QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
Address of Principal Executive Offices, Including Zip Code |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
x | Accelerated filer | o | |||||||||
Non-accelerated filer | o | Smaller reporting company | |||||||||
Emerging growth company |
Page | ||||||||
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | ||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||
Subscription | $ | $ | $ | ||||||||||||||||||||
Maintenance | 46,118 | 56,102 | |||||||||||||||||||||
Integrated solutions & other | |||||||||||||||||||||||
Total net revenues | |||||||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||
Subscription | |||||||||||||||||||||||
Maintenance | 9,811 | 10,530 | |||||||||||||||||||||
Integrated solutions & other | |||||||||||||||||||||||
Total cost of revenues | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Marketing and selling | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Restructuring costs, net | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating income (loss) | ( | ||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Other income (expense), net | ( | ||||||||||||||||||||||
(Loss) income before income taxes | ( | ( | |||||||||||||||||||||
(Benefit from) Provision for income taxes | ( | ||||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Net (loss) income per common share – basic | $( | $ | $( | $ | |||||||||||||||||||
Net (loss) income per common share – diluted | $( | $ | $( | $ | |||||||||||||||||||
Weighted-average common shares outstanding – basic | |||||||||||||||||||||||
Weighted-average common shares outstanding – diluted |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Other comprehensive (loss) income: | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ( | ||||||||||||||||||||
Comprehensive (loss) income | $ | ( | $ | $ | ( | $ |
June 30, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable, net of allowances of $ | |||||||||||
Inventories | |||||||||||
Prepaid expenses | |||||||||||
Contract assets | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Goodwill | |||||||||||
Right of use assets | |||||||||||
Deferred tax assets, net | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued compensation and benefits | |||||||||||
Accrued expenses and other current liabilities | |||||||||||
Income taxes payable | |||||||||||
Short-term debt | |||||||||||
Deferred revenue | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Long-term deferred revenue | |||||||||||
Long-term lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 7) | |||||||||||
Stockholders’ deficit: | |||||||||||
Common stock, par value $ | |||||||||||
Treasury stock | ( | ( | |||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders’ deficit | ( | ( | |||||||||
Total liabilities and stockholders’ deficit | $ | $ |
Three and Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||
Shares of Common Stock | Additional | Accumulated Other | Total | ||||||||||||||||||||||||||
Issued | In Treasury | Common Stock | Treasury Stock | Paid-in Capital | Accumulated Deficit | Comprehensive Loss | Stockholders’ Deficit | ||||||||||||||||||||||
Balances at January 1, 2023 | ( | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Stock issued pursuant to employee stock plans, net of shares withheld for employee tax obligations | — | — | ( | — | — | ( | |||||||||||||||||||||||
Repurchase of common stock | — | ( | — | ( | — | — | — | ( | |||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||
Balances at March 31, 2023 | ( | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Stock issued pursuant to employee stock plans, net of shares withheld for employee tax obligations | — | — | ( | — | — | ( | |||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||
Balances at June 30, 2023 | ( | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( |
Three and Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||
Shares of Common Stock | Additional | Accumulated Other | Total | ||||||||||||||||||||||||||
Issued | In Treasury | Common Stock | Treasury Stock | Paid-in Capital | Accumulated Deficit | Comprehensive Loss | Stockholders’ Deficit | ||||||||||||||||||||||
Balances at January 1, 2022 | ( | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Stock issued pursuant to employee stock plans, net of shares withheld for employee tax obligations | — | — | ( | — | — | ( | |||||||||||||||||||||||
Repurchase of common stock | — | ( | — | ( | — | — | — | ( | |||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||
Balances at March 31, 2022 | ( | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Stock issued pursuant to employee stock plans, net of shares withheld for employee tax obligations | — | — | ( | — | — | ( | |||||||||||||||||||||||
Repurchase of common stock | — | ( | — | ( | — | — | — | ( | |||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||
Balances at June 30, 2022 | ( | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Six Months Ended | |||||||||||
June 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
(Recovery from) allowance for doubtful accounts | ( | ||||||||||
Stock-based compensation expense | |||||||||||
Non-cash provision for restructuring | |||||||||||
Non-cash interest expense | |||||||||||
Loss on disposal of fixed assets | |||||||||||
Unrealized foreign currency transaction losses (gains) | ( | ||||||||||
(Provision for) Benefit from deferred taxes | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | |||||||||||
Inventories | ( | ||||||||||
Prepaid expenses and other assets | ( | ( | |||||||||
Accounts payable | |||||||||||
Accrued expenses, compensation and benefits and other liabilities | ( | ( | |||||||||
Income taxes payable | ( | ||||||||||
Deferred revenue and contract assets | ( | ( | |||||||||
Net cash (used in) provided by operating activities | ( | ||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from revolving line of credit | |||||||||||
Repayment of debt principal | ( | ( | |||||||||
Payments for repurchase of common stock | ( | ( | |||||||||
Proceeds from the issuance of common stock under employee stock plans | |||||||||||
Common stock repurchases for tax withholdings for net settlement of equity awards | ( | ( | |||||||||
Payments for credit facility issuance costs | ( | ||||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ( | |||||||||
Net decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
Supplemental information: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Restricted cash included in other long-term assets | |||||||||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ | $ | |||||||||
Cash paid for income taxes | $ | $ | |||||||||
Cash paid for interest | $ | $ |
June 30, 2023 | June 30, 2022 | ||||||||||
Non-vested restricted stock units | |||||||||||
Three months ended | Six months ended | ||||||||||||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||||||||||
Weighted common shares outstanding - basic | |||||||||||||||||
Net effect of common stock equivalents | |||||||||||||||||
Weighted common shares outstanding - diluted |
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||
June 30, 2023 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||
Deferred compensation assets | $ | $ | $ | $ | |||||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||
December 31, 2022 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||
Deferred compensation assets | $ | $ | $ | $ | |||||||||||||||||||
June 30, 2023 | December 31, 2022 | ||||||||||
Raw materials | $ | $ | |||||||||
Work in process | |||||||||||
Finished goods | |||||||||||
Total | $ | $ |
Year Ending December 31, | Operating Leases | Finance Leases | ||||||
