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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, 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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Title of Each Class
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Common Stock, $.01 Par Value
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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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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 2015 Annual Meeting of Stockholders
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III
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Page
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•
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the development, marketing and selling of new products and services;
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our ability to successfully implement our
Avid Everywhere
strategic plan and other strategic initiatives, including our cost saving strategies;
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anticipated trends relating to our sales, financial condition or results of operations;
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our goal of expanding our market positions;
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the anticipated performance of our products;
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our business strategies and market positioning;
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our ability to successfully consummate any potential acquisitions or investment transactions and successfully integrate acquired business into our operations;
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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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our ability to mitigate and remediate effectively the material weaknesses in our internal control over financial reporting;
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the risk of restatement of our financial statements;
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our capital resources and the adequacy thereof;
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the impact, costs and expenses of any litigation or government inquiries we may be subject to now or in the future;
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the effect of the continuing worldwide macroeconomic uncertainty on our business and results of operation;
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the expected timing of recognition of revenue backlog as revenue;
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estimated asset and liability values and amortization of our intangible assets;
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our compliance with covenants contained in our indebtedness;
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changes in inventory levels;
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seasonal factors;
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plans regarding repatriation of foreign earnings;
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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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BUSINESS
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•
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Artist Suite
encompasses all of our products and tools used to create content, including video editing solutions, digital audio workstations (DAW), music notation software, control surfaces and live sound systems. Products and tools in the
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•
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Media Suite
includes all of our tools and services used to manage, protect, distribute, and monetize media, including solutions for newsroom management, asset management, and multiplatform distribution. We are also expanding the Media Suite to include metadata tagging, protection and encryption, and analytics.
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•
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Storage Suite
refers to all of our products and tools used to capture, store, and deliver media, including online storage, nearline storage, and ingest/playout servers. These products and tools work in close concert with the Media Suite’s tagging and asset management.
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•
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Broadcast and Media.
This market 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 industry rely on workflows that span content acquisition, creation, editing, distribution, sales and redistribution and utilize all content distribution platforms, including web, mobile, internet protocol television, cable, satellite, on-air and various other proprietary platforms. For this market, we offer a range of open products and solutions including hardware- and software-based video- and audio-editing tools, collaborative workflow and asset management solutions, and automation tools, as well as scalable media storage options. Our domain expertise also allows us to provide customers in this market with a range of professional and consulting services. We sell into this market through our direct sales force and resellers.
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•
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Video and Audio Post and Professional
. This market is made up of individual artists and entities that create audio and video media as a paid service, but do not currently distribute media to end consumers on a large scale. This industry spans a wide-ranging target audience that includes: independent video editors, facilities and filmmakers that produce video media as a business but are not broadcasters; professional sound designers, editors and mixers and facilities that specialize in the creation of audio for picture; songwriters, musicians, producers, film composers and engineers who compose and record music professionally; technicians, engineers, rental companies and facilities that present, record and broadcast audio and video for live performances; and 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 production careers in the digital workplace. For this market, we offer a range of products and solutions based on the Avid MediaCentral Platform, including
hardware- and software-based creative production tools, scalable media storage options and collaborative workflows. Our domain expertise also allows us to provide customers in this market with a broad range of professional services. We sell into this market through storefront and on-line retailers, as well as through our direct sales force and resellers.
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Year Ended December 31,
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2014
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2013
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2012
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Video products and solutions
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$
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233,464
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$
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243,173
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$
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276,909
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Audio products and solutions
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145,163
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152,358
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201,921
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Total products and solutions
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378,627
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395,531
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478,830
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Services
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151,624
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167,881
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156,873
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Total net revenues
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$
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530,251
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$
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563,412
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$
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635,703
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Year Ended December 31,
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2014
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2013
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2012
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Video products and solutions
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44
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%
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43
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%
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43
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%
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Audio products and solutions
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27
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%
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27
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%
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32
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%
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Total products and solutions
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71
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%
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70
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%
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75
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%
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Services
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29
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%
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30
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%
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25
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%
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Total net revenues
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100
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%
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100
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%
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100
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%
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•
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Broadcast and Media: The Associated Press Inc., Belden Inc., Bitcentral Inc., Dalet S.A., EVS Corporation, Harmonic Inc., Imagine Communications Corp, Ross Video Limited and Vizrt Ltd., among others.
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•
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Audio and Video Post and Professional: Ableton AG, Autodesk Inc., Blackmagic Design Pty Ltd, Harman International Industries Inc., Steinberg Media Technologies GmbH, Universal Audio Inc. and Yamaha Corporation, among others.
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ITEM 1A.
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RISK FACTORS
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•
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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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regional economic downturns;
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•
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economic, social and political instability abroad and international security concerns in general;
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•
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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, and executing our business strategy internationally;
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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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compliance with the applicable laws and regulations, including, for example, the EU Data Protection Directive, the U.S. Foreign Corrupt Practices Act, or FCPA, and the U.K. Bribery Act, particularly in emerging market countries;
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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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foreign exchange controls that may prevent or limit our ability to repatriate income earned in foreign markets.
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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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challenges in 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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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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the timing of large or enterprise-wide sales and our ability to recognize revenues from such sales;
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demand planning and logistics;
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reliance on third-party reseller and distribution channels;
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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; and
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complex accounting rules for revenue recognition.
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make changes to our finance organization;
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adopt new accounting and reporting processes and procedures;
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•
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enhance our revenue recognition and other existing accounting policies and procedures;
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•
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introduce new or enhanced accounting systems and processes; and
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•
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improve our internal control over financial reporting.
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period-to-period variations in our revenues or operating results;
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our failure to accurately forecast revenues or operating results;
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•
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our ability to produce accurate and timely financial statements;
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•
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whether our results meet analysts’ expectations;
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•
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market reaction to significant corporate initiatives or announcements;
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•
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our ability to innovate;
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•
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our relative competitive position within our markets;
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•
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shifts in markets or demand for our solutions;
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•
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changes in our relationships with suppliers, resellers, distributors or customers;
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•
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our commencement of, or involvement in, litigation;
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•
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short sales, hedging or other derivative transactions involving shares of our common stock; and
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•
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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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2014
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2013
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||||
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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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$8.29
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$4.93
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$7.99
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$6.27
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Second Quarter
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$7.64
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$6.10
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$7.01
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$5.88
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Third Quarter
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$10.55
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$7.45
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$6.30
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$5.22
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Fourth Quarter
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$14.48
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$9.25
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$8.89
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$6.16
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•
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the NASDAQ Composite Index (all companies traded on NASDAQ Capital, Global or Global Select Markets),
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•
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the Avid Peer Group Index (see details following the graph).
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For the Year Ended December 31,
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||||||||||||||||||
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2014
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2013
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2012
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2011
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2010
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||||||||||
Net revenues (1)
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$
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530,251
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$
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563,412
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$
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635,703
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$
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766,885
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$
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403,518
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Cost of revenues
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204,471
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223,909
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249,008
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261,718
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264,860
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Gross profit
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325,780
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339,503
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386,695
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505,167
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138,658
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Operating expenses:
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Research and development
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90,390
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95,249
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98,879
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111,129
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113,682
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|||||
Marketing and selling
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133,049
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133,890
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153,481
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163,204
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161,963
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|||||
General and administrative
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81,181
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77,578
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52,066
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50,732
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56,479
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|||||
Amortization of intangible assets
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1,626
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|
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2,648
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4,254
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8,528
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|
|
9,743
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|||||
Restructuring (recoveries) costs, net
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(165
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)
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5,370
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24,838
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6,534
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|
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20,167
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|||||
Total operating expenses
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306,081
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314,735
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333,518
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340,127
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362,034
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|||||
Operating income (loss) from continuing operations
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19,699
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24,768
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53,177
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165,040
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(223,376
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)
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|||||
Other expense, net
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(2,783
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)
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(676
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)
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(2,041
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)
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(1,945
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)
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(513
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)
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|||||
Income (loss) from continuing operations before income taxes
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16,916
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|
|
24,092
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51,136
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163,095
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(223,889
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)
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|||||
Provision for income taxes
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2,188
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2,939
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4,049
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635
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1,796
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|||||
Income (loss) from continuing operations, net of tax (1)
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14,728
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21,153
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47,087
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162,460
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(225,685
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)
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|||||
Discontinued operations: (2)
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Gain on divestiture of consumer business
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—
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—
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37,972
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—
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—
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Income from divested operations
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—
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—
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7,832
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63,907
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38,150
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Income from discontinued operations
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—
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—
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45,804
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63,907
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38,150
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|||||
Net income (loss)
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$
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14,728
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|
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$
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21,153
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$
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92,891
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$
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226,367
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|
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$
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(187,535
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)
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Income (loss) per share - basic:
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Income (loss) per share from continuing operations, net of tax – basic
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$
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0.38
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$
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0.54
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$
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1.21
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|
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4.23
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(5.96
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)
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Income per share from discontinued operations – basic
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—
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|
|
—
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|
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1.18
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|
|
1.66
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|
|
1.01
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|||||
Net income (loss) per common share – basic
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$
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0.38
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|
|
$
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0.54
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|
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$
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2.39
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|
|
$
|
5.89
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|
|
$
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(4.95
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)
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Income (loss) per share - diluted:
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|
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||||||||||
Income (loss) per share from continuing operations, net of tax – diluted
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$
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0.38
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|
|
$
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0.54
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|
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$
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1.21
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|
|
4.22
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(5.96
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)
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Income per share from discontinued operations – diluted
|
—
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|
|
—
|
|
|
1.18
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|
|
1.65
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|
|
1.01
|
|
|||||
Net income (loss) per common share – diluted
|
$
|
0.38
|
|
|
$
|
0.54
|
|
|
$
|
2.39
|
|
|
$
|
5.87
|
|
|
$
|
(4.95
|
)
|
Weighted-average common shares outstanding – basic
|
39,147
|
|
|
39,044
|
|
|
38,804
|
|
|
38,435
|
|
|
37,895
|
|
|||||
Weighted-average common shares outstanding – diluted
|
39,267
|
|
|
39,070
|
|
|
38,836
|
|
|
38,534
|
|
|
37,895
|
|
(1)
|
Our revenues and operating results for the years ended December 31, 2014, 2013, 2012 and 2011 have been affected by the deferral of revenues from customer transactions occurring prior to 2011. On January 1, 2011, we adopted ASU No. 2009-14. Substantially all revenue arrangements prior to January 1, 2011 were generally recognized on a ratable basis over the service period of Implied Maintenance Release PCS. Subsequent to January 1, 2011, product revenues are generally recognized upon delivery and Implied Maintenance PCS and other service and support elements are recognized as services are rendered. See our policy on “Revenue Recognition” in Note B to our Consolidated Financial Statements in Item 8 of this Form 10-K for a further discussion of the effects of the changes to our revenue recognition policies on our financial results.
