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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, 2017
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OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM __________ TO __________
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Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
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04-2977748
(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of each exchange on which registered
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Common Stock, $.01 Par Value
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Nasdaq Global Select Market
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Large Accelerated Filer
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Non-accelerated Filer
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(Do not check if smaller reporting company)
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Accelerated Filer
x
Smaller Reporting Company
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Emerging Growth 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 2018 Annual Meeting of Stockholders
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III
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Page
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our ability to successfully implement our strategy, including our cost saving strategies;
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the anticipated trends and developments in our markets and the success of our products in these markets;
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our ability to develop, market and sell new products and services;
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our business strategies and market positioning;
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our ability to achieve our goal of expanding our market positions;
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anticipated trends relating to our sales, financial condition or results of operations, including our shift to a recurring revenue model and complex enterprise sales with elongated sales cycles;
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the expected timing of recognition of revenue backlog as revenue, and the timing of recognition of revenues from subscription offerings;
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our ability to successfully consummate acquisitions, or investment transactions and successfully integrate acquired businesses;
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our anticipated benefits and synergies from, and the anticipated financial impact of, any acquired business;
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the anticipated performance of our products;
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changes in inventory levels;
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plans regarding repatriation of foreign earnings;
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the outcome, impact, costs and expenses of any litigation or government inquiries to which we are or become subject;
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the effect of the continuing worldwide macroeconomic uncertainty on our business and results of operations, including Brexit;
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our ability to accelerate growth of our Cloud-enabled platform;
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our compliance with covenants contained in the agreements governing our indebtedness;
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our ability to service our debt and meet the obligations thereunder, including our ability to satisfy our conversion and repurchase obligations under our convertible notes due 2020;
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seasonal factors;
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fluctuations in foreign exchange and interest rates;
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the risk of restatement of our financial statements;
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estimated asset and liability values and amortization of our intangible assets;
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our capital resources and the adequacy thereof; and
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worldwide political uncertainty, in particular the risk that the United States may withdraw from or materially modify NAFTA or other international trade agreements.
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ITEM 1.
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BUSINESS
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Increasing rate of content creation
– many organizations are feeling intense pressure to create more and more content, increasingly tailored for audience niches, while also facing greater competition from nimble players. At the same time, access to creative tools is wider today than ever before, giving more people the ability to tell their stories.
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Exponential growth of distribution platforms
– the economic models of new distribution platforms are often not fully matured or realized. Many organizations need to embrace new opportunities while also maximizing heritage business.
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Continued increase in content consumption
– there has been a tremendous increase in viewership in the last decade, but it is spread across many outlets and channels, and while there is this increase in viewership, it is dwarfed by an increase in competitive content. In addition, with growing audience fragmentation, compelling content, brand equity and relevance is even more critical today.
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Media technology budgets
– today’s economic realities are placing pressure on media technology budgets, while content output must increase exponentially to deliver on the market requirements. Content creators and distributors have to do a lot more, with essentially flat budgets.
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the comprehensive tools and solutions to create, distribute and optimize media, with proven end-to-end solutions that are precisely designed to optimize content production and media workflow efficiencies;
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the open, integrated and efficient platform designed for media, providing an ecosystem that future-proofs and protects technology investments;
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flexible deployment models, licensing options and commercial structures, including on premises, public or private cloud, or hybrid deployments; perpetual, subscription or enterprise licensing; and flexible commercial models, all adaptable to the individual needs of each client; and
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a preeminent client and user community that helps shape our collective future, including the industry’s most inspirational and award-winning thought leaders, innovators and storytellers that keep our community at the forefront of creative techniques and workflow best practices.
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Artist Suite
encompasses all of our audio and video creative tools for editing, mixing, and live sound production. Products and tools in the Artist Suite can be deployed on premise, cloud-enabled, or through a hybrid approach. Users can collaborate to access, edit, and share the same media, and collaborate with others as if they were all in the same facility.
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Media Suite
offers solutions to securely manage, distribute, and re-purpose assets. The solutions will be based on a new metadata tracking system, where metadata will be generated algorithmically and provide a greater level of detail, making it possible to take a flexible and adaptable view of assets at any stage of the lifecycle.
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Studio Suite
comprises in-studio tools for on-air program and viewership enhancement, including 3D real-time graphics, replay servers, sports enhancements and virtual studios.
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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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Marketplaces
provide an easy and secure way for the content creators to share or publish their products or elements. The marketplaces are designed for collaboration and distribution among individuals and enterprises.
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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, graphics solutions, 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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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, graphics solutions, 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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2017
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2016
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2015
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Video products and solutions
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$
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114,787
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$
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155,408
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$
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201,559
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Audio products and solutions
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94,674
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127,702
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134,812
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Total products and solutions
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209,461
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283,110
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336,371
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Services
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209,542
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228,820
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169,224
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Total net revenues
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$
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419,003
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$
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511,930
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$
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505,595
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Year Ended December 31,
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2017
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2016
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2015
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Video products and solutions
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27
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%
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30
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%
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40
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%
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Audio products and solutions
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23
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%
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25
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%
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27
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%
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Total products and solutions
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50
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%
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55
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%
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67
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%
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Services
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50
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%
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45
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%
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33
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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: Belden Inc. (Grass Valley), ChyronHego Corporation, Dalet S.A., Dell Technologies Inc. (EMC Isilon), EVS Corporation, Harmonic Inc., Quantum Corporation, Ross Video Limited, and Vizrt Ltd., among others.
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Audio and Video Post and Professional: Ableton AG, Adobe Systems Incorporated, Apple Inc., AudioTonix Limited, Blackmagic Design Pty Ltd, PreSonus Audio Electronics, Inc., and Yamaha Corporation, among others.
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ITEM 1A.
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RISK FACTORS
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If new or current customers desire only perpetual licenses, we may not be successful in selling subscriptions.
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Although we intend to support our perpetual license business, the increased emphasis on a cloud strategy may raise concerns among our installed customer base.
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We may be unsuccessful in achieving our target pricing.
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Our revenues might decline over the short or long term as a result of this strategy.
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Our relationships with existing partners that resell perpetual licenses may be damaged.
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We may incur costs at a higher than forecasted rate as we enhance and expand our cloud operations.
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the need for our sales representatives to educate customers about the uses and benefits of our products and services, including technical capabilities, security features, potential cost savings and return on investment, which are made available in large-scale deployments;
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the desire of large and medium size organizations to undertake significant evaluation processes to determine their technology requirements prior to making information technology expenditures;
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the negotiation of large, complex, enterprise-wide contracts, as often required by our and our customers' business and legal representatives;
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the need for our customers to obtain requisition approvals from various decision makers within their organizations; and
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customer budget constraints, economic conditions and unplanned administrative delays.
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the financial and administrative burdens associated with compliance with myriad 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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economic, social and political instability abroad and international security concerns in general and the risk of war;
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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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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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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, where such redesign could involve significant costs and result in delayed and/or reduced sales of the affected products.
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failure to realize anticipated returns on investment, cost savings and synergies;
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difficulty in assimilating the operations, policies and personnel of the acquired company;
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unanticipated costs associated with acquisitions;
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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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•
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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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require us to dedicate a greater percentage of our cash flow from operations to payments on our debt, thereby reducing the availability of cash flow to fund capital expenditures, pursue other acquisitions or investments and use for general corporate purposes;
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increase our vulnerability to general adverse economic conditions, including increases in interest rates with respect to borrowings under the Financing Agreement that bear interest at variable rates or when our indebtedness is being refinanced;
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limit our ability to obtain additional financing; and
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limit our flexibility in planning for, or reacting to, changes in or challenges relating to our business and industry, creating competitive disadvantages compared to other competitors with lower debt levels and borrowing costs.
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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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period-to-period variations in our revenues or operating results;
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our failure to accurately forecast revenues or operating results or to report financial or operating results within the range of our previously issued guidance;
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our ability to produce accurate and timely financial statements;
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whether our results meet analysts’ expectations;
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market reaction to significant corporate initiatives or announcements;
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our ability to innovate;
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our relative competitive position within our markets;
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shifts in markets or demand for our solutions;
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changes in our relationships with suppliers, resellers, distributors or customers;
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our commencement of, or involvement in, litigation;
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short sales, hedging or other derivative transactions involving shares of our common stock; and
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shifts in financial markets and fluctuations of exchange rates.
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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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2017
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2016
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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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$6.07
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$4.21
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$8.33
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$6.05
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Second Quarter
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$5.87
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$4.45
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$6.69
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$5.26
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Third Quarter
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$5.53
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$4.09
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$9.78
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$5.60
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Fourth Quarter
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$7.65
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$3.99
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$7.92
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$3.99
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•
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the Nasdaq Composite Index (all companies traded on Nasdaq Capital, Global or Global Select Markets),
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the 2017 Avid Peer Group Index (see details following the graph).
