13,128
|
|
|
—
|
|
|
22,968
|
|
(b)
|
(21,998
|
)
|
(c)
|
14,098
|
|
|||||
December 31, 2009
|
|
19,678
|
|
|
—
|
|
|
21,232
|
|
(b)
|
(27,782
|
)
|
(c)
|
13,128
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for transactions with recourse
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2011
|
|
$
|
459
|
|
|
$
|
(229
|
)
|
(d)
|
$
|
(229
|
)
|
(d)(e)
|
$
|
93
|
|
(f)
|
$
|
94
|
|
December 31, 2010
|
|
1,256
|
|
|
(295
|
)
|
(d)
|
(299
|
)
|
(d)(e)
|
(203
|
)
|
(g)
|
459
|
|
|||||
December 31, 2009
|
|
784
|
|
|
571
|
|
|
571
|
|
(e)
|
(670
|
)
|
(g)
|
1,256
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deferred tax asset valuation allowance
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2011
|
|
$
|
217,897
|
|
|
$
|
(1,830
|
)
|
(i)
|
$
|
—
|
|
(h)
|
$
|
(750
|
)
|
(j)
|
$
|
215,317
|
|
December 31, 2010
|
|
207,209
|
|
|
11,025
|
|
|
(337
|
)
|
(h)
|
—
|
|
|
217,897
|
|
|||||
December 31, 2009
|
|
203,473
|
|
|
967
|
|
|
2,769
|
|
(h)
|
—
|
|
|
207,209
|
|
(a)
|
Amount represents write-offs, net of recoveries and foreign exchange gains (losses).
|
(b)
|
Provisions for sales returns and volume rebates are charged directly against revenues.
|
(c)
|
Amount represents credits for returns, volume rebates and promotions.
|
(d)
|
During 2011 and 2010, bad debt expenses related to transactions with recourse were in a credit position due to decreased bad debt requirements on lower receivables balances resulting from the termination of the Company’s leasing program.
|
(e)
|
A portion of the provision for transactions with recourse is charged directly against revenues.
|
(f)
|
Amount represents recoveries, net of defaults.
|
(g)
|
Amount represents defaults, net of recoveries.
|
(h)
|
Amount represents adjustments to the valuation allowance recorded in purchase accounting related to acquired deferred tax assets and liabilities, net operating losses and tax credits, or other miscellaneous items.
|
(i)
|
Amount represents a decrease of $14.8 million related to uncertain tax positions recorded in the Company's U.S. tax loss carryforwards, expiration of tax credits and stock compensation expense for which the company will not receive a tax deduction due to cancellation of the options, an increase of $7.9 million related to current year US tax loss carryforwards and credits, and an increase of $5.1 million related to foreign tax loss carryforwards and credits.
|
(j)
|
Amount represents the release of the valuation allowance as a result of the December 2011 tax law change in the Netherlands.
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
No.
|
|
Description
|
|
Filed with
this Form
10-K
|
|
Form or
Schedule
|
|
SEC Filing
Date
|
|
SEC File
Number
|
3.1
|
|
Certificate of Amendment of the Third Amended and Restated Certificate of Incorporation of the Registrant
|
|
|
|
8-K
|
|
July 27, 2005
|
|
000-21174
|
3.2
|
|
Third Amended and Restated Certificate of Incorporation of the Registrant
|
|
|
|
10-Q
|
|
November 14, 2005
|
|
000-21174
|
3.3
|
|
Amended and Restated By-Laws of the Registrant, as amended
|
|
|
|
8-K
|
|
October 21, 2011
|
|
000-21174
|
4.1
|
|
Specimen Certificate representing the Registrant’s Common Stock
|
|
|
|
S-1
|
|
March 11, 1993*
|
|
033-57796
|
10.1
|
|
Credit Agreement by and among Avid Technology, Inc., Avid Technology International B. V., Pinnacle Systems, Inc., Avid General Partner B.V., each of the lenders party thereto, and Wells Fargo Capital Finance, LLC, as agent, dated October 1, 2010
|
|
|
|
8-K
|
|
October 7, 2010
|
|
000-21174
|
10.2
|
|
Amendment #1 to Credit Agreement dated August 16, 2011 by and among Avid Technology, Inc., Avid Technology International B. V., Pinnacle Systems, Inc., Avid General Partner B.V., each of the lenders party thereto, and Wells Fargo Capital Finance, LLC, as agent, dated October 1, 2010
|
|
|
|
10-Q
|
|
November 10, 2011
|
|
000-21174
|
10.3
|
|
Network Drive at Northwest Park Office Lease dated as of November 20, 2009 between Avid Technology, Inc. and Netview 5 and 6 LLC (for premises at 65 Network Drive, Burlington, Massachusetts)
|
|
|
|
8-K
|
|
November 25, 2009
|
|
000-21174
|
10.4
|
|
Network Drive at Northwest Park Office Lease dated as of November 20, 2009 between Avid Technology, Inc. and Netview 1,2,3,4 & 9 LLC (for premises at 75 Network Drive, Burlington, Massachusetts)
|
|
|
|
8-K
|
|
November 25, 2009
|
|
000-21174
|
10.5
|
|