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(2)
|
On July 2, 2012, we exited our consumer business through a sale of the assets of that business. The disposition of our consumer business qualified for presentation as discontinued operations. The accompanying financial statements have been reclassified for all periods presented to report the consumer business as a discontinued operation.
|
|
As of December 31,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Cash, cash equivalents and marketable securities
|
$
|
25,056
|
|
|
$
|
48,203
|
|
|
$
|
70,390
|
|
|
$
|
32,855
|
|
|
$
|
42,782
|
|
Working capital deficit
|
(157,170
|
)
|
|
(133,009
|
)
|
|
(95,997
|
)
|
|
(227,544
|
)
|
|
(311,649
|
)
|
|||||
Total assets
|
191,599
|
|
|
235,142
|
|
|
294,361
|
|
|
340,590
|
|
|
784,643
|
|
|||||
Deferred revenues (current and long-term amounts)
|
414,840
|
|
|
466,832
|
|
|
558,485
|
|
|
697,124
|
|
|
937,624
|
|
|||||
Long-term liabilities
|
222,641
|
|
|
270,580
|
|
|
346,871
|
|
|
346,862
|
|
|
520,709
|
|
|||||
Total stockholders’ deficit
|
(341,070
|
)
|
|
(359,335
|
)
|
|
(385,592
|
)
|
|
(490,874
|
)
|
|
(310,335
|
)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
the pricing established by management when setting prices for deliverables that are intended to be sold on a standalone basis;
|
•
|
contractually stated prices for deliverables that are intended to be sold on a standalone basis;
|
•
|
the pricing of standalone sales that may not qualify as VSOE of fair value due to limited volumes or variation in prices; and
|
•
|
other pricing factors, such as the geographical region in which the products are sold and expected discounts based on the customer size and type.
|
Product Group
|
|
BESP of Implied Maintenance Release PCS (as a % of Product BESP)
|
|
Estimated Service Period
|
Professional video creative tools
|
|
1% to 13%
|
|
18 to 72 months
|
Video storage and workflow solutions
|
|
1% to 2%
|
|
72 months
|
Media management solutions
|
|
1% to 3%
|
|
12 to 72 months
|
Consumer video-editing software
|
|
1% to 6%
|
|
12 to 36 months
|
Digital audio software and workstations solutions
|
|
1% to 8%
|
|
12 to 36 months
|
Control surfaces, consoles and live-sound systems
|
|
1% to 5%
|
|
12 to 96 months
|
Notation software
|
|
4% to 8%
|
|
12 to 46 months
|
Consumer audio products
|
|
2%
|
|
24 months
|
|
Year Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Net revenues:
|
|
|
|
|
|
|||
Product revenues
|
71.4
|
%
|
|
70.2
|
%
|
|
75.3
|
%
|
Services revenues
|
28.6
|
%
|
|
29.8
|
%
|
|
24.7
|
%
|
Total net revenues
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of revenues
|
38.6
|
%
|
|
39.7
|
%
|
|
39.2
|
%
|
Gross margin
|
61.4
|
%
|
|
60.3
|
%
|
|
60.8
|
%
|
Operating expenses:
|
|
|
|
|
|
|||
Research and development
|
17.0
|
%
|
|
16.9
|
%
|
|
15.6
|
%
|
Marketing and selling
|
25.1
|
%
|
|
23.8
|
%
|
|
24.1
|
%
|
General and administrative
|
15.3
|
%
|
|
13.8
|
%
|
|
8.2
|
%
|
Amortization of intangible assets
|
0.3
|
%
|
|
0.5
|
%
|
|
0.7
|
%
|
Restructuring costs, net
|
—
|
%
|
|
1.0
|
%
|
|
3.9
|
%
|
Total operating expenses
|
57.7
|
%
|
|
55.9
|
%
|
|
52.5
|
%
|
Operating income
|
3.7
|
%
|
|
4.4
|
%
|
|
8.3
|
%
|
Interest and other income (expense), net
|
(0.5
|
)%
|
|
(0.1
|
)%
|
|
(0.3
|
)%
|
Income from continuing operations before income taxes
|
3.2
|
%
|
|
4.3
|
%
|
|
8.0
|
%
|
Provision for income taxes
|
0.4
|
%
|
|
0.5
|
%
|
|
0.6
|
%
|
Income from continuing operations, net of tax
|
2.8
|
%
|
|
3.8
|
%
|
|
7.4
|
%
|
Income from discontinued operations
|
—
|
%
|
|
—
|
%
|
|
7.2
|
%
|
Net income
|
2.8
|
%
|
|
3.8
|
%
|
|
14.6
|
%
|
Net Revenues from Continuing Operations for the Years Ended December 31, 2014 and 2013
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2014
|
|
Change
|
|
2013
|
||||||||
|
Net Revenues
|
|
$
|
|
%
|
|
Net Revenues
|
||||||
Video products and solutions
|
$
|
233,464
|
|
|
$
|
(9,709
|
)
|
|
(4.0)%
|
|
$
|
243,173
|
|
Audio products and solutions
|
145,163
|
|
|
(7,195
|
)
|
|
(4.7)%
|
|
152,358
|
|
|||
Total products and solutions
|
378,627
|
|
|
(16,904
|
)
|
|
(4.3)%
|
|
395,531
|
|
|||
Services
|
151,624
|
|
|
(16,257
|
)
|
|
(9.7)%
|
|
167,881
|
|
|||
Total net revenues
|
$
|
530,251
|
|
|
$
|
(33,161
|
)
|
|
(5.9)%
|
|
$
|
563,412
|
|
Net Revenues from Continuing Operations for the Years Ended December 31, 2013 and 2012
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2013
|
|
Change
|
|
2012
|
||||||||
|
Net Revenues
|
|
$
|
|
%
|
|
Net Revenues
|
||||||
Video products and solutions
|
$
|
243,173
|
|
|
$
|
(33,736
|
)
|
|
(12.2)%
|
|
$
|
276,909
|
|
Audio products and solutions
|
152,358
|
|
|
(49,563
|
)
|
|
(24.5)%
|
|
201,921
|
|
|||
Total products and solutions
|
395,531
|
|
|
(83,299
|
)
|
|
(17.4)%
|
|
478,830
|
|
|||
Services
|
167,881
|
|
|
11,008
|
|
|
7.0%
|
|
156,873
|
|
|||
Total net revenues
|
$
|
563,412
|
|
|
$
|
(72,291
|
)
|
|
(11.4)%
|
|
$
|
635,703
|
|
|
Year Ended December 31,
|
||||
|
2014
|
|
2013
|
|
2012
|
United States
|
36%
|
|
39%
|
|
39%
|
Other Americas
|
9%
|
|
7%
|
|
7%
|
Europe, Middle East and Africa
|
41%
|
|
38%
|
|
39%
|
Asia-Pacific
|
14%
|
|
16%
|
|
15%
|
|
For the Year Ending December 31,
|
|
|
||||||||||||||||||||||||
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
Orders executed prior to January 1, 2011
|
$
|
58,543
|
|
|
$
|
24,954
|
|
|
$
|
955
|
|
|
$
|
145
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
84,597
|
|
Orders executed or materially modified on or after January 1, 2011
|
230,009
|
|
|
125,908
|
|
|
61,244
|
|
|
26,128
|
|
|
11,294
|
|
|
330
|
|
|
454,913
|
|
|||||||
|
$
|
288,552
|
|
|
$
|
150,862
|
|
|
$
|
62,199
|
|
|
$
|
26,273
|
|
|
$
|
11,294
|
|
|
$
|
330
|
|
|
$
|
539,510
|
|
•
|
procurement of components and finished goods;
|
•
|
assembly, testing and distribution of finished products;
|
•
|
warehousing;
|
•
|
customer support related to maintenance;
|
•
|
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 Years Ended December 31, 2014 and 2013
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2014
|
|
Change
|
|
2013
|
||||||||
|
Costs
|
|
$
|
|
%
|
|
Costs
|
||||||
Products
|
$
|
143,765
|
|
|
$
|
(15,499
|
)
|
|
(9.7)%
|
|
$
|
159,264
|
|
Services
|
60,656
|
|
|
(2,521
|
)
|
|
(4.0)%
|
|
63,177
|
|
|||
Amortization of intangible assets
|
50
|
|
|
(1,418
|
)
|
|
(96.6)%
|
|
1,468
|
|
|||
Total cost of revenues
|
204,471
|
|
|
(19,438
|
)
|
|
(8.7)%
|
|
223,909
|
|
|||
|
|
|
|
|
|
|
|
||||||
Gross profit
|
$
|
325,780
|
|
|
$
|
(13,723
|
)
|
|
(4.0)%
|
|
$
|
339,503
|
|
Costs of Revenues for the Years Ended December 31, 2013 and 2012
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2013
|
|
Change
|
|
2012
|
||||||||
|
Costs
|
|
$
|
|
%
|
|
Costs
|
||||||
Products
|
$
|
159,264
|
|
|
$
|
(23,500
|
)
|
|
(12.9)%
|
|
$
|
182,764
|
|
Services
|
63,177
|
|
|
(493
|
)
|
|
(0.8)%
|
|
63,670
|
|
|||
Amortization of intangible assets
|
1,468
|
|
|
(1,106
|
)
|
|
(43.0)%
|
|
2,574
|
|
|||
Total costs of revenues
|
223,909
|
|
|
(25,099
|
)
|
|
(10.1)%
|
|
249,008
|
|
|||
|
|
|
|
|
|
|
|
||||||
Gross profit
|
$
|
339,503
|
|
|
$
|
(47,192
|
)
|
|
(12.2)%
|
|
$
|
386,695
|
|
Gross Margin % for the Years Ended December 31, 2014, 2013 and 2012
|
|||||||||
|
2014 Gross
Margin %
|
|
(Decrease) Increase in
Gross Margin %
|
|
