Avid Technology, Inc.
Oct 21, 2010

Avid Announces Third Quarter 2010 Results, Reports Revenue Growth and Profit Improvement

BURLINGTON, MA, Oct 21, 2010 (MARKETWIRE via COMTEX News Network) -- Avid(R) (NASDAQ: AVID) today reported revenues of $165.1 million for the three-month period ended September 30, 2010, compared to $152.1 million for the same period in 2009. The GAAP net loss for the third quarter was $10.0 million, or $0.26 per share, compared to a GAAP net loss of $17.2 million, or $0.46 per share, in the third quarter of 2009.

The GAAP net loss for the third quarter of 2010 included amortization of intangible assets, stock-based compensation, restructuring and other charges, a gain on asset sales, acquisition-related costs, a legal settlement and related tax adjustments collectively totaling $11.6 million. Excluding these items, the non-GAAP net income was $1.6 million for the third quarter, or $0.04 per share. The GAAP net loss for the third quarter of 2009 included $17.0 million of amortization of intangible assets, stock-based compensation, restructuring and other charges, loss on asset sales and related tax adjustments. Excluding these items, the non-GAAP net loss per share for the third quarter of 2009 was $0.01 per share.

The GAAP operating loss for the third quarter was $7.1 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 $12.0 million. Excluding these items, the non-GAAP operating profit for the third quarter was $4.9 million. A reconciliation of GAAP to non-GAAP results is included in the tables attached to this release.

"We are pleased to report our strongest financial quarter since 2007 including a non-GAAP operating profit and strong year-over-year revenue growth," said Gary Greenfield, chairman and CEO at Avid. "The steady revenue growth trend in both Avid's business and our customers' businesses is encouraging and we remain focused on improving our profit margin."