2023 (excluding six months ended June 30, 2023) | $ | $ | ||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
Thereafter | ||||||||
Total future minimum lease payments | $ | $ | ||||||
Less effects of discounting | ( | |||||||
Total lease liabilities | $ | $ |
Operating Leases | June 30, 2023 | ||||
Right of use assets | $ | ||||
Accrued expenses and other current liabilities | ( | ||||
Long-term lease liabilities | ( | ||||
Total lease liabilities | $ | ( |
Finance Leases | June 30, 2023 | ||||
Other assets | $ | ||||
Accrued expenses and other current liabilities | |||||
Total lease liabilities | $ |
June 30, 2023 | December 31, 2022 | ||||||||||
Deferred compensation | $ | $ | |||||||||
Finance lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total | $ | $ |
Six Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
Accrual balance at beginning of period | $ | $ | |||||||||
Accruals for product warranties | |||||||||||
Costs of warranty claims | ( | ( | |||||||||
Accrual balance at end of period | $ | $ |
Employee | |||||
Accrual balance as of December 31, 2022 | $ | ||||
Restructuring charges and revisions | |||||
Cash payments | ( | ||||
Foreign exchange impact on ending balance | |||||
Accrual balance as of June 30, 2023 | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
United States | $ | $ | $ | $ | |||||||||||||||||||
Other Americas | |||||||||||||||||||||||
Europe, Middle East and Africa | |||||||||||||||||||||||
Asia-Pacific | |||||||||||||||||||||||
Total net revenues | $ | $ | $ | $ |
June 30, 2023 | June 30, 2022 | ||||||||||
Contract asset at beginning of period | $ | $ | |||||||||
Revenue in excess of billings | |||||||||||
Customer billings | ( | ( | |||||||||
Contract asset at end of period | $ | $ | |||||||||
Less: long-term portion (recorded in other long-term assets) | |||||||||||
Contract asset, current portion | $ | $ |
June 30, 2023 | June 30, 2022 | ||||||||||
Deferred revenue at beginning of period | $ | $ | |||||||||
Billings deferred | |||||||||||
Recognition of prior deferred revenue | ( | ( | |||||||||
Deferred revenue at end of period | $ | $ |
June 30, 2023 | |||||
Product | $ | ||||
Subscription | |||||
Maintenance contracts | |||||
Implied PCS | |||||
Professional services, training and other | |||||
Deferred revenue at June 30, 2023 | $ |
June 30, 2023 | December 31, 2022 | ||||||||||
Term Loan, net of unamortized issuance costs and debt discount of $2,187 and $2,485 at June 30, 2023 and December 31, 2022, respectively | $ | $ | |||||||||
Credit Facility | 35,000 | — | |||||||||
Other long-term debt | 750 | ||||||||||
Total debt | $ | $ | |||||||||
Less: current portion | |||||||||||
Total long-term debt | $ | $ |
Fiscal Year | Term Loan | Credit Facility | Other Long-Term Debt | Total | ||||||||||||||||
2023 (excluding six months ended June 30, 2023) | $ | 4,775 | — | $ | ||||||||||||||||
2024 | 13,131 | — | ||||||||||||||||||
2025 | 17,906 | — | ||||||||||||||||||
2026 | 19,100 | — | ||||||||||||||||||
2027 | 124,650 | |||||||||||||||||||
Total before unamortized discount | 35,000 | |||||||||||||||||||
Less: unamortized discount and issuance costs | (2,187) | — | ( | |||||||||||||||||
Less: current portion of long-term debt | (10,744) | — | ( | ( | ||||||||||||||||
Total long-term debt | $ | 35,000 | $ | $ |
Number of Restricted Stock Units | Weighted- Average Grant-Date Fair Value | Weighted- Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in thousands) | Shares Retained to Cover Statutory Minimum Withholding Taxes | |||||||||||||||||||||||||
Non-vested at January 1, 2023 | $ | — | |||||||||||||||||||||||||||
Granted | — | ||||||||||||||||||||||||||||
Vested | ( | ( | |||||||||||||||||||||||||||
Forfeited | ( | — | |||||||||||||||||||||||||||
Non-vested at June 30, 2023 | $ | $ | |||||||||||||||||||||||||||
Number of Performance-based Restricted Stock Units | Weighted- Average Grant-Date Fair Value | Weighted- Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in thousands) | Shares Retained to Cover Statutory Minimum Withholding Taxes | |||||||||||||||||||||||||
Non-vested at January 1, 2023 | $ | — | |||||||||||||||||||||||||||
Granted | — | ||||||||||||||||||||||||||||
Vested | ( | ( | |||||||||||||||||||||||||||
Forfeited | — | ||||||||||||||||||||||||||||
Non-vested at June 30, 2023 | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Share-based compensation expense by type: | |||||||||||||||||||||||
Time-based Restricted Stock Units | $ | $ | $ | $ | |||||||||||||||||||
Performance-based Restricted Stock Units | |||||||||||||||||||||||
ESPP | |||||||||||||||||||||||
Total share-based compensation expense | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Cost of revenues | $ | $ | $ | $ | |||||||||||||||||||
Research and development expenses | |||||||||||||||||||||||
Marketing and selling expenses | |||||||||||||||||||||||
General and administrative expenses | |||||||||||||||||||||||
Total share-based compensation expense | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Subscriptions | $ | 44,439 | $ | 34,142 | $ | 83,824 | $ | 67,096 | |||||||||||||||
Maintenance | 23,468 | 27,775 | 46,118 | 56,102 | |||||||||||||||||||
Subscriptions and Maintenance | 67,907 | 61,917 | 129,942 | 123,198 | |||||||||||||||||||
Perpetual Licenses | 1,110 | 2,742 | 1,658 | 7,939 | |||||||||||||||||||
Software Licenses and Maintenance | 69,017 | 64,659 | 131,600 | 131,137 | |||||||||||||||||||
Integrated solutions | 33,735 | 28,013 | 62,445 | 56,225 | |||||||||||||||||||
Professional services & training | 5,790 | 5,008 | 12,308 | 10,967 | |||||||||||||||||||
Total revenue | $ | 108,542 | $ | 97,680 | $ | 206,353 | $ | 198,329 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||
Subscriptions | 40.9 | % | 35.0 | % | 40.6 | % | 33.8 | % | |||||||||||||||
Maintenance | 21.6 | % | 28.4 | % | 22.4 | % | 28.3 | % | |||||||||||||||
Integrated solutions & other | 37.5 | % | 36.6 | % | 37.0 | % | 37.9 | % | |||||||||||||||
Total net revenues | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Cost of revenues | 38.9 | % | 35.1 | % | 37.7 | % | 34.4 | % | |||||||||||||||
Gross margin | 61.1 | % | 64.9 | % | 62.3 | % | 65.6 | % | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research and development | 18.4 | % | 16.4 | % | 19.1 | % | 16.5 | % | |||||||||||||||
Marketing and selling | 23.4 | % | 24.2 | % | 23.3 | % | 23.0 | % | |||||||||||||||
General and administrative | 14.8 | % | 13.7 | % | 15.8 | % | 14.2 | % | |||||||||||||||
Restructuring costs, net | 5.0 | % | 0.4 | % | 2.7 | % | 0.2 | % | |||||||||||||||
Total operating expenses | 61.6 | % | 54.7 | % | 60.9 | % | 53.9 | % | |||||||||||||||
Operating (loss) income | (0.5) | % | 10.2 | % | 1.4 | % | 11.7 | % | |||||||||||||||
Interest expense, net | (3.9) | % | (2.0) | % | (3.8) | % | (1.7) | % | |||||||||||||||
Other income (loss), net | — | % | 0.1 | % | 0.1 | % | — | % | |||||||||||||||
(Loss) income before income taxes | (4.4) | % | 8.3 | % | (2.3) | % | 10.0 | % | |||||||||||||||
(Benefit from) Provision for income taxes | (0.2) | % | 0.7 | % | 0.1 | % | 0.9 | % | |||||||||||||||
Net (loss) income | (4.2) | % | 7.5 | % | (2.4) | % | 9.1 | % |
Net Revenues for the Three Months Ended June 30, 2023 and 2022 | |||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
2023 | Change | 2022 | |||||||||||||||||||||
Net Revenues | $ | % | Net Revenues | ||||||||||||||||||||
Subscriptions | $ | 44,439 | $ | 10,297 | 30.2% | $ | 34,142 | ||||||||||||||||
Maintenance | 23,468 | (4,307) | (15.5)% | 27,775 | |||||||||||||||||||
Integrated solutions & other | 40,635 | 4,872 | 13.6% | 35,763 | |||||||||||||||||||
Total net revenues | $ | 108,542 | $ | 10,862 | 11.1% | $ | 97,680 |
