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Avid Technology Announces Q2 2022 Results

·21-min read
Avid Technology, Inc.
Avid Technology, Inc.

Subscription Revenue of $34.1M, an Increase of 58.7% Year-Over-Year, Driven by Increase of Cloud-Enabled Software Subscriptions to Over 450,300

Annual Recurring Revenue of $231.0M, an Increase of 14.1% Year-Over-Year

Net Income per Common Share of $0.16 and Non-GAAP Earnings per Share of $0.26, an Increase of 4.0% Year-Over-Year

BURLINGTON, Mass., Aug. 02, 2022 (GLOBE NEWSWIRE) -- Avid® (NASDAQ: AVID), a leading technology provider that powers the media and entertainment industry, today announced its financial results for the second quarter of 2022, which ended on June 30, 2022.

Total revenue increased 3.0% year-over-year in the second quarter, led by strong subscription growth, offset by continuing macro supply chain challenges that impacted the Company’s ability to ship a significant amount of the orders received for integrated solutions during the first half of 2022. During the second quarter, the recurring components of the Company’s business remained strong with subscription revenue of $34.1 million, up 58.7% year-over-year, and subscription & maintenance revenue of $61.9 million, up 19.2% year-over-year.

The revenue growth, combined with improved gross margin, resulted in Non-GAAP Earnings per Share of $0.26.

Second Quarter 2022 Financial and Business Highlights

  • Subscription revenue was $34.1 million, an increase of 58.7% year-over-year.

  • Paid Cloud-enabled software subscriptions increased by 21.8% year-over-year to approximately 450,300 as of June 30, 2022, and increased by approximately 18,500 during the second quarter.

  • Subscription and Maintenance revenue was $61.9 million, up 19.2% year-over-year.

  • Annual Recurring Revenue was $231.0 million, an increase of 14.1% year-over-year.

  • Subscription ARR was $121.2 million, an increase of 45.8% year-over-year.

  • Total revenue was $97.7 million, an increase of 3.0% year-over-year.

  • Gross margin was 64.9%, an increase of 150 basis points year-over-year. Non-GAAP Gross Margin was 65.5%, an increase of 160 basis points year-over-year.

  • Operating expenses were $53.4 million, an increase of 4.4% year-over-year.   Non-GAAP Operating Expenses were $49.6 million, an increase of 5.4% year-over-year.

  • Net income was $7.4 million, an increase of 5.2% year-over-year. Non-GAAP Net Income was $11.8 million, an increase of 1.7% year-over-year.

  • Adjusted EBITDA was $16.5 million, an increase of 4.1% year-over-year. Adjusted EBITDA Margin was 16.9%, an increase of 20 basis points year-over-year.

  • Net income per common share was $0.16, an increase of 6.7% year-over-year. Non-GAAP Earnings per Share was $0.26, an increase of 4.0% year-over-year.

  • Net cash provided by operating activities was $7.3 million in the quarter, an increase of $0.7 million compared to the second quarter of 2021.

  • Free Cash Flow was $3.2 million in the quarter, a decrease of ($2.4) million compared to the prior year period.

  • LTM Recurring Revenue % was 79.7% of the Company’s revenue for the 12 months ended June 30, 2022, up from 76.1% for the 12 months ended June 30, 2021.

  • Repurchased 559,572 shares for $14.1 million during the second quarter, under the $115 million share repurchase authorization announced on September 9, 2021.

Jeff Rosica, Avid’s Chief Executive Officer and President, stated, “We are pleased by the continued growth from our subscription software business and continued healthy demand for our products during the second quarter.” Mr. Rosica continued, “We delivered year-over-year revenue and earnings growth in the second quarter despite having over $20 million of contractually committed orders for integrated solutions at the end of June that had not shipped in the first half due to the continued global supply chain challenges. We expect that supply chain conditions will gradually improve in the second half of 2022, resulting in favorable year-over-year growth and improved profitability in full-year 2022.”