2013 Gross
Margin %
|
|
(Decrease) Increase in
Gross Margin %
|
|
2012 Gross
Margin %
|
Products
|
62.0%
|
|
2.3%
|
|
59.7%
|
|
(2.1)%
|
|
61.8%
|
Services
|
60.0%
|
|
(2.4)%
|
|
62.4%
|
|
3.0%
|
|
59.4%
|
Total Gross Margin
|
61.4%
|
|
1.1%
|
|
60.3%
|
|
(0.5)%
|
|
60.8%
|
Operating Expenses and Operating Income for the Years Ended December 31, 2014 and 2013
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2014
|
|
Change
|
|
2013
|
||||||||
|
Expenses
|
|
$
|
|
%
|
|
Expenses
|
||||||
Research and development expenses
|
$
|
90,390
|
|
|
$
|
(4,859
|
)
|
|
(5.1)%
|
|
$
|
95,249
|
|
Marketing and selling expenses
|
133,049
|
|
|
(841
|
)
|
|
(0.6)%
|
|
133,890
|
|
|||
General and administrative expenses
|
81,181
|
|
|
3,603
|
|
|
4.6%
|
|
77,578
|
|
|||
Amortization of intangible assets
|
1,626
|
|
|
(1,022
|
)
|
|
(38.6)%
|
|
2,648
|
|
|||
Restructuring (recoveries) costs, net
|
(165
|
)
|
|
(5,535
|
)
|
|
(103.1)%
|
|
5,370
|
|
|||
Total operating expenses
|
$
|
306,081
|
|
|
$
|
(8,654
|
)
|
|
(2.7)%
|
|
$
|
314,735
|
|
|
|
|
|
|
|
|
|
||||||
Operating income
|
$
|
19,699
|
|
|
$
|
(5,069
|
)
|
|
(20.5)%
|
|
$
|
24,768
|
|
Operating Expenses and Operating Income for the Years Ended December 31, 2013 and 2012
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2013
|
|
Change
|
|
2012
|
||||||||
|
Expenses
|
|
$
|
|
%
|
|
Expenses
|
||||||
Research and development expenses
|
$
|
95,249
|
|
|
$
|
(3,630
|
)
|
|
(3.7)%
|
|
$
|
98,879
|
|
Marketing and selling expenses
|
133,890
|
|
|
(19,591
|
)
|
|
(12.8)%
|
|
153,481
|
|
|||
General and administrative expenses
|
77,578
|
|
|
25,512
|
|
|
49.0%
|
|
52,066
|
|
|||
Amortization of intangible assets
|
2,648
|
|
|
(1,606
|
)
|
|
(37.8)%
|
|
4,254
|
|
|||
Restructuring costs, net
|
5,370
|
|
|
(19,468
|
)
|
|
(78.4)%
|
|
24,838
|
|
|||
Total operating expenses
|
$
|
314,735
|
|
|
$
|
(18,783
|
)
|
|
(5.6)%
|
|
$
|
333,518
|
|
|
|
|
|
|
|
|
|
||||||
Operating income
|
$
|
24,768
|
|
|
$
|
(28,409
|
)
|
|
(53.4)%
|
|
$
|
53,177
|
|
Year-Over-Year Change in Research and Development Expenses for the Years Ended December 31, 2014 and 2013
|
|||||||||||
(dollars in thousands)
|
|||||||||||
|
2014 (Decrease)/Increase
From 2013
|
|
2013 (Decrease)/Increase
From 2012
|
||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||
Personnel-related
|
$
|
(5,150
|
)
|
|
(8.9)%
|
|
$
|
(1,279
|
)
|
|
(2.2)%
|
Facilities and information technology infrastructure
|
(1,943
|
)
|
|
(11.1)%
|
|
(943
|
)
|
|
(5.1)%
|
||
Computer hardware and supplies
|
1,467
|
|
|
43.8%
|
|
371
|
|
|
12.5%
|
||
Consulting and outside services
|
1,049
|
|
|
7.6%
|
|
(879
|
)
|
|
(6.0)%
|
||
Other expenses
|
(282
|
)
|
|
(9.3)%
|
|
(900
|
)
|
|
(22.8)%
|
||
Total research and development expenses decrease
|
$
|
(4,859
|
)
|
|
(5.1)%
|
|
$
|
(3,630
|
)
|
|
(3.7)%
|
Year-Over-Year Change in Marketing and Selling Expenses for Years Ended December 31, 2014 and 2013
|
|||||||||||
(dollars in thousands)
|
|||||||||||
|
2014 (Decrease)/Increase
From 2013
|
|
2013 (Decrease)/Increase
From 2012
|
||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||
Product introduction
|
$
|
(3,666
|
)
|
|
(100.2)%
|
|
$
|
181
|
|
|
5.2%
|
Consulting and outside services
|
1,213
|
|
|
8.8%
|
|
(4,113
|
)
|
|
(22.9)%
|
||
Foreign exchange losses (gains)
|
721
|
|
|
385.4%
|
|
(509
|
)
|
|
(73.1)%
|
||
Personnel-related
|
621
|
|
|
0.5%
|
|
(9,996
|
)
|
|
(6.9)%
|
||
Facilities and information technology infrastructure
|
(271
|
)
|
|
(1.0)%
|
|
(3,484
|
)
|
|
(10.9)%
|
||
Tradeshow and other promotional
|
27
|
|
|
0.3%
|
|
(2,213
|
)
|
|
(20.6)%
|
||
Other expenses
|
514
|
|
|
0.9%
|
|
543
|
|
|
1.0%
|
||
Total marketing and selling expenses decrease
|
$
|
(841
|
)
|
|
(0.6)%
|
|
$
|
(19,591
|
)
|
|
(12.8)%
|
Year-Over-Year Change in Amortization of Intangible Assets for the Years Ended December 31, 2014 and 2013
|
|||||||||||
(dollars in thousands)
|
|||||||||||
|
2014 Decrease
From 2013
|
|
2013 Decrease
From 2012
|
||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||
Amortization of intangible assets recorded in cost of revenues
|
$
|
(1,418
|
)
|
|
(96.6)%
|
|
$
|
(1,106
|
)
|
|
(43.0)%
|
Amortization of intangible assets recorded in operating expenses
|
(1,022
|
)
|
|
(38.6)%
|
|
(1,606
|
)
|
|
(37.8)%
|
||
Total amortization of intangible assets
|
$
|
(2,440
|
)
|
|
(59.3)%
|
|
$
|
(2,712
|
)
|
|
(39.7)%
|
Interest and Other Income (Expense) for the Years Ended December 31, 2014 and 2013
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2014
|
|
Change
|
|
2013
|
||||||||
|
Income
(Expense)
|
|
$
|
|
%
|
|
Income
(Expense)
|
||||||
Interest income
|
$
|
126
|
|
|
$
|
(429
|
)
|
|
(77.3)%
|
|
$
|
555
|
|
Interest expense
|
(1,771
|
)
|
|
(197
|
)
|
|
12.5%
|
|
(1,574
|
)
|
|||
Other income (expense), net
|
(1,138
|
)
|
|
(1,481
|
)
|
|
(431.8)%
|
|
343
|
|
|||
Total interest and other income (expense), net
|
$
|
(2,783
|
)
|
|
$
|
(2,107
|
)
|
|
311.7%
|
|
$
|
(676
|
)
|
Interest and Other Income (Expense) for the Years Ended December 31, 2013 and 2012
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2013
|
|
Change
|
|
2012
|
||||||||
|
Income
(Expense)
|
|
$
|
|
%
|
|
Income
(Expense)
|
||||||
Interest income
|
$
|
555
|
|
|
$
|
345
|
|
|
164.3%
|
|
$
|
210
|
|
Interest expense
|
(1,574
|
)
|
|
(26
|
)
|
|
1.7%
|
|
(1,548
|
)
|
|||
Other income (expense), net
|
343
|
|
|
1,046
|
|
|
(148.8)%
|
|
(703
|
)
|
|||
Total interest and other income (expense), net
|
$
|
(676
|
)
|
|
$
|
1,365
|
|
|
(66.9)%
|
|
$
|
(2,041
|
)
|
Provision for Income Taxes for the Years Ended December 31, 2014 and 2013
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2014
|
|
Change
|
|
2013
|
||||||||
|
Provision
|
|
$
|
|
%
|
|
Provision
|
||||||
Provision for income taxes
|
$
|
2,188
|
|
|
$
|
(751
|
)
|
|
(25.6)%
|
|
$
|
2,939
|
|
Provision for Income Taxes for the Years Ended December 31, 2013 and 2012
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2013
|
|
Change
|
|
2012
|
||||||||
|
Provision
|
|
$
|
|
%
|
|
Provision
|
||||||
Provision for income taxes
|
$
|
2,939
|
|
|
$
|
(1,110
|
)
|
|
(27.4)%
|
|
$
|
4,049
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net cash (used in) provided by operating activities
|
$
|
(9,897
|
)
|
|
$
|
(9,145
|
)
|
|
$
|
34,709
|
|
Net cash (used in) provided by investing activities
|
(11,800
|
)
|
|
(11,536
|
)
|
|
1,697
|
|
|||
Net cash (used in) provided by financing activities
|
(436
|
)
|
|
(96
|
)
|
|
354
|
|
|||
Effect of foreign currency exchange rates on cash and cash equivalents
|
(1,014
|
)
|
|
(1,410
|
)
|
|
775
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
$
|
(23,147
|
)
|
|
$
|
(22,187
|
)
|
|
$
|
37,535
|
|
|
Total
|
|
Less than
1 Year
|
|
1 – 3 Years
|
|
3 – 5 Years
|
|
After
5 Years
|
||||||||||
Operating leases
|
$
|
69,666
|
|
|
$
|
14,964
|
|
|
$
|
25,149
|
|
|
$
|
19,425
|
|
|
$
|
10,128
|
|
Unconditional purchase obligations (a)
|
22,538
|
|
|
22,538
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
92,204
|
|
|
$
|
37,502
|
|
|
$
|
25,149
|
|
|
$
|
19,425
|
|
|
$
|
10,128
|
|
(a)
|
At
December 31, 2014
, we had entered into purchase commitments for certain inventory and other goods and services used in our normal operations. The purchase commitments covered by these agreements are generally for a period of less than
one
year.
