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(Mark One)
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2014
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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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Large Accelerated Filer
¨
Non-accelerated Filer
¨
(Do not check if smaller reporting company)
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Accelerated Filer
x
Smaller Reporting Company
¨
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Page
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•
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our ability to mitigate and remediate effectively the material weaknesses in our internal controls over financial reporting;
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•
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the development, marketing and selling of new products and services;
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•
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our ability to successfully implement our
Avid Everywhere
strategic plan;
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•
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anticipated trends relating to our sales, financial condition or results of operations;
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•
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our goal of expanding our market positions;
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•
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our capital resources and the adequacy thereof;
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•
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the anticipated trends and development of our markets and the success of our products in these markets;
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•
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our plans regarding the relisting of our common stock on The NASDAQ Stock Market, or NASDAQ, and the liquidity of our stock;
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•
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the risk of restatement of our financial statements;
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•
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the anticipated performance of our products;
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•
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our business strategies and market positioning;
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•
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the impact, costs and expenses of any litigation and government inquiries we may be subject to now or in the future;
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•
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the effect of the continuing worldwide macroeconomic uncertainty on our business and results of operation;
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•
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estimated asset and liability values and amortization of our intangible assets;
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•
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our compliance with covenants contained in our indebtedness;
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•
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changes in inventory levels;
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•
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seasonal factors;
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•
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plans regarding repatriation of foreign earnings;
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•
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transactions in and valuations of investments and derivative instruments; and
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•
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fluctuations in foreign exchange and interest rates.
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ITEM 1.
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CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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Three Months Ended
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||||||
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March 31,
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||||||
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2014
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2013
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||||
Net revenues:
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Products
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$
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94,570
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$
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98,718
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Services
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40,412
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37,353
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Total net revenues
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134,982
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136,071
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Cost of revenues:
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Products
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34,994
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37,015
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Services
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15,671
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15,276
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Amortization of intangible assets
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50
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651
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Total cost of revenues
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50,715
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52,942
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Gross profit
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84,267
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83,129
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Operating expenses:
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Research and development
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22,954
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23,607
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Marketing and selling
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32,815
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33,909
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General and administrative
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18,331
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15,597
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Amortization of intangible assets
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480
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663
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Restructuring costs, net
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—
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273
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Total operating expenses
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74,580
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74,049
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Operating income
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9,687
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9,080
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Interest income
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20
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73
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Interest expense
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(373
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)
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(335
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)
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Other income, net
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2
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4
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Income before income taxes
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9,336
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8,822
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Provision for income taxes, net
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440
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557
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Net income
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$
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8,896
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$
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8,265
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Net income per common share – basic and diluted
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$
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0.23
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$
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0.21
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Weighted-average common shares outstanding – basic
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39,099
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38,977
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Weighted-average common shares outstanding – diluted
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39,122
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39,034
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Three Months Ended
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||||||
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March 31,
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||||||
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2014
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2013
|
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Net income
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$
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8,896
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$
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8,265
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Other comprehensive income (loss):
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Foreign currency translation adjustments
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393
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(2,611
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)
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Comprehensive income
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$
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9,289
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$
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5,654
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March 31,
2014 |
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December 31,
2013 |