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For the Year Ended December 31,
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2017
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2016
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2015
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2014
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2013
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Net revenues (1)
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$
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419,003
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$
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511,930
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$
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505,595
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$
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530,251
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$
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563,412
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Cost of revenues
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176,887
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179,207
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197,445
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204,471
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223,909
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Gross profit
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242,116
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332,723
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308,150
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325,780
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339,503
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Operating expenses:
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Research and development
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68,212
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81,564
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95,898
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90,390
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95,249
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Marketing and selling
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106,257
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110,338
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122,511
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133,049
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133,890
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General and administrative
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53,892
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61,471
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74,109
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81,181
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77,578
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Amortization of intangible assets
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1,450
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2,498
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2,354
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1,626
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2,648
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Restructuring costs (recoveries), net
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7,059
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12,837
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6,305
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(165
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)
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5,370
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Total operating expenses
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236,870
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268,708
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301,177
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306,081
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314,735
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Operating income
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5,246
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64,015
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6,973
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19,699
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24,768
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Other expense, net
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(18,668
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)
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(18,671
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)
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(6,408
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)
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(2,783
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)
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(676
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)
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(Loss) income before income taxes
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(13,422
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)
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45,344
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|
565
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16,916
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24,092
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Provision for (benefit from) income taxes
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133
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(2,875
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)
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(1,915
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)
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2,188
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|
|
2,939
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Net (loss) income
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$
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(13,555
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)
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$
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48,219
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|
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$
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2,480
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|
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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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Net (loss) income per share – basic and diluted
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$
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(0.33
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)
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$
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1.20
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$
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0.06
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|
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$
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0.38
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$
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0.54
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Weighted-average common shares outstanding – basic
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41,020
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40,021
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39,423
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|
|
39,147
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|
|
39,044
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|||||
Weighted-average common shares outstanding – diluted
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41,020
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40,176
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|
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40,380
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|
|
39,267
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|
|
39,070
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|
(1)
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Our revenues and operating results have been affected by the deferral of revenues from customer transactions occurring prior to 2011. On January 1, 2011, we adopted Accounting Standards Update, or 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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|
As of December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Cash, cash equivalents and marketable securities
|
$
|
57,223
|
|
|
$
|
44,948
|
|
|
$
|
17,902
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|
|
$
|
25,056
|
|
|
$
|
48,203
|
|
Working capital deficit (1)
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(61,753
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)
|
|
(86,931
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)
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(167,450
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)
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(157,492
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)
|
|
(133,517
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)
|
|||||
Total assets
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234,684
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|
|
249,581
|
|
|
247,926
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|
|
191,599
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|
|
235,142
|
|
|||||
Deferred revenues (current and long-term amounts)
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194,613
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|
|
225,684
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|
|
348,382
|
|
|
414,840
|
|
|
466,832
|
|
|||||
Long-term liabilities (1)
|
287,174
|
|
|
281,556
|
|
|
272,599
|
|
|
222,641
|
|
|
270,594
|
|
|||||
Total stockholders’ deficit
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(268,570
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)
|
|
(269,911
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)
|
|
(329,572
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)
|
|
(341,070
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)
|
|
(359,335
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)
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(1)
