Avid Technology Announces Q4 and Full Year 2018 Results

BURLINGTON, Mass., March 14, 2019 /PRNewswire/ -- Avid® (NASDAQ: AVID), a leading technology provider that powers the media and entertainment industry, today announced its fourth quarter and full-year 2018 financial results, provided guidance for the first quarter of 2019 and reaffirmed full-year 2019 guidance.

Fourth Quarter 2018 Financial and Business Highlights

    --  Revenue was $112.7 million, an increase of 5% year-over-year and 8%
        sequentially. Revenue excluding non-cash revenue was $112.4 million, an
        increase of 7% year-over-year and 10% sequentially.
    --  Gross Margin was 59.0%, up 450 basis points year-over-year. Non-GAAP
        Gross Margin was 60.8%, up 480 basis points year-over-year.
    --  Operating Expenses were $54.4 million, an increase of 1% year-over-year
        and 2% sequentially largely driven by a $5.2M legal settlement
        recognized as a credit in Q4 2017 offset by savings from operational
        efficiency initiatives. Excluding the non-recurring settlement,
        operating expenses declined by $4.4 million year-over year.
    --  Operating Income was $12.1 million, an improvement of $7.3 million
        year-over-year and $5.0 million sequentially.
    --  Adjusted EBITDA was $21.3 million, an increase of 42% year-over-year and
        46% sequentially. Adjusted EBITDA Margin was 18.9%, up 490 basis points
        year-over-year and sequentially.
    --  GAAP net income per common share was $0.14, up from net loss per common
        share of ($0.02) in Q4 2017.
    --  Net cash provided by operating activities was $20.1 million.
    --  Free Cash Flow was $17.7 million.
    --  Software revenue from subscriptions increased 77% year-over-year,
        surpassing $10 million in the quarter.
    --  Revenue through the Company's e-commerce activities was up 50%
        year-over-year.

2018 Financial and Business Highlights

    --  Revenue was $413.3 million, a decrease of 1% year-over-year. Revenue,
        excluding non-cash revenue, was $407.1 million, an increase of 5%
        year-over-year.
    --  Gross Margin was 57.9%, up 10 basis points year-over-year. Non-GAAP
        Gross Margin was 59.8%, up 10 basis points year-over-year.
    --  Operating Expenses were $225.5 million, a decrease of 5% year-over-year
        largely driven by savings from operational efficiency initiatives.
    --  Operating Income was $13.7 million, an increase of 161%, or $8.4
        million, year-over-year.
    --  Adjusted EBITDA was $47.5 million, a decrease of 2% year-over-year.
        Adjusted EBITDA Margin was 11.5%, flat with 2017.
    --  GAAP net loss per common share of ($0.26), up from GAAP net loss per
        common share of ($0.33) in 2017.
    --  Net cash provided by operating activities was $15.8 million.
    --  Free Cash Flow was $5.9 million, an increase of $4.8 million from the
        prior year.
    --  Software revenue from subscriptions increased 78% year-over-year, with
        approximately 125,000 cloud-enabled software subscriptions at the end of
        2018.
    --  Revenue through the Company's e-commerce activities was up 52%
        year-over-year, surpassing $50 million for the year.
    --  Recurring Revenue was 56% of the Company's revenue in 2018 up from 49%
        in 2017.
    --  Annual Contract Value (ACV) was $248 million at the end of 2018 up from
        $216 million at the end of 2017, reflecting continuing growth in Avid's
        high-margin subscription revenue plus maintenance revenues and revenues
        under long-term agreements.

"Our return to revenue growth and the improvement in our key financial metrics, including Free Cash Flow and Adjusted EBITDA, demonstrate an improving business profile for our Company," said Jeff Rosica, Chief Executive Officer and President of Avid. "Additionally, the management team is focused on continuing to build upon a scalable recurring revenue model as evidenced by our double-digit growth in subscriptions and e-commerce revenue. We intend to continue to drive R&D investments in key product areas in 2019 which are expected to set the foundation for future growth for the Company."

"We ended 2018 with strong momentum evidenced by our improving revenue streams, gross margin and cash flow. With our strong revenue backlog and the savings from our internal efficiency programs we have visibility to continued improvements in Free Cash Flow and Adjusted EBITDA during 2019," commented Ken Gayron, Executive Vice President and Chief Financial Officer of Avid.

