Avid Technology, Inc.
Jan 28, 2010

Avid Announces Fourth Quarter 2009 Results

TEWKSBURY, MA, Jan 28, 2010 (MARKETWIRE via COMTEX News Network) -- Avid(R) (NASDAQ: AVID) today reported revenues of $174.7 million for the three-month period ended December 31, 2009, compared to $206.7 million for the same period in 2008. The GAAP net loss for the quarter was $17.9 million, or $0.48 per share, compared to a GAAP net loss of $100.3 million, or $2.71 per share, in the fourth quarter of 2008.

The GAAP net loss for the fourth quarter of 2009 included amortization of intangibles, stock-based compensation, restructuring charges, acquisition related costs, net gains from divested product lines and related tax adjustments, collectively totaling $16.5 million. Excluding these items, the non-GAAP net loss was $1.4 million for the fourth quarter, or $0.04 per share.

The GAAP operating loss for the fourth quarter was $15.1 million, including amortization of intangibles, stock-based compensation, restructuring charges, acquisition related costs and net gains from divested product lines collectively totaling $17.1 million. Excluding these items, the non-GAAP operating profit was $2.0 million for the fourth quarter.

"Avid has made good progress this quarter. Our revenues were up sequentially and we believe our markets are stabilizing with some signs of recovery," said Gary Greenfield, chairman and CEO at Avid. "We reported a non-GAAP operating profit for the quarter and with the majority of our cost structure transformation complete we feel we are well positioned for margin expansion."

Revenues for the year ended December 31, 2009 were $629.0 million, compared to revenues of $844.9 million for 2008. GAAP net loss for 2009 was $68.4 million, or $1.83 per share, compared to GAAP net loss of $198.2 million, or $5.28 per share for 2008. GAAP net loss for 2009 included $55.7 million of amortization, stock-based compensation, restructuring charges, acquisition related costs, net gains from divested product lines and related tax adjustments. Excluding these items, the non-GAAP net loss was $12.7 million or $0.34 per share for 2009. GAAP net loss for 2008 included $172.9 million of amortization, stock-based compensation, restructuring charges, net gains from divested product lines, impairment charges and related tax adjustments. Excluding these items, the non-GAAP net loss was $25.2 million or $0.67 per share for 2008.

The company's cash balance on December 31, 2009 was $109 million, or approximately $2.91 per share.

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. 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. The reconciliation for operating income (loss), net income (loss) and earnings (loss) per share for the three- and twelve-month periods ended December 31, 2009 and 2008 are in the tables attached to this press release.

The company uses non-GAAP financial measures internally to manage its business, for example, in establishing its annual operating budget, in assessing segment operating performance and for measuring performance under employee incentive compensation plans. Non-GAAP financial measures are used by management in its operating and financial decision-making because management believes these measures reflect the company's ongoing business in a manner that allows meaningful period-to-period comparisons. Accordingly, the company believes it is useful for investors and others to review both GAAP and non-GAAP measures in order to (a) understand and evaluate the company's current operating performance and future prospects in the same manner as management does and (b) compare in a consistent manner the company's current financial results with past financial results. The primary limitations associated with the company's use of non-GAAP financial measures are that these measures may not be directly comparable to the amounts reported by other companies and they do not include all items of income and expense that affect the company's operations. The company's management compensates for these limitations by considering the company's financial results as determined in accordance with GAAP and by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in this press release.

Conference Call

A conference call to discuss Avid's fourth quarter 2009 financial results will be held today, January 28, 2010 at 4:30 p.m. ET. 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 above release is 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. This release also makes forward-looking statements about Avid's performance. There are a number of factors that could cause actual events or results to differ materially from those indicated by such forward-looking statements, such as Avid's ability to execute on its corporate strategy and meet customer needs, general economic conditions, competitive factors, pricing pressures, delays in product shipments and other important events and factors 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(R), Pro Tools(R), Avid Unity(TM), Interplay(R), Oxygen 8, Sibelius(R) and Pinnacle Studio(TM). 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.

