Focuses on Media Enterprises and Professionals
BURLINGTON, Mass.--(BUSINESS WIRE)--
Today Avid® (NASDAQ:
AVID) initiated a series of strategic actions to focus the company
on its Media Enterprise and Post & Professional customers and to drive
improved operating performance. As part of these actions, the company is
divesting its consumer businesses. With these changes, Avid will
concentrate on core markets where its deep domain expertise, track
record of technical innovation, and strong brand offer the greatest
opportunity for success.
"The changes we are announcing today make Avid a more focused and agile
company," said Gary Greenfield, CEO of Avid. "By streamlining and
simplifying operations, we expect to deliver improved financial
performance and partner more closely with our enterprise and
professional customers. Our objective remains to provide these customers
with the innovative solutions that allow them to create the most
listened to, most watched and most loved media in the world. I'm excited
about our future prospects."
Avid has agreed to sell its consumer audio and video product lines. The
company's consumer audio products are being sold to inMusic, the parent
company of Akai Professional, Alesis and Numark, among others.
Headquartered in Cumberland, Rhode Island, inMusic's brands are best
known for producing innovative products for music production,
performance and DJing. The products involved in this transaction include
M-Audio brand keyboards, controllers, interfaces, speakers and digital
DJ equipment and other product lines. Avid will continue to develop and
sell its industry-leading Pro Tools® line of software and hardware, as
well as associated I/O devices including Mbox and Fast Track.
Separately, the company's consumer video editing line is being sold to
Corel Corporation, a consumer software company headquartered in Ottawa,
Canada. The products involved in this transaction include Avid Studio,
Pinnacle Studio, and the Avid Studio App for the Apple iPad®,
as well as other legacy video capture products.
The divested product lines contributed approximately $91 million of
Avid's 2011 revenue of $677 million. As part of the transactions,
certain employees of Avid will transfer to each acquiring company. Avid
estimates that the proceeds from these transactions will be
approximately $17 million, subject to closing inventory adjustment, with
a portion held in escrow. Both transactions are expected to close today,
July 2, 2012.
Avid also plans to reduce the number of its employees as it streamlines
operations, with approximately 20% of its permanent employee base
impacted by the divestitures and headcount reduction plans. The company
currently expects to incur a restructuring charge of approximately $19
to $23 million related to these actions and other associated measures.
The company's cash balance on March 31, 2012 was $49.7 million. The
proceeds from the sale of these product lines should offset most of the
restructuring charges paid in 2012.
A conference call to discuss these actions has been scheduled for today,
July 2, 2012 at 12:00 p.m. ET. The call will be open to the public and
can be accessed by dialing (719)-325-2234 and referencing confirmation
code 2084154. The call and presentation slides will also be available on
Avid's website. To listen and view the slides, go to http://ir.avid.com/events.cfm
prior to the start of the conference call.
Use of Forward-Looking Statements
This release may include 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 the use of
forward-looking words, such as "anticipate," "believe," "should,"
"estimate," "expect," "intend," "confidence," "may," "plan," "feel,"
"could," "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 its strategic plans and meet customer needs; Avid's ability to
realize operational and financial benefits from the sale of its consumer
audio and video product lines and the reduction in workforce announced
today; its ability to produce innovative products in response to
changing market demand, particularly in the media industry; competitive
factors; fluctuations in its revenue, based on, among other things,
Avid's performance in particular geographies or markets, fluctuations in
foreign currency exchange rates, and seasonal factors; adverse changes
in economic conditions; Avid's liquidity; 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
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, to live concert tours and news broadcasts. Some of
Avid's most influential and pioneering solutions include Media
Composer®, Pro Tools®, Interplay®, ISIS®, VENUE, Sibelius®, and System
5. For more information about Avid solutions and services, visit www.avid.com,
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© 2012 Avid Technology, Inc. All rights reserved. Product features,
specifications, system requirements and availability are subject to
change without notice. All prices are MSRP for the U.S. and Canada only
and are subject to change without notice. Contact your local Avid office
or reseller for prices outside the U.S. and Canada. Avid, the Avid logo,
Fast Track, Media Composer, Pro Tools, Interplay, ISIS, 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 the Interplay Entertainment Corp.
which bears no responsibility for Avid products. All other trademarks
are the property of their respective owners.
Ian Bruce, 978-640-5584
Tom Fitzsimmons, 978-640-3346
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