Revenues for the nine-month period ended September 30, 2010 were $483.2 million, compared to revenues of $454.3 million for the same period in 2009. GAAP net loss for the first nine months of 2010 was $36.4 million, or $0.96 per share, compared to GAAP net loss of $50.4 million, or $1.35 per share, for the same period in 2009. GAAP net loss for the nine-month period ended September 30, 2010 included $31.4 million of amortization of intangible assets, stock-based compensation, restructuring and other charges, a gain on asset sales, acquisition-related costs, a legal settlement and related tax adjustments. Excluding these items, the non-GAAP net loss was $5.0 million for the first nine months of 2010, or $0.13 per share. GAAP net loss for the nine-month period ended September 30, 2009 was $50.4 million and included $39.1 million of amortization of intangible assets, stock-based compensation, restructuring and other charges, loss on asset sales and related tax adjustments. Excluding these items, the non-GAAP net loss was $11.3 million for the first nine-months of 2009, or $0.30 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. 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 third quarter 2010 financial results will be held today, October 21, 2010 at 4:30 p.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 above release is subject to the completion and filing of our Quarterly Report on Form 10-Q. 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), Interplay(R), ISIS(R), VENUE, Oxygen 8, Sibelius(R), System 5, 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. 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     Nine Months Ended
                                    September 30,          September 30,
                                --------------------  --------------------
                                  2010       2009       2010       2009
                                ---------  ---------  ---------  ---------
Net revenues:
  Products                      $ 134,231  $ 123,522  $ 397,044  $ 369,075
  Services                         30,828     28,597     86,131     85,216
                                ---------  ---------  ---------  ---------
      Total net revenues          165,059    152,119    483,175    454,291
                                ---------  ---------  ---------  ---------
Cost of revenues:
 Products                          64,421     57,097    193,527    176,774
 Services                          14,194     13,586     41,373     43,515
 Amortization of intangible
  assets                              745        519      2,657      1,465
 Restructuring costs                    -          -          -        799
                                ---------  ---------  ---------  ---------
      Total cost of revenues       79,360     71,202    237,557    222,553
                                ---------  ---------  ---------  ---------
Gross profit                       85,699     80,917    245,618    231,738
                                ---------  ---------  ---------  ---------
Operating expenses:
 Research and development          28,929     29,262     89,348     90,974
 Marketing and selling             43,199     44,705    129,419    127,480
 General and administrative        19,698     12,093     48,179     39,765
 Amortization of intangible
  assets                            2,283      2,782      7,557      7,779
 Restructuring and other costs,
  net                                 185      7,891      5,532     17,132
 (Gain) loss on sales of assets    (1,527)     3,398     (1,527)     3,398
                                ---------  ---------  ---------  ---------
      Total operating expenses     92,767    100,131    278,508    286,528
                                ---------  ---------  ---------  ---------
Operating loss                     (7,068)   (19,214)   (32,890)   (54,790)
Interest and other income
 (expense), net                       (30)      (240)      (132)       (29)
                                ---------  ---------  ---------  ---------
Loss before income taxes           (7,098)   (19,454)   (33,022)   (54,819)
Provision for (benefit from)
 income taxes, net                  2,897     (2,246)     3,361     (4,385)
                                ---------  ---------  ---------  ---------
Net loss                        ($  9,995) ($ 17,208) ($ 36,383) ($ 50,434)
                                =========  =========  =========  =========
Net loss per common share -
 basic and diluted              ($   0.26) ($   0.46) ($   0.96) ($   1.35)
                                =========  =========  =========  =========
Weighted-average common shares
 outstanding - basic and
 diluted                           38,045     37,341     37,826     37,251
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 September 30, 2010
                                            Operating                Net
                       Gross    Operating    (Loss)      Tax       (Loss)
                       Profit   Expenses     Income   Provision    Income
                     ---------- ---------  ---------  ---------- ---------
GAAP                 $   85,699 $  92,767  ($  7,068) $    2,897 ($  9,995)
  Amortization of
   intangible
   assets                   745    (2,283)     3,028                 3,028
  Restructuring and
   other costs, net                  (185)       185                   185
  Acquisition-rela-
   ted costs (a)                      (56)        56                    56
  Legal settlement
   (a)                             (5,600)     5,600                 5,600
  Gain on sales of
   assets                             527       (527)                 (527)
  Tax adjustment                                             399      (399)
  Stock-based
   compensation
   included in:
    Cost of
     products
     revenues               176                  176                   176
    Cost of
     services
     revenues               287                  287                   287
    Research and
     development
     expenses                        (506)       506                   506
    Marketing and
     selling
     expenses                      (1,078)     1,078                 1,078
    General and
     administrative
     expenses                      (1,581)     1,581                 1,581
                     ---------- ---------  ---------  ---------- ---------
Non-GAAP             $   86,907 $  82,005  $   4,902  $    3,296 $   1,576
Weighted-average
 shares outstanding
 - diluted                                                          38,065
Non-GAAP net income
 per share - diluted                                             $    0.04
   (a) Represents costs included in general and administrative expenses
                  Three Months Ended September 30, 2009
                       Gross    Operating  Operating     Tax        Net
                       Profit   Expenses     Loss      Benefit     Loss
                     ---------- ---------  ---------  ---------  ---------
GAAP                 $   80,917 $ 100,131  ($ 19,214) ($  2,246) ($ 17,208)
  Amortization of
   intangible
   assets                   519    (2,782)     3,301                 3,301
  Restructuring and
   other costs, net                (7,891)     7,891                 7,891
  Loss on sales of
   assets                          (3,398)     3,398                 3,398
  Tax adjustment                                            463       (463)
  Stock-based
   compensation
   included in:
    Cost of
     products
     revenues               163                  163                   163
    Cost of
     services
     revenues               247                  247                   247
    Research and
     development
     expenses                        (655)       655                   655
    Marketing and
     selling
     expenses                        (895)       895                   895