Northwest Park Lease dated as of November 20, 2009 between Avid Technology, Inc. and N.W. Building 28 Trust (for premises at 10 North Avenue, Burlington, Massachusetts)
|
|
|
|
8-K
|
|
November 25, 2009
|
|
000-21174
|
#10.6
|
|
1993 Director Stock Option Plan, as amended
|
|
|
|
10-K
|
|
February 29, 2008
|
|
000-21174
|
#10.7
|
|
Second Amended and Restated 1996 Employee Stock Purchase Plan, as amended
|
|
|
|
10-K
|
|
March 16, 2010
|
|
000-21174
|
#10.8
|
|
1997 Stock Option Plan
|
|
|
|
10-K
|
|
March 27, 1998
|
|
000-21174
|
#10.9
|
|
1997 Stock Incentive Plan, as amended
|
|
|
|
10-Q
|
|
May 14, 1997
|
|
000-21174
|
#10.10
|
|
Second Amended and Restated Non-Qualified Deferred Compensation Plan
|
|
|
|
10-K
|
|
February 29, 2008
|
|
000-21174
|
#10.11
|
|
1998 Stock Option Plan
|
|
|
|
10-K
|
|
March 16, 2005
|
|
000-21174
|
#10.12
|
|
Amended and Restated 1999 Stock Option Plan
|
|
|
|
10-K
|
|
March 16, 2005
|
|
000-21174
|
#10.13
|
|
Midiman, Inc. 2002 Stock Option/Stock Issuance Plan
|
|
|
|
10-Q
|
|
November 9, 2004
|
|
000-21174
|
#10.14
|
|
Amended and Restated 2005 Stock Incentive Plan
|
|
|
|
10-Q
|
|
August 7, 2008
|
|
000-21174
|
#10.15
|
|
Rules of the Sibelius Software Limited Enterprise Management Incentive Scheme
|
|
|
|
10-K
|
|
March 1, 2007
|
|
000-21174
|
#10.16
|
|
Form of Incentive Stock Option Agreement under the Registrant’s Amended and Restated 2005 Stock Incentive Plan
|
|
|
|
8-K
|
|
July 8, 2008
|
|
000-21174
|
#10.17
|
|
Form of Nonstatutory Stock Option Agreement under the Registrant’s Amended and Restated 2005 Stock Incentive Plan
|
|
|
|
8-K
|
|
July 8, 2008
|
|
000-21174
|
#10.18
|
|
Form of Nonstatutory Stock Option Agreement for Outside Directors under the Registrant’s Amended and Restated 2005 Stock Incentive Plan
|
|
|
|
8-K
|
|
July 8, 2008
|
|
000-21174
|
#10.19
|
|
Form of Restricted Stock Agreement under the Registrant’s Amended and Restated 2005 Stock Incentive Plan
|
|
|
|
8-K
|
|
July 8, 2008
|
|
000-21174
|
#10.20
|
|
Form of Restricted Stock Agreement for Outside Directors under the Registrant’s Amended and Restated 2005 Stock Incentive Plan
|
|
|
|
8-K
|
|
July 8, 2008
|
|
000-21174
|
#10.21
|
|
Form of Restricted Stock Unit Agreement under the Registrant’s Amended and Restated 2005 Stock Incentive Plan
|
|
|
|
8-K
|
|
July 8, 2008
|
|
000-21174
|
#10.22
|
|
Form of Restricted Stock Unit Agreement for Outside Directors under the Registrant’s Amended and Restated 2005 Stock Incentive Plan
|
|
|
|
8-K
|
|
July 8, 2008
|
|
000-21174
|
#10.23
|
|
Form of Stock Option Agreement for UK Employees under the HM Revenue and Customs Approved Sub-Plan for UK Employees under the Registrant’s Amended and Restated 2005 Stock Incentive Plan
|
|
|
|
8-K
|
|
July 8, 2008
|
|
000-21174
|
#10.24
|
|
Form of Nonstatutory Stock Option Grant Terms and Conditions (under the 1997 Stock Incentive Plan)
|
|
|
|
8-K
|
|
February 21, 2007
|
|
000-21174
|
#10.25
|
|
Form of Incentive Stock Option Grant Terms and Conditions (under the 1997 Stock Incentive Plan)
|
|
|
|
8-K
|
|
February 21, 2007
|
|
000-21174
|
#10.26
|
|
2011 Executive Bonus Plan
|
|
|
|
10-Q
|
|
August 9, 2011
|
|
000-21174
|
#10.27
|
|
Amended and Restated Executive Employment Agreement dated March 14, 2011 between the Registrant and Gary G. Greenfield
|
|
|
|
10-K
|
|
March 14, 2011
|
|
000-21174
|
#10.28
|
|
Nonstatutory Stock Option Agreement dated December 19, 2007 between the Registrant and Gary G. Greenfield
|
|
|
|
8-K
|
|
December 19, 2007
|
|
000-21174
|
#10.29
|
|
Restricted Stock Agreement dated December 19, 2007 between the Registrant and Gary G. Greenfield
|
|
|
|
8-K
|
|
December 19, 2007
|
|
000-21174
|
#10.30
|
|
Amended and Restated Executive Employment Agreement dated December 20, 2010 between the Registrant and Kenneth A. Sexton
|
|
|
|
10-K
|
|
March 14, 2011
|
|
000-21174
|
#10.31
|
|
Restricted Stock Unit Award Agreement dated January 28, 2008 between the Registrant and Kenneth A. Sexton
|
|
|
|
8-K
|
|
January 28, 2008
|
|
000-21174
|
#10.32
|
|
Nonstatutory Stock Option Agreement dated January 28, 2008 between the Registrant and Kenneth A. Sexton
|
|
|
|
8-K
|
|
January 28, 2008
|
|
000-21174
|
#10.33
|
|
Amended and Restated Executive Employment Agreement dated December 20, 2010 between the Registrant and Kirk E. Arnold
|
|
|
|
10-K
|
|
March 14, 2011
|
|
000-21174
|
#10.34
|
|
Amended and Restated Executive Employment Agreement dated December 22, 2010 between the Registrant and Christopher C. Gahagan
|
|
|
|
10-K
|
|
March 14, 2011
|
|
000-21174
|
#10.35