Explanations regarding our use of non-GAAP financial measures and operational metrics and related definitions, and reconciliations of our GAAP and non-GAAP measures, are provided in the sections below entitled "Non-GAAP Financial Measures and Operational Metrics" and "Reconciliations of GAAP financial measures to Non-GAAP financial measures".

First Quarter and Full Year 2019 Guidance

For the first quarter of 2019, Avid is providing Revenue and Adjusted EBITDA guidance. Avid is also reaffirming its guidance for Revenue, Adjusted EBITDA and Free Cash Flow for full-year 2019.


                   (in $ millions)        Q1 2019     Full Year 2019

    ---


       Revenue                    
       $96 - $104 
          $420 - $430





       Adjusted EBITDA              
       $7 - $12   
          $60 - $65





       Free Cash Flow                              
          $12 - $17

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 Q4 and Full-Year 2018 Business Update presentation posted on Avid's Investor Relations website.

Conference Call

Avid will host a conference call to discuss its financial results for the fourth quarter and full-year 2018 on Thursday, March 14, 2019 at 5:00 p.m. ET. The call will be open to the public and can be accessed by dialing 323-994-2093 and referencing confirmation code 7127947. You may also listen to the call on the Avid Investor Relations website. To listen via the website, go to the events tab at ir.avid.com for complete details prior to the start of the conference call. A replay of the call will also be available for a limited time on the Avid Investor Relations website shortly after the completion of the call.

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, and non-GAAP Gross Margin. The Company also includes the operational metrics of Bookings, Cloud-enabled software subscriptions, 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 operational metrics are included in our Form 8-K filed today. Reconciliations of the non-GAAP financial measures in this release to the Company's comparable GAAP financial measures for the periods presented are set forth below and are also included in the supplemental financial and operational data sheet available on our investor relations webpage at ir.avid.com, which also includes definitions of all operational metrics.

The earnings release also includes forward-looking non-GAAP financial measures, including Adjusted EBITDA and Free Cash Flow. Reconciliations of these forward-looking non-GAAP financial measures are not included in the earnings release due to the high variability and difficulty in making accurate forecasts and projections of some of the excluded information, together with some of the excluded information not being ascertainable or accessible at this time. As a result, the Company is 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, including the tables attached hereto, include forward-looking statements that involve risks and uncertainties, including projections and statements about our anticipated plans, objectives, expectations and intentions. Among other things, this press release includes estimated results of operations for the three months ending March 31, 2019 and the year ending December 31, 2019, which estimates are based on a variety of assumptions about key factors and metrics that will determine our future results of operations, including, for example, anticipated market uptake of new products and market-based cost inflation. Other forward-looking statements include, without limitation, statements based upon or otherwise incorporating judgments or estimates relating to future performance such as future operating results and expenses; earnings; backlog; revenue backlog conversion rate; product mix and free cash flow; Recurring Revenue and Annual Contract Value; our future strategy and business plans; our product plans, including products under development, such as cloud and subscription based offerings; our ability to raise capital and our liquidity. The projected future results of operations, and the other forward-looking statements in this release, are based on current expectations as of the date of this release and subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including but not limited to the effect on our sales, operations and financial performance resulting from: our liquidity; our ability to execute our strategic plan, and 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; and the possibility of legal proceedings adverse to our company. 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. Other factors that could adversely affect our business and prospects are set forth in our public filings with the SEC. Forward-looking statements contained herein are made only as to the date of this press release and we undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

About Avid

Avid delivers the most open and efficient media platform, connecting content creation with collaboration, asset protection, distribution, and consumption. Avid's preeminent customer community uses Avid's comprehensive tools and workflow solutions to create, distribute and monetize the most watched, loved and listened to media in the world--from prestigious and award-winning feature films to popular television shows, news programs and televised sporting events, and celebrated music recordings and live concerts. With the most flexible deployment and pricing options, Avid's industry-leading solutions include Media Composer®, Pro Tools®, Avid NEXIS®, MediaCentral®, iNEWS®, AirSpeed®, Sibelius®, Avid VENUE(TM), Avid FastServe®(TM), Maestro(TM), and PlayMaker(TM). For more information about Avid solutions and services, visit www.avid.com, connect with Avid on Facebook, Instagram, Twitter, YouTube, LinkedIn, or subscribe to Avid Blogs.

