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Avid Technology, Inc. Message Board

  • crwolfersberger crwolfersberger Apr 22, 2010 8:45 PM Flag

    Q2 CC not good -- Back to $15

    Missed Q1 EPS expectations of $0.06 loss (reported $0.11 loss)

    Full year non-GAAP guidance headed down.

    Euphonix will not contribute positively to EPS in 2010.

    Per the CC, $645m to $655m revenue translates into a non-GAAP loss of $0.32/share. I love management's spin that this revenue range is called the "break even revenue range" **IF** you ignore taxes. After factoring in taxes, the "break even revenue range" translates into a loss of $0.32/share.

    Management also stated any revenue above the break-even revenue range will translate into approx 50% non-GAAP operating income. However, they fail to mention what the expected non-GAAP contribution is AFTER TAX.

    Also, how can management project a $12m tax expense for the year based on the break-even revenue range, when non-GAAP taxes for Q1 was only $751k? That would mean management expects $11m in tax expense to hit in the remaining 3 quarters?

    So, using current analyist expectation of $672m revenue, EPS for the year calculates out to about a $0.05 loss per share.

    $650m revenue = $0.32 loss PLUS
    [$22m revenue x 50% x 90% (estimated amount pulled out for taxes) = $10m / 37.5m shares] $0.27 income = $0.05 loss.

    P.S. -- Its somewhat funny that Euphonix got screwed by the 28% runup in the share price over the past 13 days. The shares Euphonix shareholders received was based on the weighted average share price of Avid over the past 20 days. As a result of the run-up, Euphonix shareholders probably received 15% less shares than they would have received had Avid's share price hovered between $14 and $15 over the past 20 days.

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