Avid 2004 Annual Report Download - page 68

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54
As part of the TMF purchase agreement, the Company may have been required to make certain contingent cash payments,
limited in the aggregate up to an additional $10.0 million, dependent upon future revenues and/or gross margin levels
through December 2004 of products including technologies acquired from TMF. No such contingent payments were
required. As part of the iKnowledge purchase agreement, the Company was required to make certain contingent cash
payments, dependent upon the future revenues of the products acquired from iKnowledge through December 2004.
Contingent payments required to be made under this agreement were immaterial.
Pro Forma Financial Information for Acquisitions (Unaudited)
The results of operations of M-Audio, Avid Nordic and NXN have been included in the results of operations of the
Company since the respective date of each acquisition. The following unaudited pro forma financial information presents
the results of operations for the years ended December 31, 2004 and 2003 as if the acquisitions of both M-Audio and NXN
had occurred at the beginning of 2003. The Company’s pro forma results of operations giving effect to the Avid Nordic
AB, Bomb Factory Digital and Rocket Network acquisitions as if they had occurred at the beginning of 2003 is not included
as it would not differ materially from the reported results. The pro forma financial information for the combined entities has
been prepared for comparative purposes only and is not indicative of what actual results would have been if the acquisitions
had taken place at the beginning of fiscal 2003, or of future results.
Years Ended
December 31,
2004
2003
(In thousands, except per share data)
Net revenues
$631,889
$528,963
Net income
$70,285
$33,474
Net income per share:
Basic
$2.04
$1.07
Diluted
$1.90
$0.97
Identifiable Intangible Assets
As a result of all of the acquisitions described above, identifiable intangible assets consisted of the following (in thousands)
at December 31:
2004
2003
Gross
Accumulated
Amortization
Net
Gross
Accumulated
Amortization
Net
Completed technologies
$12,113
($3,405)
$8,708
$5,318
($3,503)
$1,815
Customer relationships
33,800
(1,315)
32,485
–
–
–
Trade name
5,046
(337)
4,709
–
–
–
Non-compete covenant
1,200
(218)
982
–
–
–
$52,159
($5,275)
$46,884
$5,318
($3,503)
$1,815
The Company expects amortization of these intangible assets to be approximately $7.5 million in 2005, $7.0 million in
2006, $6.2 million in 2007, $5.6 million in 2008, $4.6 million in 2009, and $16.0 million thereafter through 2016 at which
point they will be fully amortized.
G. INCOME TAXES
Income before income taxes and the components of the income tax provision (benefit) for the years ended December 31,
2004, 2003 and 2002 are as follows (in thousands):