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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22,244
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$
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48,203
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Accounts receivable, net of allowances of $12,557 and $13,963 at March 31, 2014 and December 31, 2013, respectively
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58,420
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56,770
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Inventories
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58,246
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60,122
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Deferred tax assets, net
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525
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522
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Prepaid expenses
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10,052
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7,778
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Other current assets
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15,625
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17,493
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Total current assets
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165,112
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190,888
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Property and equipment, net
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34,373
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35,186
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Intangible assets, net
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3,679
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4,260
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Long-term deferred tax assets, net
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2,422
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2,415
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Other long-term assets
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2,401
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2,393
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Total assets
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$
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207,987
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$
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235,142
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LIABILITIES AND STOCKHOLDERS’ DEFICIT
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Current liabilities:
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Accounts payable
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$
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29,846
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$
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33,990
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Accrued compensation and benefits
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22,598
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30,342
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Accrued expenses and other current liabilities
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31,560
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41,273
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Income taxes payable
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6,003
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6,875
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Deferred tax liabilities, net
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—
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14
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Deferred revenues
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209,164
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211,403
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Total current liabilities
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299,171
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323,897
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Long-term deferred tax liabilities, net
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544
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565
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Long-term deferred revenues
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242,648
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255,429
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Other long-term liabilities
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14,516
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14,586
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Total liabilities
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556,879
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594,477
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Contingencies (Note 8)
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||||
Stockholders’ deficit:
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||||
Common stock
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423
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423
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Additional paid-in capital
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1,043,881
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1,043,384
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Accumulated deficit
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(1,327,631
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)
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(1,336,526
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)
|
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Treasury stock at cost
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(71,885
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)
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(72,543
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)
|
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Accumulated other comprehensive income
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6,320
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|
|
5,927
|
|
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Total stockholders’ deficit
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(348,892
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)
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|
(359,335
|
)
|
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Total liabilities and stockholders’ deficit
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$
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207,987
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$
|
235,142
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Three Months Ended
|
||||||
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March 31,
|
||||||
|
2014
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
8,896
|
|
|
$
|
8,265
|
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Adjustments to reconcile net income to net cash used in operating activities:
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|
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|
||||
Depreciation and amortization
|
4,914
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|
6,135
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|
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Recovery from doubtful accounts
|
(108
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)
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|
(36
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)
|
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Gain on sales of assets
|
—
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(125
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)
|
||
Stock-based compensation expense
|
1,262
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|
|
2,077
|
|
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Non-cash interest expense
|
73
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|
|
73
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|
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Foreign currency transaction losses
|
48
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|
|
44
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|
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(Benefit from) provision for deferred taxes
|
(15
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)
|
|
3
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(1,541
|
)
|
|
11,366
|
|
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Inventories
|
1,877
|
|
|
2,501
|
|
||
Prepaid expenses and other current assets
|
(2,015
|
)
|
|
(374
|
)
|
||
Accounts payable
|
(4,148
|
)
|
|
(5,383
|
)
|
||
Accrued expenses, compensation and benefits and other liabilities
|
(17,543
|
)
|
|
(7,532
|
)
|
||
Income taxes payable
|
(671
|
)
|
|
(878
|
)
|
||
Deferred revenues
|
(15,021
|
)
|
|
(17,546
|
)
|
||
Net cash used in operating activities
|
(23,992
|
)
|
|
(1,410
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(3,515
|
)
|
|
(2,126
|
)
|
||
Proceeds from divestiture of consumer business
|
1,500
|
|
|
—
|
|
||
Proceeds from sale of assets
|
—
|
|
|
125
|
|
||
Increase in other long-term assets
|
(20
|
)
|
|
(8
|
)
|
||
Net cash used in investing activities
|
(2,035
|
)
|
|
(2,009
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from the issuance of common stock under employee stock plans
|
—
|
|
|
176
|
|
||
Common stock repurchases for tax withholdings for net settlement of equity awards
|
(108
|
)
|
|
(181
|
)
|
||
Net cash used in financing activities
|
(108
|
)
|
|
(5
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
176
|
|
|
(2,460
|
)
|
||
Net decrease in cash and cash equivalents
|
(25,959
|
)
|
|
(5,884
|
)
|
||
Cash and cash equivalents at beginning of period
|
48,203
|
|
|
70,390
|
|
||
Cash and cash equivalents at end of period
|
$
|
22,244
|
|
|
$
|
64,506
|
|
|
|
|
|
||||
Supplemental information:
|
|
|
|
||||
Cash paid for income taxes, net of refunds
|
$
|
524
|
|
|
$
|
476
|
|
Cash paid for interest
|
300
|
|
|
262
|
|
1.
|
FINANCIAL INFORMATION
|
2.
|
NET INCOME PER SHARE
|
|
Three Months Ended
|
||||
|
March 31,
|
||||
|
2014
|
|
2013
|
||
Options
|
4,534
|
|
|
5,605
|
|
Non-vested restricted stock units
|
123
|
|
|
475
|
|
Anti-dilutive potential common shares
|
4,657
|
|
|
6,080
|
|
3.
|
FOREIGN CURRENCY CONTRACTS
|
Derivatives Not Designated as Hedging Instruments under Accounting Standard Codification (“ASC”) Topic 815
|
|
Balance Sheet Classification
|
|
Fair Value at March 31, 2014
|
|
Fair Value at December 31, 2013
|
Financial assets:
|
|
|
|
|
|
|
Foreign currency contracts
|
|
Other current assets
|
|
$11
|
|
$59
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
Foreign currency contracts
|
|
Accrued expenses and other current liabilities
|
|
$228
|
|
$228
|
Derivatives Not Designated as Hedging
Instruments under ASC Topic 815
|
|
Net (Loss) Gain Recorded in Marketing and Selling Expenses
|
||
|
Three Months Ended March 31,
|
|||
|
2014
|
|
2013
|
|
Foreign currency contracts and revaluation of hedged items, net
|
|
$(908)
|
|
$266
|
4.