|
|
Total
|
|
Less than
1 Year
|
|
1 – 3 Years
|
|
3 – 5 Years
|
|
After
5 Years
|
||||||||||
Unrecognized tax positions and related interest
|
$
|
812
|
|
|
$
|
—
|
|
|
$
|
812
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Stand-by letters of credit
|
3,888
|
|
|
1,322
|
|
|
—
|
|
|
2,566
|
|
|
—
|
|
|||||
|
$
|
4,700
|
|
|
$
|
1,322
|
|
|
$
|
812
|
|
|
$
|
2,566
|
|
|
$
|
—
|
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net revenues:
|
|
|
|
|
|
||||||
Products
|
$
|
378,627
|
|
|
$
|
395,531
|
|
|
$
|
478,830
|
|
Services
|
151,624
|
|
|
167,881
|
|
|
156,873
|
|
|||
Total net revenues
|
530,251
|
|
|
563,412
|
|
|
635,703
|
|
|||
Cost of revenues:
|
|
|
|
|
|
||||||
Products
|
143,765
|
|
|
159,264
|
|
|
182,764
|
|
|||
Services
|
60,656
|
|
|
63,177
|
|
|
63,670
|
|
|||
Amortization of intangible assets
|
50
|
|
|
1,468
|
|
|
2,574
|
|
|||
Total cost of revenues
|
204,471
|
|
|
223,909
|
|
|
249,008
|
|
|||
Gross profit
|
325,780
|
|
|
339,503
|
|
|
386,695
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
90,390
|
|
|
95,249
|
|
|
98,879
|
|
|||
Marketing and selling
|
133,049
|
|
|
133,890
|
|
|
153,481
|
|
|||
General and administrative
|
81,181
|
|
|
77,578
|
|
|
52,066
|
|
|||
Amortization of intangible assets
|
1,626
|
|
|
2,648
|
|
|
4,254
|
|
|||
Restructuring (recoveries) costs, net
|
(165
|
)
|
|
5,370
|
|
|
24,838
|
|
|||
Total operating expenses
|
306,081
|
|
|
314,735
|
|
|
333,518
|
|
|||
Operating income
|
19,699
|
|
|
24,768
|
|
|
53,177
|
|
|||
Interest income
|
126
|
|
|
555
|
|
|
210
|
|
|||
Interest expense
|
(1,771
|
)
|
|
(1,574
|
)
|
|
(1,548
|
)
|
|||
Other (expense) income, net
|
(1,138
|
)
|
|
343
|
|
|
(703
|
)
|
|||
Income from continuing operations before income taxes
|
16,916
|
|
|
24,092
|
|
|
51,136
|
|
|||
Provision for income taxes
|
2,188
|
|
|
2,939
|
|
|
4,049
|
|
|||
Income from continuing operations, net of tax
|
14,728
|
|
|
21,153
|
|
|
47,087
|
|
|||
Discontinued operations:
|
|
|
|
|
|
||||||
Gain on divestiture of consumer business
|
—
|
|
|
—
|
|
|
37,972
|
|
|||
Income from divested operations
|
—
|
|
|
—
|
|
|
7,832
|
|
|||
Income from discontinued operations
|
—
|
|
|
—
|
|
|
45,804
|
|
|||
Net income
|
$
|
14,728
|
|
|
$
|
21,153
|
|
|
$
|
92,891
|
|
|
|
|
|
|
|
||||||
Income per common share – basic and diluted:
|
|
|
|
|
|
||||||
Income per share from continuing operations, net of tax – basic and diluted
|
$
|
0.38
|
|
|
$
|
0.54
|
|
|
$
|
1.21
|
|
Income per share from discontinued operations – basic and diluted
|
—
|
|
|
—
|
|
|
1.18
|
|
|||
Net income per common share – basic and diluted
|
$
|
0.38
|
|
|
$
|
0.54
|
|
|
$
|
2.39
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding – basic
|
39,147
|
|
|
39,044
|
|
|
38,804
|
|
|||
Weighted-average common shares outstanding – diluted
|
39,267
|
|
|
39,070
|
|
|
38,836
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net income
|
$
|
14,728
|
|
|
$
|
21,153
|
|
|
$
|
92,891
|
|
|
|
|
|
|
|
||||||
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(7,540
|
)
|
|
(1,717
|
)
|
|
606
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive income
|
$
|
7,188
|
|
|
$
|
19,436
|
|
|
$
|
93,497
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
25,056
|
|
|
$
|
48,203
|
|
Accounts receivable, net of allowances of $10,692 and $13,963 at December 31, 2014 and 2013, respectively
|
54,655
|
|
|
56,770
|
|
||
Inventories
|
48,001
|
|
|
60,122
|
|
||
Deferred tax assets, net
|
322
|
|
|
522
|
|
||
Prepaid expenses
|
6,892
|
|
|
7,778
|
|
||
Other current assets
|
17,932
|
|
|
17,493
|
|
||
Total current assets
|
152,858
|
|
|
190,888
|
|
||
Property and equipment, net
|
32,136
|
|
|
35,186
|
|
||
Intangible assets, net
|
2,445
|
|
|
4,260
|
|
||
Long-term deferred tax assets, net
|
1,886
|
|
|
2,415
|
|
||
Other long-term assets
|
2,274
|
|
|
2,393
|
|
||
Total assets
|
$
|
191,599
|
|
|
$
|
235,142
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
32,951
|
|
|
$
|
33,990
|
|
Accrued compensation and benefits
|
32,636
|
|
|
30,342
|
|
||
Accrued expenses and other current liabilities
|
32,353
|
|
|
41,273
|
|
||
Income taxes payable
|
5,480
|
|
|
6,875
|
|
||
Deferred tax liabilities, net
|
—
|
|
|
14
|
|
||
Deferred revenues
|
206,608
|
|
|
211,403
|
|
||
Total current liabilities
|
310,028
|
|
|
323,897
|
|
||
Long-term deferred tax liabilities, net
|
136
|
|
|
565
|
|
||
Long-term deferred revenues
|
208,232
|
|
|
255,429
|
|
||
Other long-term liabilities
|
14,273
|
|
|
14,586
|
|
||
Total liabilities
|
532,669
|
|
|
594,477
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note K)
|
|
|
|
||||
|
|
|
|
||||
Stockholders’ deficit:
|
|
|
|
||||
Preferred stock, $0.01 par value, 1,000 shares authorized; no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 100,000 shares authorized; 42,339 shares and 42,339 shares issued and 39,294 shares and 39,082 shares outstanding at December 31, 2014 and 2013, respectively
|
423
|
|
|
423
|
|
||
Additional paid-in capital
|
1,049,969
|
|
|
1,043,384
|
|
||
Accumulated deficit
|
(1,321,798
|
)
|
|
(1,336,526
|
)
|
||
Treasury stock at cost, net of reissuances, 3,045 shares and 3,257 shares at December 31, 2014 and 2013, respectively
|
(68,051
|
)
|
|
(72,543
|
)
|
||
Accumulated other comprehensive (loss) income
|
(1,613
|
)
|
|
5,927
|
|
||
Total stockholders’ deficit
|
(341,070
|
)
|
|
(359,335
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
191,599
|
|
|
$
|
235,142
|
|
|
Shares of
Common Stock
|
|
|
Additional
|
|
|
Accumulated
Other
|
Total
|
|||||||||
|
Issued
|
In
Treasury
|
|
Common
Stock
|
Paid-in
Capital
|
Accumulated
Deficit
|
Treasury
Stock
|
Comprehensive
Income (Loss)
|
Stockholders’
Deficit
|
||||||||
Balances at January 1, 2012
|
42,339
|
|
(3,734
|
)
|
|
423
|
|
1,028,798
|
|
(1,444,833
|
)
|
(82,301
|
)
|
7,038
|
|
(490,875
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stock issued pursuant to employee stock plans
|
|
331
|
|
|
|
(668
|
)
|
(5,737
|
)
|
6,759
|
|
|
354
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation
|
|
|
|
|
11,432
|
|
|
|
|
11,432
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
|
|
|
|
92,891
|
|
|
|
92,891
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
606
|
|
606
|
|
||||||
Balances at December 31, 2012
|
42,339
|
|
(3,403
|
)
|
|
423
|
|
1,039,562
|
|
(1,357,679
|
)
|
(75,542
|
)
|
7,644
|
|
(385,592
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stock issued pursuant to employee stock plans
|
|
146
|
|
|
|
(3,095
|
)
|
|
2,999
|
|
|
(96
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation
|
|
|
|
|
6,917
|
|
|
|
|
6,917
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
|
|
|
|
21,153
|
|
|
|
21,153
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
(1,717
|
)
|
(1,717
|
)
|
||||||
Balances at December 31, 2013
|
42,339
|
|
(3,257
|
)
|
|
423
|
|
1,043,384
|
|
(1,336,526
|
)
|
(72,543
|
)
|
5,927
|
|
(359,335
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stock issued pursuant to employee stock plans
|
|
212
|
|
|
|
(4,928
|
)
|
|
4,492
|
|
|
(436
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation
|
|
|
|
|
11,513
|
|
|
|
|
11,513
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
|
|
|
|
14,728
|
|
|
|
14,728
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
(7,540
|
)
|
(7,540
|
)
|
||||||
Balances at December 31, 2014
|
42,339
|
|
(3,045
|
)
|
|
$423
|
$1,049,969
|
$(1,321,798)
|
$(68,051)
|
$(1,613)
|
$(341,070)
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
14,728
|
|
|
$
|
21,153
|
|
|
$
|
92,891
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
17,954
|
|
|
22,767
|
|
|
27,495
|
|
|||
(Recovery) provision for doubtful accounts
|
(143
|
)
|
|
157
|
|
|
125
|
|
|||
Non-cash provision for restructuring
|
—
|
|
|
—
|
|
|
1,459
|
|
|||
Gain on sales of assets
|
—
|
|
|
(125
|
)
|
|
(252
|
)
|
|||
Gain on divestiture of consumer business
|
—
|
|
|
—
|
|
|
(37,972
|
)
|
|||
Stock-based compensation expense
|
11,513
|
|
|
6,917
|
|
|
11,432
|
|
|||
Non-cash interest expense
|
220
|
|
|
294
|
|
|
294
|
|
|||