Net Revenues for the Six Months Ended June 30, 2023 and 2022 | |||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
2023 | Change | 2022 | |||||||||||||||||||||
Net Revenues | $ | % | Net Revenues | ||||||||||||||||||||
Subscriptions | $ | 83,824 | $ | 16,728 | 24.9% | $ | 67,096 | ||||||||||||||||
Maintenance | 46,118 | $ | (9,984) | (17.8)% | 56,102 | ||||||||||||||||||
Integrated solutions & other | $ | 76,411 | $ | 1,280 | 1.7% | $ | 75,131 | ||||||||||||||||
Total net revenues | $ | 206,353 | $ | 8,024 | 4.0% | $ | 198,329 |
Net Revenues for the Nine Months Ended September 30, 2021 and 2020 | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
United States | 43% | 41% | 42% | 43% | |||||||||||||||||||
Other Americas | 5% | 9% | 7% | 7% | |||||||||||||||||||
Europe, Middle East and Africa | 38% | 37% | 36% | 38% | |||||||||||||||||||
Asia-Pacific | 14% | 13% | 15% | 13% |
Costs of Revenues and Gross Profit for the Three Months Ended June 30, 2023 and 2022 | |||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
2023 | Change | 2022 | |||||||||||||||||||||
Costs | $ | % | Costs | ||||||||||||||||||||
Subscriptions | $ | 5,522 | $ | (770) | (12.2)% | $ | 6,292 | ||||||||||||||||
Maintenance | 5,064 | (189) | (3.6)% | 5,253 | |||||||||||||||||||
Integrated solutions & other | 31,611 | 8,842 | 38.8% | 22,769 | |||||||||||||||||||
Total cost of revenues | $ | 42,197 | $ | 7,883 | 23.0% | $ | 34,314 | ||||||||||||||||
Gross profit | $ | 66,345 | $ | 2,979 | 4.7% | $ | 63,366 |
Costs of Revenues and Gross Profit for the Six Months Ended June 30, 2023 and 2022 | |||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
2023 | Change | 2022 | |||||||||||||||||||||
Costs | $ | % | Costs | ||||||||||||||||||||
Subscriptions | $ | 9,786 | $ | (2,108) | (17.7)% | $ | 11,894 | ||||||||||||||||
Maintenance | 9,811 | (719) | (6.8)% | 10,530 | |||||||||||||||||||
Integrated solutions & other | 58,218 | 12,443 | 27.2% | 45,775 | |||||||||||||||||||
Total cost of revenues | $ | 77,815 | $ | 9,616 | 14.1% | $ | 68,199 | ||||||||||||||||
Gross profit | $ | 128,538 | $ | (1,592) | (1.2)% | $ | 130,130 |
Costs of Revenues and Gross Profit for the Nine Months Ended September 30, 2021 and 2020 | |||||||||||||||||||||||
Gross Margin % for the Three Months Ended June 30, 2023 and 2022 | |||||||||||||||||
2023 Gross Margin % | Change | 2022 Gross Margin % | |||||||||||||||
Subscription | 87.6% | 6.0% | 81.6% | ||||||||||||||
Maintenance | 78.4% | (2.7)% | 81.1% | ||||||||||||||
Integrated solutions & other | 22.2% | (14.1)% | 36.3% | ||||||||||||||
Total | 61.1% | (3.8)% | 64.9% |
Gross Margin % for the Six Months Ended June 30, 2023 and 2022 | |||||||||||||||||
2023 Gross Margin % | Change | 2022 Gross Margin % | |||||||||||||||
Subscription | 88.3% | 6.0% | 82.3% | ||||||||||||||
Maintenance | 78.7% | (2.5)% | 81.2% | ||||||||||||||
Integrated solutions & other | 23.8% | (15.3)% | 39.1% | ||||||||||||||
Total | 62.3% | (3.3)% | 65.6% |
Gross Margin % for the Nine Months Ended September 30, 2021 and 2020 | |||||||||||||||||
Operating Expenses and Operating (Loss) Income for the Three Months Ended June 30, 2023 and 2022 | |||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
2023 | Change | 2022 | |||||||||||||||||||||
Expenses | $ | % | Expenses | ||||||||||||||||||||
Research and development | $ | 20,000 | $ | 3,977 | 24.8% | $ | 16,023 | ||||||||||||||||
Marketing and selling | 25,391 | 1,718 | 7.3% | 23,673 | |||||||||||||||||||
General and administrative | 16,020 | 2,656 | 19.9% | 13,364 | |||||||||||||||||||
Restructuring costs, net | 5,462 | 5,120 | 1,497.1% | 342 | |||||||||||||||||||
Total operating expenses | $ | 66,873 | $ | 13,471 | 25.2% | $ | 53,402 | ||||||||||||||||
Operating (loss) income | $ | (528) | $ | (10,492) | (105.3)% | $ | 9,964 |
Operating Expenses and Operating Income for the Six Months Ended June 30, 2023 and 2022 | |||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
2023 | Change | 2022 | |||||||||||||||||||||
Expenses | $ | % | Expenses | ||||||||||||||||||||
Research and development | $ | 39,426 | $ | 6,667 | 20.4% | $ | 32,759 | ||||||||||||||||
Marketing and selling | 48,048 | 2,448 | 5.4% | 45,600 | |||||||||||||||||||
General and administrative | 32,634 | 4,459 | 15.8% | 28,175 | |||||||||||||||||||
Restructuring costs, net | 5,462 | 5,105 | 1,430.0% | 357 | |||||||||||||||||||
Total operating expenses | $ | 125,570 | $ | 18,679 | 17.5% | $ | 106,891 | ||||||||||||||||
Operating income | $ | 2,968 | $ | (20,271) | (87.2)% | $ | 23,239 |
Change in R&D Expenses for the Three Months Ended June 30, 2023 and 2022 | |||||||||||
(dollars in thousands) | |||||||||||
2023 Increase From 2022 | |||||||||||
$ | % | ||||||||||
Other | 1,559 | 44.4 | % | ||||||||
Consulting and outside services | 1,388 | 42.2 | % | ||||||||
Personnel-related | 1,030 | 11.2 | % | ||||||||
Total G&A expenses increase | $ | 3,977 | 24.8 | % |
Change in R&D Expenses for the Six Months Ended June 30, 2023 and 2022 | |||||||||||
(dollars in thousands) | |||||||||||
2023 Increase From 2022 | |||||||||||
$ | % | ||||||||||
Consulting and outside services | 2,425 | 36.5 | % | ||||||||
Other | 2,308 | 32.0 | % | ||||||||
Personnel-related | 1,934 | 10.2 | % | ||||||||
Total research and development expenses increase | $ | 6,667 | 20.4% |
Change in R&D Expenses for the Three Months Ended March 31, 2022 and 2021 | |||||||||||
Change in R&D Expenses for the Nine Months Ended September 30, 2021 and 2020 | |||||||||||
Change in Marketing and Selling Expenses for the Three Months Ended June 30, 2023 and 2022 | |||||||||||
(dollars in thousands) | |||||||||||
2023 Increase From 2022 | |||||||||||
$ | % | ||||||||||
Personnel-related | 1,479 | 9.1 | % | ||||||||
Other | 239 | 3.2 | % | ||||||||
Total marketing and selling expenses increase | $ | 1,718 | 7.3 | % |
Change in Marketing and Selling Expenses for the Six Months Ended June 30, 2023 and 2022 | |||||||||||
(dollars in thousands) | |||||||||||
2023 Increase (Decrease) From 2022 | |||||||||||
$ | % | ||||||||||
Personnel-related | 2,254 | 7.1 | % | ||||||||
Other | 1,115 | 8.6 | % | ||||||||
Foreign exchange (gains) and losses | (921) | (82.6) | % | ||||||||
Total marketing and selling expenses increase | $ | 2,448 | 5.4 | % |
Change in Marketing and Selling Expenses for the Nine Months Ended September 30, 2021 and 2020 | |||||||||||
Change in G&A Expenses for the Three Months Ended June 30, 2023 and 2022 | |||||||||||
(dollars in thousands) | |||||||||||
2023 Increase From 2022 | |||||||||||
$ | % | ||||||||||
Other | 1,790 | 28.0 | % | ||||||||
Personnel-related | 866 | 12.4 | % | ||||||||
Total G&A expenses increase | $ | 2,656 | 19.9 | % |
Change in G&A Expenses for the Six Months Ended June 30, 2023 and 2022 | |||||||||||
(dollars in thousands) | |||||||||||
2023 Increase From 2022 | |||||||||||
$ | % | ||||||||||
Personnel-related | 2,838 | 19.9 | % | ||||||||
Other | 1,621 | 11.6 | % | ||||||||
Total G&A expenses increase | $ | 4,459 | 15.8% |
Interest Expense, Net for the Three Months Ended June 30, 2023 and 2022 | |||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
2023 | Change | 2022 | |||||||||||||||||||||
$ | % | ||||||||||||||||||||||
Interest expense, net | $ | (4,214) | $ | (2,270) | 116.8% | $ | (1,944) |
Interest Expense, Net for the Six Months Ended June 30, 2023 and 2022 | |||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
2023 | Change | 2022 | |||||||||||||||||||||
$ | % | ||||||||||||||||||||||
Interest expense, net | $ | (7,929) | $ | (4,509) | 131.8% | $ | (3,420) |
(Benefit from) Provision for Income Taxes for the Three Months Ended June 30, 2023 and 2022 | |||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