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The presentation of prior year working capital deficit and long-term liability amounts have been changed to reflect our retrospective adoption of
ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes
. The standard requires entities to present all deferred tax assets and deferred tax liabilities as non-current in a classified balance sheet.
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
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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
|
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
|
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Net revenues:
|
|
|
|
|
|
|||
Product revenues
|
50.0
|
%
|
|
55.3
|
%
|
|
66.5
|
%
|
Services revenues
|
50.0
|
%
|
|
44.7
|
%
|
|
33.5
|
%
|
Total net revenues
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of revenues
|
42.2
|
%
|
|
35.0
|
%
|
|
39.1
|
%
|
Gross margin
|
57.8
|
%
|
|
65.0
|
%
|
|
60.9
|
%
|
Operating expenses:
|
|
|
|
|
|
|||
Research and development
|
16.3
|
%
|
|
15.9
|
%
|
|
19.0
|
%
|
Marketing and selling
|
25.4
|
%
|
|
21.6
|
%
|
|
24.2
|
%
|
General and administrative
|
12.8
|
%
|
|
12.0
|
%
|
|
14.7
|
%
|
Amortization of intangible assets
|
0.3
|
%
|
|
0.5
|
%
|
|
0.5
|
%
|
Restructuring costs, net
|
1.7
|
%
|
|
2.5
|
%
|
|
1.2
|
%
|
Total operating expenses
|
56.5
|
%
|
|
52.5
|
%
|
|
59.6
|
%
|
Operating income
|
1.3
|
%
|
|
12.5
|
%
|
|
1.3
|
%
|
Interest and other expense, net
|
(4.5
|
)%
|
|
(3.7
|
)%
|
|
(1.2
|
)%
|
(Loss) income before income taxes
|
(3.2
|
)%
|
|
8.8
|
%
|
|
0.1
|
%
|
Benefit from income taxes
|
—
|
%
|
|
(0.6
|
)%
|
|
(0.4
|
)%
|
Net (loss) income
|
(3.2
|
)%
|
|
9.4
|
%
|
|
0.5
|
%
|
Net Revenues for the Years Ended December 31, 2017 and 2016
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2017
|
|
Change
|
|
2016
|
||||||||
|
Net Revenues
|
|
$
|
|
%
|
|
Net Revenues
|
||||||
Video products and solutions
|
$
|
114,787
|
|
|
$
|
(40,621
|
)
|
|
(26.1)%
|
|
$
|
155,408
|
|
Audio products and solutions
|
94,674
|
|
|
(33,028
|
)
|
|
(25.9)%
|
|
127,702
|
|
|||
Total products and solutions
|
209,461
|
|
|
(73,649
|
)
|
|
(26.0)%
|
|
283,110
|
|
|||
Services
|
209,542
|
|
|
(19,278
|
)
|
|
(8.4)%
|
|
228,820
|
|
|||
Total net revenues
|
$
|
419,003
|
|
|
$
|
(92,927
|
)
|
|
(18.2)%
|
|
$
|
511,930
|
|
Net Revenues for the Years Ended December 31, 2016 and 2015
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2016
|
|
Change
|
|
2015
|
||||||||
|
Net Revenues
|
|
$
|
|
%
|
|
Net Revenues
|
||||||
Video products and solutions
|
$
|
155,408
|
|
|
$
|
(46,151
|
)
|
|
(22.9)%
|
|
$
|
201,559
|
|
Audio products and solutions
|
127,702
|
|
|
(7,110
|
)
|
|
(5.3)%
|
|
134,812
|
|
|||
Total products and solutions
|
283,110
|
|
|
(53,261
|
)
|
|
(15.8)%
|
|
336,371
|
|
|||
Services
|
228,820
|
|
|
59,596
|
|
|
35.2%
|
|
169,224
|
|
|||
Total net revenues
|
$
|
511,930
|
|
|
$
|
6,335
|
|
|
1.3%
|
|
$
|
505,595
|
|
|
Year Ended December 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
United States
|
38%
|
|
36%
|
|
37%
|
Other Americas
|
7%
|
|
8%
|
|
7%
|
Europe, Middle East and Africa
|
39%
|
|
40%
|
|
41%
|
Asia-Pacific
|
16%
|
|
16%
|
|
15%
|
•
|
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, 2017 and 2016
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2017
|
|
Change
|
|
2016
|
||||||||
|
Costs
|
|
$
|
|
%
|
|
Costs
|
||||||
Products
|
$
|
112,606
|
|
|
$
|
1,027
|
|
|
0.9%
|
|
$
|
111,579
|
|
Services
|
56,481
|
|
|
(3,347
|
)
|
|
(5.6)%
|
|
59,828
|
|
|||
Amortization of intangible assets
|
7,800
|
|
|
—
|
|
|
—%
|
|
7,800
|
|
|||
Total cost of revenues
|
176,887
|
|
|
(2,320
|
)
|
|
(1.3)%
|
|
179,207
|
|
|||
|
|
|
|
|
|
|
|
||||||
Gross profit
|
$
|
242,116
|
|
|
$
|
(90,607
|
)
|
|
(27.2)%
|
|
$
|
332,723
|
|
Costs of Revenues for the Years Ended December 31, 2016 and 2015
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2016
|
|
Change
|
|
2015
|
||||||||
|
Costs
|
|
$
|
|
%
|
|
Costs
|
||||||
Products
|
$
|
111,579
|
|
|
$
|
(20,302
|
)
|
|
(15.4)%
|
|
$
|
131,881
|
|
Services
|
59,828
|
|
|
(1,673
|
)
|
|
(2.7)%
|
|
61,501
|
|
|||
Amortization of intangible assets
|
7,800
|
|
|
3,737
|
|
|
92.0%
|
|
4,063
|
|
|||
Total costs of revenues
|
179,207
|
|
|
(18,238
|
)
|
|
(9.2)%
|
|
197,445
|
|
|||
|
|
|
|
|
|
|
|
||||||
Gross profit
|
$
|
332,723
|
|
|
$
|
24,573
|
|
|
8.0%
|
|
$
|
308,150
|
|
Gross Margin % for the Years Ended December 31, 2017, 2016 and 2015
|
|||||||||
|
2017 Gross
Margin %
|
|
Decrease in
Gross Margin %
|
|
2016 Gross
Margin %
|
|
(Decrease) Increase in
Gross Margin %
|
|
2015 Gross
Margin %
|
Products
|
46.2%
|
|
(14.4)%
|
|
60.6%
|
|
(0.2)%
|
|
60.8%
|
Services
|
73.0%
|
|
(0.9)%
|
|
73.9%
|
|
10.2%
|
|
63.7%
|
Total Gross Margin
|
57.8%
|
|
(7.2)%
|
|
65.0%
|
|
4.1%
|
|
60.9%
|
Operating Expenses and Operating Income for the Years Ended December 31, 2017 and 2016
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2017
|
|
Change
|
|
2016
|
||||||||
|
Expenses
|
|
$
|
|
%
|
|
Expenses
|
||||||
Research and development expenses
|
$
|
68,212
|
|
|
$
|
(13,352
|
)
|
|
(16.4)%
|
|
$
|
81,564
|
|
Marketing and selling expenses
|
106,257
|
|
|
(4,081
|
)
|
|
(3.7)%
|
|
110,338
|
|
|||
General and administrative expenses
|
53,892
|
|
|
(7,579
|
)
|
|
(12.3)%
|
|
61,471
|
|
|||
Amortization of intangible assets
|
1,450
|
|
|
(1,048
|
)
|
|
(42.0)%
|
|
2,498
|
|
|||
Restructuring costs, net
|
7,059
|
|
|
(5,778
|
)
|
|
(45.0)%
|
|
12,837
|
|
|||
Total operating expenses
|
$
|
236,870
|
|
|
$
|
(31,838
|
)
|
|
(11.8)%
|
|
$
|
268,708
|
|
|
|
|
|
|
|
|
|
||||||
Operating income
|
$
|
5,246
|
|
|
$
|
(58,769
|
)
|
|
(91.8)%
|
|
$
|
64,015
|
|
Operating Expenses and Operating Income for the Years Ended December 31, 2016 and 2015
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2016
|
|
Change
|
|
2015
|
||||||||
|
Expenses
|
|
$
|
|
%
|
|
Expenses
|
||||||
Research and development expenses
|
$
|
81,564
|
|
|
$
|
(14,334
|
)
|
|
(14.9)%
|
|
$
|
95,898
|
|
Marketing and selling expenses
|
110,338
|
|
|
(12,173
|
)
|
|
(9.9)%
|
|
122,511
|
|
|||
General and administrative expenses
|
61,471
|
|
|
(12,638
|
)
|
|
(17.1)%
|
|
74,109
|
|
|||
Amortization of intangible assets
|
2,498
|
|
|
144
|
|
|
6.1%
|
|
2,354
|
|
|||
Restructuring costs, net
|
12,837
|
|
|
6,532
|
|
|
103.6%
|
|
6,305
|
|
|||
Total operating expenses
|
$
|
268,708
|
|
|
$
|
(32,469
|
)
|
|
(10.8)%
|
|
$
|
301,177
|
|
|
|
|
|
|
|
|
|
||||||
Operating income
|
$
|
64,015
|
|
|
$
|
57,042
|
|
|
818.0%
|
|
$
|
6,973
|
|
Year-Over-Year Change in R&D Expenses for the Years Ended December 31, 2017 and 2016
|
|||||||||||
(dollars in thousands)
|
|||||||||||
|
2017 Decrease
From 2016
|
|
2016 Decrease
From 2015
|
||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||
Personnel-related
|
$
|
(7,074
|
)
|
|
(15.6)%
|
|
$
|
(6,696
|
)
|
|
(12.6)%
|
Facilities and information technology
|
(2,626
|
)
|
|
(15.9)%
|
|
(358
|
)
|
|
(2.1)%
|
||
Consulting and outside services
|
(2,594
|
)
|
|
(17.3)%
|
|
(3,297
|
)
|
|
(18.4)%
|
||
Computer hardware and supplies
|
(621
|
)
|
|
(36.0)%
|
|
(3,646
|
)
|
|
(67.9)%
|
||
Other expenses
|
(437
|
)
|
|
(14.6)%
|
|
(337
|
)
|
|
(13.0)%
|
||
Total research and development expenses decrease
|
$
|
(13,352
|
)
|
|
(16.4)%
|
|
$
|
(14,334
|
)
|
|
(14.9)%
|
Year-Over-Year Change in Marketing and Selling Expenses for Years Ended December 31, 2017 and 2016
|
|||||||||||
(dollars in thousands)
|
|||||||||||
|
2017 (Decrease)/Increase
From 2016
|
|
2016 (Decrease)/Increase
From 2015
|
||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||
Personnel-related
|
$
|
(6,297
|
)
|
|
(8.0)%
|
|
$
|
(12,376
|
)
|
|
(14.4)%
|
Foreign-exchange losses
|
5,724
|
|
|
(920.0)%
|
|
607
|
|
|
49.4%
|
||
Advertising and promotions
|
(1,855
|
)
|
|
(20.3)%
|
|
(1,041
|
)
|
|
(19.4)%
|
||
Consulting and outside services
|
(1,285
|
)
|
|
(26.7)%
|
|
(3,224
|
)
|
|
(26.0)%
|
||
Other expenses
|
(1,107
|
)
|
|
(37.4)%
|
|
747
|
|
|
6.7%
|
||
Facilities and information technology
|
739
|
|
|
5.0%
|
|
3,114
|
|
|
34.1%
|
||
Total marketing and selling expenses decrease
|
$
|
(4,081
|
)
|
|
(3.7)%
|
|
$
|
(12,173
|
)
|
|
(9.9)%
|
Interest and Other Income (Expense) for the Years Ended December 31, 2017 and 2016
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2017
|
|
Change
|
|
2016
|
||||||||
|
Income
(Expense)
|
|
$
|
|
%
|
|
Income
(Expense)
|
||||||
Interest income
|
$
|
535
|
|
|
$
|
535
|
|
|
100.0%
|
|
$
|
—
|
|
Interest expense
|
(19,964
|
)
|
|
(1,061
|
)
|
|
5.6%
|
|
(18,903
|
)
|
|||
Other income (expense), net
|
761
|
|
|
529
|
|
|
228.0%
|
|
232
|
|
|||
Total interest and other income (expense), net
|
$
|
(18,668
|
)
|
|
$
|
3
|
|
|
—%
|
|
$
|
(18,671
|
)
|
Interest and Other Income (Expense) for the Years Ended December 31, 2016 and 2015
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2016
|
|
Change
|
|
2015
|
||||||||
|
Income
(Expense)
|
|
$
|
|
%
|
|
Income
(Expense)
|
||||||
Interest income
|
$
|
—
|
|
|
$
|
(113
|
)
|
|
(100.0)%
|
|
$
|
113
|
|
Interest expense
|
(18,903
|
)
|
|
(12,557
|
)
|
|
197.9%
|
|
(6,346
|
)
|
|||
Other income (expense), net
|
232
|
|
|
407
|
|
|
(232.6)%
|
|
(175
|
)
|
|||
Total interest and other income (expense), net
|
$
|
(18,671
|
)
|
|
$
|
(12,263
|
)
|
|
191.4%
|
|
$
|
(6,408
|
)
|
Provision for (Benefit from) Income Taxes for the Years Ended December 31, 2017 and 2016
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2017
|
|
Change
|
|
2016
|
||||||||
|
Provision
|
|
$
|
|
%
|
|
Benefit
|
||||||
Provision for (Benefit from) income taxes
|
$
|
133
|
|
|
$
|
3,008
|
|
|
(104.6)%
|
|
$
|
(2,875
|
)
|
Benefit from Income Taxes for the Years Ended December 31, 2016 and 2015
|
|||||||||||||
(dollars in thousands)
|
|||||||||||||
|
2016
|
|
Change
|
|
2015
|
||||||||
|
Benefit
|
|
$
|
|
%
|
|
Provision
|
||||||
Benefit from income taxes
|
$
|
(2,875
|
)
|
|
$
|
(960
|
)
|
|
50.1%
|
|
$
|
(1,915
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by (used in) operating activities
|
$
|
8,936
|
|
|
$
|
(49,195
|
)
|
|
$
|
(34,026
|
)
|
Net cash used in investing activities
|
(6,123
|
)
|
|
(15,577
|
)
|
|
(81,796
|
)
|
|||
Net cash provided by financing activities
|
8,375
|
|
|
91,452
|
|
|
109,558
|
|
|||
Effect of foreign currency exchange rates on cash and cash equivalents
|
1,087
|
|
|
366
|
|
|
(890
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
12,275
|
|
|
$
|
27,046
|
|
|
$
|
(7,154
|
)
|
|
Total
|
|
Less than
1 Year
|
|
1 – 3 Years
|
|
3 – 5 Years
|
|
After
5 Years
|
||||||||||
Notes
|
$
|
123,000
|
|
|
$
|
—
|
|
|
$
|
123,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term Loan
|
106,250
|
|
|
5,750
|
|
|
100,500
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
|
40,285
|
|
|
13,942
|
|
|
18,576
|
|
|
5,208
|
|
|
2,559
|
|
|||||
Unconditional purchase obligations (a)
|
24,415
|
|
|
24,415
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
293,950