© 2019 Avid Technology, Inc. All rights reserved. Avid, the Avid logo, Avid NEXIS, Avid FastServe, AirSpeed, iNews, Maestro, MediaCentral, Media Composer, NewsCutter, PlayMaker, Pro Tools, Avid VENUE, and Sibelius are trademarks or registered trademarks of Avid Technology, Inc. or its subsidiaries in the United States and/or other countries. All other trademarks are the property of their respective owners. Product features, specifications, system requirements and availability are subject to change without notice.



     
                AVID TECHNOLOGY, INC.



     
                Consolidated Statements of Operations



     (unaudited - in thousands, except per share data)




                                                             Three Months Ended   Twelve Months Ended


                                                                December 31,          December 31,



                                                                           2018                   2017         2018          2017






     Net revenues:


          
              Products                                             $60,185                $56,481     $205,107      $209,461


          
              Services                                              52,499                 50,777      208,175       209,542


          
                   Total net revenues                              112,684                107,258      413,282       419,003






     Cost of revenues:


          
              Products                                              31,074                 32,128      110,758       112,606


          
              Services                                              13,146                 14,734       55,560        56,481


          
              Amortization of intangible assets                      1,950                  1,950        7,800         7,800



          
                   Total cost of revenues                           46,170                 48,812      174,118       176,887





     Gross profit                                                       66,514                 58,446      239,164       242,116






     Operating expenses:


          
              Research and development                              14,836                 16,308       62,379        68,212


          
              Marketing and selling                                 23,921                 25,776      101,273       106,257


          
              General and administrative                            13,574                 10,624       55,230        53,892


          
              Amortization of intangible assets                        361                    362        1,450         1,450


          
              Restructuring costs, net                               1,747                    595        5,148         7,059


          
                   Total operating expenses                         54,439                 53,665      225,480       236,870






     Operating income                                                   12,075                  4,781       13,684         5,246





     Interest and other expense, net                                   (5,725)               (5,203)    (23,087)     (18,668)




     Income (loss) before income taxes                                   6,350                  (422)     (9,403)     (13,422)





     Provision for income taxes                                            447                    459        1,271           133




     Net income (loss)                                                  $5,903                 $(881)   $(10,674)    $(13,555)






     Net income (loss) per common share - basic and diluted              $0.14                $(0.02)     $(0.26)      $(0.33)






     Weighted-average common shares outstanding - basic                 41,860                 41,216       41,662        41,020



     Weighted-average common shares outstanding - diluted               42,430                 41,216       41,662        41,020



       
                AVID TECHNOLOGY, INC.



       
                Reconciliations of GAAP financial measures to Non-GAAP financial measures



       (unaudited - in thousands)


                                                                                                                                            Three Months Ended Twelve Months Ended


                                                                                                                                               December 31,        December 31,




       
                
                  Non-GAAP revenue                                                                                                      2018                 2017      2018       2017

    ---


       
                GAAP revenue                                                                                                                     $112,684             $107,258  $413,282   $419,003



       Amortization of acquired deferred revenue



       
                Non-GAAP revenue                                                                                                                  112,684              107,258   413,282    419,003




       Pre-2011 Revenue                                                                                                                                                        78                 985



       Elim PCS                                                                                                                                                                                1,700




       
                Non-GAAP Revenue w/o Pre-2011 and Elim                                                                                            112,684              107,180   413,282    416,318





       
                
                  Non-GAAP gross profit

    ---


       
                GAAP gross profit                                                                                                                  66,514               58,446   239,164    242,116



       Amortization of intangible assets                                                                                                                1,950                1,950     7,800      7,800



       Stock-based compensation                                                                                                                            99                (305)      321        242



       
                Non-GAAP gross profit                                                                                                              68,563               60,091   247,285    250,158




       Pre-2011 Revenue                                                                                                                                                        78                 985



       Elim PCS                                                                                                                                                                                1,700




       
                Non-GAAP gross profit w/o Pre-2011 and Elim                                                                                        68,563               60,013   247,285    247,473





       
                
                  Non-GAAP operating expenses

    ---


       
                GAAP operating expenses                                                                                                            54,439               53,665   225,480    236,870



       Less Amortization of intangible assets                                                                                                           (361)               (362)  (1,450)   (1,450)



       Less Stock-based compensation                                                                                                                  (1,828)             (2,741)  (5,937)   (8,069)