Copyright 2010 Avid Technology, Inc. All rights reserved. Product features, specifications, systems requirements and availability are subject to change without notice. Avid, Pinnacle Studio, Avid Unity, Interplay, Media Composer, 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,
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------
Net revenues:
  Products                  $  140,140  $  173,255  $  509,215  $  714,232
  Services                      34,539      33,451     119,755     130,669
                            ----------  ----------  ----------  ----------
    Total net revenues         174,679     206,706     628,970     844,901
                            ----------  ----------  ----------  ----------
Cost of revenues:
  Products                      66,588      97,182     243,362     369,186
  Services                      16,239      18,128      59,754      73,888
  Amortization of
   intangible assets               568         753       2,033       7,526
  Restructuring costs                -       1,876         799       1,876
                            ----------  ----------  ----------  ----------
    Total cost of revenues      83,395     117,939     305,948     452,476
                            ----------  ----------  ----------  ----------
Gross profit                    91,284      88,767     323,022     392,425
                            ----------  ----------  ----------  ----------
Operating expenses:
  Research and development      30,015      33,291     120,989     148,598
  Marketing and selling         50,279      49,511     177,759     208,735
  General and
   administrative               17,164      17,422      56,929      78,591
  Amortization of
   intangible assets             2,732       2,837      10,511      12,854
  Impairment of goodwill
   and intangible assets             -      78,715           -     129,972
  Restructuring costs, net       9,741      21,305      26,873      25,412
  Gain on sales of assets       (3,553)    (13,287)       (155)    (13,287)
                            ----------  ----------  ----------  ----------
    Total operating
     expenses                  106,378     189,794     392,906     590,875
                            ----------  ----------  ----------  ----------
Operating loss                 (15,094)   (101,027)    (69,884)   (198,450)
Interest and other income
 (expense), net                    (94)        331        (123)      2,936
                            ----------  ----------  ----------  ----------
Loss before income taxes       (15,188)   (100,696)    (70,007)   (195,514)
Provision for (benefit
 from) income taxes, net         2,733        (443)     (1,652)      2,663
                            ----------  ----------  ----------  ----------
Net loss                    $  (17,921) $ (100,253) $  (68,355) $ (198,177)
                            ==========  ==========  ==========  ==========
Net loss per common share -
 basic and diluted          $    (0.48) $    (2.71) $    (1.83) $    (5.28)
Weighted-average common
 shares outstanding - basic
 and diluted                    37,415      37,012      37,293      37,556
AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Change in Financial Presentation
Beginning January 1, 2009, we combined our professional video and consumer
video businesses into a single reporting segment. We will now consequently
report on two business segments:  Audio and Video.   Please note that the
segment contribution margin calculation has also changed from last year.
Segment contribution margin is now calculated as segment gross margin less
the research and development and product management expenses directly
attributable to the segment.  Comparative results for the 2008 periods have
been updated to reflect our new business structure.
Summary of the Company's revenues and contribution margin by reportable
segment and a reconciliation of segment contribution margin to consolidated
operating loss:
                              Three Months Ended      Twelve Months Ended
                                 December 31,            December 31,
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------
Revenues:
  Video (a)                 $  106,192  $  134,296  $  375,010  $  551,706
  Audio                         68,487      72,410     253,960     293,195
                            ----------  ----------  ----------  ----------
Total revenues              $  174,679  $  206,706  $  628,970  $  844,901
                            ==========  ==========  ==========  ==========
Contribution Margin:
  Video                     $   35,815  $   31,762  $  113,524  $  144,639
  Audio                         26,090      25,211      91,534     101,489
                            ----------  ----------  ----------  ----------
Segment contribution margin     61,905      56,973     205,058     246,128
                            ----------  ----------  ----------  ----------
  Less unallocated costs
   and expenses:
    Research and
     development expenses       (1,694)     (1,779)     (6,918)     (7,170)
    Marketing and selling
     expenses                  (42,224)    (45,929)   (158,812)   (191,948)
    General and
     administrative
     expenses                  (15,948)    (14,982)    (51,598)    (66,906)
    Amortization of
     acquisition-related
     intangible assets          (3,300)     (3,590)    (12,544)    (20,380)
    Impairment of goodwill
     and intangible assets           -     (78,715)          -    (129,972)
    Stock-based
     compensation               (3,486)     (3,111)    (13,394)    (14,201)
    Restructuring costs,
     net                        (9,741)    (23,181)    (27,672)    (27,288)
    Other costs                 (4,159)          -      (4,159)          -
    Gain on sales of assets      3,553      13,287         155      13,287
                            ----------  ----------  ----------  ----------
Consolidated operating loss $  (15,094) $ (101,027) $  (69,884) $ (198,450)
                            ==========  ==========  ==========  ==========
(a) Includes revenues from
 non-core product lines of: $       19  $   11,294  $    1,893  $   61,508
Reconciliation of GAAP
 operating loss to Non-GAAP
 operating income (loss):
                              Three Months Ended      Twelve Months Ended
                                 December 31,            December 31,
