Avid 1998 Annual Report Download - page 56

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Q. QUARTERLY RESULTS (UNAUDITED)
The following information has been derived from unaudited consolidated financial statements that, in the opinion of
management, include all normal recurring adjustments necessary for a fair presentation of such information.
In thousands, except per share data:
Quarters Ended
1998 1997
Dec. 31 Sept. 30(A) June 30 Mar. 31 Dec. 31 Sept. 30 June 30 Mar. 31
Net revenues $144,598 $116,185 $112,852 $108,742 $123,735 $116,510 $122,884 $108,209
Cost of revenues 54,256 45,929 44,537 45,527 54,062 51,606 59,700 56,185
Gross profit 90,342 70,256 68,315 63,215 69,673 64,904 63,184 52,024
Operating expenses:
Research & development 25,102 22,757 20,616 20,312 20,160 18,598 18,296 16,416
Marketing & selling 36,035 30,967 30,584 27,694 31,301 30,109 30,687 28,297
General & administrative 8,618 6,902 6,450 6,579 6,977 6,734 6,294 5,803
Nonrecurring costs 28,373
Amortization of acquisition-related
intangible assets 20,503 13,701
Total operating expenses 90,258 102,700 57,650 54,585 58,438 55,441 55,277 50,516
Operating income (loss) 84 (32,444) 10,665 8,630 11,235 9,463 7,907 1,508
Other income, net 1,371 2,016 2,713 2,536 2,244 2,596 2,045 1,240
Income (loss) before income
taxes 1,455 (30,428) 13,378 11,166 13,479 12,059 9,952 2,748
Provision for (benefit from)
income taxes 451 (8,855) 4,147 3,461 4,178 3,231 3,483 962
Net income (loss) $1,004 ($21,573) $9,231 $7,705 $9,301 $8,828 $6,469 $1,786
Net income (loss) per
share - basic $0.04 ($0.89) $0.40 $0.34 $0.39 $0.37 $0.28 $0.08
Net income (loss) per
share - diluted $0.04 ($0.89) $0.37 $0.31 $0.37 $0.34 $0.27 $0.08
Weighted average common
shares outstanding - basic 24,378 24,190 23,076 22,908 23,601 23,912 23,164 21,550
Weighted average common
shares outstanding -diluted 26,703 24,190 24,833 24,587 25,231 25,747 24,075 21,750
High common stock price $27.000 $38.875 $47.750 $41.250 $33.000 $38.000 $28.125 $14.000
Low common stock price $11.063 $18.625 $28.375 $26.000 $23.000 $22.000 $12.375 $9.000
(A) The results for the quarter ended September 30, 1998 reflect the restatement of previously reported results of
operations associated with the amount of the purchase price originally allocated to acquired in-process research and
development at the date of the Company’ s acquisition of Softimage. The restated amounts for the quarter reflect a decrease
in the charge for in-process research and development of $165.4 million, an increase in amortization of acquisition-related
intangible assets of $9.4 million, a decrease in benefit from income taxes of $33.2 million, a decrease in net loss of $122.8
million, and a decrease in net loss per basic and diluted share of $5.08.
The Company's quarterly operating results fluctuate as a result of a number of factors including, without limitation, the
timing of new product introductions, marketing expenditures, promotional programs, and periodic discounting due to
competitive factors. The Company's operating results may fluctuate in the future as a result of these and other factors,
including the Company's success in developing and introducing new products, its products and customer mix and the level
of competition which it experiences. The Company operates with a relatively small backlog. Quarterly sales and operating
results therefore generally depend on the volume and timing of orders received during the quarter. The Company's expense
levels are based in part on its forecasts of future revenues. If revenues are below expectations, the Company's operating
results may be adversely affected. Accordingly, there can be no assurance that the Company will be profitable in any
particular quarter.
R. SUPPLEMENTAL RECONCILIATION OF NET INCOME (LOSS) TO PRO FORMA NET INCOME
(UNAUDITED)