Q4 Revenue Growth of 12%, Highest Since 2006

BURLINGTON, Mass.--(BUSINESS WIRE)-- Avid® (NASDAQ: AVID) today reported revenues of $195.3 million for the three-month period ended December 31, 2010, compared to $174.7 million for the same period in 2009. The GAAP net loss for the fourth quarter was $571 thousand, or $0.01 per share, compared to a GAAP net loss of $17.9 million, or $0.48 per share, in the fourth quarter of 2009.

The GAAP net loss for the fourth quarters of 2010 and 2009 included amortization of intangible assets, stock-based compensation, restructuring and other charges, gains on asset sales, acquisition-related costs and related tax adjustments collectively totaling $14.8 million and $16.5 million, respectively. Excluding these items, non-GAAP net income for the fourth quarter of 2010 was $14.2 million, or $0.37 per share, compared to a non-GAAP net loss of $1.4 million, or $0.04 per share, for the fourth quarter of 2009.

"We are pleased to end 2010 on a positive note with year-on-year revenue growth for the quarter and for the year," said Gary Greenfield, chairman and CEO at Avid. "Our return to non-GAAP net income for 2010 is a significant milestone in the transformation of the business and we feel well positioned from a product and financial standpoint as we move into 2011."

Revenues for the twelve-month period ended December 31, 2010 were $678.5 million, compared to revenues of $629.0 million for the same period in 2009. GAAP net loss for 2010 was $37.0 million, or $0.98 per share, compared to a GAAP net loss of $68.4 million, or $1.83 per share, for 2009. GAAP net loss for 2010 and 2009 included amortization of intangible assets, stock-based compensation, restructuring and other charges, gains on asset sales, acquisition-related costs, a legal settlement and related tax adjustments collectively totaling $46.2 million and $55.7 million, respectively. Excluding these items, non-GAAP net income for 2010 was $9.2 million, or $0.24 per share, compared to a non-GAAP net loss of $12.7 million, or $0.34 per share, for 2009.

GAAP operating loss for 2010 was $36.2 million including amortization of intangible assets, stock-based compensation, restructuring and other charges, a gain on asset sales, acquisition-related costs and a legal settlement collectively totaling $49.8 million. Excluding these items, our non-GAAP operating profit for 2010 was $13.6 million or 2% of revenue.

A reconciliation of GAAP to non-GAAP results is included in the tables attached to this release.

Use of Non-GAAP Financial Measures

This press release contains "non-GAAP financial measures" under the rules of the U.S. Securities and Exchange Commission. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with, disclosures required by generally accepted accounting principles, or GAAP. Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. The reconciliation of the GAAP to non-GAAP financial measures that we provide is in the tables attached to this press release.

We consider both GAAP and non-GAAP financial results in managing our business. Non-GAAP financial measures are used internally, for example, in establishing annual operating budgets, in assessing operating performance and for measuring performance under incentive compensation plans. Non-GAAP financial measures are also used in operating and financial decision-making because we believe these measures reflect our ongoing business and allow meaningful period-to-period comparisons. We believe it is useful for investors and others to also review both GAAP and non-GAAP measures in order to understand and evaluate our current operating performance and future prospects in the same manner as management and to compare in a consistent manner the company's current financial results with past financial performance. The primary limitations associated with our use of non-GAAP financial measures are that they may not include all items of income and expense that affect our operations and that the non-GAAP financial measures we use may not be directly comparable to those reported by other companies. For example, the terms used in this press release, non-GAAP operating profit and non-GAAP net income, do not have standardized meanings. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. We seek to compensate for this limitation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in the tables attached to this press release.

Conference Call

A conference call to discuss Avid's fourth quarter 2010 financial results will be held today, February 4, 2011 at 8:00 a.m. EDT. The call will be open to the public and can be accessed by dialing 719.457.2617 and referencing confirmation code 4569475. The call and subsequent replay will also be available on Avid's website. To listen via this alternative, go to the Investors tab at www.avid.com for complete details prior to the start of the conference call.

