Avid Technology 2008 Investor Day

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Avid Technology 2008 Investor Day Avid Technology 2008 Investor Day October 27th, 2008 Safe Harbor Statement Please note that remarks made during this presentation may include forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995. Any statements contained in this presentation that are not statements of historical fact may be deemed to be forward-looking statements. There are a number of factors that could cause actual events or results to differ materially from those indicated by these forward- looking statements, such as competitive factors, including Avid’s ability to anticipate customer needs, pricing pressures, Avid’s ability to execute its strategic plan, and adverse changes in general economic or market conditions, particularly in the content-creation industry. Other important events and factors appear in Avid’s filings with the U.S. Securities and Exchange Commission. In addition, the forward-looking statements included in this presentation represent our estimates only as of today and should not be relied upon as representing our views as of any subsequent date. Avid undertakes no obligation to review or update these forward-looking statements. A historical reconciliation of the GAAP to non GAAP reconciliation is available on www.avid.com in our quarterly earning press releases. For purposes of understanding our future business model, we are providing some forward-looking analysis on a non-GAAP basis. Our GAAP financial measures are not, however, accessible on a forward-looking basis and the differences between our future GAAP and non-GAAP financial measures could be substantial. Agenda Agenda - Continued , The Team • Gary Greenfield, CEO and Chairman • Kirk Arnold, EVP, Customer Operations • Martin Vann, VP, Worldwide Sales and Service • Dave Lebolt, VP, CTO • Tim Claman, Senior Director, Product Management • Paul Lypaczewski, VP, Video Business • Tex Schenkkan, VP, Audio Business • Beth Martinko, VP, Customer Success • Ken Sexton , CFO and Chief Administrative Officer • Glover Lawrence, Corporate Development • Joel Legon, VP, Finance • Jerry Kelly, VP, IT • Ed Raine, VP, HR • Paige Parisi, VP, General Counsel Vision, Strategy and Transformational Plans Gary Greenfield CEO and Chairman Our Mission Inspire passion, unleash creativity, and realize dreams in a digital world Strategy Evolution • Capitalize on our strengths • Avid solutions play in strong, growing markets • Adhere to customer-focused strategic principles • Initiate a three phase transformation plan • Leverage strengthened leadership team Avid Strengths Leadership Positions & Passionate Customers, Respected Brands Employees & Partners Deep Domain Expertise Innovative Products & Strong Product Portfolios Avid’s Five Strategic Principles • Drive customer success – Avid is committed to making each and every individual customer successful. Period. It’s that simple. • From enthusiasts to the enterprise – Whether performing live or telling a story to sharing a vision or broadcasting the news – we create products to support our customers at all stages. • Fluid, dependable workflows – Reliability. Flexibility. Ease of use. High Performance. We provide best-in class solutions that make our customers more productive and competitive. • Collaborative support – For the individual user, the workgroup, a community or the enterprise, we enable a collaborative environment for success. • Avid optimized in an open ecosystem – Avid products are innovative, reliable, integrated and best of breed. We work in partnership with a 3rd party community resulting in superior interoperability. Transformation Plan Phase 1 Phase 2 Phase 3 Build core Unlock new Get Healthy momentum and sources of growth expand margins – Use our scale – Maximize profit – Expand into new – Become more from leadership product and efficient and positions customer streamlined – Expand number of adjacencies – Clear brand strategy products each – Revenue growth – Become more open customer uses in-line with markets we serve – Expand recurring – Leverage one face revenue streams to the customer – Invest for the future – Target healthy cash generation Drive Avid to Full Potential New Organization Provides Focus on Customer • Enables the strategy - A single Avid go-to-market approach for high-end customers - Ties together video strategy from consumer to professional - Forces prioritization of strategic initiatives in a “One Avid” fashion • Customer focused - New Customer Operations group aligned around customers/channels as the “front end” for each business segment - VP of Customer Success