BURLINGTON, Mass.--(BUSINESS WIRE)-- Avid® (NASDAQ: AVID) today reported revenues of $161.3 million for the three-month period ended June 30, 2011, compared to $162.2 million for the same period in 2010. The GAAP net loss for the second quarter was $11.9 million, or $0.31 per share, compared to a GAAP net loss of $12.9 million, or $0.34 per share, in the second quarter of 2010.

The GAAP net loss for the second quarter of 2011 and 2010 included amortization of intangible assets, stock-based compensation, loss on asset sales, a legal settlement, acquisition-related costs, restructuring recoveries and charges and related tax adjustments collectively totaling $8.0 million and $10.9 million, respectively. Excluding these items, the non-GAAP net loss for the second quarter of 2011 was $3.9 million, or $0.10 per share, compared to a non-GAAP net loss of $2.0 million, or $0.05 per share, for the second quarter of 2010.

"While Q2 was difficult, I believe our business is sound," said Gary Greenfield, chairman and CEO at Avid. "Our customer focus is unwavering and I believe we'll succeed by continuing to listen to them and responding with innovative, open tools to help video and audio professionals and enthusiasts around the world create great content they can distribute anywhere, anytime."

Revenues for the six-month period ended June 30, 2011 were $327.7 million, compared to revenues of $318.1 million for the same period in 2010. The GAAP net loss for the first six months of 2011 was $17.0 million, or $0.44 per share, compared to a GAAP net loss of $26.4 million, or $0.70 per share, for the same period in 2010. The GAAP net loss for the six-month period ended June 30, 2011 included $12.2 million of amortization of intangible assets, stock-based compensation, net restructuring recoveries, loss on asset sales, a legal settlement, acquisition-related costs and related tax adjustments. Excluding these items, the non-GAAP net loss was $4.8 million, or $0.12 per share, for the first half of 2011. The GAAP net loss for the six-month period ended June 30, 2010 included $19.8 million of amortization of intangible assets, stock-based compensation, restructuring charges, acquisition-related costs and related tax adjustments. Excluding these items, the non-GAAP net loss was $6.6 million, or $0.17 per share, for the first half of 2010.

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

Conference Call

A conference call to discuss Avid's second quarter 2011 financial results will be held today, July 21, 2011 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 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.

Management considers 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, such as non-GAAP net loss, 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.

Use of Forward-Looking Statements

The contents of this release are 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. 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," "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 changing market demand; general economic conditions and conditions within the rapidly evolving media industry specifically; competitive factors; fluctuations in Avid's revenues, based on, among other things, Avid's performance in particular geographies; 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.

© 2011 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 June 30,										Six Months Ended June 30,
					2011					2010					2011					2010
Net revenues:
	Products				$129,190					$134,134					$266,525					$262,813
	Services				32,154					28,026					61,142					55,303
	Total net revenues				161,344					162,160					327,667					318,116
Cost of revenues:
	Products				62,964					65,837					127,615					129,106
	Services				15,312					13,139					29,699					27,179
	Amortization of intangible assets				685					946					1,351					1,912
	Total cost of revenues				78,961					79,922					158,665					158,197
Gross profit					82,383					82,238					169,002					159,919
Operating expenses:
	Research and development				30,453					30,268					60,426					60,419
	Marketing and selling				46,052					44,474					90,862					86,220
	General and administrative				14,920					13,879					30,218					28,481
	Amortization of intangible assets				2,161					2,417					4,306					5,274
	Restructuring and other (recoveries) costs, net				(163	)				4,007					(2,379	)				5,347
	Loss on sales of assets				597					-					597					-
	Total operating expenses				94,020					95,045					184,030					185,741
Operating loss					(11,637	)				(12,807	)				(15,028	)				(25,822	)
Interest and other income (expense), net					(768	)				(102	)				(1,068	)				(102	)
Loss before income taxes					(12,405	)				(12,909	)				(16,096	)				(25,924	)
(Benefit from) provision for income taxes, net					(543	)				(3	)				883					464
Net loss					($11,862	)				($12,906	)				($16,979	)				($26,388	)
Net loss per common share - basic and diluted					($0.31	)				($0.34	)				($0.44	)				($0.70	)
Weighted-average common shares outstanding - basic and diluted					38,413					37,909					38,323					37,714

AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Reconciliations of GAAP financial measures to Non-GAAP financial measures:
Three Months Ended June 30, 2011
					Gross Profit				Operating Expenses					Operating Loss					Tax Benefit					Net Loss
GAAP					$82,383				$94,020					($11,637	)				($543	)				($11,862	)
	Amortization of intangible assets				685				(2,161	)				2,846										2,846
	Restructuring recoveries, net								163					(163	)									(163	)
	Acquisition-related costs (a)								(200	)				200										200
	Legal settlement (a)								(192	)				192										192
	Loss on sales of assets								(597	)				597										597
	Tax adjustment																		245					(245	)
	Stock-based compensation included in:
		Cost of products revenues			110									110										110
		Cost of services revenues			277									277										277
		Research and development expenses							(427	)				427										427
		Marketing and selling expenses							(1,356	)				1,356										1,356
		General and administrative expenses							(2,355	)				2,355										2,355
Non-GAAP					$83,455				$86,895					($3,440	)				($298	)				($3,910	)
Weighted-average shares outstanding - diluted																								38,413
Non-GAAP net income per share - diluted																								($0.10	)
Three Months Ended June 30, 2010
					Gross Profit				Operating Expenses					Operating Loss					Tax (Benefit) Provision					Net Loss
GAAP					$82,238				$95,045					($12,807	)				($3	)				($12,906	)
	Amortization of intangible assets				946				(2,417	)				3,363										3,363
	Restructuring and other costs, net								(4,007	)				4,007										4,007
	Acquisition-related costs (a)								(83	)				83										83
	Tax adjustment																		171					(171	)
	Stock-based compensation included in:
		Cost of products revenues			197									197										197
		Cost of services revenues			282									282										282
		Research and development expenses							(547	)				547										547
		Marketing and selling expenses							(1,107	)				1,107										1,107
		General and administrative expenses							(1,531	)				1,531										1,531
Non-GAAP					$83,663				$85,353					($1,690	)				$168					($1,960	)
Weighted-average shares outstanding - diluted																								37,909
Non-GAAP net loss per share - diluted																								($0.05	)
	(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:
Six Months Ended June 30, 2011
					Gross Profit				Operating Expenses				Operating Loss					Tax Provision				Net Loss
GAAP					$169,002				$184,030				($15,028	)				$883				($16,979	)
	Amortization of intangible assets				1,351				(4,306	)			5,657									5,657
	Restructuring recoveries, net								2,379				(2,379	)								(2,379	)
	Acquisition-related costs (a)								(200	)			200									200
	Legal settlement (a)								(192	)			192									192
	Loss on sales of assets								(597	)			597									597
	Tax adjustment																	300				(300	)
	Stock-based compensation included in:
		Cost of products revenues			249								249									249
		Cost of services revenues			545								545									545
		Research and development expenses							(899	)			899									899
		Marketing and selling expenses							(2,574	)			2,574									2,574
		General and administrative expenses							(3,995	)			3,995									3,995
Non-GAAP					$171,147				$173,646				($2,499	)				$1,183				($4,750	)
Weighted-average shares outstanding - diluted																						38,323
Non-GAAP net income per share - diluted																						($0.12	)
Six Months Ended June 30, 2010
					Gross Profit				Operating Expenses				Operating Loss					Tax Provision				Net Loss
GAAP					$159,919				$185,741				($25,822	)				$464				($26,388	)
	Amortization of intangible assets				1,912				(5,274	)			7,186									7,186
	Restructuring and other costs, net (b)								(5,347	)			5,347									5,347
	Acquisition-related costs (a)								(769	)			769									769
	Tax adjustment																	455				(455	)
	Stock-based compensation included in:
		Cost of products revenues			386								386									386
		Cost of services revenues			535								535									535
		Research and development expenses							(1,198	)			1,198									1,198
		Marketing and selling expenses							(2,075	)			2,075									2,075
		General and administrative expenses							(2,792	)			2,792									2,792
Non-GAAP					$162,752				$168,286				($5,534	)				$919				($6,555	)
Weighted-average shares outstanding - diluted																						37,714
Non-GAAP net loss per share - diluted																						($0.17	)
	(a)	Represents costs included in general and administrative expenses
	(b)	Includes costs of $3.7 million related to exiting our former Tewksbury, Massachusetts headquarters lease
Revenue Summary:
					Three Months Ended								Six Months Ended
					June 30,								June 30,
					2011				2010				2011					2010
Video revenues					$96,262				$93,521				$190,882					$177,874
Audio revenues					65,082				68,639				136,785					140,242
	Total net revenues				$161,344				$162,160				$327,667					$318,116

AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)
				June 30,						December 31,
				2011						2010
ASSETS:
Current assets:
Cash and cash equivalents				$	37,557					$	42,782
Accounts receivable, net of allowances of $15,400 and $17,149  at June 30, 2011 and December 31, 2010, respectively					98,386						101,171
Inventories					129,795						108,357
Deferred tax assets, net					1,144						1,068
Prepaid expenses					7,628						7,688
Other current assets					15,622						16,130
Total current assets					290,132						277,196
Property and equipment, net					59,254						62,519
Intangible assets, net					24,625						29,750
Goodwill					247,520						246,997
Other assets					11,065						10,109
Total assets				$	632,596					$	626,571
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Borrowings under revolving credit facilities				$	13,000					$	-
Accounts payable					44,777						47,340
Accrued compensation and benefits					31,834						41,101
Accrued expenses and other current liabilities					35,560						40,986
Income taxes payable					2,801						4,640
Deferred revenues					49,341						40,585
Total current liabilities					177,313						174,652
Long-term liabilities					28,036						25,309
Total liabilities					205,349						199,961
Stockholders' equity:
Common stock					423						423
Additional paid-in capital					1,012,348						1,005,198
Accumulated deficit					(515,963	)					(495,254	)
Treasury stock at cost, net of reissuances					(84,834	)					(91,025	)
Accumulated other comprehensive income					15,273						7,268
Total stockholders' equity					427,247						426,610
Total liabilities and stockholders' equity				$	632,596					$	626,571

AVID TECHNOLOGY, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited - in thousands)
				Three Months Ended										Six Months Ended
				June 30,										June 30,
				2011					2010					2011					2010
Cash flows from operating activities:
Net loss				($11,862	)				($12,906	)				($16,979	)				($26,388	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization				7,903					8,194					15,875					16,497
Provision for (recoveries of) doubtful accounts				315					160					459					(10	)
Non-cash provision for restructuring				-					249					125					249
Loss on sales of assets				597					-					597					-
Gain on disposal of fixed assets				(1	)				(33	)				(6	)				(46	)
Compensation expense from stock grants and options				4,525					3,664					8,262					6,986
Unrealized foreign currency transaction losses (gains)				2,705					(2,684	)				6,490					(5,248	)
Changes in deferred tax assets and liabilities, excluding initial effects of acquisitions				(4	)				(250	)				(4	)				(250	)
Changes in operating assets and liabilities, excluding initial effects of acquisitions:
Accounts receivable				(2,864	)				(15,028	)				2,228					(17,521	)
Inventories				(4,695	)				(3,959	)				(21,438	)				1,744
Prepaid expenses and other current assets				1,738					5,358					(208	)				5,269
Accounts payable				(2,732	)				18,117					(2,625	)				20,920
Accrued expenses, compensation and benefits, and other liabilities				(2,107	)				(2,880	)				(16,246	)				(18,482	)
Income taxes payable				(1,427	)				(1,172	)				(2,031	)				(967	)
Deferred revenues				672					786					11,815					8,346
Net cash used in operating activities				(7,237	)				(2,384	)				(13,686	)				(8,901	)
Cash flows from investing activities:
Purchases of property and equipment				(2,534	)				(12,500	)				(6,078	)				(22,509	)
(Increase) decrease in other long-term assets				(350	)				(214	)				(574	)				67
Payments for business acquisitions, net of cash acquired				-					(10,921	)				-					(27,008	)
Purchases of marketable securities				-					(500	)				-					(2,250	)
Proceeds from sales of marketable securities				-					1,000					-					19,605
Net cash used in investing activities				(2,884	)				(23,135	)				(6,652	)				(32,095	)
Cash flows from financing activities:
Proceeds from (payments related to) the issuance of common stock under employee stock plans, net				1,222					405					1,349					(322	)
Proceeds from revolving credit facilities				13,000					-					21,000					-
Payments on revolving credit facilities				-					-					(8,000	)				-
Net cash provided by (used in) financing activities				14,222					405					14,349					(322	)
Effect of exchange rate changes on cash and cash equivalents				236					(1,828	)				764					(3,406	)
Net increase (decrease) in cash and cash equivalents				4,337					(26,942	)				(5,225	)				(44,724	)
Cash and cash equivalents at beginning of period				33,220					73,735					42,782					91,517
Cash and cash equivalents at end of period				$37,557					$46,793					$37,557					$46,793

Avid
Investor Contact:
Tom Fitzsimmons, 978-640-3346
tom.fitzsimmons@avid.com
or
Media Contact:
Michele Perry, 978-640-5113
michele.perry@avid.com

Source: Avid

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