       Less Restructuring costs, net                                                                                                                  (1,747)               (595)  (5,148)   (7,059)



       Less Restatement costs                                                                                                                            (11)               (558)    (826)   (1,284)



       Less Acquisition, integration and other costs                                                                                                    (300)               (266)    (361)     (163)



       Less Efficiency program costs                                                                                                                     (14)               (931)     (94)   (3,985)



       
                Non-GAAP operating expenses                                                                                                        50,178               48,212   211,664    214,860






       
                
                  Non-GAAP operating income

    ---


       
                GAAP operating income                                                                                                              12,075                4,781    13,684      5,246



       Amortization of intangible assets                                                                                                                2,311                2,312     9,250      9,250



       Stock-based compensation                                                                                                                         1,927                2,436     6,258      8,311



       Restructuring costs, net                                                                                                                         1,747                  595     5,148      7,059



       Restatement costs                                                                                                                                   11                  558       826      1,284



       Acquisition, integration and other costs                                                                                                           300                  266       361        163



       Efficiency program costs                                                                                                                            14                  931        94      3,985



       
                Non-GAAP operating income                                                                                                          18,385               11,879    35,621     35,298






       
                
                  Adjusted EBITDA

    ---


       
                Non-GAAP operating income (from above)                                                                                             18,385               11,879    35,621     35,298



       Depreciation                                                                                                                                     2,924                3,093    11,891     13,087



       
                Adjusted EBITDA                                                                                                                    21,309               14,972    47,512     48,385




       
                Adjusted EBITDA margin                                                                                                              18.9%               14.0%    11.5%     11.5%



       Pre-2011 Revenue                                                                                                                                                        78                 985



       Elim PCS                                                                                                                                                                                1,700




       
                Adjusted EBITDA w/o Pre-2011 and Elim                                                                                              21,309               14,894    47,512     45,700



       
                Adjusted EBITDA w/o Pre-2011 and Elim margin                                                                                        18.9%               13.9%    11.5%     11.0%





       
                
                  Adjusted free cash flow

    ---


       
                GAAP net cash provided by operating activities                                                                                     20,070                2,833    15,822      8,936



       Capital expenditures                                                                                                                           (2,396)             (1,752)  (9,936)   (7,877)




       
                Free Cash Flow                                                                                                                     17,674                1,081     5,886      1,059





       
                Non-Operational / One-time Items



       Restructuring payments                                                                                                                             714                2,599     5,741     12,139



       Restatement payments                                                                                                                               146                  455     1,133        834



       Acquisition, integration and other payments                                                                                                         63                  120        53        313



       Efficiency program payments                                                                                                                                            500       134      3,863




       
                Sub-Total Non-Operational / One-Time Items                                                                                            923                3,674     7,061     17,149





       
                Adjusted free cash flow                                                                                                           $18,597               $4,755   $12,947    $18,208




       
                Adjusted free cash flow conversion of adjusted EBITDA                                                                                 87%                 32%      27%       38%





       These non-GAAP measures reflect how Avid manages its businesses internally. Avid's non-GAAP measures may varyfrom how other



       companies present non-GAAP measures. Non-GAAP financial measures are not based on a comprehensive set of accounting rules



       or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with,



       disclosures required by generally accepted accounting principles, or GAAP. Non-GAAP financial measures should be considered in



       addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP.



              
                AVID TECHNOLOGY, INC.



              
                Consolidated Balance Sheets



              (unaudited - in thousands)




                                                                                                                                      
     
     December 31,   
     
     December 31,


                                                                                                                                                    2018              2017



                                                                        
              
                
                  ASSETS

                                                                                             ---


              Current assets:



                  Cash and cash equivalents                                                                                                     $56,103           $57,223



                  Restricted cash                                                                                                                 8,500



                  Accounts receivable, net of allowances of $1,339 and $11,142



                     at December 31, 2018 and December 31, 2017, respectively                                                                    67,754            40,134



                  Inventories                                                                                                                    32,956            38,421



                  Prepaid expenses                                                                                                                8,853             8,208



                  Contract assets                                                                                                                16,513



                  Other current assets                                                                                                            5,917            10,341




                     Total current assets                                                                                                       196,596           154,327





                  Property and equipment, net                                                                                                    21,582            21,903