Unrealized foreign currency transaction gains
|
(6,730
|
)
|
|
(10
|
)
|
|
(1,251
|
)
|
|||
Provision for deferred taxes
|
69
|
|
|
730
|
|
|
(400
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
2,258
|
|
|
11,030
|
|
|
26,765
|
|
|||
Inventories
|
12,122
|
|
|
9,021
|
|
|
20,844
|
|
|||
Prepaid expenses and other current assets
|
(2,130
|
)
|
|
4,393
|
|
|
(3,745
|
)
|
|||
Accounts payable
|
(947
|
)
|
|
(1,416
|
)
|
|
(7,111
|
)
|
|||
Accrued expenses, compensation and benefits and other liabilities
|
(5,758
|
)
|
|
8,932
|
|
|
(3,300
|
)
|
|||
Income taxes payable
|
(1,090
|
)
|
|
(1,324
|
)
|
|
676
|
|
|||
Deferred revenues
|
(51,963
|
)
|
|
(91,664
|
)
|
|
(93,241
|
)
|
|||
Net cash (used in) provided by operating activities
|
(9,897
|
)
|
|
(9,145
|
)
|
|
34,709
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(13,292
|
)
|
|
(11,625
|
)
|
|
(9,703
|
)
|
|||
Change in other long-term assets
|
(8
|
)
|
|
(36
|
)
|
|
(40
|
)
|
|||
Proceeds from divestiture of consumer business
|
1,500
|
|
|
—
|
|
|
11,440
|
|
|||
Proceeds from sale of assets
|
—
|
|
|
125
|
|
|
—
|
|
|||
Net cash (used in) provided by investing activities
|
(11,800
|
)
|
|
(11,536
|
)
|
|
1,697
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from the issuance of common stock under employee stock plans
|
252
|
|
|
177
|
|
|
1,022
|
|
|||
Common stock repurchases for tax withholdings for net settlement of equity awards
|
(688
|
)
|
|
(273
|
)
|
|
(668
|
)
|
|||
Proceeds from revolving credit facilities
|
25,500
|
|
|
—
|
|
|
14,000
|
|
|||
Payments on revolving credit facilities
|
(25,500
|
)
|
|
—
|
|
|
(14,000
|
)
|
|||
Net cash (used in) provided by financing activities
|
(436
|
)
|
|
(96
|
)
|
|
354
|
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
(1,014
|
)
|
|
(1,410
|
)
|
|
775
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
(23,147
|
)
|
|
(22,187
|
)
|
|
37,535
|
|
|||
Cash and cash equivalents at beginning of year
|
48,203
|
|
|
70,390
|
|
|
32,855
|
|
|||
Cash and cash equivalents at end of year
|
$
|
25,056
|
|
|
$
|
48,203
|
|
|
$
|
70,390
|
|
|
|
|
|
|
|
||||||
Cash paid for income taxes, net of refunds
|
$
|
2,146
|
|
|
$
|
2,173
|
|
|
$
|
6,554
|
|
Cash paid for interest
|
1,551
|
|
|
1,281
|
|
|
1,224
|
|
B.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
•
|
the pricing established by management when setting prices for deliverables that are intended to be sold on a standalone basis;
|
•
|
contractually stated prices for deliverables that are intended to be sold on a standalone basis;
|
•
|
the pricing of standalone sales that may not qualify as VSOE of fair value due to limited volumes or variation in prices; and
|
•
|
other pricing factors, such as the geographical region in which products are sold and expected discounts based on the customer size and type.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Allowance for sales returns and exchanges
–
beginning of year
|
$
|
12,519
|
|
|
$
|
19,460
|
|
|
$
|
22,767
|
|
Additions and adjustments to the allowance
|
9,260
|
|
|
9,243
|
|
|
11,402
|
|
|||
Deductions against the allowance
|
(12,269
|
)
|
|
(16,184
|
)
|
|
(14,709
|
)
|
|||
Allowance for sales returns and exchanges
–
end of year
|
$
|
9,510
|
|
|
$
|
12,519
|
|
|
$
|
19,460
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Allowance for doubtful accounts
–
beginning of year
|
$
|
1,444
|
|
|
$
|
1,517
|
|
|
$
|
2,401
|
|
Bad debt (recovery) expense
|
(143
|
)
|
|
157
|
|
|
125
|
|
|||
Reduction in provision for doubtful accounts
|
(119
|
)
|
|
(230
|
)
|
|
(1,009
|
)
|
|||
Allowance for doubtful accounts
–
end of year
|
$
|
1,182
|
|
|
$
|
1,444
|
|
|
$
|
1,517
|
|
|
|
Depreciable Life (years)
|
||
|
|
Minimum
|
|
Maximum
|
Computer and video equipment and software, including internal use software
|
|
2
|
|
5
|
Manufacturing tooling and testbeds
|
|
3
|
|
5
|
Office equipment
|
|
3
|
|
5
|
Furniture, fixtures and other
|
|
3
|
|
8
|
C.
|
NET INCOME PER SHARE
|
|
Year Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Options
|
4,748
|
|
|
5,193
|
|
|
6,069
|
|
Non-vested restricted stock units
|
118
|
|
|
352
|
|
|
638
|
|
Anti-dilutive potential common shares
|
4,866
|
|
|
5,545
|
|
|
6,707
|
|
D.
|
FOREIGN CURRENCY CONTRACTS
|
Derivatives Not Designated as Hedging Instruments Under
Accounting Standards Codification (
“
ASC
”
) Topic 815
|
|
Balance Sheet Classification
|
|
Fair Value at December 31, 2014
|
|
Fair Value at December 31, 2013
|
Financial assets:
|
|
|
|
|
|
|
Foreign currency contracts
|
|
Other current assets
|
|
$—
|
|
$59
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
Foreign currency contracts
|
|
Accrued expenses and other current liabilities
|
|
$518
|
|
$228
|
Derivatives Not Designated as Hedging
Instruments Under ASC Topic 815
|
|
Net Loss Recorded in Marketing and Selling Expenses
|
||||
|
2014
|
|
2013
|
|
2012
|
|
Foreign currency contracts
|
|
$(908)
|
|
$(187)
|
|
$(707)
|
E.
|
FAIR VALUE MEASUREMENTS
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
December 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
|
$
|
1,859
|
|
|
$
|
1,245
|
|
|
$
|
614
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
518
|
|
|
$
|
—
|
|
|
$
|
518
|
|
|
$
|
—
|
|
|
|
|
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
|
|
|
$
|
—
|
|
F.
|
ACCOUNTS RECEIVABLE
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Accounts receivable
|
$
|
65,347
|
|
|
$
|
70,733
|
|
Less:
|
|
|
|
||||
Allowance for doubtful accounts
|
(1,182
|
)
|
|
(1,444
|
)
|
||
Allowance for sales returns and rebates
|
(9,510
|
)
|
|
(12,519
|
)
|
||
Total
|
$
|
54,655
|
|
|
$
|
56,770
|
|
G.
|
INVENTORIES
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Raw materials
|
$
|
9,942
|
|
|
$
|
10,142
|
|
Work in process
|
248
|
|
|
338
|
|
||
Finished goods
|
37,811
|
|
|
49,642
|
|
||
Total
|
$
|
48,001
|
|
|
$
|
60,122
|
|
H.
|
PROPERTY AND EQUIPMENT
|
|
|
December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Computer and video equipment and software
|
|
$
|
113,220
|
|
|
$
|
107,464
|
|
Manufacturing tooling and testbeds
|
|
2,327
|
|
|
2,548
|
|
||
Office equipment
|
|
4,664
|
|
|
4,737
|
|
||
Furniture, fixtures and other
|
|
8,659
|
|
|
10,909
|
|
||
Leasehold improvements
|
|
29,431
|
|
|
33,310
|
|
||
|
|
158,301
|
|
|
158,968
|
|
||
Less: Accumulated depreciation and amortization
|
|
126,165
|
|
|
123,782
|
|
||
Total
|
|
$
|
32,136
|
|
|
$
|
35,186
|
|
I.
|
INTANGIBLE ASSETS
|
|
December 31,
|
||||||||||||||||||||||
|
2014
|
|
2013
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Completed technologies and patents
|
$
|
51,950
|
|
|
$
|
(51,950
|
)
|
|
$
|
—
|
|
|
$
|
52,711
|
|
|
$
|
(52,659
|
)
|
|
$
|
52
|
|
Customer relationships
|
49,216
|
|
|
(46,771
|
)
|
|
2,445
|
|
|
49,627
|
|
|
(45,557
|
)
|
|
4,070
|
|
||||||
Trade names
|
5,936
|
|
|
(5,936
|
)
|
|
—
|
|
|
5,976
|
|
|
(5,976
|
)
|
|
—
|
|
||||||
Capitalized software costs
|
5,043
|
|
|
(5,043
|
)
|
|
—
|
|
|
5,944
|
|
|
(5,806
|
)
|
|
138
|
|
||||||
Total
|
$
|
112,145
|
|
|
$
|
(109,700
|
)
|
|
$
|
2,445
|
|
|
$
|
114,258
|
|
|
$
|
(109,998
|
)
|
|
$
|
4,260
|
|
J.
|
OTHER LONG-TERM LIABILITIES
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Deferred rent
|
$
|
8,236
|
|
|
$
|
8,361
|
|
Accrued restructuring
|
1,334
|
|
|
2,335
|
|
||
Deferred compensation
|
4,703
|
|
|
3,890
|
|
||
Total
|
$
|
14,273
|
|
|
$
|
14,586
|
|
Year Ending December 31,
|
|
||
2015
|
$
|
14,964
|
|
2016
|
13,353
|
|
|
2017
|
11,796
|
|
|
2018
|
9,723
|
|
|
2019
|
9,702
|
|
|
Thereafter
|
10,128
|
|
|
Total
|
$
|
69,666
|
|
Accrual balance at January 1, 2012
|
$
|
5,100
|
|
Accruals for product warranties
|
7,737
|
|
|
Cost of warranty claims
|
(7,854
|
)
|
|
Allocation to divested consumer business
|
(507
|
)
|
|
Accrual balance at December 31, 2012
|
4,476
|
|
|
Accruals for product warranties
|
5,346
|
|
|
Cost of warranty claims
|
(6,321
|
)
|
|
Accrual balance at December 31, 2013
|
3,501
|
|
|
Accruals for product warranties
|
3,985
|
|
|
Cost of warranty claims
|
(4,694
|
)
|
|
Accrual balance at December 31, 2014
|
$
|
2,792
|
|
L.