|
|
Amended and Restated Executive Employment Agreement dated December 22, 2010 between the Registrant and Ronald S. Greenberg
|
|
|
|
10-K
|
|
March 14, 2011
|
|
000-21174
|
#10.36
|
|
Letter Agreement between the Registrant and Ronald S. Greenberg dated September 15, 2011
|
|
|
|
10-Q
|
|
November 10, 2011
|
|
000-21174
|
#10.37
|
|
Form of Executive Officer Employment Letter as of January 1, 2012
|
|
X
|
|
|
|
|
|
|
#10.38
|
|
Form of Executive Officer Employment Agreement as of January 1, 2011
|
|
|
|
10-K
|
|
March 14, 2011
|
|
000-21174
|
#10.39
|
|
Form of Amended and Restated Employment Agreement used prior to January 1, 2011
|
|
|
|
10-K
|
|
March 14, 2011
|
|
000-21174
|
#10.40
|
|
2012 Executive Bonus Plan
|
|
|
|
8-K
|
|
February 28, 2012
|
|
000-21174
|
21
|
|
Subsidiaries of the Registrant
|
|
X
|
|
|
|
|
|
|
23.1
|
|
Consent of Ernst & Young LLP
|
|
X
|
|
|
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|
|
|
32.1
|
|
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|
|
|
**100.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
**100.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
**100.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
**100.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
|
|
|
|
|
|
|
**100.LAB
|
|
XBRL Taxonomy Label Linkbase Document
|
|
|
|
|
|
|
|
|
**100.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
#
|
Management contract or compensatory plan identified pursuant to Item 15(a)3.
|
|
*
|
Effective date of Form S-1.
|
|
**
|
XBRL Interactive Data Files will be filed by amendment to this annual report on Form 10-K within 30 days of the filing date of this annual report on Form 10-K, as permitted by Rule 405(a)(2) of Regulation S-T.
|
(i)
|
The acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (a) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (b) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this section, the following acquisitions shall not constitute a Change-in-Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (D) any acquisition pursuant to a transaction which satisfies the criteria set forth in clauses (a) and (b) of paragraph (iii) below; or
|
(ii)
|
Individuals who, as of [insert hire date] (the “Effective Date”), constitute the Company's Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Company's Board of Directors; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
|
(iii)
|
Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the operating assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (a) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 40% of, respectively, the then-outstanding shares of common stock (or other equity interests, in the case of an entity other than a corporation), and the combined voting power of the then-outstanding voting securities of the corporation or other entity resulting from such Business Combination (which as used in this section shall include, without limitation, a corporation or other entity which as a result of such transaction owns all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, and (b) no Person (excluding any corporation or other entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding shares of common stock (or other equity interests, in the case of an entity other than a corporation) of the corporation or other entity resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation or other entity;
|
1.
|
I have reviewed this Annual Report on Form 10-K of Avid Technology, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
Date:
|
February 29, 2012
|
/s/ Gary G. Greenfield
|
|
|
|
|
Gary G. Greenfield
|
|
|
|
|
Chairman of the Board of Directors,
|
|
|
|
|
Chief Executive Officer and President
(Principal Executive Officer)
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Avid Technology, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
Date:
|
February 29, 2012
|
/s/ Ken Sexton
|
|
|
|
|
Ken Sexton
|
|
|
|
|
Executive Vice President, Chief Financial Officer
|
|
|
|
|
and Chief Administrative Officer
(Principal Financial Officer)
|
|
Date:
|
February 29, 2012
|
/s/ Gary G. Greenfield
|
|
|
|
Gary G. Greenfield
|
|
|
|
Chairman of the Board of Directors, Chief Executive
|
|
|
|
Officer and President
(Principal Executive Officer)
|
|
Date:
|
February 29, 2012
|
/s/ Ken Sexton
|
|
|
|
Ken Sexton
|
|
|
|
Executive Vice President, Chief Financial
|
|
|
|
Officer and Chief Administrative Officer
(Principal Financial Officer)
|
|