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Technology Stocks : Avid Technology

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To: BMcV who wrote (655)	2/4/1999 5:12:00 PM
From: BMcV	Read Replies (1) of 777

highlights: --revenues grew 17% in 4Q, enough to quell doubts. --cost of revenues remained the same on absolute terms, meaning $2o million in gross profit more than the same quarter last year. --$5 million of that went to R&D, which is fine. --$5 million went to Marketing, which is ok. --$10 million went to pre-tax income, which is best of all. "tax-effected income" simply means "fully taxed". The possible restatement of the 3Q charge is related to recent comments from the SEC that they will look more closely at writeoffs of acquisitions as "purchased R&D". Every tech company that has made an acquisition in the last five or ten years has written off most of the purchase price as "purchased R%D" in order to get the goodwill and associated amortization (which hurts forward earnings) off the books. The SEC is looking into this practice and all companies should be so cautious in their comments as AVID is. However, depending on the spin the media and analysts put on this, it could hurt the stock tomorrow. In short, stellar results from what looks again to be a growth company. If the world were just and intelligent, we should see 35 tomorrow.

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