|
FAIR VALUE MEASUREMENTS
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
March 31,
2014 |
|
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
|
$
|
1,899
|
|
|
$
|
1,230
|
|
|
$
|
669
|
|
|
$
|
—
|
|
Foreign currency contracts
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
228
|
|
|
—
|
|
|
228
|
|
|
—
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
December 31, 2013
|
|
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
|
$
|
1,920
|
|
|
$
|
1,271
|
|
|
$
|
649
|
|
|
$
|
—
|
|
Foreign currency contracts
|
59
|
|
|
—
|
|
|
59
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
228
|
|
|
—
|
|
|
228
|
|
|
—
|
|
5.
|
INVENTORIES
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Raw materials
|
$
|
10,151
|
|
|
$
|
10,142
|
|
Work in process
|
371
|
|
|
338
|
|
||
Finished goods
|
47,724
|
|
|
49,642
|
|
||
Total
|
$
|
58,246
|
|
|
$
|
60,122
|
|
6.
|
INTANGIBLE ASSETS
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Completed technologies and patents
|
$
|
52,615
|
|
|
$
|
(52,615
|
)
|
|
$
|
—
|
|
|
$
|
52,711
|
|
|
$
|
(52,659
|
)
|
|
$
|
52
|
|
Customer relationships
|
49,610
|
|
|
(46,020
|
)
|
|
3,590
|
|
|
49,627
|
|
|
(45,557
|
)
|
|
4,070
|
|
||||||
Trade names
|
5,973
|
|
|
(5,973
|
)
|
|
—
|
|
|
5,976
|
|
|
(5,976
|
)
|
|
—
|
|
||||||
Capitalized software costs
|
5,944
|
|
|
(5,855
|
)
|
|
89
|
|
|
5,944
|
|
|
(5,806
|
)
|
|
138
|
|
||||||
Total
|
$
|
114,142
|
|
|
$
|
(110,463
|
)
|
|
$
|
3,679
|
|
|
$
|
114,258
|
|
|
$
|
(109,998
|
)
|
|
$
|
4,260
|
|
7.
|
OTHER LONG-TERM LIABILITIES
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Long-term deferred rent
|
$
|
8,385
|
|
|
$
|
8,361
|
|
Long-term accrued restructuring
|
2,202
|
|
|
2,335
|
|
||
Long-term deferred compensation
|
3,929
|
|
|
3,890
|
|
||
Total
|
$
|
14,516
|
|
|
$
|
14,586
|
|
8.
|
CONTINGENCIES
|
|
Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Accrual balance at beginning of year
|
$
|
3,501
|
|
|
$
|
4,476
|
|
Accruals for product warranties
|
1,270
|
|
|
1,151
|
|
||
Costs of warranty claims
|
(1,335
|
)
|
|
(1,554
|
)
|
||
Accrual balance at end of period
|
$
|
3,436
|
|
|
$
|
4,073
|
|
9.
|
RESTRUCTURING COSTS AND ACCRUALS
|
|
Employee-
Related
|
|
Facilities/ Other-
Related
|
|
Total
|
||||||
Accrual balance at December 31, 2013
|
$
|
2,399
|
|
|
$
|
6,102
|
|
|
$
|
8,501
|
|
Accretion
|
—
|
|
|
171
|
|
|
171
|
|
|||
Cash payments
|
(1,693
|
)
|
|
(1,233
|
)
|
|
(2,926
|
)
|
|||
Foreign exchange impact on ending balance
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|||
Accrual balance at March 31, 2014
|
$
|
687
|
|
|
$
|
5,040
|
|
|
$
|
5,727
|
|
10.