|
|
|
$
|
44,107
|
|
|
$
|
242,076
|
|
|
$
|
5,208
|
|
|
$
|
2,559
|
|
(a)
|
At
December 31, 2017
, we had entered into purchase commitments for certain inventory and other goods used in our normal operations. The purchase commitments covered by these agreements are 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
|
$
|
1,500
|
|
|
$
|
1,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Stand-by letters of credit
|
3,492
|
|
|
944
|
|
|
2,093
|
|
|
167
|
|
|
288
|
|
|||||
|
$
|
4,992
|
|
|
$
|
2,444
|
|
|
$
|
2,093
|
|
|
$
|
167
|
|
|
$
|
288
|
|
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,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net revenues:
|
|
|
|
|
|
||||||
Products
|
$
|
209,461
|
|
|
$
|
283,110
|
|
|
$
|
336,371
|
|
Services
|
209,542
|
|
|
228,820
|
|
|
169,224
|
|
|||
Total net revenues
|
419,003
|
|
|
511,930
|
|
|
505,595
|
|
|||
Cost of revenues:
|
|
|
|
|
|
||||||
Products
|
112,606
|
|
|
111,579
|
|
|
131,881
|
|
|||
Services
|
56,481
|
|
|
59,828
|
|
|
61,501
|
|
|||
Amortization of intangible assets
|
7,800
|
|
|
7,800
|
|
|
4,063
|
|
|||
Total cost of revenues
|
176,887
|
|
|
179,207
|
|
|
197,445
|
|
|||
Gross profit
|
242,116
|
|
|
332,723
|
|
|
308,150
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
68,212
|
|
|
81,564
|
|
|
95,898
|
|
|||
Marketing and selling
|
106,257
|
|
|
110,338
|
|
|
122,511
|
|
|||
General and administrative
|
53,892
|
|
|
61,471
|
|
|
74,109
|
|
|||
Amortization of intangible assets
|
1,450
|
|
|
2,498
|
|
|
2,354
|
|
|||
Restructuring costs, net
|
7,059
|
|
|
12,837
|
|
|
6,305
|
|
|||
Total operating expenses
|
236,870
|
|
|
268,708
|
|
|
301,177
|
|
|||
Operating income
|
5,246
|
|
|
64,015
|
|
|
6,973
|
|
|||
Interest income
|
535
|
|
|
—
|
|
|
113
|
|
|||
Interest expense
|
(19,964
|
)
|
|
(18,903
|
)
|
|
(6,346
|
)
|
|||
Other income (expense), net
|
761
|
|
|
232
|
|
|
(175
|
)
|
|||
(Loss) income before income taxes
|
(13,422
|
)
|
|
45,344
|
|
|
565
|
|
|||
Provision for (benefit from) income taxes
|
133
|
|
|
(2,875
|
)
|
|
(1,915
|
)
|
|||
Net (loss) income
|
$
|
(13,555
|
)
|
|
$
|
48,219
|
|
|
$
|
2,480
|
|
|
|
|
|
|
|
||||||
Net (loss) income per common share – basic and diluted
|
$
|
(0.33
|
)
|
|
$
|
1.20
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding – basic
|
41,020
|
|
|
40,021
|
|
|
39,423
|
|
|||
Weighted-average common shares outstanding – diluted
|
41,020
|
|
|
40,176
|
|
|
40,380
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net (loss) income
|
$
|
(13,555
|
)
|
|
$
|
48,219
|
|
|
$
|
2,480
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
7,470
|
|
|
(1,717
|
)
|
|
(6,566
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive (loss) income
|
$
|
(6,085
|
)
|
|
$
|
46,502
|
|
|
$
|
(4,086
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
57,223
|
|
|
$
|
44,948
|
|
Accounts receivable, net of allowances of $11,142 and $8,618 at December 31, 2017 and 2016, respectively
|
40,134
|
|
|
43,520
|
|
||
Inventories
|
38,421
|
|
|
50,701
|
|
||
Prepaid expenses
|
8,208
|
|
|
6,031
|
|
||
Other current assets
|
10,341
|
|
|
5,805
|
|
||
Total current assets
|
154,327
|
|
|
151,005
|
|
||
Property and equipment, net
|
21,903
|
|
|
30,146
|
|
||
Intangible assets, net
|
13,682
|
|
|
22,932
|
|
||
Goodwill
|
32,643
|
|
|
32,643
|
|
||
Long-term deferred tax assets, net
|
1,318
|
|
|
1,245
|
|
||
Other long-term assets
|
10,811
|
|
|
11,610
|
|
||
Total assets
|
$
|
234,684
|
|
|
$
|
249,581
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
30,160
|
|
|
$
|
26,435
|
|
Accrued compensation and benefits
|
25,466
|
|
|
25,387
|
|
||
Accrued expenses and other current liabilities
|
31,549
|
|
|
34,088
|
|
||
Income taxes payable
|
1,815
|
|
|
1,012
|
|
||
Short-term debt
|
5,906
|
|
|
5,000
|
|
||
Deferred revenues
|
121,184
|
|
|
146,014
|
|
||
Total current liabilities
|
216,080
|
|
|
237,936
|
|
||
Long-term debt
|
204,498
|
|
|
188,795
|
|
||
Long-term deferred tax liabilities, net
|
—
|
|
|
913
|
|
||
Long-term deferred revenues
|
73,429
|
|
|
79,670
|
|
||
Other long-term liabilities
|
9,247
|
|
|
12,178
|
|
||
Total liabilities
|
503,254
|
|
|
519,492
|
|
||
|
|
|
|
||||
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 issued, and 41,356 shares and 40,727 shares outstanding at December 31, 2017 and 2016, respectively
|
423
|
|
|
423
|
|
||
Additional paid-in capital
|
1,035,808
|
|
|
1,043,063
|
|
||
Accumulated deficit
|
(1,284,703
|
)
|
|
(1,271,148
|
)
|
||
Treasury stock at cost, net of reissuances, 983 shares and 1,612 shares at December 31, 2017 and 2016, respectively
|
(17,672
|
)
|
|
(32,353
|
)
|
||
Accumulated other comprehensive loss
|
(2,426
|
)
|
|
(9,896
|
)
|
||
Total stockholders’ deficit
|
(268,570
|
)
|
|
(269,911
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
234,684
|
|
|
$
|
249,581
|
|
|
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, 2015
|
42,339
|
|
(3,045
|
)
|
|
423
|
|
1,049,969
|
|
(1,321,798
|
)
|
(68,051
|
)
|
(1,613
|
)
|
(341,070
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stock issued pursuant to employee stock plans
|
|
823
|
|
|
|
(14,215
|
)
|
|
17,691
|
|
|
3,476
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation
|
|
|
|
|
9,514
|
|
|
|
|
9,514
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Convertible senior notes conversion feature (net of taxes of $6,493 and net of issuance cost of $1,088)
|
|
|
|
|
20,718
|
|
|
|
|
20,718
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Purchase of capped call transaction
|
|
|
|
|
(10,125
|
)
|
|
|
|
(10,125
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Repurchase of common stock
|
|
(587
|
)
|
|
|
(23
|
)
|
|
(7,976
|
)
|
|
(7,999
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
|
|
|
|
2,480
|
|
|
|
2,480
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
(6,566
|
)
|
(6,566
|
)
|
||||||
Balances at December 31, 2015
|
42,339
|
|
(2,809
|
)
|
|
423
|
|
1,055,838
|
|
(1,319,318
|
)
|
(58,336
|
)
|
(8,179
|
)
|
(329,572
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cumulative-effect adjustment due to adoption of ASU No. 2016-09
|
|
|
|
|
49
|
|
(49
|
)
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||
Stock issued pursuant to employee stock plans
|
|
1,197
|
|
|
|
(20,740
|
)
|
|
25,983
|
|
|
5,243
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation
|
|
|
|
|
7,916
|
|
|
|
|
7,916
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
|
|
|
|
48,219
|
|
|
|
48,219
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
(1,717
|
)
|
(1,717
|
)
|
||||||
Balances at December 31, 2016
|
42,339
|
|
(1,612
|
)
|
|
423
|
|
1,043,063
|
|
(1,271,148
|
)
|
(32,353
|
)
|
(9,896
|
)
|
(269,911
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stock issued pursuant to employee stock plans
|
|
629
|
|
|
|
(15,565
|
)
|
|
14,681
|
|
|
(884
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation
|
|
|
|
|
8,311
|
|
|
|
|
8,311
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
|
|
|
|
|
(13,555
|
)
|
|
|
(13,555
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
7,470
|
|
7,470
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Partial retirement of convertible senior notes conversion feature
|
|
|
|
|
(5
|
)
|
|
|
|
(5
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Partial unwind capped call cash receipt
|
|
|
|
|
4
|
|
|
|
|
4
|
|
||||||
Balances at December 31, 2017
|
42,339
|
|
(983
|
)
|
|
423
|
|
1,035,808
|
|
(1,284,703
|
)
|
(17,672
|
)
|
(2,426
|
)
|
(268,570
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(13,555
|
)
|
|
$
|
48,219
|
|
|
$
|
2,480
|
|
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
22,337
|
|
|
25,479
|
|
|
20,088
|
|
|||
(Recovery) provision for doubtful accounts
|
(340
|
)
|
|
886
|
|
|
(23
|
)
|
|||
Stock-based compensation expense
|
8,311
|
|
|
7,916
|
|
|
9,514
|
|
|||
Non-cash provision for restructuring
|
3,191
|
|
|
1,137
|
|
|
—
|
|
|||
Non-cash interest expense
|
8,951
|
|
|
9,620
|
|
|
2,890
|
|
|||
Unrealized foreign currency transaction losses (gains)
|
7,336
|
|
|
(2,599
|
)
|
|
(7,013
|
)
|
|||
Benefit from deferred taxes
|
(873
|
)
|
|
(1,842
|
)
|
|
(6,693
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
3,800
|
|
|
14,321
|
|
|
2,442
|
|
|||
Inventories
|
12,280
|
|
|
(2,628
|
)
|
|
3,056
|
|
|||
Prepaid expenses and other assets
|
(7,567
|
)
|
|
(1,839
|
)
|
|
10,000
|
|
|||
Accounts payable
|
3,606
|
|
|
(18,959
|
)
|
|
11,232
|
|
|||
Accrued expenses, compensation and benefits and other liabilities
|
(8,189
|
)
|
|
(6,280
|
)
|
|
(11,842
|
)
|
|||
Income taxes payable
|
800
|
|
|
(9
|
)
|
|
(1,041
|
)
|
|||
Deferred revenues
|
(31,152
|
)
|
|
(122,617
|
)
|
|
(69,116
|
)
|
|||
Net cash provided by (used in) operating activities
|
8,936
|
|
|
(49,195
|
)
|
|
(34,026
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(7,877
|
)
|
|
(11,003
|
)
|
|
(15,330
|
)
|
|||
Increase in other long-term assets
|
(36
|
)
|
|
(30
|
)
|
|
(43
|
)
|
|||
Payments for business acquisitions, net of cash acquired
|
—
|
|
|
—
|
|
|
(65,967
|
)
|
|||
Decrease (increase) in restricted cash
|
1,790
|
|
|
(4,544
|
)
|
|
(456
|
)
|
|||
Net cash used in investing activities
|
(6,123
|
)
|
|
(15,577
|
)
|
|
(81,796
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from long-term debt
|
16,694
|
|
|
100,000
|
|
|
120,401
|
|
|||
Repayment of debt
|
(6,735
|
)
|
|
(3,750
|
)
|
|
—
|
|
|||
Payments for repurchase of common stock
|
—
|
|
|
—
|
|
|
(7,999
|
)
|
|||
Cash paid for capped call transaction
|
—
|
|
|
—
|
|
|
(10,125
|
)
|
|||
Proceeds from the issuance of common stock under employee stock plans
|
445
|
|
|
6,184
|
|
|
5,035
|
|
|||
Common stock repurchases for tax withholdings for net settlement of equity awards
|
(1,329
|
)
|
|
(941
|
)
|
|
(1,559
|
)
|
|||
Proceeds from revolving credit facilities
|
—
|
|
|
25,000
|
|
|
70,500
|
|
|||
Payments on revolving credit facilities
|
—
|
|
|
(30,000
|
)
|
|
(65,500
|
)
|
|||
Payments for credit facility issuance costs
|
(700
|
)
|
|
(5,041
|
)
|
|
(1,195
|
)
|
|||
Net cash provided by financing activities
|
8,375
|
|
|
91,452
|
|
|
109,558
|
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
1,087
|
|
|
366
|
|
|
(890
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
12,275
|
|
|
27,046
|
|
|
(7,154
|
)
|
|||
Cash and cash equivalents at beginning of year
|
44,948
|
|
|
17,902
|
|
|
25,056
|
|
|||
Cash and cash equivalents at end of year
|
$
|
57,223
|
|
|
$
|
44,948
|
|
|
$
|
17,902
|
|
|
|
|
|
|
|
||||||
Supplemental information:
|
|
|
|
|
|
||||||
Cash (refunded) paid for income taxes, net
|
$
|
(100
|
)
|
|
$
|
1,587
|
|
|
$
|
2,251
|
|
Cash paid for interest
|
10,966
|
|
|
9,302
|
|
|
3,456
|
|
|||
Non-cash transaction – property and equipment included in accounts payable or accruals
|
30
|
|
|
119
|
|
|
500
|
|
|||
Non-cash transaction – unpaid issuance costs for long-term debt
|
—
|
|
|
—
|
|
|
130
|
|
A.