Ken Gayron, Chief Financial Officer and Executive Vice President of Avid, added, “We continued to grow our Recurring Revenue streams and deliver profitable year-over-year growth during the second quarter.” Mr. Gayron continued, “Despite the challenges posed by supply chain, we ended the quarter with revenue and Adjusted EBITDA in line with our first half forecast and remain confident in our business trajectory and long-term model.   Additionally, we believe our strong capital and liquidity position provides flexibility in operating our business to drive long term strategic value through prudent capital allocation.”

Third Quarter and Full-Year 2022 Guidance

For the third quarter of 2022, Avid is providing guidance for revenue, Subscription & Maintenance Revenue, Non-GAAP Earnings per Share and Adjusted EBITDA. For the full-year 2022, Avid is reaffirming its guidance for Subscription & Maintenance Revenue due to the continued strong demand for these offerings. While Avid is also seeing healthy market conditions and strong demand for its integrated solutions, the impact on its integrated solutions business from the global supply chain challenges and the expected timing of the recovery from these challenges are adding variability to its full-year 2022 business plans. As a result, Avid is widening the range for full-year 2022 total revenue guidance, while keeping the same midpoint, to better reflect the range of possible outcomes for the year. Avid is adjusting its full-year guidance for Adjusted EBITDA and Non-GAAP EPS to reflect the wider revenue range. Avid is also adjusting its Free Cash Flow guidance for full-year 2022 as a result of several factors. First, Avid is seeing more rapid adoption of enterprise subscriptions globally—which is strategically important for the company and is positive for its long-term model, but which has different near term cash conversion characteristics than its individual creatives subscription business. Second, the expected timing of Avid’s integrated solutions manufacturing recovery happening later in the second half will likely lead to some cash collections from these shipments falling into early 2023. And third, to the extent it can, Avid plans to temporarily build up its inventories to a level that will provide a sufficient buffer and greater flexibility to better navigate the variability in anticipated supply chain conditions over the next several quarters, and most importantly, to better meet the strong demand the company is seeing.

($ in millions, except per share amounts)

                                 

Q3 2022 Guidance

Revenue

 

$100 – $112

Subscription & Maintenance Revenue

 

$67 – $70

Non-GAAP Earnings per Share

 

$0.27 – $0.39

Adjusted EBITDA

 

$17.5 – $23.5

Q3 Non-GAAP Earnings per Share assumes 45.0 million shares outstanding.

 

 

 

 

 

Full-Year 2022 Guidance

Revenue

 

$425 – $455

Subscription & Maintenance Revenue

 

$266 – $274

Non-GAAP Earnings per Share

 

$1.37 – $1.53

Adjusted EBITDA

 

$83 – $95

Free Cash Flow

 

$45 – $59

2022 Non-GAAP Earnings per Share assumes 45.2 million shares outstanding.

 

 

 

All guidance presented by the Company is inherently uncertain and subject to numerous risks and uncertainties. Avid’s actual future results of operations could differ materially from those shown in the table above. For a discussion of some of the key assumptions underlying the guidance, as well as the key risks and uncertainties associated with these forward-looking statements, please see “Forward-Looking Statements” below as well as the Avid Technology Q2 2022 Earnings presentation posted on Avid’s Investor Relations website at ir.Avid.com.

Conference Call to Discuss Second Quarter 2022 Results on August 2, 2022

Avid will host a conference call to discuss its financial results for the second quarter 2022 on Tuesday, August 2, 2022 at 5:30 p.m. ET. Participants may join the webcast in listen-only mode and access the presentation slides using the link on the Avid Investor Relations website, which can be found on the Events & Presentations tab at ir.Avid.com. Please connect at least 5 minutes in advance to ensure a timely connection to the call. A replay of the call will also be available for a limited time and can be accessed on the Events & Presentations tab of the Avid Investor Relations website shortly after the completion of the call.

