8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):  January 28, 2010

AVID TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware (State or Other Jurisdiction of Incorporation or Organization)		0-21174   (Commission File Number)		04-2977748 (I.R.S. Employer  Identification No.)
	One Park West, Tewksbury, MA (Address of Principal Executive Offices)		01876 (Zip Code)
Registrant’s telephone number, including area code: (978) 640-6789
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

This Current Report on Form 8-K contains a number of forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, about the performance of Avid Technology, Inc. (the “Company”). For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects” and similar expressions are intended to identify forward-looking statements. There are a number of factors that could cause actual events or results to differ materially from those indicated by such forward-looking statements, many of which are beyond the Company’s control, including the risk factors disclosed previously and from time to time in the Company’s filings with the U.S. Securities and Exchange Commission.  In addition, the forward-looking statements contained herein represent the Company’s estimate only as of the date of this filing and should not be relied upon as representing the Company’s estimate as of any subsequent date. While the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements.

Item 2.02. Results of Operations and Financial Condition

On January 28, 2010, the Company announced its financial results for the quarter ended December 31, 2009. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information contained in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

 The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

99.1        Press Release issued by the Company on January 28, 2010.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  January 28, 2010	AVID TECHNOLOGY, INC. (Registrant)
	By:	/s/ Ken Sexton                                          Ken Sexton Executive Vice President, Chief Financial Officer and Chief Administrative Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release issued by the Company dated January 28, 2010.

4

EX-99.1

EXHIBIT 99.1      

Contact:	Investor Contact: Tom Fitzsimmons, tom.fitzsimmons@avid.com, 978-640-3346
	Media Contact: Amy Peterson, amy.peterson@avid.com, 978-640-3448

Avid Announces Fourth Quarter 2009 Results

TEWKSBURY, Mass., January 28, 2010 — Avid® (NASDAQ: AVID) today reported revenues of $174.7 million for the three-month period ended December 31, 2009, compared to $206.7 million for the same period in 2008. The GAAP net loss for the quarter was $17.9 million, or $0.48 per share, compared to a GAAP net loss of $100.3 million, or $2.71 per share, in the fourth quarter of 2008.

The GAAP net loss for the fourth quarter of 2009 included amortization of intangibles, stock-based compensation, restructuring charges, acquisition related costs, net gains from divested product lines and related tax adjustments, collectively totaling $16.5 million. Excluding these items, the non-GAAP net loss was $1.4 million for the fourth quarter, or $0.04 per share.

The GAAP operating loss for the fourth quarter was $15.1 million, including amortization of intangibles, stock-based compensation, restructuring charges, acquisition related costs and net gains from divested product lines collectively totaling $17.1 million.   Excluding these items, the non-GAAP operating profit was $2.0 million for the fourth quarter.

“Avid has made good progress this quarter.  Our revenues were up sequentially and we believe our markets are stabilizing with some signs of recovery,” said Gary Greenfield, chairman and CEO at Avid. “We reported a non-GAAP operating profit for the quarter and with the majority of our cost structure transformation complete we feel we are well positioned for margin expansion.”

Revenues for the year ended December 31, 2009 were $629.0 million, compared to revenues of $844.9 million for 2008. GAAP net loss for 2009 was $68.4 million, or $1.83 per share, compared to GAAP net loss of $198.2 million, or $5.28 per share for 2008. GAAP net loss for 2009 included $55.7 million of amortization, stock-based compensation, restructuring charges, acquisition related costs, net gains from divested product lines and related tax adjustments. Excluding these items, the non-GAAP net loss was $12.7 million or $0.34 per share for 2009. GAAP net loss for 2008 included $172.9 million of amortization, stock-based compensation, restructuring charges, net gains from divested product lines, impairment charges and related tax adjustments. Excluding these items, the non-GAAP net loss was $25.2 million or $0.67 per share for 2008.

The company’s cash balance on December 31, 2009 was $109 million, or approximately $2.91 per share.

Use of Non-GAAP Financial Measures

This press release contains “non-GAAP financial measures” under the rules of the U.S. Securities and Exchange Commission. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with, disclosures required by generally accepted accounting principles, or GAAP. The reconciliation for operating income (loss), net income (loss) and earnings (loss) per share for the three- and twelve-month periods ended December 31, 2009 and 2008 are in the tables attached to this press release.

The company uses non-GAAP financial measures internally to manage its business, for example, in establishing its annual operating budget, in assessing segment operating performance and for measuring performance under employee incentive compensation plans. Non-GAAP financial measures are used by management in its operating and financial decision-making because management believes these measures reflect the company’s ongoing business in a manner that allows meaningful period-to-period comparisons. Accordingly, the company believes it is useful for investors and others to review both GAAP and non-GAAP measures in order to (a) understand and evaluate the company’s current operating performance and future prospects in the same manner as management does and (b) compare in a consistent manner the company’s current financial results with past financial results. The primary limitations associated with the company’s use of non-GAAP financial measures are that these measures may not be directly comparable to the amounts reported by other companies and they do not include all items of income and expense that affect the company’s operations. The company’s management compensates for these limitations by considering the company’s financial results as determined in accordance with GAAP and by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in this press release.