|
BUSINESS
|
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 the products are sold and expected discounts based on the customer size and type.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Allowance for sales returns and exchanges
–
beginning of year
|
$
|
7,861
|
|
|
$
|
8,583
|
|
|
$
|
9,510
|
|
Additions and adjustments to the allowance
|
14,494
|
|
|
9,325
|
|
|
8,468
|
|
|||
Deductions against the allowance
|
(12,439
|
)
|
|
(10,047
|
)
|
|
(9,395
|
)
|
|||
Allowance for sales returns and exchanges
–
end of year
|
$
|
9,916
|
|
|
$
|
7,861
|
|
|
$
|
8,583
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Allowance for doubtful accounts
–
beginning of year
|
$
|
757
|
|
|
$
|
643
|
|
|
$
|
1,182
|
|
Bad debt (recovery) expense
|
(340
|
)
|
|
886
|
|
|
(23
|
)
|
|||
Increase (reduction) in allowance for doubtful accounts
|
809
|
|
|
(772
|
)
|
|
(516
|
)
|
|||
Allowance for doubtful accounts
–
end of year
|
$
|
1,226
|
|
|
$
|
757
|
|
|
$
|
643
|
|
|
|
Depreciable Life
|
||
|
|
Minimum
|
|
Maximum
|
Computer and video equipment and software, including internal use software
|
|
2 years
|
|
5 years
|
Manufacturing tooling and testbeds
|
|
3 years
|
|
5 years
|
Office equipment
|
|
3 years
|
|
5 years
|
Furniture, fixtures and other
|
|
3 years
|
|
8 years
|
C.
|
ACQUISITION
|
D.
|
NET INCOME PER SHARE
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
|||
Options
|
2,290
|
|
|
3,670
|
|
|
1,901
|
|
Non-vested restricted stock units
|
3,063
|
|
|
729
|
|
|
470
|
|
Anti-dilutive potential common shares
|
5,353
|
|
|
4,399
|
|
|
2,371
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
December 31,
2017 |
|
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 investments
|
$
|
1,743
|
|
|
$
|
484
|
|
|
$
|
1,259
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
December 31, 2016
|
|
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 investments
|
$
|
2,035
|
|
|
$
|
493
|
|
|
$
|
1,542
|
|
|
$
|
—
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Accounts receivable
|
$
|
51,276
|
|
|
$
|
52,138
|
|
Less:
|
|
|
|
||||
Allowance for doubtful accounts
|
(1,226
|
)
|
|
(757
|
)
|
||
Allowance for sales returns and rebates
|
(9,916
|
)
|
|
(7,861
|
)
|
||
Total
|
$
|
40,134
|
|
|
$
|
43,520
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Raw materials
|
$
|
11,217
|
|
|
$
|
10,481
|
|
Work in process
|
397
|
|
|
291
|
|
||
Finished goods
|
26,807
|
|
|
39,929
|
|
||
Total
|
$
|
38,421
|
|
|
$
|
50,701
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Computer and video equipment and software
|
|
$
|
127,322
|
|
|
$
|
120,853
|
|
Manufacturing tooling and testbeds
|
|
3,591
|
|
|
3,567
|
|
||
Office equipment
|
|
5,036
|
|
|
4,958
|
|
||
Furniture, fixtures and other
|
|
10,639
|
|
|
10,691
|
|
||
Leasehold improvements
|
|
34,779
|
|
|
34,780
|
|
||
|
|
181,367
|
|
|
174,849
|
|
||
Less: Accumulated depreciation and amortization
|
|
159,464
|
|
|
144,703
|
|
||
Total
|
|
$
|
21,903
|
|
|
$
|
30,146
|
|
I.
|
INTANGIBLE ASSETS AND GOODWILL
|
|
December 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Completed technologies and patents
|
$
|
58,609
|
|
|
$
|
(47,072
|
)
|
|
$
|
11,537
|
|
|
$
|
57,994
|
|
|
$
|
(38,657
|
)
|
|
$
|
19,337
|
|
Customer relationships
|
54,946
|
|
|
(52,801
|
)
|
|
2,145
|
|
|
54,597
|
|
|
(51,002
|
)
|
|
3,595
|
|
||||||
Trade names
|
1,346
|
|
|
(1,346
|
)
|
|
—
|
|
|
1,346
|
|
|
(1,346
|
)
|
|
—
|
|
||||||
Capitalized software costs
|
4,911
|
|
|
(4,911
|
)
|
|
—
|
|
|
4,911
|
|
|
(4,911
|
)
|
|
—
|
|
||||||
Total
|
$
|
119,812
|
|
|
$
|
(106,130
|
)
|
|
$
|
13,682
|
|
|
$
|
118,848
|
|
|
$
|
(95,916
|
)
|
|
$
|
22,932
|
|
J.
|
OTHER LONG-TERM LIABILITIES
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred rent
|
$
|
2,970
|
|
|
$
|
5,458
|
|
Accrued restructuring
|
731
|
|
|
1,256
|
|
||
Deferred compensation
|
5,546
|
|
|
5,464
|
|
||
Total
|
$
|
9,247
|
|
|
$
|
12,178
|
|
Year Ending December 31,
|
|
||
2018
|
$
|
13,942
|
|
2019
|
11,740
|
|
|
2020
|
6,836
|
|
|
2021
|
2,927
|
|
|
2022
|
2,281
|
|
|
Thereafter
|
2,559
|
|
|
Total
|
$
|
40,285
|
|
Accrual balance at January 1, 2015
|
$
|
2,792
|
|
Accruals for product warranties
|
3,025
|
|
|
Cost of warranty claims
|
(3,583
|
)
|
|
Accrual balance at December 31, 2015
|
2,234
|
|
|
Accruals for product warranties
|
2,822
|
|
|
Cost of warranty claims
|
(2,538
|
)
|
|
Accrual balance at December 31, 2016
|
2,518
|
|
|
Accruals for product warranties
|
2,572
|
|
|
Cost of warranty claims
|
(2,545
|
)
|
|
Accrual balance at December 31, 2017
|
$
|
2,545
|
|
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, 2017
|
2,847,502
|
|
$10.43
|
|
|
Granted
|
—
|
|
$—
|
|
|
Exercised
|
—
|
|
$—
|
|
|
Forfeited or canceled
|
(557,485
|
)
|
$13.59
|
|
|
Options outstanding at December 31, 2017
|
2,290,017
|
|
$9.65
|
2.31
|
$—
|
Options vested at December 31, 2017 or expected to vest
|
2,290,017
|
|
$9.65
|
2.31
|
$—
|
Options exercisable at December 31, 2017
|
2,282,517
|
|
$9.66
|
2.30
|
$—
|
|
Year Ended December 31,
|
|
2015
|
Expected dividend yield
|
0.00%
|
Risk-free interest rate
|
1.07%
|
Expected volatility
|
52.0%
|
Expected life (in years)
|
4.48
|
Weighted-average fair value of options granted (per share)
|
$3.91
|
|
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, 2017
|
2,155,781
|
|
$6.33
|
|
|
Granted
|
1,799,346
|
|
$4.63
|
|
|
Vested
|
(779,963
|
)
|
$7.26
|
|
|
Forfeited
|
(111,916
|
)
|
$6.12
|
|
|
Non-vested at December 31, 2017
|
3,063,248
|
|
$5.10
|
0.93
|
$16,480
|
Expected to vest
|
1,809,138
|
|
$5.49
|
0.93
|
$9,733
|
|
Year Ended December 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
Expected dividend yield
|
0.00%
|
|
0.00%
|
|
0.00%
|
Risk-free interest rate
|
0.83%
|
|
0.40%
|
|
0.03%
|
Expected volatility
|
62.0%
|
|
69.0%
|
|
37.0%
|
Expected life (in years)
|
0.49
|
|
0.49
|
|
0.24
|
Weighted-average fair value of shares issued (per share)
|
$0.86
|
|
$1.20
|
|
$2.15
|
|
Year Ended December 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
Shares issued under the ESPP
|
96,507
|
|
129,342
|
|
98,300
|
Average price of shares issued
|
$4.53
|
|
$4.35
|
|
$10.17
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cost of products revenues
|
$
|
53
|
|
|
$
|
60
|
|
|
$
|
199
|
|
Cost of services revenues
|
189
|
|
|
381
|
|
|
624
|
|
|||
Research and development expenses
|
694
|
|
|
376
|
|
|
461
|
|
|||
Marketing and selling expenses
|
1,944
|
|
|
1,958
|
|
|
1,785
|
|
|||
General and administrative expenses
|
5,431
|
|
|
5,141
|
|
|
6,445
|
|
|||
Total
|
$
|
8,311
|
|
|
$
|
7,916
|
|
|
$
|
9,514
|
|
M.