Management to Participate in the Oppenheimer 25th Annual Technology, Internet & Communications Conference on August 9

What: Oppenheimer 25th Annual Technology, Internet & Communications Conference
Participants: Jeff Rosica, Chief Executive Officer and President
                   Ken Gayron, Chief Financial Officer and EVP
Type: Group presentation and 1x1 meetings
Date: Tuesday, August 9, 2022
Group presentation time: 8:15 a.m. ET
The group presentation will be available to the public via live webcast, and a replay will be available for a limited period. For details on how to watch online, please visit the Events & Presentations tab at http://ir.avid.com.

Non-GAAP Financial Measures and Operational Metrics

Avid includes non-GAAP financial measures in this press release, including Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Non-GAAP Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Net Income, and Non-GAAP Earnings per Share. The Company also includes the operational metrics of Cloud-enabled software subscriptions, Annual Recurring Revenue (ARR), Subscription ARR, Recurring Revenue, LTM Recurring Revenue % and Annual Contract Value in this release. Avid believes the non-GAAP financial measures and operational metrics provided in this release provide helpful information to investors with respect to evaluating the Company’s performance. Unless noted, all financial and operating information is reported based on actual exchange rates. Definitions of the non-GAAP financial measures and the operational metrics are included in our Form 8-K filed today. Reconciliations of the non-GAAP financial measures presented in this press release to the Company's comparable GAAP financial measures for the periods presented are set forth below and are included in the supplemental financial and operational data sheet available on our Investor Relations website at ir.Avid.com, which also includes definitions of all operational metrics.

This press release also includes expectations for future Adjusted EBITDA, Non-GAAP Earnings per Share and Free Cash Flow, which are forward-looking non-GAAP financial measures. Reconciliations of these forward-looking non-GAAP measures are not included in this press release or elsewhere, due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from the estimation of the non-GAAP results, together with some of the excluded information not being ascertainable or accessible at this time. As a result, we are unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measure without unreasonable efforts.

Forward-Looking Statements

Certain information provided in this press release includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include statements regarding our future financial performance or position, results of operations, business strategy, plans and objectives of management for future operations, and other statements that are not historical fact. You can identify forward-looking statements by their use of forward-looking words such as “may”, “will”, “anticipate”, “expect”, “believe”, “estimate”, “intend”, “plan”, “should”, “seek”, or other comparable terms.

Readers of this press release should understand that these forward-looking statements are not guarantees of performance or results. Forward-looking statements provide our current expectations and beliefs concerning future events and are subject to risks, uncertainties, and factors relating to our business and operations, all of which are difficult to predict and could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements.

These risks, uncertainties, and factors include, but are not limited to: risks related to the impact of the ongoing coronavirus (COVID-19) pandemic and subsequent variants on our business, suppliers, consumers, customers and employees; economic, social, and political instability, security concerns, and the risk of war, armed conflict and/or cyber conflict, particularly originating in, and complicated by, areas of heightened geopolitical tension and open conflict such as Ukraine, where we have outsourced research and development activities, Russia, and bordering territories; our liquidity; our ability to execute our strategic plan including our cost saving strategies, and to meet customer needs; our ability to retain and hire key personnel; our ability to produce innovative products in response to changing market demand, particularly in the media industry; our ability to successfully accomplish our product development plans; competitive factors; history of losses; fluctuations in our revenue based on, among other things, our performance and risks in particular geographies or markets; our higher indebtedness and ability to service it and meet the obligations thereunder; restrictions in our credit facilities; our move to a subscription model and related effect on our revenues and ability to predict future revenues; fluctuations in subscription and maintenance renewal rates; elongated sales cycles; fluctuations in foreign currency exchange rates; seasonal factors; adverse changes in economic conditions; variances in our revenue backlog and the realization thereof; risks related to the availability and prices of raw materials, including any negative effects caused by inflation, armed conflict and related sanctions, weather conditions, or health pandemics; disruptions, inefficiencies, and/or complications in our operations and/or dynamic and unpredictable global supply chain, including interruptions, delays, complications, and other impacts related to armed conflict and/or cyber conflict and related international sanctions and reprisals and the ongoing COVID-19 pandemic and subsequent variants; the costs, disruption, and diversion of management's attention due to the ongoing COVID-19 pandemic and subsequent variants, armed conflict and/or cyber conflict and related international sanctions and reprisals; the possibility of legal proceedings adverse to our Company; and other risks described in our reports filed from time to time with the U.S. Securities and Exchange Commission. Moreover, the business may be adversely affected by future legislative, regulatory or other changes, including tax law changes, as well as other economic, business and/or competitive factors. The risks included above are not exhaustive. We caution readers not to place undue reliance on any forward-looking statements included in this press release which speak only as to the date of this press release. We undertake no responsibility to update or revise any forward-looking statements, except as required by law.