|
CAPITAL STOCK
|
|
Total Shares
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Term (years)
|
Aggregate
Intrinsic
Value
(in thousands)
|
|
Options outstanding at January 1, 2014
|
4,726,415
|
|
$14.18
|
|
|
Granted
|
2,097,350
|
|
$7.54
|
|
|
Exercised
|
(25,505
|
)
|
$9.79
|
|
|
Forfeited or canceled
|
(1,234,149
|
)
|
$16.44
|
|
|
Options outstanding at December 31, 2014
|
5,564,111
|
|
$11.20
|
4.83
|
$24,940
|
Options vested at December 31, 2014 or expected to vest
|
5,272,012
|
|
$11.38
|
4.71
|
$23,086
|
Options exercisable at December 31, 2014
|
3,044,259
|
|
$13.81
|
3.91
|
$9,144
|
|
|
Year Ended December 31,
|
||||
|
|
2014
|
|
2013
|
|
2012
|
Expected dividend yield
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
Risk-free interest rate
|
|
1.24%
|
|
0.87%
|
|
0.94%
|
Expected volatility
|
|
50.3%
|
|
50.1%
|
|
52.8%
|
Expected life (in years)
|
|
4.16
|
|
4.68
|
|
4.56
|
Weighted-average fair value of options granted (per share)
|
|
$3.03
|
|
$3.33
|
|
$4.89
|
|
Non-Vested Restricted Stock Units
|
||||
|
Total Shares
|
Weighted-
Average
Grant-Date
Fair Value
|
Weighted-
Average
Remaining
Contractual
Term (years)
|
Aggregate
Intrinsic
Value
(in thousands)
|
|
Non-vested at January 1, 2014
|
322,733
|
|
$11.30
|
|
|
Granted
|
801,316
|
|
$10.19
|
|
|
Vested
|
(264,513
|
)
|
$11.19
|
|
|
Forfeited
|
(47,656
|
)
|
$15.25
|
|
|
Non-vested at December 31, 2014
|
811,880
|
|
$10.01
|
0.88
|
$11,529
|
Expected to vest
|
741,436
|
|
$10.02
|
0.84
|
$10,528
|
|
Year Ended December 31,
|
||||
|
2014
|
|
2013
|
|
2012
|
Expected dividend yield
|
0.00%
|
|
0.00%
|
|
0.00%
|
Risk-free interest rate
|
0.09%
|
|
0.09%
|
|
0.08%
|
Expected volatility
|
35.0%
|
|
51.0%
|
|
51.5%
|
Expected life (in years)
|
0.17
|
|
0.25
|
|
0.25
|
Weighted-average fair value of shares issued (per share)
|
$2.02
|
|
$1.00
|
|
$1.30
|
|
Year Ended December 31,
|
||||
|
2014
|
|
2013
|
|
2012
|
Shares issued under the ESPP
|
—
|
|
27,936
|
|
142,658
|
Average price of shares issued
|
$—
|
|
$6.29
|
|
$6.96
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Cost of products revenues
|
$
|
397
|
|
|
$
|
360
|
|
|
$
|
410
|
|
Cost of services revenues
|
279
|
|
|
436
|
|
|
582
|
|
|||
Research and development expenses
|
502
|
|
|
582
|
|
|
986
|
|
|||
Marketing and selling expenses
|
3,658
|
|
|
1,778
|
|
|
3,754
|
|
|||
General and administrative expenses
|
6,677
|
|
|
3,761
|
|
|
5,700
|
|
|||
Total
|
$
|
11,513
|
|
|
$
|
6,917
|
|
|
$
|
11,432
|
|
M.
|
EMPLOYEE BENEFIT PLANS
|
N.
|
INCOME TAXES
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Income (loss) from continuing operations before income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
(6,864
|
)
|
|
$
|
(16,414
|
)
|
|
$
|
19,198
|
|
Foreign
|
23,780
|
|
|
40,506
|
|
|
31,938
|
|
|||
Total income from continuing operations before income taxes
|
$
|
16,916
|
|
|
$
|
24,092
|
|
|
$
|
51,136
|
|
Provision for (benefit from) income taxes:
|
|
|
|
|
|
||||||
Current tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
14
|
|
|
$
|
(104
|
)
|
|
$
|
(750
|
)
|
State
|
83
|
|
|
114
|
|
|
102
|
|
|||
Foreign benefit of net operating losses
|
(180
|
)
|
|
(170
|
)
|
|
(154
|
)
|
|||
Other foreign
|
2,217
|
|
|
2,369
|
|
|
5,251
|
|
|||
Total current tax expense
|
2,134
|
|
|
2,209
|
|
|
4,449
|
|
|||
Deferred tax expense (benefit):
|
|
|
|
|
|
||||||
Other foreign
|
54
|
|
|
730
|
|
|
(400
|
)
|
|||
Total deferred tax expense (benefit)
|
54
|
|
|
730
|
|
|
(400
|
)
|
|||
Total provision for income taxes
|
$
|
2,188
|
|
|
$
|
2,939
|
|
|
$
|
4,049
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Deferred tax assets:
|
|
|
|
||||
Tax credit and net operating loss carryforwards
|
$
|
290,523
|
|
|
$
|
244,379
|
|
Allowances for bad debts
|
231
|
|
|
277
|
|
||
Difference in accounting for:
|
|
|
|
||||
Revenues
|
63,916
|
|
|
98,838
|
|
||
Costs and expenses
|
29,004
|
|
|
29,784
|
|
||
Inventories
|
7,004
|
|
|
9,209
|
|
||
Acquired intangible assets
|
13,667
|
|
|
17,726
|
|
||
Gross deferred tax assets
|
404,345
|
|
|
400,213
|
|
||
Valuation allowance
|
(398,733
|
)
|
|
(396,143
|
)
|
||
Deferred tax assets after valuation allowance
|
5,612
|
|
|
4,070
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Difference in accounting for:
|
|
|
|
||||
Costs and expenses
|
(3,540
|
)
|
|
(1,712
|
)
|
||
Gross deferred tax liabilities
|
(3,540
|
)
|
|
(1,712
|
)
|
||
Net deferred tax assets
|
$
|
2,072
|
|
|
$
|
2,358
|
|
Recorded as:
|
|
|
|
||||
Current deferred tax assets, net
|
322
|
|
|
522
|
|
||
Long-term deferred tax assets, net
|
1,886
|
|
|
2,415
|
|
||
Current deferred tax liabilities, net
|
—
|
|
|
(14
|
)
|
||
Long-term deferred tax liabilities, net
|
(136
|
)
|
|
(565
|
)
|
||
Net deferred tax assets
|
$
|
2,072
|
|
|
$
|
2,358
|
|
|
Year Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Tax credits
|
(9.4
|
)%
|
|
(6.2
|
)%
|
|
(1.2
|
)%
|
Foreign operations
|
(35.8
|
)%
|
|
(43.8
|
)%
|
|
(12.7
|
)%
|
Non-deductible expenses and other
|
4.6
|
%
|
|
2.1
|
%
|
|
1.4
|
%
|
Increase (decrease) in valuation allowance
|
18.5
|
%
|
|
25.1
|
%
|
|
(14.6
|
)%
|
Effective tax rate
|
12.9
|
%
|
|
12.2
|
%
|
|
7.9
|
%
|
Unrecognized tax benefits at January 1, 2012
|
$
|
20,180
|
|
Increases for tax positions taken during a prior period
|
3,198
|
|
|
Decreases related to the lapse of applicable statutes of limitations
|
(749
|
)
|
|
Unrecognized tax benefits at December 31, 2012
|
22,629
|
|
|
Increases for tax positions taken during a prior period
|
2,205
|
|
|
Decreases related to the lapse of applicable statutes of limitations
|
(105
|
)
|
|
Unrecognized tax benefits at December 31, 2013
|
24,729
|
|
|
Increases for tax positions taken during a prior period
|
1,118
|
|
|
Unrecognized tax benefits at December 31, 2014
|
$
|
25,847
|
|
O.
|
RESTRUCTURING COSTS AND ACCRUALS
|
|
Non-Acquisition-Related
Restructuring
Liabilities
|
|
Acquisition-Related
Restructuring
Liabilities
|
|
|
||||||||||||||
|
Employee-
Related
|
|
Facilities-
Related
& Other
|
|
Employee-
Related
|
|
Facilities-
Related
|
|
Total
|
||||||||||
Accrual balance at January 1, 2012
|
$
|
4,045
|
|
|
$
|
6,461
|
|
|
$
|
—
|
|
|
$
|
390
|
|
|
$
|
10,896
|
|
New restructuring charges – operating expenses
|
14,751
|
|
|
8,081
|
|
|
—
|
|
|
—
|
|
|
22,832
|
|
|||||
Revisions of estimated liabilities
|
(841
|
)
|
|
2,229
|
|
|
—
|
|
|
618
|
|
|
2,006
|
|
|||||
Accretion
|
—
|
|
|
382
|
|
|
—
|
|
|
22
|
|
|
404
|
|
|||||
Cash payments
|
(14,082
|
)
|
|
(4,893
|
)
|
|
—
|
|
|
(435
|
)
|
|
(19,410
|
)
|
|||||
Non-cash write-offs
|
—
|
|
|
(1,459
|
)
|
|
—
|
|
|
—
|
|
|
(1,459
|
)
|
|||||
Foreign exchange impact on ending balance
|
425
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
462
|
|
|||||
Accrual balance at December 31, 2012
|
4,298
|
|
|
10,838
|
|
|
—
|
|
|
595
|
|
|
15,731
|
|
|||||
New restructuring charges – operating expenses
|
3,539
|
|
|
|
|
|
—
|
|
|
—
|
|
|
3,539
|
|
|||||
Revisions of estimated liabilities
|
50
|
|
|
2,060
|
|
|
—
|
|
|
(279
|
)
|
|
1,831
|
|
|||||
Accretion
|
—
|
|
|
586
|
|
|
—
|
|
|
26
|
|
|
612
|
|
|||||
Cash payments
|
(5,469
|
)
|
|
(7,394
|
)
|
|
—
|
|
|
(342
|
)
|
|
(13,205
|
)
|
|||||
Foreign exchange impact on ending balance
|
(19
|
)
|
|
12
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||
Accrual balance at December 31, 2013
|
2,399
|
|
|
6,102
|
|
|
—
|
|
|
—
|
|
|
8,501
|
|
|||||
Revisions of estimated liabilities
|
—
|
|
|
(165
|
)
|
|
—
|
|
|
—
|
|
|
(165
|
)
|
|||||
Accretion
|
—
|
|
|
565
|
|
|
—
|
|
|
—
|
|
|
565
|
|
|||||
Cash payments
|
(2,340
|
)
|
|
(4,172
|
)
|
|
—
|
|
|
—
|
|
|
(6,512
|
)
|
|||||
Foreign exchange impact on ending balance
|
(1
|
)
|
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|||||
Accrual balance at December 31, 2014
|
$
|
58
|
|
|
$
|
2,285
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,343
|
|
P.
