Avid 2nd Quarter Results

Avid released their 2nd quarter financial results yesterday. Revenue was flat relative to last year and the company lost about $6 million for the quarter, including various charges. This compares to Q1 when they eked out a tiny net profit of just $20 thousand. You can listen to the analyst conference call here. (In Safari, the player told me that I didn’t have the correct plug-in, but with Flip4Mac installed, it played the audio anyway.)

The company also announced the appointment of Joel Legon as CFO. He was formerly the corporate controller.

In the call, outgoing CEO David Krall said they were focusing on “storage, asset management and services,” and added that, “we believe winning the hearts and minds of aspiring professionals is a key to long term growth in the professional video segment,” and he mentioned new marketing programs aimed at independents and education.

The company also announced “a reduction in force of approximately 150 positions, primarily, but not exclusively, in the company’s Video business unit.” Broadcasting and Cable magazine reported that 129 people have already been laid off. In the conference call, Krall said the layoffs were mostly in their Mountain View storage engineering division, which is being moved to Tewskbury and Canada.

Interim CEO Nancy Hawthorne indicated that they need to improve both operationally, and in terms of infrastructure, and to that end, have engaged consulting firm Bain & Company.

Avid’s post production business declined 7% relative to last year and increased 7% relative to last quarter. More than half of the Adrenaline systems sold this year were HD-capable.

In the midst of an across-the-board 2-3% drop in the stock prices yesterday, Avid fell only about 1%. This morning it’s down a little more. (Chart)

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3 Comments on “Avid 2nd Quarter Results”

  1. DKG Says:

    “he mentioned new marketing programs aimed at independents and education.”

    How about saving the money to be spent on marketing and just lowering the price to compete, dollar for dollar, with FCP. I’m sure a $1,000 software-only Media Composer would turn heads. How about a DS, hardware included for $10,000?

    DKG

  2. Norman Says:

    My worry — the laying off of that many workers, primarily in the Video division. Perhaps I misread this (certainly the L2 group doesn’t seem concerned) but it seems that this is a public shifting of priorities. Clearly they don’t make most of their money from Hollywood editors — no one ever said they do. But I still remember when Lightworks was bought by a straight hardware firm — Tektronix. They just didn’t get the NLE market at all and that was pretty the end of Lightworks. We can’t afford another one of those missteps.

  3. Steve Says:

    That was my concern, as well. But I’m just not clear enough about what those laid off people do to understand what it really means.

    The call was very general, which I suspect is common when talking to stock market analysts, but on some level Apple must have been the elephant in the room.


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