Avid: Fiscal 3Q08 Financial Results

Avid Technology, Inc. reported revenue of $217.1 million for the three-month period ended September 30, 2008, compared to $226.8 million for the same period in 2007. GAAP net loss for the quarter was $66.4 million, or $1.80 per share, compared to GAAP net loss of $5.9 million, or $.14 per share, in the third quarter of 2007.

GAAP net loss in the third quarter of 2008 included goodwill and intangible asset impairment charges associated with the 2005 Pinnacle acquisition, amortization, stock-based compensation, restructuring charges and related tax adjustments totaling $62.0 million. Excluding these items, non-GAAP loss per share was $.12. For the third quarter of 2007, GAAP net loss included $21.0 million of amortization, stock-based compensation, restructuring charges, other costs and related tax adjustments. Excluding these items, non-GAAP earnings per diluted share were $.37 in the third quarter of 2007.

As part of the company’s business transformation efforts, Avid also announced today plans to divest the Softimage 3D animation product line. In addition, the company announced a reduction in workforce to better align its cost structure around the core businesses.

“We’ve made solid progress in transforming Avid, by organizing around our customers, delivering solutions that will help our customers succeed, and taking necessary steps to align our cost structure to support our core product lines,” said Gary Greenfield, Avid’s chairman and CEO. “We are pleased with our progress and plan to leverage Avid’s collective audio and video strengths, from the consumer to the enterprise, in ways that will deliver sustainable value to customers and prospects.”

Revenue for the nine-month period ended September 30, 2008 was $638.2 million, compared to revenue of $671.1 million for the same period in 2007. GAAP net loss for the first nine months of 2008 was $97.9 million, or $2.59 per share, compared to GAAP net loss of $11.8 million, or $.29 per share, for the same period in 2007. GAAP net loss for the nine-month period ended September 30, 2008 included $82.0 million of impairment charges, amortization, stock-based compensation, restructuring charges and related tax adjustments. Excluding these items, the non-GAAP loss per share was $.42 per share for the first nine months of 2008. GAAP net loss for the nine-month period ended September 30, 2007 included $45.8 million of amortization, stock-based compensation, restructuring charges, other costs and related tax adjustments. Excluding these items, non-GAAP earnings per diluted share were $.82 for the first nine months of 2007.

At September 30, 2008, the company’s cash balance was $122.4 million, down $102.0 million since the end of 2007. During the first quarter of 2008, the company used $93.2 million in cash to repurchase 4.3 million shares of common stock under the previously-announced share buyback program.

Recent Highlights

• The release of Avid DS 10 – a solution designed to save customers time and money by offering professional editing, compositing, keying, image retouching, and paint and graphics capabilities in a single application.  
• The introduction of Avid automation to the European marketplace for the first time – integrating the broadcast master control solutions Avid acquired from Sundance Digital.
• BusinessWeek named Avid’s Digidesign 003 Factory, a portable digital audio production console for aspiring musicians and producers, as a recipient of this year’s prestigious IDEA Award for Best Global Design. The 003 Factory was awarded a bronze medal in the highly competitive Entertainment category. M-Audio also received the prestigious Best Buy BRAVO! Award in the Musical Instruments category.
• All of the Emmy Award winners across 31 Outstanding Picture Editing, Outstanding Sound Editing/Mixing, and Outstanding Program categories at the 60th Annual Emmy Awards used at least one system from Avid to create this year’s top television programming. A majority of these programs employed workflows consisting of multiple systems from the various Avid brands. In total, more than 140 nominees in 38 categories used Avid brand systems.