|
SEGMENT INFORMATION
|
|
Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Video products and solutions net revenues
|
$
|
60,078
|
|
|
$
|
58,824
|
|
Audio products and solutions net revenues
|
34,492
|
|
|
39,894
|
|
||
Products and solutions net revenues
|
94,570
|
|
|
98,718
|
|
||
Services net revenues
|
40,412
|
|
|
37,353
|
|
||
Total net revenues
|
$
|
134,982
|
|
|
$
|
136,071
|
|
|
Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Revenues:
|
|
|
|
||||
United States
|
$
|
45,079
|
|
|
$
|
50,815
|
|
Other Americas
|
14,479
|
|
|
13,103
|
|
||
Europe, Middle East and Africa
|
55,424
|
|
|
51,271
|
|
||
Asia-Pacific
|
20,000
|
|
|
20,882
|
|
||
Total net revenues
|
$
|
134,982
|
|
|
$
|
136,071
|
|
11.
|
CREDIT AGREEMENT
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended March 31,
|
||||
|
2014
|
|
2013
|
||
Net revenues:
|
|
|
|
||
Product revenues
|
70.1
|
%
|
|
72.5
|
%
|
Services revenues
|
29.9
|
%
|
|
27.5
|
%
|
Total net revenues
|
100.0
|
%
|
|
100.0
|
%
|
Cost of revenues
|
37.6
|
%
|
|
38.9
|
%
|
Gross margin
|
62.4
|
%
|
|
61.1
|
%
|
Operating expenses:
|
|
|
|
||
Research and development
|
17.0
|
%
|
|
17.3
|
%
|
Marketing and selling
|
24.3
|
%
|
|
24.9
|
%
|
General and administrative
|
13.6
|
%
|
|
11.5
|
%
|
Amortization of intangible assets
|
0.3
|
%
|
|
0.5
|
%
|
Restructuring costs, net
|
—
|
%
|
|
0.2
|
%
|
Total operating expenses
|
55.2
|
%
|
|
54.4
|
%
|
Operating income
|
7.2
|
%
|
|
6.7
|
%
|
Interest and other income (expense), net
|
(0.3
|
)%
|
|
(0.2
|
)%
|
Income before income taxes
|
6.9
|
%
|
|
6.5
|
%
|
Provision for income taxes, net
|
0.3
|
%
|
|
0.4
|
%
|
Net income
|
6.6
|
%
|
|
6.1
|
%
|
Net Revenues for the Three Months Ended March 31, 2014 and 2013
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2014
|
|
Change
|
|
2013
|
||||||||
|
Net Revenues
|
|
$
|
|
%
|
|
Net Revenues
|
||||||
Video products and solutions net revenues
|
$
|
60,078
|
|
|
$
|
1,254
|
|
|
2.1%
|
|
$
|
58,824
|
|
Audio products and solutions net revenues
|
34,492
|
|
|
(5,402
|
)
|
|
(13.5)%
|
|
39,894
|
|
|||
Products and solutions net revenues
|
94,570
|
|
|
(4,148
|
)
|
|
(4.2)%
|
|
98,718
|
|
|||
Services net revenues
|
40,412
|
|
|
3,059
|
|
|
8.2%
|
|
37,353
|
|
|||
Total net revenues
|
$
|
134,982
|
|
|
$
|
(1,089
|
)
|
|
(0.8)%
|
|
$
|
136,071
|
|
|
Three Months Ended March 31,
|
||
|
2014
|
|
2013
|
United States
|
33%
|
|
37%
|
Other Americas
|
11%
|
|
10%
|
Europe, Middle East and Africa
|
41%
|
|
38%
|
Asia-Pacific
|
15%
|
|
15%
|
•
|
procurement of components and finished goods;
|
•
|
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 Three Months Ended March 31, 2014 and 2013
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2014
|
|
Change
|
|
2013
|
||||||||
|
Costs
|
|
$
|
|
%
|
|
Costs
|
||||||
Cost of products revenues
|
$
|
34,994
|
|
|
$
|
(2,021
|
)
|
|
(5.5)%
|
|
$
|
37,015
|
|
Cost of services revenues
|
15,671
|
|
|
395
|
|
|
2.6%
|
|
15,276
|
|
|||
Amortization of intangible assets
|
50
|
|
|
(601
|
)
|
|
(92.3)%
|
|
651
|
|
|||
Total cost of revenues
|
$
|
50,715
|
|
|
$
|
(2,227
|
)
|
|
(4.2)%
|
|
$
|
52,942
|
|
|
|
|
|
|
|
|
|
||||||
Gross profit
|
$
|
84,267
|
|
|
$
|
1,138
|
|
|
1.4%
|
|
$
|
83,129
|
|
Operating Expenses and Operating Income for the Three Months Ended March 31, 2014 and 2013
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2014
|
|
Change
|
|
2013
|
||||||||
|
Expenses
|
|
$
|
|
%
|
|
Expenses
|
||||||
Research and development expenses
|
$
|
22,954
|
|
|
$
|
(653
|
)
|
|
(2.8)%
|
|
$
|
23,607
|
|
Marketing and selling expenses
|
32,815
|
|
|
(1,094
|
)