Avid Powers Greater Creators

People who create media for a living become greater creators with Avid’s award-winning technology solutions to make, manage and monetize today’s most celebrated video and audio content—from iconic movies and bingeworthy TV series, to network news and sports, to recorded music and the live stage. What began more than 30 years ago with our invention of nonlinear digital video editing has led to individual artists, creative teams and organizations everywhere subscribing to our powerful tools and collaborating securely in the cloud. We continue to re-imagine the many ways editors, musicians, producers, journalists and other content creators will bring their stories to life. Discover the possibilities at avid.com and join the conversation on social media with the multitude of brilliant creative people who choose Avid for a lifetime of success.

© 2022 Avid Technology, Inc., Avid and its logo are property of Avid. All rights reserved. Other trademarks are property of their respective owners.

Contacts

Investor contact:
Whit Rappole
Avid
ir@Avid.com

                                     

PR contact:
Jim Sheehan
Avid
jim.sheehan@Avid.com

 

 

 


AVID TECHNOLOGY, INC.

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations

 

 

 

 

 

 

 

 

(unaudited - in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

Net revenues:

 

 

 

 

 

 

 

 

Subscription

 

$

34,142

 

 

$

21,508

 

 

$

67,096

 

 

$

46,376

 

Maintenance

 

 

27,775

 

 

 

30,443

 

 

 

56,102

 

 

 

60,295

 

Integrated solutions & other

 

 

35,763

 

 

 

42,925

 

 

 

75,131

 

 

 

82,569

 

Total net revenues

 

 

97,680

 

 

 

94,876

 

 

 

198,329

 

 

 

189,240

 

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Subscription

 

 

6,292

 

 

 

3,575

 

 

 

11,894

 

 

 

6,190

 

Maintenance

 

 

5,253

 

 

 

5,822

 

 

 

10,530

 

 

 

11,396

 

Integrated solutions & other

 

 

22,769

 

 

 

25,341

 

 

 

45,775

 

 

 

50,100

 

Total cost of revenues

 

 

34,314

 

 

 

34,738

 

 

 

68,199

 

 

 

67,686

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

63,366

 

 

 

60,138

 

 

 

130,130

 

 

 

121,554

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

16,023

 

 

 

16,093

 

 

 

32,759

 

 

 

31,510

 

Marketing and selling

 

 

23,673

 

 

 

21,354

 

 

 

45,600

 

 

 

42,098

 

General and administrative

 

 

13,364

 

 

 

13,678

 

 

 

28,175

 

 

 

27,313

 

Restructuring costs, net

 

 

342

 

 

 

15

 

 

 

357

 

 

 

1,089

 

Total operating expenses

 

 

53,402

 

 

 

51,140

 

 

 

106,891

 

 

 

102,010

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

9,964

 

 

 

8,998

 

 

 

23,239

 

 

 

19,544

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(1,944

)

 

 

(1,783

)

