Avid Issues Corrected 3Q Results

European revenues recognized too soon
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TEWKSBURY, MASS.: Avid reported third-quarter results today that reflect corrections on overseas revenues, the company said. The company posted a net loss of $17.2 million, or 46 cents a share, on revenues of $152.1 million.

The figures represent a decrease in revenues of $1.6 million and of gross profit by $1.1 million with regard to results reported last month.

“These results reflect corrections of errors identified in its previously announced investigation concerning the timing of recognition of revenue,” Avid said in its earnings release. “As a result of these errors, Avid has determined that it has a material weakness in the design and operating effectiveness of its controls and procedures in Europe relating to ensuring that revenue is recognized only after transfer of title and risk of loss to the customer.”

Since the adjustments were related to timing, Avid said the revenue and gross profit sums would be factored into the fourth quarter.

Avid’s revenues for the three months ending Sept. 30 were down 30 percent compared to the same period a year ago, though the final net loss figure was cut by 74 percent.

The year-ago net loss of $66.4 million included an impairment charge of $51.3 million. This year’s net loss included “amortization of intangibles, stock-based compensation, restructuring charges, loss on asset sales and related tax adjustments, collectively totaling $17 million,” Avid said. Excluding those items, non-GAAP net loss was $215,000.

Since these adjustments were related to timing of revenue recognition, and not amount, the revenue and related gross profit will be recognized in the fourth quarter of 2009. Additionally, income taxes were reduced by $0.1 million.

Avid reported cash, equivalents and “marketable securities” of $103 million at the close of the quarter. Long-term liabilities totaled $13.3 million.

More on Avid:
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