Avid 2000 Annual Report Download - page 3

TO OUR SHAREHOLDERS
After a focused year of rebuilding, Avid is once again on a mission – redefining the way people everywhere Make,
Manage and Move Media. Our progress in 2000 was substantial: we restored Avid’s revenue growth, refined our
business strategy, and reenergized our workforce to begin executing our long-term product vision. I am pleased with
our progress to date, and believe we’re in a tremendous position to capitalize on the emerging opportunities presented
by the conversion from analog to digital methods of content creation, management, and distribution.
After a significant restructuring in 1999, we achieved an operating profit in the first quarter of 2000, excluding
amortization of acquisition-related intangible assets. We continued that momentum throughout the year, producing
stronger results each subsequent quarter and putting Avid back on the road to solid financial health. Our fourth quarter
revenue grew 13% on a year-over-year basis to $126.1 million, the second highest revenue quarter in Avid’s history.
We also improved our operating efficiency, reducing sales and marketing expenses and research and development costs
as percentages of revenue by 4% and 2% respectively. As a whole, we completed the year generating net revenues of
$476.1 million, 5% growth versus the 6% decline posted in 1999.
Strategically, we saw a critical need to bring focus and accountability to the specific markets we serve, and recognized
the tremendous value to our customers of tying all of our products together into complete end-to-end solutions. As a
result, we created a unified operating structure in mid-2000 of four business units: Avid Media Solutions, Avid Internet
Solutions, Digidesign, and Softimage. Today, each unit is executing plans to achieve vertical market growth, as well as
contributing its piece to Avid’s broader mission of making, managing, and moving media.
We also addressed the challenge of identifying markets that represent new growth opportunities for Avid, and began
delivering solutions to these markets. For the streaming media and Internet infrastructure markets, we introduced the
Trilligent Cluster, a high-performance turnkey streaming media server. To strengthen our graphics and animation business,
and to pursue growth in interactive games for the Web, we added new 3D technology from The Motion Factory, Inc.
In broadcast, our purchase of Pluto Technologies International Inc. took us one step closer to our goal of offering
broadcasters a complete, end-to-end workflow solution – which we accomplished in early 2001 with the acquisition of
the remaining ownership interest of iNews, LLC. These initiatives represent an extension of Avid’s market reach into
high growth areas that we believe are influencing how media is – and will continue to be – created, managed, and
distributed in the future.
We successfully delivered on the product commitments we made to customers in 2000 with innovative solutions for the
markets we serve. With new versions of the Avid Symphony, Avid|DS, Media Composer, and Avid Xpress systems, we
offered enhanced features and functionality for the professional nonlinear editing and finishing markets. We improved
workflow efficiency for broadcasters with Avid Unity for News, NewsCutter, MediaManager, and TransferManager, and
integrated them with the high-definition server technology we obtained from Pluto, including AirSPACE, VideoSPACE,
and HyperSPACE. We launched an online content community and services portal, AvidProNet.com, providing Avid users
best-in-class information about the art and business of media creation and production. And we responded to specific
customer demands – offering lower-cost professional video editing and publishing capabilities with Avid Xpress DV and
Avid ePublisher software, incorporating surround sound audio capabilities into Digidesign Pro Tools software, and intro-
ducing our flagship 3D animation software, SOFTIMAGE|XSI, to the film, games, interactive and broadcast industries.
With significant opportunities emerging in digital media, Avid is once again in an excellent position to help shape the
future. Rebuilding our business in 2000 was just the first in a series of steps we’re taking to pursue this goal. On the
next few pages, we highlight our plans for furthering the momentum we’ve begun to generate. In closing, I would like
to thank all of our customers, shareholders, suppliers, and employees for their continued support. It’s an exciting time
to Make, Manage and Move Media – I look forward to helping Avid make that vision a reality in 2001 and beyond.
David Krall
President & Chief Executive Officer
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