|
|
(3.2)%
|
|
33,909
|
|
|||
General and administrative expenses
|
18,331
|
|
|
2,734
|
|
|
17.5%
|
|
15,597
|
|
|||
Amortization of intangible assets
|
480
|
|
|
(183
|
)
|
|
(27.6)%
|
|
663
|
|
|||
Restructuring costs, net
|
—
|
|
|
(273
|
)
|
|
(100.0)%
|
|
273
|
|
|||
Total operating expenses
|
$
|
74,580
|
|
|
$
|
531
|
|
|
0.7%
|
|
$
|
74,049
|
|
|
|
|
|
|
|
|
|
||||||
Operating income
|
$
|
9,687
|
|
|
$
|
607
|
|
|
6.7%
|
|
$
|
9,080
|
|
Change in Research and Development Expenses for the Three Months Ended March 31, 2014 and 2013
|
||||||
(dollars in thousands)
|
||||||
|
2014 Decrease
From 2013
|
|||||
|
$
|
|
%
|
|||
Facilities and information technology infrastructure costs
|
$
|
(363
|
)
|
|
(9.4
|
)%
|
Personnel-related expenses
|
(269
|
)
|
|
(1.9
|
)%
|
|
Other expenses
|
(21
|
)
|
|
(0.4
|
)%
|
|
Total research and development expenses decrease
|
$
|
(653
|
)
|
|
(2.8
|
)%
|
Change in Marketing and Selling Expenses for the Three Months Ended March 31, 2014 and 2013
|
||||||
(dollars in thousands)
|
||||||
|
2014 (Decrease)
Increase
From 2013
|
|||||
|
$
|
|
%
|
|||
Product introduction expenses
|
$
|
(2,103
|
)
|
|
(99.3
|
)%
|
Foreign exchange (gains) losses
|
1,178
|
|
|
(437.4
|
)%
|
|
Personnel-related expenses
|
554
|
|
|
1.7
|
%
|
|
Other expenses
|
(723
|
)
|
|
(56.0
|
)%
|
|
Total marketing and selling expenses decrease
|
$
|
(1,094
|
)
|
|
(3.2
|
)%
|
Provision for Income Taxes, Net for the Three Months Ended March 31, 2014 and 2013
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2014
|
|
Change
|
|
2013
|
||||||||
|
Provision
|
|
$
|
|
%
|
|
Provision
|
||||||
Provision for income taxes, net
|
$
|
440
|
|
|
$
|
(117
|
)
|
|
(21.0)%
|
|
$
|
557
|
|
|
Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Net cash used in operating activities
|
$
|
(23,992
|
)
|
|
$
|
(1,410
|
)
|
Net cash used in investing activities
|
(2,035
|
)
|
|
(2,009
|
)
|
||
Net cash used in financing activities
|
(108
|
)
|
|
(5
|
)
|
||
Effect of foreign currency exchange rates on cash and cash equivalents
|
176
|
|
|
(2,460
|
)
|
||
Net decrease in cash and cash equivalents
|
$
|
(25,959
|
)
|
|
$
|
(5,884
|
)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 6.
|
EXHIBITS
|
|
|
AVID TECHNOLOGY, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
Date: September 23, 2014
|
By:
|
/s/ John W. Frederick
|
|
|
|
Name:
Title:
|
John W. Frederick
Executive Vice President, Chief Financial
Officer and Chief Administrative Officer
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
No.
|
|
Description
|
|
Filed with
this Form
10-Q
|
|
Form or
Schedule
|
|
SEC Filing
Date
|
|
SEC File
Number
|
3.1
|
|
Amended Certificate of Designations, Preferences and Rights of Series A Junior Participating Preferred Stock
|
|
|
|
8-K
|
|
January 7, 2014
|
|
000-21174
|
4.1
|
|
Rights Agreement, dated as of January 6, 2014, between Registrant and Computershare Trust Company, N.A. as Rights Agent, including all exhibits thereto
|
|
|
|
8-K
|
|
January 7, 2014
|
|
000-21174
|
#10.1
|
|
Summary of 2014 Annual Executive Incentive Program
|
|
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
|
|
X
|
|
|
|
|
|
|
*100.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
X
|
|
|
|
|
|
|
*100.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
X
|
|
|
|
|
|
|
*100.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
X
|
|
|
|
|
|
|
*100.LAB
|
|
XBRL Taxonomy Label Linkbase Document
|
|
X
|
|
|
|
|
|
|
*100.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
|
X
|
|
|
|
|
|
|
|
#
|
Management contract or compensatory plan identified pursuant to Item 15(a)3.