                  Intangible assets, net                                                                                                          4,432            13,682



                  Goodwill                                                                                                                       32,643            32,643



                  Long-term deferred tax assets, net                                                                                              1,158             1,318



                  Other long-term assets                                                                                                          9,432            10,811




                     Total assets                                                                                                              $265,843          $234,684





                                                         
              
                
                  LIABILITIES AND STOCKHOLDERS' DEFICIT

                                                                                             ---


              Current liabilities:



                  Accounts payable                                                                                                              $39,239           $30,160



                  Accrued compensation and benefits                                                                                              21,967            25,466



                  Accrued expenses and other current liabilities                                                                                 37,547            31,549



                  Income taxes payable                                                                                                            1,853             1,815



                  Short-term debt                                                                                                                 1,405             5,906



                  Deferred revenues                                                                                                              85,662           121,184




                     Total current liabilities                                                                                                  187,673           216,080





                  Long-term debt                                                                                                                220,590           204,498



                  Long-term deferred revenues                                                                                                    13,939            73,429



                  Other long-term liabilities                                                                                                    10,302             9,247



                     Total liabilities                                                                                                          432,504           503,254






              Stockholders' deficit:



              Preferred stock, $0.01 par value, 1,000 shares authorized; no shares issued or
    outstanding



              Common stock, $0.01 par value, 100,000 shares authorized; 42,339 shares issued,                                                       423               423
    and 41,948 shares and 41,356 shares outstanding at December 31, 2018 and 2017,
    respectively



              Additional paid-in capital                                                                                                      1,028,924         1,035,808



              Accumulated deficit                                                                                                           (1,187,010)      (1,284,703)



              Treasury stock at cost, net of reissuances, 391 shares and 983 shares at December                                                 (5,231)         (17,672)
    31, 2018 and 2017, respectively



              Accumulated other comprehensive loss                                                                                              (3,767)          (2,426)




                     Total stockholders' deficit                                                                                              (166,661)        (268,570)




                     Total liabilities and stockholders' deficit                                                                               $265,843          $234,684



     
                AVID TECHNOLOGY, INC.



     
                Consolidated Statements of Cash Flows



     (unaudited - in thousands)




                                                                                                              Twelve Months Ended


                                                                                                                  December 31,



                                                                                                                             2018                2017 (1)






     
                Cash flows from operating activities:


              
              Net loss                               $(10,674)                                               $(13,555)


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


                         Depreciation and
                          amortization                             21,142                                                   22,337


                         Provision for
                          (recovery from)
                          doubtful accounts                           119                                                    (340)


                         Stock-based
                          compensation
                          expense                                   6,258                                                    8,311


                         Non-cash
                          provision for
                          restructuring                             1,083                                                    3,191


                         Non-cash interest
                          expense                                   8,987                                                    8,951


                         Unrealized foreign
                          currency
                          transaction
                          (gains) losses                            (996)                                                   7,336


                         Provision for
                          (benefit from)
                          deferred taxes                              113                                                    (873)


                         Changes in
                          operating assets
                          and liabilities:


                                                            Accounts
                                                             receivable                (6,689)                                        3,800


                                                            Inventories                  (551)                                       12,280


                                                            Prepaid
                                                             expenses and
                                                             other assets                5,832                                       (7,567)


                                                            Accounts
                                                             payable                     9,148                                         3,606


                         Accrued
                                                             expenses,
                                                             compensation
                                                             and benefits
                                                             and other
                                                             liabilities               (8,853)                                      (8,189)


                                                            Income taxes
                                                             payable                        38                                           800


                                                            Deferred
                                                             revenue and
                                                             contract
                                                             assets                    (9,135)                                     (31,152)



                   Net cash provided by operating activities                                                           15,822                   8,936






     
                Cash flows from investing activities:


                         Purchases of property
                          and equipment                           (9,936)                                                 (7,877)


                         Decrease (increase)
                          in other long-term
                          assets                                       19                                                     (36)


                   Net cash used in investing activities                                                              (9,917)                (7,913)






     
                Cash flows from financing activities:


                         Proceeds from long-
                          term debt                                22,688                                                   16,694


                         Repayment of debt                       (18,451)                                                 (6,735)


                         Proceeds from the
                          issuance of common
                          stock under employee
                          stock plans                                 355                                                      445