2023 | Change | 2022 | |||||||||||||||||||||
$ | % | ||||||||||||||||||||||
(Benefit from) Provision for Income Taxes | $ | (126) | $ | (852) | (117.4)% | $ | 726 |
Provision for Income Taxes for the Six Months Ended June 30, 2023 and 2022 | |||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
2023 | Change | 2022 | |||||||||||||||||||||
$ | % | ||||||||||||||||||||||
Provision for Income Taxes | $ | 183 | $ | (1,669) | (90.1)% | $ | 1,852 |
Six Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
Net cash (used in) provided by operating activities | $ | (16,177) | $ | 15,221 | |||||||
Net cash used in investing activities | (10,008) | (7,359) | |||||||||
Net cash provided by (used in) financing activities | 23,548 | (19,407) | |||||||||
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash | (645) | (941) | |||||||||
Net decrease in cash, cash equivalents and restricted cash | $ | (3,282) | $ | (12,486) |
Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced programs | Maximum approximate dollar value of shares that may yet be purchased under the programs | ||||||||||||||||||||||
April 1, 2023 - April 30, 2023 | — | $ | — | 0 | $ | 36,647,369 | ||||||||||||||||||||
May 1, 2023 -May 31, 2023 | — | $ | — | 0 | $ | 36,647,369 | ||||||||||||||||||||
June 1, 2023 - June 30, 2023 | — | $ | — | 0 | $ | 36,647,369 |
Incorporated by Reference | ||||||||||||||||||||||||||||||||
Exhibit No. | Description | Filed with this Form 10-Q | Form or Schedule | SEC Filing Date | SEC File Number | |||||||||||||||||||||||||||
3.1 | X | |||||||||||||||||||||||||||||||
3.3 | 8-K | June 1, 2023 | 001-36254 | |||||||||||||||||||||||||||||
3.4 | 8-K | June 1, 2023 | 001-36254 | |||||||||||||||||||||||||||||
31.1 | X | |||||||||||||||||||||||||||||||
31.2 | X | |||||||||||||||||||||||||||||||
32.1 | * | |||||||||||||||||||||||||||||||
101.INS | eXtensible Business Reporting Language (XBRL) Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||||||||||||||||||||||||||
**101.SCH | XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||||||||||||||
**101.CAL | XBRL Taxonomy Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||
**101.DEF | XBRL Taxonomy Definition Linkbase Document | X | ||||||||||||||||||||||||||||||
**101.LAB | XBRL Taxonomy Label Linkbase Document | X | ||||||||||||||||||||||||||||||
**101.PRE | XBRL Taxonomy Presentation Linkbase Document | X |
AVID TECHNOLOGY, INC. | ||||||||||||||
(Registrant) | ||||||||||||||
Date: | August 9, 2023 | By: | /s/ Kenneth Gayron | |||||||||||
Name: | Kenneth Gayron | |||||||||||||
Title: | Executive Vice President and Chief Financial Officer |
Date: | August 9, 2023 | /s/ Jeff Rosica | |||||||||||||||
Jeff Rosica | |||||||||||||||||
President and Chief Executive Officer (Principal Executive Officer) |
Date: | August 9, 2023 | /s/ Kenneth Gayron | |||||||||||||||
Kenneth Gayron | |||||||||||||||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
Date: | August 9, 2023 | /s/ Jeff Rosica | ||||||||||||
Jeff Rosica | ||||||||||||||
President and Chief Executive Officer (Principal Executive Officer) |
Date: | August 9, 2023 | /s/ Kenneth Gayron | ||||||||||||
Kenneth Gayron | ||||||||||||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Net revenues: | ||||
Revenues | $ 108,542 | $ 97,680 | $ 206,353 | $ 198,329 |
Cost of revenues: | ||||
Total cost of revenues | 42,197 | 34,314 | 77,815 | 68,199 |
Gross profit | 66,345 | 63,366 | 128,538 | 130,130 |
Operating expenses: | ||||
Research and development | 20,000 | 16,023 | 39,426 | 32,759 |
Marketing and selling | 25,391 | 23,673 | 48,048 | 45,600 |
General and administrative | 16,020 | 13,364 | 32,634 | 28,175 |
Restructuring costs, net | 5,462 | 342 | 5,462 | 357 |
Total operating expenses | 66,873 | 53,402 | 125,570 | 106,891 |
Operating income (loss) | (528) | 9,964 | 2,968 | 23,239 |
Interest expense, net | (4,214) | (1,944) | (7,929) | (3,420) |
Other income (expense), net | 20 | 79 | 167 | (8) |
(Loss) income before income taxes | (4,722) | 8,099 | (4,794) | 19,811 |
(Benefit from) Provision for income taxes | (126) | 726 | 183 | 1,852 |
Net (loss) income | $ (4,596) | $ 7,373 | $ (4,977) | $ 17,959 |
Net (loss) income per common share – basic | $ (0.10) | $ 0.16 | $ (0.11) | $ 0.40 |
Net (loss) income per common share – diluted | $ (0.10) | $ 0.16 | $ (0.11) | $ 0.40 |
Weighted-average common shares outstanding – basic | 44,099 | 44,740 | 43,957 | 44,778 |
Weighted-average common shares outstanding – diluted | 44,099 | 45,110 | 43,957 | 45,280 |
Subscription | ||||
Net revenues: | ||||
Revenues | $ 44,439 | $ 34,142 | $ 83,824 | $ 67,096 |
Cost of revenues: | ||||
Total cost of revenues | 5,522 | 6,292 | 9,786 | 11,894 |
Maintenance | ||||
Net revenues: | ||||
Revenues | 23,468 | 27,775 | ||
Cost of revenues: | ||||
Total cost of revenues | 5,064 | 5,253 | ||
Integrated solutions & other | ||||
Net revenues: | ||||
Revenues | 40,635 | 35,763 | 76,411 | 75,131 |
Cost of revenues: | ||||
Total cost of revenues | $ 31,611 | $ 22,769 | $ 58,218 | $ 45,775 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Net (loss) income | $ (4,596) | $ 7,373 | $ (4,977) | $ 17,959 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (365) | (1,735) | 229 | (1,936) |
Comprehensive income (loss) | $ (4,961) | $ 5,638 | $ (4,748) | $ 16,023 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Current assets: | ||
Allowance for doubtful accounts | $ 539 | $ 601 |
Stockholders' deficit: | ||
Commons stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 46,935,000 | 46,551,000 |
Common stock, shares outstanding | 44,009,000 | 43,771,000 |
FINANCIAL INFORMATION (Notes) |
6 Months Ended |
---|---|
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
FINANCIAL INFORMATION | FINANCIAL INFORMATION The accompanying condensed consolidated financial statements include the accounts of Avid Technology, Inc. and its wholly owned subsidiaries (collectively, “we” or “our”). These financial statements are unaudited. However, in the opinion of management, the condensed consolidated financial statements reflect all normal and recurring adjustments necessary for their fair statement. Interim results are not necessarily indicative of results expected for any other interim period or a full year. We prepared the accompanying unaudited condensed consolidated financial statements in accordance with the instructions for Form 10-Q and, therefore, include all information and footnotes necessary for a complete presentation of operations, comprehensive income, financial position, changes in stockholders’ deficit, and cash flows in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying condensed consolidated balance sheet as of December 31, 2022 was derived from our audited consolidated financial statements and does not include all disclosures required by U.S. GAAP for annual financial statements. We filed audited consolidated financial statements as of and for the year ended December 31, 2022 in our Annual Report on Form 10-K for the year ended December 31, 2022, which included information and footnotes necessary for such presentation. The financial statements contained in this Form 10-Q should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022. The consolidated results of operations for the three months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023. The Company’s results of operations are affected by economic conditions, including macroeconomic conditions and levels of business and consumer confidence. Our preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from our estimates. Significant Accounting Policies There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2022.