|
|
*
|
Pursuant to Rule 406T of Regulation S-T, XBRL (Extensible Business Reporting Language) information is deemed not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934 and otherwise is not subject to liability under these sections.
|
•
|
On March 10, 2014, the Compensation Committee (the “Committee”) of the Board of Directors of Avid Technology, Inc. (the “Company”) adopted a 2014 Annual Incentive Program (the “2014 Program”).
|
•
|
All of the Company’s executive officers and certain other officers designated by the Committee and other eligible employees participate in the 2014 Program.
|
•
|
The Committee administers the 2014 Program and all decisions under the 2014 Program with respect to the Company’s executive officers, including payouts, are subject to prior approval by the Committee and are made in the Committee's sole discretion.
|
•
|
Incentive amounts, if any, will be determined and paid by March 15, 2015. In order to receive an incentive payout, if any, under the 2014 Program, a participant must be employed by the Company as of the day incentive amounts are paid unless otherwise provided in such participant’s employment agreement, offer letter or other agreement.
|
•
|
The Committee approved three metrics for purposes of determining performance objectives and payouts under the 2014 Program, each measured separately and weighted as follows:
|
◦
|
EBITDA (defined as net income or loss before interest, taxes, depreciation, stock based compensation and amortization adjusted for certain charges including restructuring, restatement, and management change expenses as well as certain other one-time charges), at 50% weighting;
|
◦
|
Bookings, at 30% weighting; and
|
◦
|
Free Cash Flow (defined as operating cash flow less capital expenditures where operating cash flow excludes certain charges including restructuring, restatement and management change expenses as well as certain other one-time charges), at 20% weighting.
|
•
|
Each of the performance objectives has a threshold, target and maximum level of payment opportunity. Upon achievement of the thresholds, each participant is eligible to receive 50% of the portion of his or her target bonus relating to that metric. Upon the achievement of the targets, each participant is eligible to receive 100% of the portion of his or her target bonus relating to that metric, up to a maximum of 200% for our executive and other officers for achievement in excess of the target results. Results that fall between the threshold and maximum trigger eligibility for a payout amount determined on a linear basis. Payment in excess of 100% of a participant’s target bonus with respect to the EBITDA and free cash flow performance objectives can be made only if the threshold bookings performance objective has been met. Results that fall between the threshold and maximum trigger eligibility for a payout amount determined on a linear basis.
|
•
|
Metrics are subject to adjustment and approval by the Committee for future corporate transactions, including acquisitions.
|
•
|
The actual payment amounts under the 2014 Program will be determined for each participating executive officer based on the Company’s results using three variables: (1) the participant’s annual incentive target opportunity, which is based on a percentage of the participant’s base salary; (2) the Committee’s assessment and certification of Company performance compared with the target for each of the above-referenced performance objectives, with any adjustments applied and (3) relative weightings for each performance objective.
|
•
|
The final amount payable to each participant will be determined by the Committee or its designee, in its sole discretion.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q 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:
|
September 23, 2014
|
|
/s/ Louis Hernandez, Jr.
|
|
|
|
|
|
Louis Hernandez, Jr.
|
|
|
|
|
|
Chief Executive Officer and President
(Principal Executive Officer)
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q 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:
|
September 23, 2014
|
|
/s/ John W. Frederick
|
|
|
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John W. Frederick
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Executive Vice President, Chief Financial Officer
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and Chief Administrative Officer
(Principal Financial Officer)
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Date:
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September 23, 2014
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/s/ Louis Hernandez, Jr.
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Louis Hernandez, Jr.
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Chief Executive Officer and President
(Principal Executive Officer)
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Date:
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September 23, 2014
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/s/ John W. Frederick
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John W. Frederick
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Executive Vice President, Chief Financial
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Officer and Chief Administrative Officer
(Principal Financial Officer)
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