Use of Forward-Looking Statements

The contents of this release are subject to the completion and filing of our Annual Report on Form 10-K. This release includes forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995. Statements in this press release that relate to future results or events are forward-looking statements and are based on Avid's current estimates and assumptions. Forward-looking statements may be identified by use of forward-looking words, such as "anticipate," ‘believe," "could," "estimate," "expect," "intend," "confidence," "may," "plan," "feel," "should," "will" and "would," or similar expressions. Actual results and events in future periods may differ materially from those expressed or implied by these forward-looking statements because of a number of risks, uncertainties and other factors, including: Avid's ability to execute on its corporate strategy and meet customer needs, including the ability to produce innovative products in response to rapidly evolving market demand; general economic conditions and conditions within the media industry specifically; competitive factors; pricing pressures; delays in product shipments; and other risk factors and uncertainties disclosed previously and from time to time in Avid's filings with the U.S. Securities and Exchange Commission. In addition, the forward-looking statements contained herein represent Avid's estimates only as of today and should not be relied upon as representing the company's estimates as of any subsequent date. While Avid may elect to update these forward-looking statements at some point in the future, Avid specifically disclaims any obligation to do so, even if the estimates change.

About Avid

Avid creates the digital audio and video technology used to make the most listened to, most watched and most loved media in the world — from the most prestigious and award-winning feature films, music recordings, television shows, live concert tours and news broadcasts, to music and movies made at home. Some of Avid's most influential and pioneering solutions include Media Composer®, Pro Tools®, Interplay®, ISIS®, VENUE, Oxygen 8, Sibelius®, System 5, and Pinnacle Studio™. For more information about Avid solutions and services, visit www.avid.com, del.icio.us, Flickr, Twitter and YouTube; connect with Avid on Facebook; or subscribe to Avid Industry Buzz.

© 2010 Avid Technology, Inc. All rights reserved. Avid, the Avid Logo, Interplay, ISIS, Media Composer, Pinnacle Studio, Pro Tools and Sibelius are trademarks or registered trademarks of Avid Technology, Inc. or its subsidiaries in the United States and/or other countries. The Interplay name is used with the permission of Interplay Entertainment Corp., which bears no responsibility for Avid products. All other trademarks are the property of their respective owners.

AVID TECHNOLOGY, INC.
Condensed Consolidated Statements of Operations
(unaudited - in thousands, except per share data)
			Three Months Ended											Twelve Months Ended
			December 31,											December 31,
			2010					2009						2010					2009
Net revenues:
Products			$	162,863				$	140,140					$	559,907				$	509,215
Services				32,484					34,539						118,615					119,755
Total net revenues				195,347					174,679						678,522					628,970
Cost of revenues:
Products				74,458					66,588						267,985					243,362
Services				15,117					16,239						56,490					59,754
Amortization of intangible assets				642					568						3,299					2,033
Restructuring costs				-					-						-					799
Total cost of revenues				90,217					83,395						327,774					305,948
Gross profit				105,130					91,284						350,748					323,022
Operating expenses:
Research and development				30,881					30,015						120,229					120,989
Marketing and selling				47,759					46,121						177,178					173,601
General and administrative				16,166					21,322						64,345					61,087
Amortization of intangible assets				2,186					2,732						9,743					10,511
Restructuring and other costs, net				14,918					9,741						20,450					26,873
Gain on sales of assets				(3,502	)				(3,553	)					(5,029	)				(155	)
Total operating expenses				108,408					106,378						386,916					392,906
Operating loss				(3,278	)				(15,094	)					(36,168	)				(69,884	)
Interest and other income (expense), net				(258	)				(94	)					(390	)				(123	)
Loss before income taxes				(3,536	)				(15,188	)					(36,558	)				(70,007	)
(Benefit from) provision for income taxes, net				(2,965	)				2,733						396					(1,652	)
Net loss				($571	)				($17,921	)					($36,954	)				($68,355	)
Net loss per common share - basic and diluted				($0.01	)				($0.48	)					($0.98	)				($1.83	)
Weighted-average common shares outstanding - basic and diluted				38,101					37,415						37,895					37,293

AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Change in Financial Presentation
Beginning January 1, 2010, we are reporting based on a single reporting segment. Comparative results for the 2009 periods have been updated to reflect this new business structure.
Reconciliations of GAAP financial measures to Non-GAAP financial measures:
			Three Months Ended December 31, 2010
			Gross				Operating						Operating					Tax					Net
			Profit				Expenses						(Loss) Income					(Benefit) Provision					(Loss) Income
GAAP			$	105,130			$	108,408						($3,278	)				($2,965	)				($571	)
Amortization of intangible assets				642				(2,186	)					2,828										2,828
Restructuring and other costs, net								(14,918	)					14,918										14,918
Gain on sales of assets								3,502						(3,502	)									(3,502	)
Tax adjustment																			2,752					(2,752	)
Stock-based compensation included in:
	Cost of products revenues			162										162										162
	Cost of services revenues			232										232										232
	Research and development expenses							(523	)					523										523
	Marketing and selling expenses							(956	)					956										956
	General and administrative expenses							(1,434	)					1,434										1,434
Non-GAAP			$	106,166			$	91,893					$	14,273					($213	)			$	14,228
Weighted-average shares outstanding - diluted																								38,182
Non-GAAP net income per share - diluted																							$	0.37
			Three Months Ended December 31, 2009
			Gross				Operating						Operating					Tax					Net
			Profit				Expenses						(Loss) Income					Provision					Loss
GAAP			$	91,284			$	106,378						($15,094	)			$	2,733					($17,921	)
Amortization of intangible assets				568				(2,732	)					3,300										3,300
Restructuring and other costs, net								(9,741	)					9,741										9,741
Acquisition-related costs (a)								(4,159	)					4,159										4,159
Gain on sales of assets								3,553						(3,553	)									(3,553	)
Tax adjustment																			585					(585	)
Stock-based compensation included in:
	Cost of products revenues			193										193										193
	Cost of services revenues			286										286										286
	Research and development expenses							(717	)					717										717
	Marketing and selling expenses							(1,074	)					1,074										1,074
	General and administrative expenses							(1,216	)					1,216										1,216
Non-GAAP			$	92,331			$	90,292					$	2,039				$	3,318					($1,373	)
Weighted-average shares outstanding - diluted																								37,415
Non-GAAP net loss per share - diluted																								($0.04	)
(a)	Represents costs included in general and administrative expenses

AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Reconciliations of GAAP financial measures to Non-GAAP financial measures:
			Twelve Months Ended December 31, 2010
			Gross				Operating					Operating						Tax					Net
			Profit				Expenses					(Loss) Income						Provision					(Loss) Income
GAAP			$	350,748			$	386,916					($36,168	)				$	396					($36,954	)
Amortization of intangible assets				3,299				(9,743	)				13,042											13,042
Restructuring and other costs, net (a)								(20,450	)				20,450											20,450
Acquisition-related costs (b)								(825	)				825											825
Legal settlement (b)								(5,600	)				5,600											5,600
Gain on sales of assets								4,029					(4,029	)										(4,029	)
Tax adjustment																			3,606					(3,606	)
Stock-based compensation included in:
	Cost of products revenues			724									724											724
	Cost of services revenues			1,054									1,054											1,054
	Research and development expenses							(2,227	)				2,227											2,227
	Marketing and selling expenses							(4,109	)				4,109											4,109
	General and administrative expenses							(5,807	)				5,807											5,807
Non-GAAP			$	355,825			$	342,184				$	13,641					$	4,002				$	9,249
Weighted-average shares outstanding - diluted																								37,963
Non-GAAP net income per share - diluted																							$	0.24
			Twelve Months Ended December 31, 2009
			Gross				Operating					Operating						Tax					Net
			Profit				Expenses					Loss						(Benefit) Provision					Loss
GAAP			$	323,022			$	392,906					($69,884	)					($1,652	)				($68,355	)
Amortization of intangible assets				2,033				(10,511	)				12,544											12,544
Restructuring and other costs, net				799				(26,873	)				27,672											27,672
Acquisition-related costs (b)								(4,159	)				4,159											4,159
Gain on sales of assets								155					(155	)										(155	)
Tax adjustment																			1,942					(1,942	)
Stock-based compensation included in:
	Cost of products revenues			859									859											859
	Cost of services revenues			1,154									1,154											1,154
	Research and development expenses							(2,454	)				2,454											2,454
	Marketing and selling expenses							(3,596	)				3,596											3,596
	General and administrative expenses							(5,331	)				5,331											5,331
Non-GAAP			$	327,867			$	340,137					($12,270	)				$	290					($12,683	)
Weighted-average shares outstanding - diluted																								37,293
Non-GAAP net loss per share - diluted																								($0.34	)
(a)	Includes costs of $3.7 million related to exiting our former Tewksbury, Massachusetts headquarters lease
(b)	Represents costs included in general and administrative expenses
Revenue Summary:			Three Months Ended									Twelve Months Ended
			December 31,									December 31,
			2010					2009				2010						2009
Video revenues			$	117,793			$	106,192				$	395,853					$	375,010
Audio revenues				77,554				68,487					282,669						253,960
Total net revenues			$	195,347			$	174,679				$	678,522					$	628,970

AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)
		December 31,						December 31,
		2010						2009
ASSETS:
Current assets:
Cash and cash equivalents		$	42,782					$	91,517
Marketable securities			-						17,360
Accounts receivable, net of allowances of $17,403 and $16,347 at December 31, 2010 and 2009, respectively
			101,171						79,741
Inventories			108,357						77,243
Deferred tax assets, net			1,068						770
Prepaid expenses			7,688						7,789
Other current assets			16,130						22,516
Total current assets			277,196						296,936
Property and equipment, net			62,519						37,217
Intangible assets, net			29,750						29,235
Goodwill			246,221						227,195
Other assets			10,109						20,455
Total assets		$	625,795					$	611,038
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable		$	47,340					$	30,230
Accrued compensation and benefits			41,101						25,281
Accrued expenses and other current liabilities			40,673						55,591
Deferred tax liabilities, net			313						-
Income taxes payable			4,640						3,228
Deferred revenues			40,585						39,107
Total current liabilities			174,652						153,437
Long-term liabilities			25,309						14,483
Total liabilities			199,961						167,920
Stockholders' equity:
Common stock			423						423
Additional paid-in capital			1,005,198						992,489
Accumulated deficit			(496,030	)					(444,661	)
Treasury stock at cost, net of reissuances			(91,025	)					(112,389	)
Accumulated other comprehensive income			7,268						7,256
Total stockholders' equity			425,834						443,118
Total liabilities and stockholders' equity		$	625,795					$	611,038

AVID TECHNOLOGY, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited - in thousands)
				Three Months Ended											Twelve Months Ended
				December 31,											December 31,
				2010					2009						2010					2009
Cash flows from operating activities:
Net loss					($571	)				($17,921	)					($36,954	)				($68,355	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization					8,521					8,072						33,547					32,130
(Recoveries of) provision for doubtful accounts					(91	)				276						194					1,930
Non-cash provision for restructuring					89					1,042						380					3,140
Gain on sales of assets					(3,502	)				(3,553	)					(5,029	)				(155	)
(Gain) loss on disposal of fixed assets					(8	)				(3	)					(78	)				43
Compensation expense from stock grants and options					3,307					3,486						13,921					13,394
Changes in deferred tax assets and liabilities, excluding initial effects of acquisitions					233					381						(1,160	)				(1,634	)
Changes in operating assets and liabilities, excluding initial effects of acquisitions
Accounts receivable					(11,510	)				5,449						(17,847	)				24,771
Inventories					(12,328	)				14,453						(27,672	)				17,766
Prepaid expenses and other current assets					2,358					1,521						8,778					8,980
Accounts payable					2,109					7,471						15,941					739
Accrued expenses, compensation and benefits and other liabilities					25,739					14,295						718					(13,517	)
Income taxes payable					(621	)				391						1,669					(6,330	)
Deferred revenues					(5,947	)				(16,824	)					816					(26,373	)
Net cash provided by (used in) operating activities					7,778					18,536						(12,776	)				(13,471	)
Cash flows from investing activities:
Purchases of property and equipment					(2,930	)				(9,058	)					(28,856	)				(18,689	)
Increase in other long-term assets					(634	)				(9,848	)					(523	)				(11,432	)
Payments for business acquisitions, net of cash acquired					-					-						(27,008	)				(4,413	)
Proceeds from sales of assets					3,502					3,502						4,502					3,502
Proceeds from notes receivable					-					511						-					2,500
Purchases of marketable securities					-					(3,149	)					(2,250	)				(55,741	)
Proceeds from sales of marketable securities					-					10,642						19,605					64,318
Net cash used in investing activities					(62	)				(7,400	)					(34,530	)				(19,955	)
Cash flows from financing activities:
Payments related to stock option purchase					-					-						-					(526	)
Proceeds from the issuance of common stock under employee stock plans, net					797					535						736					646
Proceeds from revolving credit facilities					5,000					-						5,000					-
Payments on revolving credit facilities					(5,000	)				-						(5,000	)				-
Payments for credit facility issuance costs					(870	)				-						(1,063	)				-
Net cash provided by financing activities					(73	)				535						(327	)				120
Effect of exchange rate changes on cash and cash equivalents					778					1,728						(1,102	)				3,031
Net increase (decrease) in cash and cash equivalents					8,421					13,399						(48,735	)				(30,275	)
Cash and cash equivalents at beginning of period					34,361					78,118						91,517					121,792
Cash and cash equivalents at end of period				$	42,782				$	91,517					$	42,782				$	91,517
Non-cash investing activities:
Landlord allowance for leasehold improvements					-					-					$	6,036					-
Issuance of common stock for business acquisition					-					-					$	5,000					-

Avid
Investor Contact:
Tom Fitzsimmons, 978-640-3346
tom.fitzsimmons@avid.com
or
Media Contact:
Carter Holland, 978-640-3172
carter.holland@avid.com

Source: Avid

News Provided by Acquire Media