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NET INCOME PER SHARE Earnings Per Share (Notes) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME PER SHARE | NET (LOSS) INCOME PER SHARE Net income per common share is presented for both basic income per share (“Basic EPS”) and diluted income per share (“Diluted EPS”). Basic EPS is based on the weighted-average number of common shares outstanding during the period. Diluted EPS is based on the weighted-average number of common shares and common share equivalents outstanding during the period. The potential common shares that were considered anti-dilutive securities were excluded from the diluted earnings per share calculations for the relevant periods either because the sum of the exercise price per share and the unrecognized compensation cost per share was greater than the average market price of our common stock for the relevant periods, or because they were considered contingently issuable. The contingently issuable potential common shares result from certain restricted stock units granted to our employees that vest based on performance conditions, market conditions, or a combination of performance and market conditions. The following table sets forth (in thousands) potential common shares that were considered anti-dilutive securities at June 30, 2023 and 2022:
The following table sets forth (in thousands) the basic and diluted weighted common shares outstanding for the three months ended June 30, 2023 and 2022:
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FAIR VALUE MEASUREMENTS (Notes) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Assets Measured at Fair Value on a Recurring Basis We measure deferred compensation investments on a recurring basis. As of June 30, 2023 and December 31, 2022, our deferred compensation investments were classified as either Level 1 or Level 2 in the fair value hierarchy. Assets valued using quoted market prices in active markets and classified as Level 1 are money market and mutual funds. Assets valued based on other observable inputs and classified as Level 2 are insurance contracts. The assets held at fair value are included in “Other current assets” and “Other long-term assets” on our consolidated balance sheet as of June 30, 2023 and 2022. The following tables summarize our deferred compensation investments measured at fair value on a recurring basis (in thousands):
Financial Instruments Not Recorded at Fair Value The carrying amounts of our other financial assets and liabilities including cash, accounts receivable, accounts payable, and accrued liabilities approximate their respective fair values because of the relatively short period of time between their origination and their expected realization or settlement. The carrying value of the term loan is net of debt issuance costs and approximates its fair value. Cash and equivalents were classified as Level 1 and all other financial instruments were classified as Level 2 within the fair value hierarchy.
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INVENTORIES (Notes) |
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES Inventories consisted of the following (in thousands):
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LEASES LEASES (Notes) |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES We have entered into a number of facility leases to support our research and development activities, sales operations, and other corporate and administrative functions in North America, Europe, and Asia, which qualify as operating leases under U.S. GAAP. We also have a limited number of equipment leases that qualify as either operating or finance leases. We determine if contracts with vendors represent a lease or have a lease component under U.S. GAAP at contract inception. Our leases have remaining terms ranging from less than one year to five years. Some of our leases include options to extend or terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Operating lease right of use assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the lease commencement date. As our leases generally do not provide an implicit rate, we use an estimated incremental borrowing rate in determining the present value of future payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular location and currency environment. As of June 30, 2023, the weighted average incremental borrowing rate was 6.0% and the weighted average remaining lease term was 4.7 years. Finance lease right of use assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the lease commencement date. Each lease agreement provides an implicit discount rate used to determine the present value of future payments. As of June 30, 2023, the weighted-average discount rate was 1.2% and the weighted average remaining lease term was less than one year. Lease costs for minimum lease payments is recognized on a straight-line basis over the lease term. Our total operating lease costs were $1.5 million and $1.4 million for the three months ended June 30, 2023 and June 30, 2022, respectively and $3.0 million and $2.9 million for the six months ended June 30, 2023 and June 30, 2022, respectively. Related cash payments were $1.5 million and $1.5 million for the three months ended June 30, 2023 and June 30, 2022, respectively, and $3.2 million and $3.1 million for the six months ended June 30, 2023 and June 30, 2022, respectively. Short term lease costs were $0.5 million and $0.6 million for the three months ended June 30, 2023 and June 30, 2022, respectively, and $1.1 million and $1.2 million for the six months ended June 30, 2023 and June 30, 2022, respectively. Operating lease costs are included within costs of revenue, research and development, marketing and selling, and general and administrative lines on the condensed consolidated statements of operations, and the related cash payments are included in the operating cash flows on the condensed consolidated statements of cash flows. Finance lease costs, variable lease costs, and sublease income are not material. The table below reconciles the undiscounted future minimum lease payments for operating and finance leases under non-cancelable leases with terms of more than one year to the total lease liabilities recognized on the condensed consolidated balance sheets as of June 30, 2023 (in thousands):
Supplemental balance sheet information related to leases was as follows (in thousands):
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LEASES | LEASES We have entered into a number of facility leases to support our research and development activities, sales operations, and other corporate and administrative functions in North America, Europe, and Asia, which qualify as operating leases under U.S. GAAP. We also have a limited number of equipment leases that qualify as either operating or finance leases. We determine if contracts with vendors represent a lease or have a lease component under U.S. GAAP at contract inception. Our leases have remaining terms ranging from less than one year to five years. Some of our leases include options to extend or terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Operating lease right of use assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the lease commencement date. As our leases generally do not provide an implicit rate, we use an estimated incremental borrowing rate in determining the present value of future payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular location and currency environment. As of June 30, 2023, the weighted average incremental borrowing rate was 6.0% and the weighted average remaining lease term was 4.7 years. Finance lease right of use assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the lease commencement date. Each lease agreement provides an implicit discount rate used to determine the present value of future payments. As of June 30, 2023, the weighted-average discount rate was 1.2% and the weighted average remaining lease term was less than one year. Lease costs for minimum lease payments is recognized on a straight-line basis over the lease term. Our total operating lease costs were $1.5 million and $1.4 million for the three months ended June 30, 2023 and June 30, 2022, respectively and $3.0 million and $2.9 million for the six months ended June 30, 2023 and June 30, 2022, respectively. Related cash payments were $1.5 million and $1.5 million for the three months ended June 30, 2023 and June 30, 2022, respectively, and $3.2 million and $3.1 million for the six months ended June 30, 2023 and June 30, 2022, respectively. Short term lease costs were $0.5 million and $0.6 million for the three months ended June 30, 2023 and June 30, 2022, respectively, and $1.1 million and $1.2 million for the six months ended June 30, 2023 and June 30, 2022, respectively. Operating lease costs are included within costs of revenue, research and development, marketing and selling, and general and administrative lines on the condensed consolidated statements of operations, and the related cash payments are included in the operating cash flows on the condensed consolidated statements of cash flows. Finance lease costs, variable lease costs, and sublease income are not material. The table below reconciles the undiscounted future minimum lease payments for operating and finance leases under non-cancelable leases with terms of more than one year to the total lease liabilities recognized on the condensed consolidated balance sheets as of June 30, 2023 (in thousands):
Supplemental balance sheet information related to leases was as follows (in thousands):
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OTHER LONG-TERM LIABILITIES (Notes) |
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER LONG-TERM LIABILITIES | OTHER LONG-TERM LIABILITIES Other long-term liabilities consisted of the following (in thousands):
