Avid 2015 Annual Report Download - page 46

Download and view the complete annual report

Please find page 46 of the 2015 Avid annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 113

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113

40
RESULTS OF OPERATIONS
The following table sets forth certain items from our consolidated statements of operations as a percentage of net revenues for the
periods indicated:
Year Ended December 31,
2015 2014 2013
Net revenues:
Product revenues 66.5 % 71.4 % 70.2 %
Services revenues 33.5 % 28.6 % 29.8 %
Total net revenues 100.0 % 100.0 % 100.0 %
Cost of revenues 39.1 % 38.6 % 39.7 %
Gross margin 60.9 % 61.4 % 60.3 %
Operating expenses:
Research and development 19.0 % 17.0 % 16.9 %
Marketing and selling 24.2 % 25.1 % 23.8 %
General and administrative 14.7 % 15.3 % 13.8 %
Amortization of intangible assets 0.5 % 0.3 % 0.5 %
Restructuring costs, net 1.2 % — % 1.0 %
Total operating expenses 59.6 % 57.7 % 55.9 %
Operating income 1.3 % 3.7 % 4.4 %
Interest and other income (expense), net (1.2)% (0.5)% (0.1)%
Income before income taxes 0.1 % 3.2 % 4.3 %
(Benefit) provision for income taxes (0.4)% 0.4 % 0.5 %
Net income 0.5 % 2.8 % 3.8 %
Net Revenues
Our net revenues are derived mainly from sales of video and audio hardware and software products and solutions for digital
media content creation, distribution and monetization, and related professional services and maintenance contracts. We
commonly sell large, complex solutions to our customers that, due to their strategic nature, have long lead times where the timing
of order execution and fulfillment can be difficult to predict. As a result, the timing and amount of product revenue recognized
each quarter related to these large orders, as well as the services associated with them, can fluctuate significantly from quarter to
quarter and cause quarterly and annual operating results to vary.
Net Revenues for the Years Ended December 31, 2015 and 2014
(dollars in thousands)
2015 Change 2014
Net Revenues $ % Net Revenues
Video products and solutions $ 201,559 $ (31,905) (13.7)% $ 233,464
Audio products and solutions 134,812 (10,351) (7.1)% 145,163
Total products and solutions 336,371 (42,256) (11.2)% 378,627
Services 169,224 17,600 11.6% 151,624
Total net revenues $ 505,595 $ (24,656) (4.6)% $ 530,251