    General and
     administrative
     expenses                        (906)       906                   906
                     ---------- ---------  ---------  ---------  ---------
Non-GAAP             $   81,846 $  83,604  ($  1,758) ($  1,783) ($    215)
Weighted-average
 shares outstanding
 - diluted                                                          37,341
Non-GAAP net loss
 per share - diluted                                             ($   0.01)
AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Reconciliations of GAAP financial measures to Non-GAAP financial measures:
                   Nine Months Ended September 30, 2010
                       Gross    Operating  Operating     Tax        Net
                       Profit   Expenses     Loss     Provision    Loss
                     ---------- ---------  ---------  ---------- ---------
GAAP                 $  245,618 $ 278,508  ($ 32,890) $    3,361 ($ 36,383)
  Amortization of
   intangible
   assets                 2,657    (7,557)    10,214                10,214
  Restructuring and
   other costs, net
   (a)                             (5,532)     5,532                 5,532
  Acquisition-
   related costs (b)                 (825)       825                   825
  Legal settlement
   (b)                             (5,600)     5,600                 5,600
  Gain on sales of
   assets                             527       (527)                 (527)
  Tax adjustment                                             854      (854)
  Stock-based
   compensation
   included in:
    Cost of
     products
     revenues               562                  562                   562
    Cost of
     services
     revenues               822                  822                   822
    Research and
     development
     expenses                      (1,704)     1,704                 1,704
    Marketing and
     selling
     expenses                      (3,153)     3,153                 3,153
    General and
     administrative
     expenses                      (4,373)     4,373                 4,373
                     ---------- ---------  ---------  ---------- ---------
Non-GAAP             $  249,659 $ 250,291  ($    632) $    4,215 ($  4,979)
Weighted-average
 shares outstanding
 - diluted                                                          37,826
Non-GAAP net loss
 per share - diluted                                             ($   0.13)
   (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
                   Nine Months Ended September 30, 2009
                       Gross    Operating  Operating     Tax        Net
                       Profit   Expenses     Loss      Benefit     Loss
                     ---------- ---------  ---------  ---------  ---------
GAAP                 $  231,738 $ 286,528  ($ 54,790) ($  4,385) ($ 50,434)
  Amortization of
   intangible
   assets                 1,465    (7,779)     9,244                 9,244
  Restructuring and
   other costs, net         799   (17,132)    17,931                17,931
  Loss on sales of
   assets                          (3,398)     3,398                 3,398
  Tax adjustment                                         1,357     (1,357)
  Stock-based
   compensation
   included in:
    Cost of
     products
     revenues               666                  666                   666
    Cost of
     services
     revenues               868                  868                   868
    Research and
     development
     expenses                      (1,737)     1,737                 1,737
    Marketing and
     selling
     expenses                      (2,522)     2,522                 2,522
    General and
     administrative
     expenses                      (4,115)     4,115                 4,115
                     ---------- ---------  ---------  ---------  ---------
Non-GAAP             $  235,536 $ 249,845  ($ 14,309) ($  3,028) ($ 11,310)
Weighted-average
 shares outstanding
 - diluted                                                          37,251
Non-GAAP net loss
 per share - diluted                                             ($   0.30)
Revenue Summary:
                                 Three Months Ended     Nine Months Ended
                                    September 30,         September 30,
                                --------------------- ---------------------
                                      2010       2009       2010       2009
                                ---------- ---------- ---------- ----------
Video revenues                  $  100,186 $   92,617 $  278,060 $  268,818
Audio revenues                      64,873     59,502    205,115    185,473
                                ---------- ---------- ---------- ----------
  Total net revenues            $  165,059 $  152,119 $  483,175 $  454,291
                                ========== ========== ========== ==========
AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)
                                               September 30,  December 31,
                                                    2010          2009
                                                ------------  ------------
ASSETS:
Current assets:
  Cash, cash equivalents and marketable
   securities                                   $     34,361  $    108,877
  Accounts receivable, net of allowances of
   $15,733 and $16,347 at September 30, 2010
   and December 31, 2009, respectively                89,674        79,741
  Inventories                                         96,306        77,243
  Prepaid and other current assets                    27,782        31,075
                                                ------------  ------------
       Total current assets                          248,123       296,936
Property and equipment, net                           65,088        37,217
Intangible assets, net                                32,564        29,235
Goodwill                                             244,282       227,195
Other assets                                           9,859        20,455
                                                ------------  ------------
       Total assets                             $    599,916  $    611,038
                                                ============  ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
  Accounts payable                                    45,250        30,230
  Accrued expenses and other current
   liabilities                                        66,770        84,100
  Deferred revenues                                   46,822        39,107
                                                ------------  ------------
       Total current liabilities                     158,842       153,437
Long-term liabilities                                 22,116        14,483
                                                ------------  ------------
       Total liabilities                             180,958       167,920
                                                ------------  ------------
Stockholders' equity:
  Common stock                                           423           423
  Additional paid-in capital                       1,001,891       992,489
  Accumulated deficit                               (494,927)     (444,661)
  Treasury stock at cost, net of reissuances         (92,355)     (112,389)
  Accumulated other comprehensive income               3,926         7,256
                                                ------------  ------------
       Total stockholders' equity                    418,958       443,118
                                                ------------  ------------
       Total liabilities and stockholders'
        equity                                  $    599,916  $    611,038
                                                ============  ============

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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