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CONTINGENCIES (Notes) |
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments We entered into a long-term agreement to purchase a variety of information technology solutions from a third party in the second quarter of 2020, which included an unconditional commitment to purchase a minimum of $32.2 million of products and services over the initial five years of the agreement. We have purchased $23.5 million of products and services pursuant to this agreement as of June 30, 2023. We have letters of credit that are used as security deposits in connection with our leased Burlington, Massachusetts office space. In the event of default on the underlying leases, the landlords would, at June 30, 2023, be eligible to draw against the letters of credit to a maximum of $0.7 million. We also have letters of credit in connection with security deposits for other facility leases totaling $0.4 million in the aggregate, as well as letters of credit totaling $3.4 million that otherwise support our ongoing operations. These letters of credit have various terms and expire during 2023 and beyond, while some of the letters of credit may automatically renew based on the terms of the underlying agreements. Letters of credit that are collateralized by restricted cash are included in the caption “Restricted cash” and “Other long-term assets” on our condensed consolidated balance sheets as of June 30, 2023. Contingencies Our industry is characterized by the existence of a large number of patents and frequent claims and litigation regarding patent and other intellectual property rights. In addition to the legal proceedings described below, we are involved in legal proceedings from time to time arising from the normal course of business activities, including claims of alleged infringement of intellectual property rights and contractual, commercial, employee relations, product or service performance, or other matters. We do not believe these matters will have a material adverse effect on our financial position or results of operations. However, the outcome of legal proceedings and claims brought against us is subject to significant uncertainty. Therefore, our financial position or results of operations may be negatively affected by the unfavorable resolution of one or more of these proceedings for the period in which a matter is resolved. Our results could be materially adversely affected if we are accused of, or found to be, infringing third parties’ intellectual property rights. Following the termination of our former Chairman and Chief Executive Officer on February 25, 2018, we received a notice alleging that we breached the former employee’s employment agreement. On April 16, 2019, we received an additional notice again alleging we breached the former employee’s employment agreement. We have since been in communications with our former Chairman and Chief Executive Officer’s counsel. While we intend to defend any claim vigorously, when and if a claim is actually filed, we are currently unable to estimate an amount or range of any reasonably possible losses that could occur as a result of this matter. On July 14, 2020, we sent a notice to a customer demanding sums that we believe are due to Avid pursuant to a contract. On October 7, 2020, the customer sent a notice to us denying any legal liability and demanding payment for breach of contract resulting from various alleged delays by us. While we intend to defend any claim vigorously when and if a claim is actually filed, we are currently unable to estimate an amount or range of any reasonably possible losses that could occur related to this matter. We consider all claims on a quarterly basis and based on known facts assess whether potential losses are considered reasonably possible, probable, and estimable. Based upon this assessment, we then evaluate disclosure requirements and whether to accrue for such claims in our condensed consolidated financial statements. We record a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated and such amount is material. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. At June 30, 2023 and as of the date of filing of these condensed consolidated financial statements, we believe that, other than as set forth in this note, no provision for liability nor disclosure is required related to any claims because: (a) there is no reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim, (b) a reasonably possible loss or range of loss cannot be estimated, or (c) such estimate is immaterial. Additionally, we provide indemnification to certain customers for losses incurred in connection with intellectual property infringement claims brought by third parties with respect to our products. These indemnification provisions generally offer perpetual coverage for infringement claims based upon the products covered by the agreement and the maximum potential amount of future payments we could be required to make under these indemnification provisions is theoretically unlimited. To date, we have not incurred material costs related to these indemnification provisions; accordingly, we believe the estimated fair value of these indemnification provisions is immaterial. Further, certain arrangements with customers include clauses whereby we may be subject to penalties for failure to meet certain performance obligations; however, we have not recorded any related material penalties to date. We provide warranties on externally sourced and internally developed hardware. For internally developed hardware, and in cases where the warranty granted to customers for externally sourced hardware is greater than that provided by the manufacturer, we record an accrual for the related liability based on historical trends and actual material and labor costs. The following table sets forth the activity in the product warranty accrual account for the six months ended June 30, 2023 and 2022 (in thousands):
The warranty accrual is included in the caption “accrued expenses and other current liabilities” in our condensed consolidated balance sheet.
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REVENUE (Notes) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE Disaggregated Revenue and Geography Information Through the evaluation of the discrete financial information that is regularly reviewed by the chief operating decision makers (our chief executive officer and chief financial officer), we have determined that we have one reporting unit and operating segment. The following table sets forth our revenues by geographic region for the three and six months ended June 30, 2023 and 2022 (in thousands):
Contract Asset Contract asset activity for the six months ended June 30, 2023 and 2022 was as follows (in thousands):
Deferred Revenue Deferred revenue activity for the six months ended June 30, 2023 and 2022 was as follows (in thousands):
A summary of the significant performance obligations included in deferred revenue is as follows (in thousands):
Remaining Performance Obligations For transaction prices allocated to remaining performance obligations, we apply practical expedients and do not disclose quantitative or qualitative information for remaining performance obligations (i) that have original expected durations of one year or less and (ii) where we recognize revenue equal to what we have the right to invoice and that amount corresponds directly with the value to the customer of our performance to date. Historically, for many of our products, we had an ongoing practice of making when-and-if-available software updates available to customers free of charge for a period of time after initial sales to customers. The expectation created by this practice of providing free Software Updates represents an implied obligation of a form of post-contract customer support (“Implied PCS”) which represents a performance obligation. While we have ceased providing Implied PCS on new product offerings, we continue to provide Implied PCS for older products that were predominately sold in prior years. Revenue attributable to Implied PCS performance obligations is recognized over time on a ratable basis over the period that Implied PCS is expected to be provided, which is typically six years. We have remaining performance obligations of $3.2 million attributable to Implied PCS recorded in deferred revenue as of June 30, 2023. We expect to recognize revenue for these remaining performance obligations of $0.7 million for the remainder of 2023 and $1.1 million, $0.7 million, $0.4 million and $0.2 million for the years ending December 31, 2024, 2025, 2026, and 2027, respectively, and an immaterial amount thereafter. As of June 30, 2023, we had approximately $14.7 million of transaction price allocated to remaining performance obligations for certain enterprise agreements that have not yet been fully invoiced. Approximately $13.4 million of these performance obligations were unbilled as of June 30, 2023. Remaining performance obligations represent obligations we must deliver for specific products and services in the future where there is not yet an enforceable right to invoice the customer. Our remaining performance obligations do not include contractually committed minimum purchases that are common in our strategic purchase agreements with resellers since our specific obligations to deliver products or services is not yet known, as customers may satisfy such commitments by purchasing an unknown combination of current or future product offerings. While the timing of fulfilling individual performance obligations under the contracts can vary dramatically based on customer requirements, we expect to recognize the $14.7 million in roughly equal installments through 2028. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations due to contract breach, contract amendments, and changes in the expected timing of delivery.
