Avid 1997 Annual Report Download - page 49

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42
Company’s product lines. As of December 31, 1996, the Company had completed the related restructuring and product
transition actions.
In September 1996, the Company recorded a nonrecurring charge of $8,800,000, associated primarily with the Company’s
decision not to release the Avid Media Spectrum product line. This charge includes costs to write-off inventory, fixed
assets, capitalized software and various other costs associated with the canceled product line. Approximately $7,200,000 of
the charge relates to non-cash items associated with the write-off of assets. As of December 31, 1997, the Company had
completed the related restructuring.
As described in Note O, in connection with the 1995 acquisitions, the Company incurred merger costs of approximately
$5,456,000. Of this amount, approximately $3,900,000 represented a provision for direct transaction expenses, primarily
professional fees, and $1,600,000 consisted of various restructuring charges.
O. Acquisitions
In March 1995, the Company acquired Parallax Software Limited and 3 Space Software Limited, developers of paint and
compositing software, and Elastic Reality, Inc., a developer of special effects software. These transactions, which were
accounted for as poolings of interest, were effected through the exchange of approximately 1.5 million shares of the
Company’s Common Stock for all of the issued and outstanding shares of these entities. The December 31, 1995,
accompanying statement of stockholders’ equity includes a retained earnings adjustment for December 31, 1994 for retained
earnings of the companies, as the Company’s previous years’ financial statements were not restated. The operations of
Parallax Software Limited, 3 Space Software Limited and Elastic Reality, Inc. were not material to the Company’s
consolidated operations.
In January 1995, the Company completed a merger with Digidesign. The merger was accounted for as a pooling of interests
and was effected through the exchange of approximately 6 million shares of the Company's Common Stock for all of the
issued and outstanding shares of Digidesign based on a merger exchange ratio of .79 shares of Avid Common Stock for each
share of Digidesign Common Stock. The historical consolidated financial statements for all years prior to the acquisition
were restated in the consolidated financial statements to include the financial position, results of operations and cash flows
of Digidesign.