|
PRODUCT AND GEOGRAPHIC INFORMATION
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Video products and solutions
|
$
|
233,464
|
|
|
$
|
243,173
|
|
|
$
|
276,909
|
|
Audio products and solutions
|
145,163
|
|
|
152,358
|
|
|
201,921
|
|
|||
Total products and solutions
|
378,627
|
|
|
395,531
|
|
|
478,830
|
|
|||
Services
|
151,624
|
|
|
167,881
|
|
|
156,873
|
|
|||
Total net revenues
|
$
|
530,251
|
|
|
$
|
563,412
|
|
|
$
|
635,703
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Revenues:
|
|
|
|
|
|
||||||
United States
|
$
|
193,060
|
|
|
$
|
218,154
|
|
|
$
|
249,364
|
|
Other Americas
|
45,342
|
|
|
43,131
|
|
|
47,817
|
|
|||
Europe, Middle East and Africa
|
217,767
|
|
|
214,441
|
|
|
245,189
|
|
|||
Asia-Pacific
|
74,082
|
|
|
87,686
|
|
|
93,333
|
|
|||
Total net revenues
|
$
|
530,251
|
|
|
$
|
563,412
|
|
|
$
|
635,703
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Long-lived assets:
|
|
|
|
||||
United States
|
$
|
30,465
|
|
|
$
|
33,193
|
|
Other countries
|
3,945
|
|
|
4,385
|
|
||
Total long-lived assets
|
$
|
34,410
|
|
|
$
|
37,578
|
|
Q.
|
CREDIT AGREEMENT
|
(In thousands, except per share data)
|
Quarter Ended
|
||||||||||||||||||||||||||||||
2014
|
|
2013
|
|||||||||||||||||||||||||||||
|
Dec. 31
|
|
Sept. 30
|
|
June 30
|
|
Mar. 31
|
|
Dec. 31
|
|
Sept. 30
|
|
June 30
|
|
Mar. 31
|
||||||||||||||||
Net revenues
|
$
|
128,196
|
|
|
$
|
142,429
|
|
|
$
|
124,644
|
|
|
$
|
134,982
|
|
|
$
|
147,103
|
|
|
$
|
138,893
|
|
|
$
|
141,345
|
|
|
$
|
136,071
|
|
Cost of revenues
|
50,548
|
|
|
52,788
|
|
|
50,420
|
|
|
50,665
|
|
|
59,801
|
|
|
56,055
|
|
|
54,294
|
|
|
52,291
|
|
||||||||
Amortization of intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
158
|
|
|
158
|
|
|
501
|
|
|
651
|
|
||||||||
Gross profit
|
77,648
|
|
|
89,641
|
|
|
74,224
|
|
|
84,267
|
|
|
87,144
|
|
|
82,680
|
|
|
86,550
|
|
|
83,129
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Research and development
|
23,212
|
|
|
22,154
|
|
|
22,070
|
|
|
22,954
|
|
|
24,556
|
|
|
23,239
|
|
|
23,847
|
|
|
23,607
|
|
||||||||
Marketing and selling
|
34,527
|
|
|
31,410
|
|
|
34,297
|
|
|
32,815
|
|
|
34,566
|
|
|
31,512
|
|
|
33,903
|
|
|
33,909
|
|
||||||||
General and administrative
|
22,222
|
|
|
20,644
|
|
|
19,984
|
|
|
18,331
|
|
|
23,135
|
|
|
22,715
|
|
|
16,131
|
|
|
15,597
|
|
||||||||
Amortization of intangible assets
|
375
|
|
|
373
|
|
|
398
|
|
|
480
|
|
|
667
|
|
|
660
|
|
|
658
|
|
|
663
|
|
||||||||
Restructuring (recoveries) costs, net
|
—
|
|
|
—
|
|
|
(165
|
)
|
|
—
|
|
|
2,491
|
|
|
688
|
|
|
1,918
|
|
|
273
|
|
||||||||
Total operating expenses
|
80,336
|
|
|
74,581
|
|
|
76,584
|
|
|
74,580
|
|
|
85,415
|
|
|
78,814
|
|
|
76,457
|
|
|
74,049
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Operating (loss) income
|
(2,688
|
)
|
|
15,060
|
|
|
(2,360
|
)
|
|
9,687
|
|
|
1,729
|
|
|
3,866
|
|
|
10,093
|
|
|
9,080
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other (expense) income, net
|
(1,620
|
)
|
|
(455
|
)
|
|
(357
|
)
|
|
(351
|
)
|
|
192
|
|
|
(363
|
)
|
|
(247
|
)
|
|
(258
|
)
|
||||||||
(Loss) income before income taxes
|
(4,308
|
)
|
|
14,605
|
|
|
(2,717
|
)
|
|
9,336
|
|
|
1,921
|
|
|
3,503
|
|
|
9,846
|
|
|
8,822
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Provision for income taxes
|
761
|
|
|
365
|
|
|
622
|
|
|
440
|
|
|
792
|
|
|
921
|
|
|
669
|
|
|
557
|
|
||||||||
Net (loss) income
|
$
|
(5,069
|
)
|
|
$
|
14,240
|
|
|
$
|
(3,339
|
)
|
|
$
|
8,896
|
|
|
$
|
1,129
|
|
|
$
|
2,582
|
|
|
$
|
9,177
|
|
|
$
|
8,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
(Loss) income per share – basic
|
$
|
(0.13
|
)
|
|
$
|
0.36
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.23
|
|
|
$
|
0.03
|
|
|
$
|
0.07
|
|
|
$
|
0.24
|
|
|
$
|
0.21
|
|
(Loss) income per share – diluted
|
(0.13
|
)
|
|
0.36
|
|
|
(0.09
|
)
|
|
0.23
|
|
|
0.03
|
|
|
0.07
|
|
|
0.23
|
|
|
0.21
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted-average common shares outstanding – basic
|
39,234
|
|
|
39,133
|
|
|
39,119
|
|
|
39,099
|
|
|
39,080
|
|
|
39,075
|
|
|
39,040
|
|
|
38,977
|
|
||||||||
Weighted-average common shares outstanding – diluted
|
39,966
|
|
|
39,201
|
|
|
39,119
|
|
|
39,122
|
|
|
39,111
|
|
|
39,076
|
|
|
39,069
|
|
|
39,034
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
(1)
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
(2)
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
(3)
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
•
|
Control Environment
- We did not maintain an effective control environment, which is the foundation for the discipline and structure necessary for effective internal control over financial reporting, as evidenced by: (i) an insufficient number of personnel appropriately qualified to perform control monitoring activities, including the recognition of the risks and complexities of our transactions and business operations, (ii) an insufficient number of personnel with an appropriate level of GAAP knowledge and experience or ongoing training in the application of GAAP commensurate with our financial reporting requirements, which resulted in erroneous judgments regarding the proper application of GAAP, and (iii) insufficient corporate involvement to adequately exercise appropriate oversight of accounting judgments and estimates.
|
•
|
Risk Assessment
- We did not have an effective risk assessment process. From a governance perspective, we historically did not have a formal process to identify, update and assess risks, including changes in our business practices, that could significantly impact our consolidated financial statements as well as the system of internal control over financial reporting.
|
•
|
Control Activities
- We did not have control activities that were designed and operating effectively, including controls over the inputs inherent in the Company’s revenue recognition models. Control activities that were historically in place (i) did not always address relevant risks, (ii) were sometimes performed with incomplete information and (iii) were not performed on all relevant transactions. In addition, the level of precision of the management review controls was not sufficient to identify all potential errors.
|
•
|
Information and Communications
- We did not implement appropriate information technology controls related to change management and access for certain information systems that are relevant to the preparation of the consolidated financial statements and our system of internal control over financial reporting. As a result of the material weaknesses identified, there is a possibility that the effectiveness of business process controls, which are dependent on the affected information systems or electronic data and financial reports generated from the affected information systems, may be adversely affected.
|
•
|
Monitoring Activities
- We did not maintain effective monitoring of controls related to the financial close and reporting process.
|
•
|
Continuing to improve the control environment through (i) being staffed with sufficient number of personnel appropriately qualified to perform control monitoring activities, (ii) increasing the level of GAAP knowledge and experience through ongoing training and staffing adjustments, and (iii) implementing and formalizing corporate oversight of accounting judgments and estimates;
|
•
|
Implementing a formal risk assessment process;
|
•
|
Formalizing and implementing controls over the inputs inherent in our revenue recognition models;
|
•
|
Implementing control activities that address relevant risks and assure that all transactions are subject to such control activities;
|
•
|
Ensuring all information systems that impact revenue recognition and other financial information and disclosures have effective information technology controls, including access and change management controls; and
|
•
|
Implementing additional monitoring activities over the financial close and reporting process.
|
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) 3.
|
LISTING OF EXHIBITS. The list of exhibits, which are filed or furnished with this report or are incorporated herein by reference, is set forth in the Exhibit Index immediately preceding the exhibits and is incorporated herein by reference.
|
By:
|
/s/ Louis Hernandez, Jr.
|
|
Louis Hernandez, Jr.
Chairman, Chief Executive Officer and President
(Principal Executive Officer)
|
|
|
Date:
|
March 16, 2015
|
By:
|
/s/ Louis Hernandez, Jr.
|
|
By:
|
/s/ John W. Frederick
|
|
By:
|
/s/ Ryan H. Murray
|
|
|
Louis Hernandez, Jr.