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------
GAAP operating loss         $  (15,094) $ (101,027) $  (69,884) $ (198,450)
Adjustments to reconcile to
 Non-GAAP operating income
 (loss):
  Amortization of
   intangible assets             3,300       3,590      12,544      20,380
  Impairment of goodwill
   and intangible assets             -      78,715           -     129,972
  Stock-based compensation       3,486       3,111      13,394      14,201
  Restructuring costs, net       9,741      23,181      27,672      27,288
  Other costs                    4,159           -       4,159           -
  Gain on sales of assets       (3,553)    (13,287)       (155)    (13,287)
                            ----------  ----------  ----------  ----------
Non-GAAP operating income
 (loss):                    $    2,039  $   (5,717) $  (12,270) $  (19,896)
                            ==========  ==========  ==========  ==========
AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Reconciliation of GAAP net
 loss to Non-GAAP net loss:
                              Three Months Ended      Twelve Months Ended
                                 December 31,            December 31,
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------
GAAP net loss               $  (17,921) $ (100,253) $  (68,355) $ (198,177)
Adjustments to reconcile to
 Non-GAAP net loss:
  Amortization of
   intangible assets             3,300       3,590      12,544      20,380
  Impairment of goodwill
   and intangible assets             -      78,715           -     129,972
  Stock-based compensation       3,486       3,111      13,394      14,201
  Restructuring costs, net       9,741      23,181      27,672      27,288
  Other costs                    4,159           -       4,159           -
  Gain on sales of assets       (3,553)    (13,287)       (155)    (13,287)
  Related tax adjustments         (585)     (4,331)     (1,942)     (5,619)
                            ----------  ----------  ----------  ----------
Non-GAAP net loss:          $   (1,373) $   (9,274) $  (12,683) $  (25,242)
                            ==========  ==========  ==========  ==========
Weighted-average common
 shares outstanding -
 diluted                        37,415      37,012      37,293      37,556
Non-GAAP net loss per
 common share - diluted     $    (0.04) $    (0.25) $    (0.34) $    (0.67)
Stock-based compensation      Three Months Ended      Twelve Months Ended
 included in:                     December 31,            December 31,
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------
  Cost of products revenues $      193  $      136  $      859  $      616
  Cost of services revenues        286         131       1,154         539
  Research and development
   expenses                        717         605       2,454       2,820
  Marketing and selling
   expenses                      1,074         897       3,596       4,005
  General and
   administrative expenses       1,216       1,342       5,331       6,221
                            ----------  ----------  ----------  ----------
                            $    3,486  $    3,111  $   13,394  $   14,201
                            ==========  ==========  ==========  ==========
AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)
                                                December 31,  December 31,
                                                    2009          2008
                                                ------------  ------------
ASSETS:
Current assets:
  Cash, cash equivalents and marketable
   securities                                   $    108,877  $    147,694
  Accounts receivable, net of allowances of
   $16,347 and $23,182 at December 31, 2009
   and 2008, respectively                             79,741       103,527
  Inventories                                         77,243        95,755
  Prepaid and other current assets                    29,913        43,969
                                                ------------  ------------
    Total current assets                             295,774       390,945
Property and equipment, net                           37,217        38,321
Intangible assets, net                                29,235        38,143
Goodwill                                             227,195       225,375
Other assets                                          20,455        10,801
                                                ------------  ------------
    Total assets                                $    609,876  $    703,585
                                                ============  ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
  Accounts payable                              $     30,230  $     29,419
  Accrued expenses and other current
   liabilities                                        82,938       101,107
  Deferred revenues                                   39,107        68,581
                                                ------------  ------------
    Total current liabilities                        152,275       199,107
Long-term liabilities                                 14,483        11,823
                                                ------------  ------------
    Total liabilities                                166,758       210,930
                                                ------------  ------------
Stockholders' equity:
  Common stock                                           423           423
  Additional paid-in capital                         992,489       980,563
  Accumulated deficit                               (444,661)     (365,431)
  Treasury stock at cost, net of reissuances        (112,389)     (124,852)
  Accumulated other comprehensive income               7,256         1,952
                                                ------------  ------------
    Total stockholders' equity                       443,118       492,655
                                                ------------  ------------
    Total liabilities and stockholders' equity  $    609,876  $    703,585
                                                ============  ============

Contact:
Investor Contact:
Tom Fitzsimmons
Email Contact
978-640-3346

Media Contact:
Amy Peterson
Email Contact
978-640-3448


SOURCE: Avid

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