|
EMPLOYEE BENEFIT PLANS
|
N.
|
INCOME TAXES
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(Loss) income from operations before income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
(4,811
|
)
|
|
$
|
12,402
|
|
|
$
|
(23,977
|
)
|
Foreign
|
(8,611
|
)
|
|
32,942
|
|
|
24,542
|
|
|||
Total (loss) income from operations before income taxes
|
$
|
(13,422
|
)
|
|
$
|
45,344
|
|
|
$
|
565
|
|
Provision for (Benefit from) income taxes:
|
|
|
|
|
|
||||||
Current tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
(4
|
)
|
|
$
|
102
|
|
|
$
|
115
|
|
State
|
59
|
|
|
32
|
|
|
3
|
|
|||
Foreign benefit of net operating losses
|
(66
|
)
|
|
(1,247
|
)
|
|
(180
|
)
|
|||
Other foreign
|
1,774
|
|
|
(48
|
)
|
|
3,734
|
|
|||
Total current tax expense (benefit)
|
1,763
|
|
|
(1,161
|
)
|
|
3,672
|
|
|||
Deferred tax (benefit) expense:
|
|
|
|
|
|
||||||
Federal benefit related to Note issuance
|
—
|
|
|
—
|
|
|
(6,493
|
)
|
|||
Federal
|
(821
|
)
|
|
96
|
|
|
—
|
|
|||
Other foreign
|
(809
|
)
|
|
(1,810
|
)
|
|
906
|
|
|||
Total deferred tax (benefit) expense
|
(1,630
|
)
|
|
(1,714
|
)
|
|
(5,587
|
)
|
|||
Total provision for (benefit from) income taxes
|
$
|
133
|
|
|
$
|
(2,875
|
)
|
|
$
|
(1,915
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Tax credit and net operating loss carryforwards
|
$
|
267,706
|
|
|
$
|
369,847
|
|
Allowances for bad debts
|
34
|
|
|
431
|
|
||
Difference in accounting for:
|
|
|
|
||||
Revenues
|
18,057
|
|
|
35,856
|
|
||
Costs and expenses
|
16,149
|
|
|
26,537
|
|
||
Inventories
|
4,501
|
|
|
9,118
|
|
||
Acquired intangible assets
|
1,830
|
|
|
6,112
|
|
||
Gross deferred tax assets
|
308,277
|
|
|
447,901
|
|
||
Valuation allowance
|
(298,955
|
)
|
|
(432,631
|
)
|
||
Deferred tax assets after valuation allowance
|
9,322
|
|
|
15,270
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Difference in accounting for:
|
|
|
|
||||
Costs and expenses
|
(3,608
|
)
|
|
(6,457
|
)
|
||
Acquired intangible assets
|
(2,189
|
)
|
|
(3,669
|
)
|
||
Basis difference convertible notes
|
(2,207
|
)
|
|
(4,812
|
)
|
||
Gross deferred tax liabilities
|
(8,004
|
)
|
|
(14,938
|
)
|
||
Net deferred tax assets
|
$
|
1,318
|
|
|
$
|
332
|
|
Recorded as:
|
|
|
|
||||
Long-term deferred tax assets, net
|
1,318
|
|
|
1,245
|
|
||
Long-term deferred tax liabilities, net
|
—
|
|
|
(913
|
)
|
||
Net deferred tax assets
|
$
|
1,318
|
|
|
$
|
332
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Statutory tax
|
$
|
(4,698
|
)
|
|
$
|
15,870
|
|
|
$
|
198
|
|
Tax credits
|
(1,646
|
)
|
|
(2,468
|
)
|
|
(2,972
|
)
|
|||
Foreign operations
|
3,113
|
|
|
(12,662
|
)
|
|
(4,055
|
)
|
|||
Change in uncertain tax positions
|
800
|
|
|
(6,710
|
)
|
|
—
|
|
|||
Non-deductible expenses and other
|
1,109
|
|
|
670
|
|
|
2,303
|
|
|||
Federal benefit related to Note issuance
|
—
|
|
|
—
|
|
|
(6,493
|
)
|
|||
Tax deficiency on stock-based compensation
|
—
|
|
|
2,509
|
|
|
—
|
|
|||
Change in valuation allowance
|
1,455
|
|
|
(84
|
)
|
|
9,104
|
|
|||
Provision for (benefit from) income taxes
|
$
|
133
|
|
|
$
|
(2,875
|
)
|
|
$
|
(1,915
|
)
|
Unrecognized tax benefits at January 1, 2015
|
$
|
25,847
|
|
Increases for tax positions taken during a prior period
|
148
|
|
|
Unrecognized tax benefits at December 31, 2015
|
25,995
|
|
|
Increases for tax positions taken during a prior period
|
1,041
|
|
|
Decreases for tax positions taken during a prior period
|
(25,995
|
)
|
|
Unrecognized tax benefits at December 31, 2016
|
1,041
|
|
|
Increases for tax positions taken during a prior period
|
800
|
|
|
Unrecognized tax benefits at December 31, 2017
|
$
|
1,841
|
|
O.
|
RESTRUCTURING COSTS AND ACCRUALS
|
|
Employee-
Related
|
|
Facilities-
Related
& Other
|
|
Total
|
||||||
Accrual balance at January 1, 2015
|
58
|
|
|
2,285
|
|
|
2,343
|
|
|||
New restructuring charges – operating expenses
|
5,766
|
|
|
—
|
|
|
5,766
|
|
|||
Revisions of estimated liabilities
|
—
|
|
|
539
|
|
|
539
|
|
|||
Accretion
|
—
|
|
|
226
|
|
|
226
|
|
|||
Cash payments
|
(315
|
)
|
|
(1,301
|
)
|
|
(1,616
|
)
|
|||
Foreign exchange impact on ending balance
|
—
|
|
|
(78
|
)
|
|
(78
|
)
|
|||
Accrual balance at December 31, 2015
|
5,509
|
|
|
1,671
|
|
|
7,180
|
|
|||
New restructuring charges – operating expenses
|
10,491
|
|
|
943
|
|
|
11,434
|
|
|||
Revisions of estimated liabilities
|
(497
|
)
|
|
763
|
|
|
266
|
|
|||
Accretion
|
—
|
|
|
287
|
|
|
287
|
|
|||
Cash payments
|
(8,225
|
)
|
|
(1,701
|
)
|
|
(9,926
|
)
|
|||
Non-cash write-offs
|
—
|
|
|
1,137
|
|
|
1,137
|
|
|||
Foreign exchange impact on ending balance
|
(260
|
)
|
|
(7
|
)
|
|
(267
|
)
|
|||
Accrual balance at December 31, 2016
|
7,018
|
|
|
3,093
|
|
|
10,111
|
|
|||
New restructuring charges – operating expenses
|
3,095
|
|
|
1,526
|
|
|
4,621
|
|
|||
Revisions of estimated liabilities
|
(1,087
|
)
|
|
334
|
|
|
(753
|
)
|
|||
Accretion
|
—
|
|
|
325
|
|
|
325
|
|
|||
Cash payments
|
(6,750
|
)
|
|
(4,252
|
)
|
|
(11,002
|
)
|
|||
Non-cash write-offs
|
—
|
|
|
3,191
|
|
|
3,191
|
|
|||
Foreign exchange impact on ending balance
|
(65
|
)
|
|
16
|
|
|
(49
|
)
|
|||
Accrual balance at December 31, 2017
|
$
|
2,211
|
|
|
$
|
4,233
|
|
|
$
|
6,444
|
|
P.
