Avid 2011 Annual Report Download - page 2

To our shareholders
2011 was a year of continued change for both Avid and our customers. While 2011 revenue was essentially flat with 2010, we
continued to make progress in realigning our business and improving our profitability. In 2011, our GAAP operating loss was
lowered by over one-third; we reported the highest gross margin as a percent of revenue since 2005 and reported improved
profitability—on both a GAAP and non-GAAP basis—as compared to 2010. These improved results reflect our efforts to
improve our execution across our business and to deliver the solutions that enable our customers to be more successful.
We believe Avid is well positioned as the industry continues to transition to digital environments, including creation,
management and distribution of media across multiple platforms. The demand for higher quality content continues to increase.
With over 70% of the US web audience watching video and the number of multi-screen outlets increasing, we see an
opportunity for the creation of a higher volume of high quality content. Consumers want a selection of quality content that can
be viewed on multiple devices—from televisions, digital video recorders, in-home entertainment systems to laptops, tablets,
mobile phones and portable media devices. Consumers also want access to this media whenever and wherever they want.
Content providers, including cable operators, satellite companies and telecommunications companies, as well as media and
entertainment companies, are seeking professional, flexible and cost effective solutions to help them repurpose and create
high quality content to meet consumer demand.
Once created, these same content distributors need to be able to manage and monetize this content. Avid is well positioned to
supply the technology and expertise to help the industry and our customers to succeed, across all the markets we serve—from
the media enterprise to the large and small post facilities and independent professionals, all the way to the consumer.
Our Integrated Media Enterprise (or IME), a framework for integrating media operations and business management processes
across the enterprise, is beginning to take hold and resonate with customers. IME is a scalable solution backed by creative
tools like Media Composer® and Pro Tools® to facilitate production, our intelligent storage system (ISIS®) and iNEWS® to
support infrastructure, Interplay® Media Asset Manager to automate ingest production, and distribution processes and mobile
applications like Interplay Central that offer customers added convenience and flexibility. Across the board, we will continue to
engage in conversations with our customers to seek their feedback and guidance on how to best deliver the solutions to meet
their demands for improved workflows and even greater levels of openness, performance, collaboration and productivity.
We continue on our path of innovation with key product releases that emphasize openness and greater choice for our
customers. In 2011 we introduced several new products including Avid Motion Graphics™, ISIS 5000-16, Fast Track® C Series
and the Keystation Mini keyboard controller as well as mobile companion applications−Scorch® and Avid Studio for the iPad®.
In addition, we have also completed significant updates to Interplay MAM 4.0 and NewsVision® as well as our flagship editing
solutions Media Composer 6 and Pro Tools 10 with new HDX hardware.
Over the past year, Avid customers who used these same products were honored for their work in the areas of music, film
and television with more than 100 recognized as award nominees and winners at The Oscar®, GRAMMY®, ACE Eddie and
Emmy® Awards. Avid customers earned Oscar wins in the categories of Best Picture, Sound Editing, Sound Mixing and
Animated Feature Film in addition to ACE Eddie wins for Best Edited Feature Film, Best Edited Documentary and the Lifetime
Achievement Award. Avid customers also took home GRAMMY® awards for Record and Song of the Year, Producer of the
Year, Best New Artist, and Pop, Alternative, R&B, Rap, Dance and Country Albums of the Year. Lastly, our customers took home
Emmy® statuettes for Outstanding Drama Series, Comedy Series, Reality Program in addition to Sound Mixing and Editing for
Nonfiction Programming and Picture Editing for Reality Programming.
We have made progress, but recognize that we need to continue to identify and implement additional operational
improvements across the Company. We remain sharply focused on improving profitability while driving revenue growth.
As we head into 2012, we will continue to strengthen and build on our foundation. We are fortunate to have some of the most
talented and creative employees in the industry working here at Avid. This can only be matched by the passion and talent of
our customers. Working together we are a powerful combination.
We are encouraged by the opportunities that lie ahead of us and are optimistic that we have what it takes to help our
customers succeed at what they do best: create the most listened to, most watched and most loved media in the world.
Gary Greenfield
The reconciliation of GAAP to non-GAAP results is available on the IR page of our website at ir.avid.com in the press release announcing our fourth quarter earnings.
Gary G. Greenfield
Chairman and
Chief Executive Officer