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LONG-TERM DEBT AND CREDIT AGREEMENT (Notes) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG TERM DEBT AND CREDIT AGREEMENT | LONG-TERM DEBT AND CREDIT AGREEMENT Long-term debt consisted of the following (in thousands):
The following table summarizes the contractual maturities of our borrowing obligations as of June 30, 2023 (in thousands):
Credit Agreement On January 5, 2021, the Company entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. as collateral and administrative agent, and a syndicate of banks, as lenders thereunder (the “Lenders”). Pursuant to the Credit Agreement, the Lenders agreed to provide the Company with (a) a term loan in the aggregate principal amount of $180.0 million (the “Term Loan”) and (b) a revolving credit facility (the “Revolving Credit Facility”) of up to a maximum of $70.0 million in borrowings outstanding at any time. The Revolving Credit Facility can be used for working capital, other general corporate purposes and for other permitted uses. The proceeds from the Term Loan, plus available cash on hand, were used to repay outstanding borrowings in the principal amount of $201 million under the Company’s prior financing agreement, which was then terminated. In connection with this termination, the Company incurred a loss on extinguishment of debt of $3.7 million as a result of writing off $2.6 million of remaining unamortized issuance costs as well as a $1.1 million prepayment penalty. In connection with the Credit Agreement, the Company incurred $2.5 million of issuance discounts and an immaterial amount of issuance costs. The Term Loan discount and issuance costs are being amortized over the remaining life of the Second A&R Credit Agreement (as defined below). On February 25, 2022, the Company executed an Amended and Restated Credit Agreement (the “A&R Credit Agreement) with JPMorgan Chase Bank, N.A. and the Lenders. The A&R Credit Agreement extended the term of the Term Loan to February 25, 2027, reduced the applicable interest rate margins by 0.25%, removed the LIBOR floor, moved the reference rate from LIBOR to the Secured Overnight Financing Rate (“SOFR”), reset the principal amortization schedule, and eliminated the fixed charge coverage ratio. In connection with the A&R Credit Agreement, the Company accounted for the amendment as a modification and incurred an additional $0.4 million of issuance costs during the three months ended March 31, 2022. These additional costs and the remaining unamortized Term Loan discount and issuance costs are being amortized jointly over the amended remaining life of the Second A&R Credit Agreement. On October 6, 2022, the Company executed a Second Amended and Restated Credit Agreement (the “Second A&R Credit Agreement”) with JPMorgan Chase Bank, N.A. and the Lenders. Pursuant to the Second A&R Credit Agreement, the Lenders agreed to provide the Company with (a) an additional term loan in the aggregate principal amount of $20 million (of which approximately $19 million was used to pay off the Company’s then outstanding drawings under the Revolving Credit Facility), and (b) an additional $50 million of available borrowing capacity under the Revolving Credit Facility, increasing the aggregate amount available to $120.0 million. The Second A&R Credit Agreement includes substantially similar terms as the A&R Credit Agreement and does not result in any changes to financial covenants, pricing or the maturity date of February 25, 2027. In connection with the Second A&R Credit Agreement, the Company accounted for the amendment as a modification and incurred an additional $0.5 million of issuance costs during the three months ended December 31, 2022. These additional costs and the remaining unamortized Term Loan discount and issuance costs are being amortized jointly over the amended remaining life of the Second A&R Credit Agreement. We recorded $3.8 million and $7.1 million of interest expense on the Term Loan and Revolving Credit Facility for the three and six months ended June 30, 2023. The effective interest rate for the six months ended June 30, 2023 was 7.05%. As of June 30, 2023, there was $35 million outstanding under the Revolving Credit Facility. We were in compliance with the Second A&R Credit Agreement covenants as of June 30, 2023.
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STOCKHOLDERS' EQUITY (Notes) |
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Stock-Based Compensation Information with respect to the Company’s non-vested time-based restricted stock units for the six months ended June 30, 2023 was as follows:
Information with respect to the Company’s non-vested performance-based restricted stock units for the six months ended June 30, 2023 was as follows:
The following table sets forth stock-based compensation expense by award type for the three and six months ended June 30, 2023 and 2022 (in thousands):
Stock-based compensation was included in the following captions in the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022 (in thousands):
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FINANCIAL INFORMATION (Policies) |
6 Months Ended |
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Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revenue from Contract with Customer | Significant Accounting Policies There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2022.
|
Recent Accounting Pronouncements |
NET INCOME PER SHARE Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities Excluded From Computation of Net (Income) Loss Per Share | The following table sets forth (in thousands) potential common shares that were considered anti-dilutive securities at June 30, 2023 and 2022:
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Schedule of Weighted Average Number of Shares | The following table sets forth (in thousands) the basic and diluted weighted common shares outstanding for the three months ended June 30, 2023 and 2022:
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FAIR VALUE MEASUREMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis | The following tables summarize our deferred compensation investments measured at fair value on a recurring basis (in thousands):
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INVENTORIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories consisted of the following (in thousands):
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LEASES LEASES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessee, Operating Lease, Liability, Maturity | The table below reconciles the undiscounted future minimum lease payments for operating and finance leases under non-cancelable leases with terms of more than one year to the total lease liabilities recognized on the condensed consolidated balance sheets as of June 30, 2023 (in thousands):
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Finance Lease, Liability, Maturity | The table below reconciles the undiscounted future minimum lease payments for operating and finance leases under non-cancelable leases with terms of more than one year to the total lease liabilities recognized on the condensed consolidated balance sheets as of June 30, 2023 (in thousands):
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Assets and Liabilities, Lessee | Supplemental balance sheet information related to leases was as follows (in thousands):
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OTHER LONG-TERM LIABILITIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term liabilities | Other long-term liabilities consisted of the following (in thousands):
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CONTINGENCIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product warranty accrual activity | The following table sets forth the activity in the product warranty accrual account for the six months ended June 30, 2023 and 2022 (in thousands):
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REVENUE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue by Type | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue by Geographic Region | The following table sets forth our revenues by geographic region for the three and six months ended June 30, 2023 and 2022 (in thousands):
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Contract Asset | Contract Asset Contract asset activity for the six months ended June 30, 2023 and 2022 was as follows (in thousands):
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Deferred Revenue | Deferred revenue activity for the six months ended June 30, 2023 and 2022 was as follows (in thousands):
A summary of the significant performance obligations included in deferred revenue is as follows (in thousands):
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LONG-TERM DEBT AND CREDIT AGREEMENT (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long-term debt consisted of the following (in thousands):