|
PRODUCT AND GEOGRAPHIC INFORMATION
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Video products and solutions
|
$
|
114,787
|
|
|
$
|
155,408
|
|
|
$
|
201,559
|
|
Audio products and solutions
|
94,674
|
|
|
127,702
|
|
|
134,812
|
|
|||
Total products and solutions
|
209,461
|
|
|
283,110
|
|
|
336,371
|
|
|||
Services
|
209,542
|
|
|
228,820
|
|
|
169,224
|
|
|||
Total net revenues
|
$
|
419,003
|
|
|
$
|
511,930
|
|
|
$
|
505,595
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
||||||
United States
|
$
|
161,155
|
|
|
$
|
186,658
|
|
|
$
|
185,109
|
|
Other Americas
|
27,031
|
|
|
38,824
|
|
|
37,081
|
|
|||
Europe, Middle East and Africa
|
163,059
|
|
|
206,605
|
|
|
206,192
|
|
|||
Asia-Pacific
|
67,758
|
|
|
79,843
|
|
|
77,213
|
|
|||
Total net revenues
|
$
|
419,003
|
|
|
$
|
511,930
|
|
|
$
|
505,595
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Long-lived assets:
|
|
|
|
||||
United States
|
$
|
24,292
|
|
|
$
|
29,970
|
|
Other countries
|
8,426
|
|
|
11,786
|
|
||
Total long-lived assets
|
$
|
32,718
|
|
|
$
|
41,756
|
|
Q.
|
LONG-TERM DEBT AND CREDIT AGREEMENT
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Term Loan, net of unamortized debt issuance costs of $3,499 at December 31, 2017 and $4,042 at December 31, 2016, respectively
|
$
|
102,751
|
|
|
$
|
92,208
|
|
Notes, net of unamortized original issue discount and debt issuance costs of $17,026 at December 31, 2017 and $23,413 at December 31, 2016, respectively
|
105,974
|
|
|
101,587
|
|
||
Other long-term debt
|
1,679
|
|
|
—
|
|
||
Total debt
|
210,404
|
|
|
193,795
|
|
||
Less: current portion
|
5,906
|
|
|
5,000
|
|
||
Total long-term debt
|
$
|
204,498
|
|
|
$
|
188,795
|
|
(In thousands, except per share data)
|
Quarter Ended
|
||||||||||||||||||||||||||||||
2017
|
|
2016
|
|||||||||||||||||||||||||||||
|
Dec. 31
|
|
Sept. 30
|
|
June 30
|
|
Mar. 31
|
|
Dec. 31
|
|
Sept. 30
|
|
June 30
|
|
Mar. 31
|
||||||||||||||||
Net revenues
|
$
|
107,258
|
|
|
$
|
105,265
|
|
|
$
|
102,373
|
|
|
$
|
104,107
|
|
|
$
|
115,295
|
|
|
$
|
119,019
|
|
|
$
|
134,069
|
|
|
$
|
143,547
|
|
Cost of revenues
|
46,862
|
|
|
42,957
|
|
|
40,670
|
|
|
38,598
|
|
|
43,876
|
|
|
41,678
|
|
|
44,320
|
|
|
41,533
|
|
||||||||
Amortization of intangible assets
|
1,950
|
|
|
1,950
|
|
|
1,950
|
|
|
1,950
|
|
|
1,950
|
|
|
1,950
|
|
|
1,950
|
|
|
1,950
|
|
||||||||
Gross profit
|
58,446
|
|
|
60,358
|
|
|
59,753
|
|
|
63,559
|
|
|
69,469
|
|
|
75,391
|
|
|
87,799
|
|
|
100,064
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Research and development
|
16,308
|
|
|
16,025
|
|
|
16,991
|
|
|
18,888
|
|
|
18,773
|
|
|
19,953
|
|
|
21,433
|
|
|
21,405
|
|
||||||||
Marketing and selling
|
25,776
|
|
|
25,652
|
|
|
29,018
|
|
|
25,811
|
|
|
21,311
|
|
|
27,231
|
|
|
30,177
|
|
|
31,619
|
|
||||||||
General and administrative
|
10,624
|
|
|
15,193
|
|
|
13,644
|
|
|
14,431
|
|
|
13,112
|
|
|
13,822
|
|
|
16,818
|
|
|
17,719
|
|
||||||||
Amortization of intangible assets
|
362
|
|
|
362
|
|
|
363
|
|
|
363
|
|
|
363
|
|
|
567
|
|
|
782
|
|
|
786
|
|
||||||||
Restructuring costs (recoveries), net
|
595
|
|
|
(582
|
)
|
|
6,063
|
|
|
983
|
|
|
4,959
|
|
|
5,314
|
|
|
(213
|
)
|
|
2,777
|
|
||||||||
Total operating expenses
|
53,665
|
|
|
56,650
|
|
|
66,079
|
|
|
60,476
|
|
|
58,518
|
|
|
66,887
|
|
|
68,997
|
|
|
74,306
|
|
||||||||
Operating income (loss)
|
4,781
|
|
|
3,708
|
|
|
(6,326
|
)
|
|
3,083
|
|
|
10,951
|
|
|
8,504
|
|
|
18,802
|
|
|
25,758
|
|
||||||||
Other expense, net
|
(5,203
|
)
|
|
(4,701
|
)
|
|
(3,918
|
)
|
|
(4,846
|
)
|
|
(4,622
|
)
|
|
(4,707
|
)
|
|
(5,159
|
)
|
|
(4,183
|
)
|
||||||||
(Loss) income before income taxes
|
(422
|
)
|
|
(993
|
)
|
|
(10,244
|
)
|
|
(1,763
|
)
|
|
6,329
|
|
|
3,797
|
|
|
13,643
|
|
|
21,575
|
|
||||||||
Provision for (benefit from) income taxes
|
459
|
|
|
(1,065
|
)
|
|
587
|
|
|
152
|
|
|
1,108
|
|
|
(5,321
|
)
|
|
703
|
|
|
635
|
|
||||||||
Net (loss) income
|
$
|
(881
|
)
|
|
$
|
72
|
|
|
$
|
(10,831
|
)
|
|
$
|
(1,915
|
)
|
|
$
|
5,221
|
|
|
$
|
9,118
|
|
|
$
|
12,940
|
|
|
$
|
20,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net (loss) income per share – basic and diluted
|
$
|
(0.02
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.26
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.13
|
|
|
$
|
0.23
|
|
|
$
|
0.33
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted-average common shares outstanding – basic
|
41,216
|
|
|
41,133
|
|
|
40,953
|
|
|
40,772
|
|
|
40,637
|
|
|
40,194
|
|
|
39,678
|
|
|
39,566
|
|
||||||||
Weighted-average common shares outstanding – diluted
|
41,216
|
|
|
41,355
|
|
|
40,953
|
|
|
40,772
|
|
|
40,746
|
|
|
40,476
|
|
|
39,734
|
|
|
39,640
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
(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.
|
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.
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
No.
