Avid 2011 Annual Report Download - page 11

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In addition, other companies that compete with certain of our products and solutions are listed below by the market segment in
which they compete:
• Media Enterprises: Bit Central Inc., Dalet S.A., Editshare LLC, EVS Corporation, Grass Valley, Harmonic Inc., Harris
Corporation, Quantel Inc. and Vizrt Ltd., among others.
• Professionals and Post: Autodesk Inc., Harman International Industries Inc. and Yamaha Corporation, among others.
• Creative Enthusiasts: Corel Corporation, Magix AG and Roland Corporation, among others.
SALES AND SERVICE CHANNELS
We market and sell our products and solutions through a combination of direct and indirect sales channels. Our direct sales
channel consists of internal sales representatives serving select customers and market segments, as well as our e-commerce sales
programs. Our indirect sales channels include global networks of independent distributors, value-added resellers, dealers and
retailers. Net revenues derived through indirect channels were approximately 60%, 65% and 66% for 2011, 2010 and 2009,
respectively. In 2011, an increase in Media Enterprise revenues was a significant driver in the increased sales through direct
channels, as compared to 2010.
We have significant international operations with offices in 20 countries. Sales to customers outside the United States accounted
for 59%, 58% and 60%, respectively, of our consolidated net revenues for 2011, 2010 and 2009.
We generally ship our products shortly after the receipt of an order, which is typical for our industry. Historically, a high
percentage of our revenues has been generated in the third month of each fiscal quarter and concentrated in the latter part of that
month. Accordingly, orders may exist at the end of a quarter that have not been shipped and have not been recognized as
revenues. Backlog that may exist at the end of any quarter is not a reliable indicator of future sales levels.
In most years, our first quarter revenues are the lowest for the year and typically are lower sequentially from the fourth quarter of
the prior year. By contrast, our fourth quarter revenues are usually the highest revenues by quarter for the year. Our past
experience may not be predictive of future seasonality due to the timing of recognizing revenue on larger transactions, changes in
foreign currency rates and other factors that can cause results to deviate from these prior seasonal patterns.
We provide customer service and support directly through regional support centers and major-market field service representatives
and indirectly through dealers, value-added resellers and authorized third-party service providers. Depending on the solution,
customers may choose from a variety of support offerings, including telephone and online technical support, on-site assistance,
hardware replacement and extended warranty, and software upgrades. In addition to support services, we offer a broad array of
professional services, including installation, integration, planning and consulting services, and customer training.
MANUFACTURING AND SUPPLIERS
Our manufacturing operations consist primarily of the testing of subassemblies and components purchased from third parties, the
duplication of software, and the configuration, assembly and testing of board sets, software, related hardware components and
complete systems. In addition to our internal manufacturing operations, we rely on a network of contractors around the globe to
manufacture many of our products, components and subassemblies. Our products undergo testing and quality assurance at the
final assembly stage. We depend on sole-source suppliers for certain key hardware product components and finished goods,
including some critical items. Although we have procedures in place to mitigate the risks associated with our sole-sourced
suppliers, we cannot be certain that we will be able to obtain sole-sourced components or finished goods from alternative
suppliers or that we will be able to do so on commercially reasonable terms without a material impact on our results of operations
or financial position. For the risks associated with our use of contractors and sole-source vendors, see “Risk Factors” in Item 1A
of this annual report.
Our company-operated manufacturing facilities are located in: Burlington, Massachusetts; Dublin, Ireland; and Mountain View,
California. Our Burlington and Dublin operations are ISO 14001, Environmental Management System, certified. During 2012,
we will be working toward ISO 14001 certification for our Mountain View operations.