SCRI - Avid Woes Continue with Q3 Warning

http://scri.com/avid-woes-continue-with-q3-warning/

Avid today reported certain preliminary financial results for the fiscal quarter ended September 30, 2012. Avid’s third quarter results are preliminary, subject to change, and expressed in approximate figures. Avid currently plans to hold a conference call on October 29, 2012 to provide additional detail and updated results for the third quarter and information as to current expectations for the fourth quarter.

Avid now sees revenue of $125 million to $127 million, and a GAAP loss of $17 million to $19 million; previous Street consensus was for revenue of $145.2 million and a profit of 14 cents a share. In the year ago quarter, Avid had revenue of $164.7 million and a GAAP oss of $7.6 million. The company notes that the Q3 revenue range includes $4 million of revenue from divested businesses; ongoing businesses had revenue of $121 million to $123 million, versus $143 million a year ago.

On a non-GAAP basis, the company expects a net loss for the quarter of $3 million to $5 million.

Avid said the weak quarter “was largely due to sales execution in the Americas region and some transitional issues related to the implementation of the strategic actions announced by the company in July 2012.”

So year over year revenue drops from $143 Million to around 123 Million (sans $4 Million from now divested products). Also a net loss of at least $3 Million. GAAP loss of at least $17 Million vs $7.6 Million a year ago. The slow but steady decline continues.

Yes a free BMCC with every Avid install...wait a minute, isnt that vaporware ;)

[Herb Sevush] "Not being an Avid shareholder I see this as great new - each loss brings us that much closer to Avid being bought up by BMD, at which point MC is issued for free, Symphony goes for $200 and Isis goes for a penny to the pound and they throw in a free BM cine camera with each install."

Honestly, I know it still has a bunch of loyal users, but MC's interface is utterly impenetrable to new users and the whole way it manages media is bizarre. The app generally has the feel of a program which has had far too much grafted onto it over the years and which has survived through a few too many major shifts in related markets (the rise of DV, the shift to file-based workflow, etc.), and I bet this is reflected in the coherence (or rather incoherence) of the codebase as well. Consider that both Apple (with FCP X last year) and Adobe (with Premiere Pro in 2003) considered it prudent to discard and replace NLE environments that weren't nearly as old as Media Composer now is. Avid is even rumored to have started doing this with MC, but supposedly backed off out of fear that it would alienate its conservative customer base.

How much value would an app like this really have to a company like Blackmagic? It seems like almost the exact opposite of the NLE they'd build if they built one themselves.

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Digital Workflow/Colorist, Nice Dissolve.

You should follow me on Twitter here. Or read our blog.

[Tim Wilson] "Nobody's going to win any money betting what businesses Grant doesn't want to get into."

Who would have thought BMD would be interested in DaVinci? The way I understand it, Grant used DaVinci in his editorial workflow and when it was up for grabs just decided to take it on. Who knows, maybe he cuts with Avid as well. He seems to have a great business plan - make great products that he would want to use in his own editorial workflow, spend nothing on customer support, pass savings onto customers. It's not AJA but it seems to be working.

Herb Sevush
Zebra Productions
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nothin' attached to nothin'
"Deciding the spine is the process of editing" F. Bieberkopf

[Herb Sevush] "Who would have thought BMD would be interested in DaVinci? The way I understand it, Grant used DaVinci in his editorial workflow and when it was up for grabs just decided to take it on. "

Yep, that's what he told us in an interview we posted here at the COW. A fun listen.

I asked him if there was anything else he was using in his post business that we should know about. He laughed and said, "Pretty much all of it."

Also a good summary of his current business plan for BMD: pretty much all of it.

The interview's title is a quote from Grant, "We want to blow people's minds." And that was just BEFORE they announced the camera....

[Michael Phillips] "When this comes up, my current response is: "Grant is crazy enough to do it, but smart enough not to.""

And when I asked him straight up if he was interested in Avid, he laughed and changed the subject. See? A wise man.

[Dennis Radeke] "FYI - Premiere Pro got re-written again in 2010 with the shipping of CS5 which became a native 64-bit application on both Mac and PC."

I don't believe it did. A 64-bit port rarely involves a complete rewrite. Mostly it's making sure your source code isn't making any overly broad assumptions about pointer sizes and then setting a compiler flag.

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Digital Workflow/Colorist, Nice Dissolve.

You should follow me on Twitter here. Or read our blog.

Craig, I'm starting to have the image of you rubbing your hands in delight before you press send, and than laughing maniacally after you send it.

[Craig Seeman] "So year over year revenue drops from $143 Million to around 123 Million (sans $4 Million from now divested products). Also a net loss of at least $3 Million. GAAP loss of at least $17 Million vs $7.6 Million a year ago. The slow but steady decline continues."

http://en.wikipedia.org/wiki/Goodwill_(accounting)

Maybe it could be an episode of "Shark Tank."