|
|
Description
|
|
Filed with
this Form
10-K
|
|
Form or
Schedule
|
|
SEC Filing
Date
|
|
SEC File
Number
|
3.1
|
|
|
|
|
8-K
|
|
July 27, 2005
|
|
000-21174
|
|
3.2
|
|
|
|
|
10-Q
|
|
November 14, 2005
|
|
000-21174
|
|
3.3
|
|
|
|
|
8-K
|
|
October 21, 2011
|
|
000-21174
|
|
4.1
|
|
Specimen Certificate representing the Registrant’s Common Stock
|
|
|
|
S-1
|
|
March 11, 1993*
|
|
033-57796
|
4.2
|
|
|
|
|
8-K
|
|
January 7, 2014
|
|
000-21174
|
|
4.3
|
|
|
|
|
8-K
|
|
January 7, 2014
|
|
000-21174
|
|
10.1
|
|
|
|
|
8-K
|
|
November 25, 2009
|
|
000-21174
|
|
10.2
|
|
|
|
|
8-K
|
|
November 25, 2009
|
|
000-21174
|
|
#10.3
|
|
|
|
|
10-K
|
|
February 29, 2008
|
|
000-21174
|
|
#10.4
|
|
|
|
|
10-K
|
|
March 16, 2010
|
|
000-21174
|
|
#10.5
|
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|
|
|
10-K
|
|
September 12, 2014
|
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001-36254
|
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#10.6
|
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1997 Stock Option Plan
|
|
|
|
10-K
|
|
March 27, 1998
|
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000-21174
|
#10.7
|
|
1997 Stock Incentive Plan, as amended
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10-Q
|
|
May 14, 1997
|
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000-21174
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#10.8
|
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10-K
|
|
February 29, 2008
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000-21174
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#10.9
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10-K
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March 16, 2005
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000-21174
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#10.10
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10-K
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March 16, 2005
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000-21174
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#10.11
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10-Q
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August 7, 2008
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000-21174
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#10.12
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10-K
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September 12, 2014
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001-36254
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#10.13
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10-K
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September 12, 2014
|
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001-36254
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#10.14
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10-K
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September 12, 2014
|
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001-36254
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#10.15
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8-K
|
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July 8, 2008
|
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000-21174
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#10.16
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8-K
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July 8, 2008
|
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000-21174
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#10.17
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8-K
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July 8, 2008
|
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000-21174
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#10.18
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8-K
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|
July 8, 2008
|
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000-21174
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#10.19
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8-K
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February 21, 2007
|
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000-21174
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#10.20
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8-K
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February 21, 2007
|
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000-21174
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#10.21
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10-K
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March 16, 2015
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001-36254
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#10.22
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10-K
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March 16, 2015
|
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001-36254
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#10.23
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10-K
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March 16, 2015
|
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001-36254
|
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#10.24
|
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10-K
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March 16, 2015
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001-36254
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#10.25
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8-K/A
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February 12, 2013
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000-21174
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#10.26
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10-Q
|
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September 12, 2014
|
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001-36254
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#10.27
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10-K
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March 14, 2011
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000-21174
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#10.28
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10-K
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February 29, 2012
|
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000-21174
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#10.29
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10-K
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September 12, 2014
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001-36254
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#10.30
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8-K/A
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February 12, 2013
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000-21174
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#10.31
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10-Q
|
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September 12, 2014
|
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001-36254
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#10.32
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8-K
|
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July 25, 2013
|
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000-21174
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#10.33
|
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10-Q
|
|
September 23, 2014
|
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001-36254
|
|
10.34
|
|
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|
|
8-K
|
|
April 13, 2015
|
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001-36254
|
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10.35
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|
8-K
|
|
April 13, 2015
|
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001-36254
|
10.36
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|
8-K
|
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April 13, 2015
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001-36254
|
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#10.37
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10-Q
|
|
May 8, 2015
|
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001-36254
|
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10.38
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8-K/A
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June 16, 2015
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001-36254
|
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10.39
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8-K/A
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June 16, 2015
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001-36254
|
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10.40
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8-K
|
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June 23, 2015
|
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001-36254
|
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#10.41
|
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10-Q
|
|
November 6, 2015
|
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001-36254
|
|
10.42
|
|
|
|
|
10-K
|
|
March 15, 2016
|
|
001-36254
|
|
10.43
|
|
|
|
|
|
8-K
|
|
March 20, 2017
|
|
001-36254
|
10.44
|
|
|
|
|
|
8-K
|
|
February 21, 2018
|
|
001-36254
|
10.45
|
|
|
|
X
|
|
|
|
|
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10.46
|
|
|
X
|
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|
|
|
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21
|
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X
|
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|
|
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23.1
|
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X
|
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23.2
|
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X
|
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31.1
|
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X
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31.2
|
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X
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32.1
|
|
|
X
|
|
|
|
|
|
|
|
**101.INS
|
|
XBRL Instance Document
|
|
X
|
|
|
|
|
|
|
**101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
X
|
|
|
|
|
|
|
**101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
X
|
|
|
|
|
|
|
**101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
X
|
|
|
|
|
|
|
**101.LAB
|
|
XBRL Taxonomy Label Linkbase Document
|
|
X
|
|
|
|
|
|
|
**101.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.
|
By:
|
/s/ Jeff Rosica
|
|
Jeff Rosica
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
Date:
|
March 15, 2018
|
By:
|
/s/ Jeff Rosica
|
|
By:
|
/s/ Brian E. Agle
|
|
By:
|
/s/ Ryan H. Murray
|
|
|
Jeff Rosica
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
Brian E. Agle
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
Ryan H. Murray
Vice President of Finance and Chief Accounting Officer
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
Date:
|
March 15, 2018
|
|
Date:
|
March 15, 2018
|
|
Date:
|
March 15, 2018
|
|
NAME
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/ Nancy Hawthorne
|
|
|
|
|
Nancy Hawthorne
|
|
Chair of the Board of Directors
|
|
March 15, 2018
|
|
|
|
|
|
/s/ Jeff Rosica
|
|
|
|
|
Jeff Rosica
|
|
President and Chief Executive Officer
|
|
March 15, 2018
|
|
|
|
|
|
/s/ Robert M. Bakish
|
|
|
|
|
Robert M. Bakish
|
|
Director
|
|
March 15, 2018
|
|
|
|
|
|
/s/ Paula E. Boggs
|
|
|
|
|
Paula E. Boggs
|
|
Director
|
|
March 15, 2018
|
|
|
|
|
|
/s/ Elizabeth M. Daley
|
|
|
|
|
Elizabeth M. Daley
|
|
Director
|
|
March 15, 2018
|
|
|
|
|
|
/s/ John P. Wallace
|
|
|
|
|
John P. Wallace
|
|
Director
|
|
March 15, 2018
|
|
|
|
|
|
/s/ John H. Park
|
|
|
|
|
John H. Park
|
|
Director
|
|
March 15, 2018
|
|
|
|
|
|
/s/ Peter Westley
|
|
|
|
|
Peter Westley
|
|
Director
|
|
March 15, 2018
|
|
|
|
|
|
/s/ Daniel B. Silvers
|
|
|
|
|
Daniel B. Silvers
|
|
Director
|
|
March 15, 2018
|
|
|
BORROWER:
|
|
|
AVID TECHNOLOGY, INC.
|
|
By:
|
/s/ Brian E. Agle
|
|
|
Name: Brian E. Agle
|
|
|
Title: Senior Vice President and Chief Financial Officer
|
|
|
GUARANTOR:
|
|
|
AVID TECHNOLOGY WORLDWIDE, INC.
|
|
By:
|
/s/ Brian E. Agle
|
|
|
Name: Brian E. Agle
|
|
|
Title: President
|
|
|
ADMINISTRATIVE AGENT AND COLLATERAL AGENT:
|
|
|
CERBERUS BUSINESS FINANCE, LLC
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Chief Executive Officer
|
|
|
Lenders:
|
|
|
CERBERUS ASRS FUNDING LLC
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Vice President
|
|
|
CERBERUS ASRS HOLDINGS LLC
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Vice President
|
|
|
CERBERUS AUS LEVERED HOLDINGS LP
|
|
By:
|
CAL I GP Holdings LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS AUS LEVERED II LP
|
|
By:
|
CAL II GP, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Vice President
|
|
|
CERBERUS ICQ LEVERED LLC
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Vice President
|
|
|
CERBERUS ICQ LEVERED LOAN OPPORTUNITIES FUND, L.P.
|
|
By:
|
Cerberus ICQ Levered Opportunities GP, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS ICQ OFFSHORE LEVERED LP
|
|
By:
|
Cerberus ICQ Offshore GP LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS ICQ OFFSHORE LOAN OPPORTUNITIES MASTER FUND, L.P.
|
|
By:
|
Cerberus ICQ Offshore Levered GP, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS KRS LEVERED LOAN OPPORTUNITIES FUND, L.P.
|
|
By:
|
Cerberus KRS Levered Opportunities GP, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS LEVERED LOAN OPPORTUNITIES FUND III, L.P.
|
|
By:
|
Cerberus Levered Opportunities III GP, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS LOAN FUNDING XIX, L.P.
|
|
By:
|
Cerberus LFGP XIX, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS LOAN FUNDING XV, L.P.
|
|
By:
|
Cerberus ICQ GP, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS LOAN FUNDING XVI LP
|
|
By:
|
Cerberus PSERS GP, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS LOAN FUNDING XVII LTD.
|
|
By:
|
Cerberus ASRS Holdings LLC, its attorney-in-fact
|
|
|
|
|
|
/s/ Daniel E. Wolf
|
|
|
Duly Authorized Signatory
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Vice President
|
|
|
CERBERUS NJ CREDIT OPPORTUNITIES FUND, L.P.
|
|
By:
|
Cerberus NJ Credit Opportunities GP, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS PSERS LEVERED LOAN OPPORTUNITIES FUND, L.P.
|
|
By:
|
Cerberus PSERS Levered Opportunities GP, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS FSBA HOLDINGS LLC
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Vice President
|
|
|
CERBERUS ND CREDIT HOLDINGS LLC
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Vice President
|
|
|
CERBERUS OFFSHORE LEVERED LOAN OPPORTUNITIES MASTER FUND III, L.P.
|
|
By:
|
Cerberus Offshore Levered Opportunities III GP, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS SWC LEVERED LOAN OPPORTUNITIES MASTER FUND, L.P.
|
|
By:
|
Cerberus SWC Levered Opportunities GP, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS LOAN FUNDING XVIII L.P.
|
|
By:
|
Cerberus LFGP VXIII, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS LOAN FUNDING XX L.P.
|
|
By:
|
Cerberus LFGP XX, LLC
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Senior Managing Director
|
|
|
CERBERUS N-1 FUNDING LLC
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Vice President
|
|
|
CERBERUS OFFSHORE LEVERED III LP
|
|
By:
|
COL III GP Inc.
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Vice President
|
|
|
CERBERUS SWC LEVERED II LLC
|
|
|
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Vice President
|
|
|
BORROWER:
|
|
|
AVID TECHNOLOGY, INC.
|
|
By:
|
/s/ Brian E. Agle
|
|
|
Name: Brian E. Agle
|
|
|
Title: Senior Vice President and Chief Financial Officer
|
|
|
GUARANTOR:
|
|
|
AVID TECHNOLOGY WORLDWIDE, INC.
|
|
By:
|
/s/ Brian E. Agle
|
|
|
Name: Brian E. Agle
|
|
|
Title: President
|
|
|
ADMINISTRATIVE AGENT AND COLLATERAL AGENT:
|
|
|
CERBERUS BUSINESS FINANCE, LLC
|
|
By:
|
/s/ Daniel E. Wolf
|
|
|
Name: Daniel E. Wolf
|
|
|
Title: Chief 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):
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a)
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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
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b)
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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:
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March 15, 2018
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/s/ Jeff Rosica
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Jeff Rosica
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President and Chief Executive Officer
(Principal Executive Officer)
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1.
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I have reviewed this Annual Report on Form 10-K of Avid Technology, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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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:
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March 15, 2018
|
|
/s/ Brian E Agle
|
|
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Brian E. Agle
|
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Senior Vice President and Chief Financial Officer
|
|
|
|
|
|
(Principal Financial Officer)
|
|
Date:
|
March 15, 2018
|
|
/s/ Jeff Rosica
|
|
|
|
|
Jeff Rosica
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
|
Date:
|
March 15, 2018
|
|
/s/ Brian E. Agle
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Brian E. Agle
|
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Senior Vice President and Chief Financial Officer
|
|
|
|
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(Principal Financial Officer)
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