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Schedule of Maturities of Long-term Debt | The following table summarizes the contractual maturities of our borrowing obligations as of June 30, 2023 (in thousands):
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STOCKHOLDERS' EQUITY (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity | Information with respect to the Company’s non-vested time-based restricted stock units for the six months ended June 30, 2023 was as follows:
Information with respect to the Company’s non-vested performance-based restricted stock units for the six months ended June 30, 2023 was as follows:
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Share-based Payment Arrangement, Expensed and Capitalized, Amount | tock-based compensation expense by award type for the three and six months ended June 30, 2023 and 2022 (in thousands):
Stock-based compensation was included in the following captions in the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022 (in thousands):
|
NET INCOME PER SHARE Earnings Per Share (Details) - shares shares in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Non-vested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Net Loss Per Share [Line Items] | ||
Anti-dilutive potential common shares (in thousands of shares) | 1,291 | 826 |
NET INCOME PER SHARE Weighted Average Shares Outstanding (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||
Weighted-average common shares outstanding – basic | 44,099 | 44,740 | 43,957 | 44,778 |
Net effect of common stock equivalents | 0 | 370 | 0 | 502 |
Weighted-average common shares outstanding – diluted | 44,099 | 45,110 | 43,957 | 45,280 |
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Financial Assets: | ||
Deferred compensation assets | $ 281 | $ 376 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial Assets: | ||
Deferred compensation assets | 87 | 85 |
Significant Other Observable Inputs (Level 2) | ||
Financial Assets: | ||
Deferred compensation assets | 194 | 291 |
Significant Unobservable Inputs (Level 3) | ||
Financial Assets: | ||
Deferred compensation assets | $ 0 | $ 0 |
INVENTORIES (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,964 | $ 7,984 |
Work in process | 288 | 288 |
Finished Goods | 20,776 | 12,709 |
Total inventory | 28,028 | 20,981 |
Finished goods, consigned | $ 2,400 | $ 1,400 |
LEASES LEASES (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Lessee, Lease, Description [Line Items] | ||||
Operating Lease, Weighted Average Discount Rate, Percent | 6.00% | 6.00% | ||
Operating Lease, Weighted Average Remaining Lease Term | 4 years 8 months 12 days | 4 years 8 months 12 days | ||
Finance Lease, Weighted Average Discount Rate, Percent | 1.20% | 1.20% | ||
Operating Lease, Cost | $ 1.5 | $ 1.4 | $ 3.0 | $ 2.9 |
Operating Lease, Payments | 1.5 | 1.5 | 3.2 | 3.1 |
Short-term Lease, Cost | $ 0.5 | $ 0.6 | $ 1.1 | $ 1.2 |
Minimum [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lessee, Operating Lease, Term of Contract | 1 year | 1 year | ||
Maximum [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lessee, Operating Lease, Term of Contract | 5 years | 5 years |
LEASES Maturity Schedule (Details) $ in Thousands |
Jun. 30, 2023
USD ($)
|
---|---|
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2023 (excluding six months ended June 30, 2023) | $ 3,125 |
2024 | 5,840 |
2025 | 5,898 |
2026 | 5,958 |
2027 | 5,500 |
Thereafter | 2,067 |
Total future minimum lease payments | 28,388 |
Less effects of discounting | (3,822) |
Total lease liabilities | (24,566) |
Finance Lease, Liability, Payment, Due [Abstract] | |
2023 (excluding six months ended June 30, 2023) | 94 |
2024 | 41 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
Thereafter | 0 |
Total future minimum lease payments | 135 |
Less effects of discounting | 0 |
Total lease liabilities | $ 135 |
LEASES Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Leases [Abstract] | ||
Right of use assets | $ 20,756 | $ 21,395 |
Accrued expenses and other current liabilities | (4,682) | |
Long-term lease liabilities | (19,884) | (20,470) |
Total lease liabilities | (24,566) | |
Other assets | 132 | |
Accrued expenses and other current liabilities | 135 | |
Other long-term liabilities | 0 | $ (46) |
Total lease liabilities | $ 135 |
OTHER LONG-TERM LIABILITIES (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Deferred compensation | $ 3,493 | $ 3,715 |
Finance Lease, Liability, Noncurrent | 0 | 46 |
Other long-term liabilities | 551 | 587 |
Total | $ 4,044 | $ 4,348 |
RESTRUCTURING COSTS AND ACCRUALS (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023
USD ($)
|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2023
USD ($)
position
|
Jun. 30, 2022
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 5,462 | $ 342 | $ 5,462 | $ 357 |
Restructuring and Related Cost, Number of Positions Eliminated | position | 101 | |||
Employee Severance [Member] | ||||
Restructuring accrual [Roll Forward] | ||||
Accrual balance at beginning of year | $ 205 | |||
Cash payments | (1,029) | |||
Foreign exchange impact on ending balance | 5 | |||
Accrual balance at end of period | $ 4,653 | 4,653 | ||
New restructuring charges - operating expenses | $ 5,472 |
REVENUE Revenue by Type (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023
USD ($)
|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2023
USD ($)
|
Jun. 30, 2022
USD ($)
|
|
Revenue from Contract with Customer [Abstract] | ||||
Number of reportable segments | 1 | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 108,542 | $ 97,680 | $ 206,353 | $ 198,329 |
REVENUE Revenue by Geographic Regions (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 108,542 | $ 97,680 | $ 206,353 | $ 198,329 |
United States | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 46,601 | 40,160 | 87,029 | 84,549 |
Other Americas | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 5,097 | 8,406 | 15,298 | 13,300 |
Europe, Middle East and Africa | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 41,006 | 36,316 | 73,927 | 75,161 |
Asia-Pacific | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 15,838 | $ 12,798 | $ 30,099 | $ 25,319 |
REVENUE Contract Asset (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Dec. 31, 2022 |
|
Change in Contract with Customer, Asset [Abstract] | |||
Contract asset at beginning of period | $ 37,765 | $ 25,397 | |
Revenue in excess of billings | 47,651 | 19,735 | |
Customer billings | (39,092) | (14,858) | |
Contract asset at end of period | 46,324 | $ 30,274 | |
Less: long-term portion (recorded in other long-term assets) | 7,837 | $ 9,324 | |
Contract asset, current portion | $ 38,487 | $ 20,950 |
REVENUE Deferred Revenue Activity (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Movement in Deferred Revenue [Roll Forward] | ||
Deferred revenue at beginning of period | $ 94,150 | $ 98,082 |
Billings deferred | 40,831 | 45,192 |
Recognition of prior deferred revenue | (70,500) | (62,341) |
Deferred revenue at end of period | 64,481 | 80,933 |
Deferred Revenue Arrangement [Line Items] | ||
Remaining Performance Obligation | 14,700 | |
Deferred Revenue | 64,481 | $ 80,933 |
Subscription | ||
Deferred Revenue Arrangement [Line Items] | ||
Remaining Performance Obligation | 1,672 | |
Subscription Arrangement [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Remaining Performance Obligation | 14,926 | |
Maintenance contracts | ||
Deferred Revenue Arrangement [Line Items] | ||
Remaining Performance Obligation | 42,885 | |
Implied PCS | ||
Deferred Revenue Arrangement [Line Items] | ||
Remaining Performance Obligation | 3,233 | |
Professional services, training and other | ||
Deferred Revenue Arrangement [Line Items] | ||
Remaining Performance Obligation | $ 1,765 |
LONG-TERM DEBT AND CREDIT AGREEMENT - SCHEDULE OF LONG TERM DEBT (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
Jun. 30, 2022 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Term Loan, net of unamortized issuance costs and debt discount of $2,187 and $2,485 at June 30, 2023 and December 31, 2022, respectively | $ 177,375 | $ 181,853 | |
Other long-term debt | 815 | ||
Total debt | 213,125 | $ 182,668 | |
Less: current portion | 10,912 | 9,710 | $ 9,710 |
Total long-term debt | $ 202,213 | $ 172,958 |
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2023 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2023 |
Sep. 09, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock Repurchase Program, Authorized Amount | $ 115,000 | ||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 36,600 | ||||
Stock Repurchased During Period, Value | $ (420) | $ (14,143) | $ (10,816) | ||
Treasury Stock, Common | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock Repurchased During Period, Shares | (15) | (560) | (354) | ||
Stock Repurchased During Period, Value | $ 420 | $ 14,143 | $ 10,816 |
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