 

 

(3,420

)

 

 

(3,901

)

Other income (expense), net

 

 

79

 

 

 

150

 

 

 

(8

)

 

 

(3,405

)

Income before income taxes

 

 

8,099

 

 

 

7,365

 

 

 

19,811

 

 

 

12,238

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

726

 

 

 

359

 

 

 

1,852

 

 

 

841

 

Net income

 

$

7,373

 

 

$

7,006

 

 

$

17,959

 

 

$

11,397

 

 

 

 

 

 

 

 

 

 

Net income per common share - basic

 

$

0.16

 

 

$

0.15

 

 

$

0.40

 

 

$

0.25

 

Net income per common share - diluted

 

$

0.16

 

 

$

0.15

 

 

$

0.40

 

 

$

0.25

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding - basic

 

 

44,740

 

 

 

45,211

 

 

 

44,778

 

 

 

44,887

 

Weighted-average common shares outstanding - diluted

 

 

45,110

 

 

 

46,550

 

 

 

45,280

 

 

 

46,420

 

 

 

 

 

 

 

 

 

 


AVID TECHNOLOGY, INC.

 

 

 

 

 

 

 

 

Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures

 

 

 

 

(unaudited - in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

GAAP Revenue

 

 

 

 

 

 

 

 

GAAP Revenue

 

$

97,680

 

 

$

94,876

 

 

$

198,329

 

 

$

189,240

 

 

 

 

 

 

 

 

 

 

Non-GAAP Gross Profit

 

 

 

 

 

 

 

 

GAAP Gross Profit

 

 

63,366

 

 

 

60,138

 

 

 

130,130

 

 

 

121,554

 

Stock-based compensation

 

 

589

 

 

 

478

 

 

 

1,015

 

 

 

918

 

Non-GAAP Gross Profit

 

$

63,955

 

 

$

60,616

 

 

$

131,145

 

 

$

122,472

 

GAAP Gross Margin

 

 

64.9

%

 

 

63.4

%

 

 

65.6

%

 

 

64.2

%

Non-GAAP Gross Margin

 

 

65.5

%

 

 

63.9

%

 

 

66.1

%

 

 

64.7

%

 

 

 

 

 

 

 

 

 

Non-GAAP Operating Expenses

 

 

 

 

 

 

 

 

GAAP Operating Expenses

 

 

53,402

 

 

 

51,140

 

 

 

106,891

 

 

 

102,010

 

Less Amortization of intangible assets

 

 

(57

)

 

 

(105

)

 

 

(115

)

 

 

(210

)

Less Stock-based compensation

 

 

(3,056

)

 

 

(3,159

)

 

 

(6,052

)

 

 

(6,136

)

Less Restructuring costs, net

 

 

(342

)

 

 

(15

)

 

 

(357

)

 

 

(1,089

)

Less Acquisition, integration and other costs

 

 

50

 

 

 

(838

)

 

 

(409

)

 

 

(1,207

)

Less Efficiency program costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(48

)

Less Digital Transformation Initiative

 

 

(445

)

 

 

-

 

 

 

(688

)

 

 

-

 

Less COVID-19 related expenses

 

 

-

 

 

 

(20

)

 

 

-

 

 

 

(22

)

Non-GAAP Operating Expenses

 

$

49,552

 

 

$

47,003

 

 

$

99,270

 

 

$

93,298

 

 

 

 

 

 

 

 

 

 

Non-GAAP Operating Income and Adjusted EBITDA

 

 

 

 

 

 

 

 

GAAP net income

 

 

7,373

 

 

 

7,006

 

 

 

17,959

 

 

 

11,397

 

Interest and other expense

 

 

1,865

 

 

 

1,633

 

 

 

3,428

 

 

 

7,306

 

Provision for income taxes

 

 

726

 

 

 

359

 

 

 

1,852

 

 

 

841

 

GAAP Operating Income

 