Conference Call

A conference call to discuss Avid’s fourth quarter 2009 financial results will be held today, January 28, 2010 at 4:30 p.m. ET. The call will be open to the public and can be accessed by dialing 719.457.2617 and referencing confirmation code 4569475. The call and subsequent replay will also be available on Avid’s website. To listen via this alternative, go to the Investors tab at www.avid.com for complete details prior to the start of the conference call.

Use of Forward-Looking Statements

The above release is subject to the completion and filing of our Annual Report on Form 10-K. This release includes forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995. This release also makes forward-looking statements about Avid’s performance. There are a number of factors that could cause actual events or results to differ materially from those indicated by such forward-looking statements, such as Avid’s ability to execute on its corporate strategy and meet customer needs, general economic conditions, competitive factors, pricing pressures, delays in product shipments and other important events and factors disclosed previously and from time to time in Avid’s filings with the U.S. Securities and Exchange Commission. In addition, the forward-looking statements contained herein represent Avid’s estimates only as of today and should not be relied upon as representing the company’s estimates as of any subsequent date. While Avid may elect to update these forward-looking statements at some point in the future, Avid specifically disclaims any obligation to do so, even if the estimates change.

About Avid

Avid creates the digital audio and video technology used to make the most listened to, most watched and most loved media in the world – from the most prestigious and award-winning feature films, music recordings, television shows, live concert tours and news broadcasts, to music and movies made at home.  Some of Avid’s most influential and pioneering solutions include Media Composer®, Pro Tools®, Avid Unity™, Interplay®, Oxygen 8, Sibelius® and Pinnacle Studio™. For more information about Avid solutions and services, visit www.avid.com, del.icio.us, Flickr, Twitter and YouTube; connect with Avid on Facebook; or subscribe to Avid Industry Buzz.

© 2010 Avid Technology, Inc. All rights reserved. Product features, specifications, systems requirements and availability are subject to change without notice.  Avid, Pinnacle Studio, Avid Unity, Interplay, Media Composer, Pro Tools, and Sibelius are trademarks or registered trademarks of Avid Technology, Inc. or its subsidiaries in the United States and/or other countries. The Interplay name is used with the permission of Interplay Entertainment Corp., which bears no responsibility for Avid products. All other trademarks are the property of their respective owners.

AVID TECHNOLOGY, INC.
Condensed Consolidated Statements of Operations
(unaudited - in thousands, except per share data)
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2009			2008			2009			2008
Net revenues:
Products	$	140,140		$	173,255		$	509,215		$	714,232
Services		34,539			33,451			119,755			130,669
Total net revenues		174,679			206,706			628,970			844,901
Cost of revenues:
Products		66,588			97,182			243,362			369,186
Services		16,239			18,128			59,754			73,888
Amortization of intangible assets		568			753			2,033			7,526
Restructuring costs		-			1,876			799			1,876
Total cost of revenues		83,395			117,939			305,948			452,476
Gross profit		91,284			88,767			323,022			392,425
Operating expenses:
Research and development		30,015			33,291			120,989			148,598
Marketing and selling		50,279			49,511			177,759			208,735
General and administrative		17,164			17,422			56,929			78,591
Amortization of intangible assets		2,732			2,837			10,511			12,854
Impairment of goodwill and intangible assets		-			78,715			-			129,972
Restructuring costs, net		9,741			21,305			26,873			25,412
Gain on sales of assets		(3,553	)		(13,287	)		(155	)		(13,287	)
Total operating expenses		106,378			189,794			392,906			590,875
Operating loss		(15,094	)		(101,027	)		(69,884	)		(198,450	)
Interest and other income (expense), net		(94	)		331			(123	)		2,936
Loss before income taxes		(15,188	)		(100,696	)		(70,007	)		(195,514	)
Provision for (benefit from) income taxes, net		2,733			(443	)		(1,652	)		2,663
Net loss	$	(17,921	)	$	(100,253	)	$	(68,355	)	$	(198,177	)
Net loss per common share - basic and diluted	$	(0.48	)	$	(2.71	)	$	(1.83	)	$	(5.28	)
Weighted-average common shares outstanding - basic and diluted		37,415			37,012			37,293			37,556

AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Change in Financial Presentation
Beginning January 1, 2009, we combined our professional video and consumer video businesses into a single reporting segment.
We will now consequently report on two business segments: Audio and Video. Please note that the segment contribution
margin calculation has also changed from last year. Segment contribution margin is now calculated as segment gross margin
less the research and development and product management expenses directly attributable to the segment. Comparative
results for the 2008 periods have been updated to reflect our new business structure.
Summary of the Company's revenues and contribution margin by reportable segment and a reconciliation
of segment contribution margin to consolidated operating loss:
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2009			2008			2009			2008
Revenues:
Video  (a)	$	106,192		$	134,296		$	375,010		$	551,706
Audio		68,487			72,410			253,960			293,195
Total revenues	$	174,679		$	206,706		$	628,970		$	844,901
Contribution Margin:
Video	$	35,815		$	31,762		$	113,524		$	144,639
Audio		26,090			25,211			91,534			101,489
Segment contribution margin		61,905			56,973			205,058			246,128
Less unallocated costs and expenses:
Research and development expenses		(1,694	)		(1,779	)		(6,918	)		(7,170	)
Marketing and selling expenses		(42,224	)		(45,929	)		(158,812	)		(191,948	)
General and administrative expenses		(15,948	)		(14,982	)		(51,598	)		(66,906	)
Amortization of acquisition-related intangible assets		(3,300	)		(3,590	)		(12,544	)		(20,380	)
Impairment of goodwill and intangible assets		-			(78,715	)		-			(129,972	)
Stock-based compensation		(3,486	)		(3,111	)		(13,394	)		(14,201	)
Restructuring costs, net		(9,741	)		(23,181	)		(27,672	)		(27,288	)
Other costs		(4,159	)		-			(4,159	)		-
Gain on sales of assets		3,553			13,287			155			13,287
Consolidated operating loss	$	(15,094	)	$	(101,027	)	$	(69,884	)	$	(198,450	)
(a)  Includes revenues from non-core product lines of:	$	19		$	11,294		$	1,893		$	61,508
Reconciliation of GAAP operating loss to Non-GAAP operating income (loss):
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
		2009			2008			2009			2008
GAAP operating loss	$	(15,094	)	$	(101,027	)	$	(69,884	)	$	(198,450	)
Adjustments to reconcile to Non-GAAP operating income (loss):
Amortization of intangible assets		3,300			3,590			12,544			20,380
Impairment of goodwill and intangible assets		-			78,715			-			129,972
Stock-based compensation		3,486			3,111			13,394			14,201
Restructuring costs, net		9,741			23,181			27,672			27,288
Other costs		4,159			-			4,159			-
Gain on sales of assets		(3,553	)		(13,287	)		(155	)		(13,287	)
Non-GAAP operating income (loss):	$	2,039		$	(5,717	)	$	(12,270	)	$	(19,896	)

AVID TECHNOLOGY, INC.
(unaudited - in thousands, except per share data)
Reconciliation of GAAP net loss to Non-GAAP net loss:
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2009			2008			2009			2008
GAAP net loss	$	(17,921	)	$	(100,253	)	$	(68,355	)	$	(198,177	)
Adjustments to reconcile to Non-GAAP net loss:
Amortization of intangible assets		3,300			3,590			12,544			20,380
Impairment of goodwill and intangible assets		-			78,715			-			129,972
Stock-based compensation		3,486			3,111			13,394			14,201
Restructuring costs, net		9,741			23,181			27,672			27,288
Other costs		4,159			-			4,159			-
Gain on sales of assets		(3,553	)		(13,287	)		(155	)		(13,287	)
Related tax adjustments		(585	)		(4,331	)		(1,942	)		(5,619	)
Non-GAAP net loss:	$	(1,373	)	$	(9,274	)	$	(12,683	)	$	(25,242	)
Weighted-average common shares outstanding - diluted		37,415			37,012			37,293			37,556
Non-GAAP net loss per common share - diluted	$	(0.04	)	$	(0.25	)	$	(0.34	)	$	(0.67	)
	Three Months Ended						Twelve Months Ended
Stock-based compensation included in:	December 31,						December 31,
		2009			2008			2009			2008
Cost of products revenues	$	193		$	136		$	859		$	616
Cost of services revenues		286			131			1,154			539
Research and development expenses		717			605			2,454			2,820
Marketing and selling expenses		1,074			897			3,596			4,005
General and administrative expenses		1,216			1,342			5,331			6,221
	$	3,486		$	3,111		$	13,394		$	14,201

AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)
	December 31,			December 31,
	2009			2008
ASSETS:
Current assets:
Cash, cash equivalents and marketable securities	$	108,877		$	147,694
Accounts receivable, net of allowances of $16,347 and $23,182
at December 31, 2009 and 2008, respectively		79,741			103,527
Inventories		77,243			95,755
Prepaid and other current assets		29,913			43,969
Total current assets		295,774			390,945
Property and equipment, net		37,217			38,321
Intangible assets, net		29,235			38,143
Goodwill		227,195			225,375
Other assets		20,455			10,801
Total assets	$	609,876		$	703,585
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable	$	30,230		$	29,419
Accrued expenses and other current liabilities		82,938			101,107
Deferred revenues		39,107			68,581
Total current liabilities		152,275			199,107
Long-term liabilities		14,483			11,823
Total liabilities		166,758			210,930
Stockholders' equity:
Common stock		423			423
Additional paid-in capital		992,489			980,563
Accumulated deficit		(444,661	)		(365,431	)
Treasury stock at cost, net of reissuances		(112,389	)		(124,852	)
Accumulated other comprehensive income		7,256			1,952
Total stockholders' equity		443,118			492,655
Total liabilities and stockholders' equity	$	609,876		$	703,585