Avid Technology, Inc. (AVID)
Q3 2008 Earnings Call
October 23, 2008 4:30 pm ET
Gary Greenfield - Chairman of the Board, CEO
Kenneth Sexton - Chief Financial Officer, Executive VP, Chief Administrative Officer
Joel Legon - VP - Finance, Principal Accounting Officer
Tom Fitzsimmons - Director and Investor Relations for Avid Technology
Steven Frankel - Canaccord Adams
Paul Coster - JP Morgan
Andrew Abrams - Avian Securities
Mike Olson - Piper Jaffray
James Ricchiuti - Needham & Company
Allen Davis - D.A. Davidson & Co.
Previous Statements by AVID
» Avid Technology Inc. Q4 2008 Earnings Call Transcript
» Avid Technology, Inc. Q2 2008 Earnings Call Transcript
» Avid Technology Inc. Q1 2008 Earnings Call Transcript
Good afternoon everyone. I am Tom Fitzsimmons, Director Investor Relations for Avid Technology. I would like to welcome you to today’s call. With me today are Gary Greenfield, Avid’s Chairman and CEO; Ken Sexton, Chief Financial Officer and Chief Administrative Officer; and Joel Legon our Vice President of Finance who will join us for Q&A.
Before we begin, please note that this call includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about average performance. There are number of factors that could cause actual events or results to different materials from those indicated by such statements; such as competitive characters including Avid’s ability to entertain customer’s needs, pricing pressures, our ability to execute our strategic plans, and adverse changes in the general economic or market conditions. Other important events and factors appear Avid’s filings with the Unites States Securities and Exchange Commission. In addition, our forward-looking statements represent our estimates only as of today October 23, 2008 and should not be relied on as representing our views on any subsequent day. AVID undertakes no obligation to review or update these forward- looking statements.
During this call we will be referring to non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. The most directly comparable financial measures calculated in accordance with GAAP and a reconciliation of GAAP measures to those non-GAAP measures are contained in the press release announcing this quarter’s results and are available in the investor relation section of our website at www.avid.com. And now I would like to turn the call over to Gary.
Thank you Tom and welcome everyone to our third quarter 2008 results conference call. Although there are few highlights of our third quarter, Ken will provide the financial details and then I will provide an update in our progress and average transformation. Ken will then wrap up with an update to our 2008 guidance and Ken, Joel and I will take your questions.
As we discussed on previous calls, Avid is in the midst of significant transformation. While Q3 presented challenges that can recover, we are on the path to return Avid to sustained financial health. For the third quarter we reported revenue of $217.1 million and a loss of $0.12 cents per share on a non-GAAP EPS basis.
In the month since our last earnings call the leadership team in Avid has been working with the employees to accelerate the effort it needed to reach our goal of operating as a single company. As a part of that work we have identified a number of changes that will help us to become more physically fit. This included implantation of more efficient and effective processes and the elimination of duplicative work efforts. At the same time we also took a hard look across the business, to find the best way to integrate our various groups into a more customer centric organization. This work resulted in the identification of new roles, the redeployment of the existing employees and the elimination of some positions. In addition, we have entered into an agreement to divest our SoftImage 3D, animation product line which is part of our professional video segment.
The staff reductions plus the pending transaction will affect about 1/5 of our employees and impact nearly all Avid locations and areas of the organization, including costumer operations, customer success, our video and audio business units and our administrative operations. These actions are an important step in our transformation as we reset the cost base and unify our business into one Avid.
Regarding Avid’s accomplishments during the quarter, we made significant progress against the goals we outlined; our last call is a part of our corporate strategy. We introduced a number of new products many of which have received industry awards as have our customers who continue to earn prestigious industry recognition at award ceremonies like the Emmy’s this past September.
In the third quarter we began shipping DS version 10 worldwide. This is a highly anticipated release for our customers, the new system runs on a high performance platform designed to have costumers save time and money with a single application to create and finish high quality post production and broadcast content. Feed back on the latest version of the Avid DS workflow from costumers has been positive.
At the recent AES show we have previewed Digidesign Pro Tools 8, the next evolution of our widely used music creation and audio production software which includes the video satellite feature, an option that brings Avid high res video playback into the Pro tools audio work flow. This release is important for 2 reasons. First is the development of valuable input for our costumers. Second, it demonstrates our commitment to provide better interoperability of our own work flows for our costumers. We also signed the Software Developers Kit License Agreement with Red, an emerging camera manufacturer as a part of our continued efforts to foster an open ecosystem of work flows and interoperability with third party products.