 

9,964

 

 

 

8,998

 

 

 

23,239

 

 

 

19,544

 

Amortization of intangible assets

 

 

57

 

 

 

105

 

 

 

115

 

 

 

210

 

Stock-based compensation

 

 

3,645

 

 

 

3,637

 

 

 

7,067

 

 

 

7,054

 

Restructuring costs, net

 

 

342

 

 

 

15

 

 

 

357

 

 

 

1,089

 

Acquisition, integration and other costs

 

(50

)

 

 

838

 

 

 

409

 

 

 

1,207

 

Efficiency program costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

48

 

Digital Transformation Initiative

 

 

445

 

 

 

-

 

 

 

688

 

 

 

-

 

COVID-19 related expenses

 

 

-

 

 

 

20

 

 

 

-

 

 

 

22

 

Non-GAAP Operating Income

 

$

14,403

 

 

$

13,613

 

 

$

31,875

 

 

$

29,174

 

Depreciation

 

 

2,066

 

 

 

2,202

 

 

 

3,869

 

 

 

4,321

 

Adjusted EBITDA

 

$

16,469

 

 

$

15,815

 

 

$

35,744

 

 

$

33,495

 

GAAP net income margin

 

 

7.5

%

 

 

7.4

%

 

 

9.1

%

 

 

6.0

%

Adjusted EBITDA Margin

 

 

16.9

%

 

 

16.7

%

 

 

18.0

%

 

 

17.7

%

 

 

 

 

 

 

 

 

 

Non-GAAP Net Income

 

 

 

 

 

 

 

 

GAAP net income

 

 

7,373

 

 

 

7,006

 

 

 

17,959

 

 

 

11,397

 

Amortization of intangible assets

 

 

57

 

 

 

105

 

 

 

115

 

 

 

210

 

Stock-based compensation

 

 

3,645

 

 

 

3,637

 

 

 

7,067

 

 

 

7,054

 

Restructuring costs, net

 

 

342

 

 

 

15

 

 

 

357

 

 

 

1,089

 

Acquisition, integration and other costs

 

(50

)

 

 

838

 

 

 

409

 

 

 

1,207

 

Efficiency program costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

48

 

Digital Transformation Initiative

 

 

445

 

 

 

-

 

 

 

688

 

 

 

-

 

COVID-19 related expenses

 

 

-

 

 

 

20

 

 

 

-

 

 

 

22

 

Loss on Extinguishment of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,748

 

Tax impact of non-GAAP adjustments

 

 

-

 

 

 

(10

)

 

 

(3

)

 

 

(159

)

Non-GAAP Net Income

 

$

11,812

 

 

$

11,611

 

 

$

26,592

 

 

$

24,616

 

Weighted-average share count (Basic)

 

 

44,740

 

 

 

45,211

 

 

 

44,778

 

 

 

44,887

 

Weighted-average share count (Diluted)

 

 

45,110

 

 

 

46,550

 

 

 

45,280

 

 

 

46,420

 

Non-GAAP Earnings per Share (Basic)

 

$

0.26

 

 

$

0.26

 

 

$

0.59

 

 

$

0.55

 

Non-GAAP Earnings per Share (Diluted)

 

$

0.26

 

 

$

0.25

 

 

$

0.59

 

 

$

0.53

 

 

 

 

 

 

 

 

 

 

Free Cash Flow

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

 

7,305

 

 

 

6,585

 

 

 

15,221

 

 

 

18,898

 

Capital expenditures

 

 

(4,115

)

 

 

(1,021

)

 

 

(7,359

)

 

 

(2,275

)

Free Cash Flow

 

$

3,190

 

 

$

5,564

 

 

$

7,862

 

 

$

16,623

 

Free Cash Flow conversion from Adjusted EBITDA

 

 

19.4

%

 

 

35.2

%

 

 

22.0

%

 

 

49.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



AVID TECHNOLOGY, INC.