                        Common stock
                          repurchases for tax
                          withholdings for net
                          settlement of equity
                          awards                                    (998)                                                 (1,329)


                         Partial retirement of
                          the Notes conversion
                          feature and capped
                          call option unwind                         (58)



                         Payments for credit
                          facility issuance
                          costs                                   (1,000)                                                   (700)


                   Net cash provided by financing activities                                                            2,536                   8,375





      Effect of exchange rate changes on cash, cash
       equivalents, and restricted cash                                                                                 (780)                  1,087



      Net increase in cash, cash equivalents, and
       restricted cash                                                                                                  7,661                  10,485


      Cash, cash equivalents and restricted cash at
       beginning of the year                                                                                           60,433                  49,948



      Cash, cash equivalents and restricted cash at
       end of the year                                                                                                $68,094                 $60,433

                                                                                                                                                 ===


     
                Supplemental information:



     Cash and cash equivalents                                                                                       $56,103                 $57,223



     Restricted cash                                                                                                   8,500                       -


      Restricted cash included in other long-term
       assets                                                                                                           3,491                   3,210



      Total cash, cash equivalents and restricted
       cash shown in the statement of cash flows                                                                      $68,094                 $60,433

                                                                                                                                                 ===



      (1) The Condensed Consolidated Statement of Cash Flows for the year ended December 31, 2017 has been
       revised to reflect the adoption, on January 1, 2018, of ASU 2016-18, Statement of Cash Flows (Topic
       230): Restricted Cash. The Condensed Consolidated Statements of Cash Flows reflects the changes during
       the periods in the total of cash, cash equivalents, and restricted cash. Therefore, restricted cash
       activity is included with cash when reconciling the beginning-of-period and end-of-period total
       amounts shown.



       
                AVID TECHNOLOGY, INC.



       
                Supplemental Revenue Information



       (unaudited - in millions)





       Backlog Disclosure for Quarter Ended December 31, 2018


                                                                                                       
       
                December 31, 2017



                                                                                                     
       
               As Previously        
     
          ASC 606        
       
          As       
     
     September 30,          
     
     December 31,
                                                                                                            Reported                          Adj.                  Adjusted                             2018                     2018

                                                                                                                                                                                                                                  ---


       
                Revenue Backlog*





       Deferred Revenue                                                                                                    $194.6                    $(96.6) (1)              $98.0                      $88.2                    $99.6



       Other Backlog                                                                                                        341.5                      (6.6) (2)              334.9                      370.9                    357.2



       Total Revenue Backlog                                                                                               $536.1                   $(103.2)                 $432.9                     $459.1                   $456.8

                                                                                                                                                                                                                                  ===






       The expected timing of recognition of revenue backlog as of December 31, 2018 is as follows:




                                                                                                                              2019                       2020                    2021                 Thereafter                   Total






       Deferred Revenue                                                                                                     $80.4                      $12.6                    $3.9                       $2.7                    $99.6



       Other Backlog                                                                                                        109.5                       66.9                    64.4                      116.4                    357.2




       Total Revenue Backlog                                                                                               $189.9                      $79.5                   $68.3                     $119.1                   $456.8

    ---                                                                                                                                                                                                                           ---



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




               (1) The reduction is primarily
                attributable to the elimination
                of the requirement to have
                vendor specific objective
                evidence of fair value for
                undelivered elements that
                existed under ASC 605, the prior
                applicable accounting guidance,
                for software products, which no
                longer precludes revenue
                recognition under ASC 606. The
                impact of the adoption of ASC
                606 reported in our Form 10-Q
                for the three months ended March
                31, 2018 has been revised to
                reflect an additional reduction
                to deferred revenue and
                accumulated deficit as of
                January 1, 2018 of $3.8 million.




               (2) For subscription contracts,
                we are now required under ASC
                606 to record contract assets
                for annual and multi-year
                subscriptions that are billed
                monthly, resulting in an
                increase in contract assets at
                the date of adoption.  In
                addition, some of our enterprise
                agreements have fixed payment
                schedules whereas the timing of
                the fulfillment of performance
                obligations under the contracts
                can vary, which can result in
                the fulfillment of performance
                obligations exceeding contract
                billings, which also results in
                contract assets.

View original content:http://www.prnewswire.com/news-releases/avid-technology-announces-q4-and-full-year-2018-results-300812839.html

SOURCE Avid Technology, Inc.