Chairman, Chief Executive Officer and President
(Principal Executive Officer)
|
|
|
John W. Frederick
Executive Vice President, Chief Financial Officer and Chief Administrative Officer
(Principal Financial Officer)
|
|
|
Ryan H. Murray
Vice President of Finance and Chief Accounting Officer
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
Date:
|
March 16, 2015
|
|
Date:
|
March 16, 2015
|
|
Date:
|
March 16, 2015
|
|
NAME
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/ Louis Hernandez, Jr.
|
|
|
|
|
Louis Hernandez, Jr.
|
|
Chairman of the Board of Directors
|
|
March 16, 2015
|
|
|
|
|
|
/s/ Nancy Hawthorne
|
|
|
|
|
Nancy Hawthorne
|
|
Lead Director
|
|
March 16, 2015
|
|
|
|
|
|
_____________________
|
|
|
|
|
Robert M. Bakish
|
|
Director
|
|
March 16, 2015
|
|
|
|
|
|
/s/ George H. Billings
|
|
|
|
|
George H. Billings
|
|
Director
|
|
March 16, 2015
|
|
|
|
|
|
/s/ Elizabeth M. Daley
|
|
|
|
|
Elizabeth M. Daley
|
|
Director
|
|
March 16, 2015
|
|
|
|
|
|
/s/ Youngme E. Moon
|
|
|
|
|
Youngme E. Moon
|
|
Director
|
|
March 16, 2015
|
|
|
|
|
|
/s/ John H. Park
|
|
|
|
|
John H. Park
|
|
Director
|
|
March 16, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
3.4
|
|
Amended Certificate of Designations, Preferences and Rights of Series A Junior Participating Preferred Stock
|
|
|
|
8-K
|
|
January 7, 2014
|
|
000-21174
|
4.1
|
|
Specimen Certificate representing the Registrant’s Common Stock
|
|
|
|
S-1
|
|
March 11, 1993*
|
|
033-57796
|
4.2
|
|
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
|
|
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
|
|
Amendment #2 to Credit Agreement dated March 16, 2012 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
|
|
May 10, 2012
|
|
000-21174
|
10.4
|
|
Amendment #3 to Credit Agreement dated November 20, 2012 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-K
|
|
September 12, 2014
|
|
001-36254
|
10.5
|
|
Amendment #13 to Credit Agreement dated August 29, 2014 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
|
|
September 4, 2014
|
|
001-36254
|
10.6
|
|
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
|
10.7
|
|
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
|
#10.8
|
|
1993 Director Stock Option Plan, as amended
|
|
|
|
10-K
|
|
February 29, 2008
|
|
000-21174
|
#10.9
|
|
Second Amended and Restated 1996 Employee Stock Purchase Plan, as amended
|
|
|
|
10-K
|
|
March 16, 2010
|
|
000-21174
|
#10.10
|
|
Amendment No #2 to Second Amended and Restated 1996 Employee Stock Purchase Plan, as amended
|
|
|
|
10-K
|
|
September 12, 2014
|
|
001-36254
|
#10.11
|
|
1997 Stock Option Plan
|
|
|
|
10-K
|
|
March 27, 1998
|
|
000-21174
|
#10.12
|
|
1997 Stock Incentive Plan, as amended
|
|
|
|
10-Q
|
|
May 14, 1997
|
|
000-21174
|
#10.13
|
|
Second Amended and Restated Non-Qualified Deferred Compensation Plan
|
|
|
|
10-K
|
|
February 29, 2008
|
|
000-21174
|
#10.14
|
|
1998 Stock Option Plan
|
|
|
|
10-K
|
|
March 16, 2005
|
|
000-21174
|
#10.15
|
|
Amended and Restated 1999 Stock Option Plan
|
|
|
|
10-K
|
|
March 16, 2005
|
|
000-21174
|
#10.16
|
|
Amended and Restated 2005 Stock Incentive Plan
|
|
|
|
10-Q
|
|
August 7, 2008
|
|
000-21174
|
#10.17
|
|
Amendment No. 1 to Amended and Restated 2005 Stock Incentive Plan
|
|
|
|
10-K
|
|
September 12, 2014
|
|
001-36254
|
#10.18
|
|
Form of Incentive Stock Option Agreement under the Registrant’s Amended and Restated 2005 Stock Incentive Plan
|
|
|
|
10-K
|
|
September 12, 2014
|
|
001-36254
|
#10.19
|
|
Form of Nonstatutory Stock Option Agreement under the Registrant’s Amended and Restated 2005 Stock Incentive Plan
|
|
|
|
10-K
|
|
September 12, 2014
|
|
001-36254
|
#10.20
|
|
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
|
#10.21
|
|
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
|
|
2014 Stock Incentive Plan
|
|
X
|
|
|
|
|
|
|
#10.27
|
|
Form of Restricted Stock Unit Agreement under the Registrant’s Amended and Restated 2014 Stock Incentive Plan
|
|
X
|
|
|
|
|
|
|
#10.28
|
|
Form of NSO Agreement under the Registrant’s 2014 Stock Incentive Plan
|
|
X
|
|
|
|
|
|
|
#10.29
|
|
Form of ISO/NSO Agreement under the Registrant’s 2014 Stock Incentive Plan
|
|
X
|
|
|
|
|
|
|
#10.30
|
|
Separation Agreement dated February 6, 2013 between Registrant and Gary G. Greenfield
|
|
|
|
8-K/A
|
|
February 12, 2013
|
|
000-21174
|
#10.31
|
|
Consulting and Separation Agreement dated April 22, 2013 between the Registrant and Kenneth A Sexton
|
|
|
|
10-Q
|
|
September 12, 2014
|
|
001-36254
|
#10.32
|
|
Amended and Restated Executive Employment Agreement dated December 22, 2010 between the Registrant and Christopher C. Gahagan
|
|
|
|
10-K
|
|
March 14, 2011
|
|
000-21174
|
#10.33
|
|
Form of Executive Officer Employment Letter as of January 1, 2012
|
|
|
|
10-K
|
|
February 29, 2012
|
|
000-21174
|
#10.34
|
|
Summary of 2013 Annual Executive Incentive Program
|
|
|
|
10-K
|
|
September 12, 2014
|
|
001-36254
|
#10.35
|
|
Executive Employment Agreement dated February 11, 2013 between the Registrant and Louis Hernandez, Jr.
|
|
|
|
8-K/A
|
|
February 12, 2013
|
|
000-21174
|
#10.36
|
|
Amended and Restated Executive Employment Agreement dated April 22, 2013 between the Registrant and John Frederick
|
|
|
|
10-Q
|
|
September 12, 2014
|
|
001-36254
|
#10.37
|
|
2013 Remediation Bonus Plan
|
|
|
|
8-K
|
|
July 25, 2013
|
|
000-21174
|
#10.38
|
|
Summary of 2014 Annual Executive Incentive Program
|
|
|
|
10-Q
|
|
September 23, 2014
|
|
001-36254
|
21
|
|
Subsidiaries of the Registrant
|
|
X
|
|
|
|
|
|
|
23.1
|
|
Consent of Deloitte & Touche 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
|
|
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.
|
|
*
|
Effective date of Form S-1.
|
|
**
|
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.
|
1.
|
Purpose
|
2.
|
Definitions
|
(b)
|
A Change in Control shall not be deemed to occur by reason of:
|
3.
|
Eligibility
|
4.
|
Administration and Delegation
|
5.
|
Stock Available for Awards
|
(a)
|
Number of Shares; Share Counting
.
|
(b)
|
Sub-limits
.
|
6.
|
Stock Options
|
(5)
|
by any combination of the above permitted forms of payment.
|
7.
|
Director Awards
|
(d)
|
Terms of Director Options
. Options granted under this Section 7 shall:
|
(4)
|
Contain such other terms and conditions as the Board shall determine.
|
(e)
|
Special Vesting Rules
.
|
8.
|
Stock Appreciation Rights
|
(b)
|
Grants
. SARs may be granted in tandem with, or independently of, Options granted under the Plan.
|
9.
|
Restricted Stock; Restricted Stock Units
|
(d)
|
Additional Provisions Relating to Restricted Stock
.
|
(e)
|
Additional Provisions Relating to Restricted Stock Units
.
|
(2)
|
Voting Rights
. A Participant shall have no voting rights with respect to any Restricted Stock Units.
|
10.
|
Other Stock-Based Awards
|
11.
|
Adjustments for Changes in Common Stock and Certain Other Events
|
(b)
|
Reorganization Events
.
|
12.
|
General Provisions Applicable to Awards
|
(j)
|
Performance Awards
.
|
13.
|
Miscellaneous
|
|
|
|
Notice of Grant of [Performance/Time]-Based
Restricted Stock Units under
The 2014 stock incentive plan
|
|
|
FIRST NAME LAST NAME
ADDRESS LINE 1
ADDRESS LINE 2
ADDRESS LINE 3
CITY, STATE, ZIPCODE
|
Grant Number:
Employee ID:
Plan:
|
OPTION NUMBER
EMPLOYEE IDENTIFIER
2014 Stock Incentive Plan
|
|
|
|
Notice of Grant of Time-Based Stock
Option under The 2014 Stock Incentive Plan
|
|
|
[NAME]
[ADDRESS]
|
Grant Number(s):
Employee ID:
Plan:
|
__________
__________
__________
|
5.
|
Tax Matters
. No NSO Shares will be issued pursuant to the exercise of this option unless and until the Optionee pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option. In the Board’s discretion, and subject to such conditions as the Board may establish, such tax obligations may be paid in whole or in part in shares of Common Stock, including NSO Shares retained from the option creating the tax obligation, valued at their Fair Market Value. The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Optionee.
|
|
|
|
Notice of Grant of Time-Based Stock
Option under Amended and Restated
2014 Stock Incentive Plan
|
|
|
[NAME]
[ADDRESS]
|
Grant Number(s):
Employee ID:
Plan:
|
2014 Stock Incentive Plan
|
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.
|
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Date:
|
March 16, 2015
|
/s/ Louis Hernandez, Jr.
|
|
|
|
|
Louis Hernandez, Jr.
|
|
|
|
|
Chairman, 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:
|
March 16, 2015
|
/s/ John W. Frederick
|
|
|
|
|
John W. Frederick
|
|
|
|
|
Executive Vice President, Chief Financial Officer
|
|
|
|
|
and Chief Administrative Officer
(Principal Financial Officer)
|
|
Date:
|
March 16, 2015
|
/s/ Louis Hernandez, Jr.
|
|
|
|
Louis Hernandez, Jr.
|
|
|
|
Chairman, Chief Executive Officer and President
|
|
|
|
(Principal Executive Officer)
|
|
Date:
|
March 16, 2015
|
/s/ John W. Frederick
|
|
|
|
John W. Frederick
|
|
|
|
Executive Vice President, Chief Financial
|
|
|
|
Officer and Chief Administrative Officer
(Principal Financial Officer)
|
|