 

 

 

 

Condensed Consolidated Balance Sheets

 

 

 

 

(unaudited - in thousands)

 

 

 

 

 

 

June 30,

 

December 31,

 

 

 

2022

 

 

 

2021

 

Assets

 

 

 

 

Current Assets

 

 

 

 

Cash and Cash Equivalents

 

 

44,332

 

 

$

56,818

 

Restricted Cash

 

 

2,413

 

 

 

2,416

 

Accounts receivable, net of allowances of $1,653 and $1,456 at June 30, 2022 and December 31, 2021, respectively

 

 

53,878

 

 

 

77,046

 

Inventories

 

 

19,249

 

 

 

19,922

 

Prepaid Expenses

 

 

9,003

 

 

 

5,464

 

Contract Assets

 

 

20,950

 

 

 

18,903

 

Other Current Assets

 

 

2,199

 

 

 

1,953

 

Total Current Assets

 

 

152,024

 

 

 

182,522

 

 

 

 

 

 

Property and Equipment, Net

 

 

19,689

 

 

 

16,028

 

Goodwill

 

 

32,643

 

 

 

32,643

 

Right of Use Assets

 

 

21,874

 

 

 

24,143

 

Deferred Tax Assets, Net

 

 

3,600

 

 

 

5,210

 

Other Long-Term Assets

 

 

17,292

 

 

 

13,454

 

Total Assets

 

$

247,122

 

 

$

274,000

 

 

 

 

 

 

Liabilities and Stockholders' Deficit

 

 

 

 

Current Liabilities

 

 

 

 

Accounts Payable

 

 

32,899

 

 

$

26,854

 

Accrued Compensation and Benefits

 

 

21,568

 

 

 

35,458

 

Accrued Expenses and Other Current Liabilities

 

 

34,902

 

 

 

37,552

 

Income Taxes Payable

 

 

92

 

 

 

868

 

Short-Term Debt

 

 

8,701

 

 

 

9,158

 

Deferred Revenues

 

 

68,724

 

 

 

87,475

 

Total Current Liabilities

 

 

166,886

 

 

 

197,365

 

 

 

 

 

 

Long-Term Debt

 

 

177,782

 

 

 

160,806

 

Long-Term Deferred Revenues

 

 

12,209

 

 

 

10,607

 

Long-Term Lease Liabilities

 

 

21,298

 

 

 

23,379

 

Other Long-Term Liabilities

 

 

5,307

 

 

 

5,917

 

Total Liabilities

 

 

383,482

 

 

 

398,074

 

 

 

 

 

 

Stockholders' Deficit

 

 

 

 

Common Stock

 

 

461

 

 

 

455

 

Treasury Stock

 

 

(50,049

)

 

 

(25,090

)

Additional paid-in capital

 

 

1,028,277

 

 

 

1,031,633

 

Accumulated Deficit

 

 

(1,109,000

)

 

 

(1,126,959

)

Accumulated Other Comprehensive Loss

 

 

(6,049

)

 

 

(4,113

)

Total Stockholders' Deficit

 

 

(136,360

)

 

 

(124,074

)

 

 

 

 

 

Total Liabilities and Stockholders' Deficit

 

$

247,122

 

 

$

274,000

 

 

 

 

 

 


AVID TECHNOLOGY, INC.

 

 

 

Condensed Consolidated Statements of Cash Flows

 

 

 

(unaudited - in thousands)

 

 

 

 

Six Months Ended

 

June 30,

 

 

2022

 

 

 

2021

 

 

 

 

 

Cash flows from operating activities:

 

 

 

Net income

$

17,959

 

 

$

11,397

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

3,869

 

 

 

4,321

 

Provision for doubtful accounts

 

222

 

 

 

270

 

Stock-based compensation expense

 

7,067

 

 

 

6,702

 

Non-cash provision for restructuring

 

338

 

 

 

927

 

Non-cash interest expense

 

247

 

 

 

257

 

Loss on extinguishment of debt

 

-

 

 

 

2,579

 

Loss on Disposal of Fixed Assets

 

548

 

 

 

-

 

Unrealized foreign currency transaction gains

 

(1,729

)

 

 

(1,468

)

Benefit from deferred taxes

 

1,610

 

 

 

547

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

22,945

 

 

 

19,599

 

Inventories

 

672

 

 

 

2,326

 

Prepaid expenses and other assets

 

(5,664

)

 

 

(2,629

)

Accounts payable

 

6,044

 

 

 

(48

)

Accrued expenses, compensation and benefits and other liabilities

 

(16,105

)

 

 

(14,942

)

Income taxes payable

 

(776

)

 

 

(16

)

Deferred revenue and contract assets

 

(22,026

)

 

 

(10,924

)

Net cash provided by operating activities

 

15,221

 

 

 

18,898

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

(7,359

)

 

 

(2,275

)

Net cash used in investing activities

 

(7,359

)

 

 

(2,275

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Proceeds from revolving credit facility

 

19,000

 

 

 

-

 

Proceeds from long-term debt

 

-

 

 

 

180,000

 

Repayment of debt

 

(2,288

)

 

 

(205,824

)

Payments for repurchase of common stock

 

(25,262

)

 

 

-

 

Proceeds from the issuance of common stock under employee stock plans

 

468

 

 

 

363

 

Common stock repurchases for tax withholdings for net settlement of equity awards

 

(10,885

)

 

 

(14,038

)

Prepayment penalty on extinguishment of debt

 

-

 

 

 

(1,169

)

Payments for credit facility issuance costs

 

(440

)

 

 

(2,574

)

Net cash used in financing activities

 

(19,407

)

 

 

(43,242

)

 

 

 

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

(941

)

 

 

56

 

Net decrease in cash, cash equivalents, and restricted cash

 

(12,486

)

 

 

(26,563

)

Cash, cash equivalents and restricted cash at beginning of the period

$

60,556

 

 

 

83,638

 

Cash, cash equivalents and restricted cash at end of the period

$

48,070

 

 

$

57,075

 

Supplemental information:

 

 

 

Cash and cash equivalents

 

44,332

 

 

$

53,337

 

Restricted cash

 

2,413

 

 

 

1,422

 

Restricted cash included in other long-term assets

 

1,325

 

 

 

2,316

 

Total cash, cash equivalents and restricted cash shown in the statement of cash flows

$

48,070

 

 

$

57,075

 

 

 

 

 


AVID TECHNOLOGY, INC.

 

Supplemental Revenue Information

 

 

 

 

 

(unaudited - in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

March 31,

 

June 30,

 

 

 

 

 

 

 

2022

 

2022

 

2021

 

 

 

 

 

 

 

Revenue Backlog*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred Revenue

$

80.9

 

$

92.3

 

$

91.6

 

 

 

 

 

 

Other Backlog

$

285.4

 

$

283.0

 

$

309.4

 

 

 

 

 

 

Total Revenue Backlog

$

366.3

 

$

375.3

 

$

401.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The expected timing of recognition of revenue backlog as of March 31, 2022 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

2023

 

2024

 

2025

 

Thereafter

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

Deferred Revenue

$

52.2

 

$

20.7

 

$

4.9

 

$

2.0

 

$

1.2

 

$

80.9

Other Backlog

74.6

 

87.0

 

62.4

 

33.0

 

28.4

 

$

285.4

Total Revenue Backlog

$

126.7

 

$

107.6

 

$

67.3

 

$

35.0

 

$

29.6

 

$

366.3

 

 

 

 

 

 

 

 

 

 

 

 

*A definition of Revenue Backlog is included in our Form 10-K and the supplemental financial and operational data sheet available on our investor relations webpage at ir.avid.com.