reporting to CEO with company-wide responsibility over customer support Avid: Leader in Market Solutions Kirk Arnold EVP, Customer Operations Market Led Growth Consumers Video & Audio Professionals Enterprise Customers Education customer segments customer segments From the Enthusiasts…. To Our Professional & Enterprise Customers Why this is exciting • We now have an opportunity to bring the full strength of Avid to our customers – Audio, Video solutions – Rationalized channel efforts – Products & services • Customer segments are the cornerstone of new customer-focused processes and behaviors – Customer Advisory Board – Customer Success Model – Alliances and partnerships Media technology sector growing ahead of average technology spend Sampling of Avid Segment Growth • Broadcast = 6% • Education = 10% • Creative Independents = 15% Technology Industry Average Growth Rate = 7% Avid Market Growth Rate = 9% Source: IABM / Screen Digest Broadcast customers likely impacted by the downturn US Advertising growthgiven vs. US the GDP growth cyclicality of advertising spend 20% GDP/Advertising Correlation: 97% 10 0 Note: All data is US only; CAPEX on both new and used equipment counted -10 1980 Source: Veronis19 Suhler81 Stevenson, US Economic Bureau 1982 GDP 1983 Advertising 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 But broadcast spend also positively impacted by business and technology trends • Major increases in broadcast CAPEX occurred in 1997, 1999, and 2003, ahead of major multi-day broadcast events occurring in 1998, 2000, 2004 – sporting events, elections • Government edict • Move to digital workflows •HD transition Global Sales and Distribution Dynamics Avid Customer Base Installed Key Product Base • 270,000 Businesses • 60,500 MC Adrenaline & Meridien Systems • 5,000 Broadcast & Post • 725,000 Legacy Pro Tools Systems • 10M Registered Consumers Channel Partners Emerging Markets • 926 Distributors • Russia, Saudi Arabia and Ukraine • 22,400 Retail Outlets • Argentina and Brazil • China and India One Avid Delivering end to end solutions to our customers Driving effectiveness & efficiencies Leveraging powerful brands Emerson Tour Martin Vann VP, Worldwide Sales and Service Avid Video Paul Lypaczewski Vice President and General Manager What is Avid’s Video business? Avid is dedicated to delivering scalable, collaborative workflow solutions for media enthusiasts and professionals, from content creation to multiple distribution Avid’s Video Market Position • We are the market leader in professional editorial solutions • We provide the most purchased consumer editorial solution • We are the largest provider of real-time data storage & workflow solutions for media • We are the market leader for Production Content management • We are a major player in On-Air and Broadcast solutions and the leader in newsroom production, communication, and newscast control Source IABM 2006, extrapolated to 2007 and Avid estimates. Avid’s Advantage Avid‘s differentiation is the productivity and workflows that we provide to groups of editors, sharing and managing media and metadata, from content creation to multiple distribution • Editors are differentiated because they manage production process within workgroups, capturing media and metadata and creating content for multiple distribution. • Production asset management and workflow tools like Interplay and iNews coordinate activity of workgroups and manage metadata. • Shared storage makes media sharing possible within workgroups. • Knowledge of production workflows, software integration and making systems work sets us apart from packaged software vendors. Stand Alone Editor • Editing can be accomplished on a laptop • Offline editing or compressed formats • Ingest & Output via IT interconnect & files 1394/Ethernet Small Post Workgroup • Collaborators share “workspaces” on Unity Editing (Media Composer) Avid Unity MediaNetwork Audio (Pro Tools) Finishing (DS Nitris) Large Post Workgroup • Logging on Assist Editing (Media Composer) ISIS Audio (Pro Tools) Finishing (DS, Symphony) Logging (Assist) Interplay Live Show • Live Ingest & Logging; Graphics Logging Editing (MC) ISIS (Assist) Audio (Pro Tools) Finishing (Symphony) Interplay Graphics Ingest (AirSpeed) (Photoshop, After Effects) Large News Production • Integration with iNEWS and Play-to-Air Logging Editing (NewsCutter) ISIS (Assist) Journalists (iNEWS/Instinct) Play-to-Air Command, Sundance Interplay Ingest (AirSpeed) AirSpeed Deko On-air Workflow - Acquisition CaptureManager ISIS / Interplay Command Satellite Feeds AirSpeed AirSpeed Broadcast Deko iNEWS Servers ACM Web & Other Channels Camera Crews iNEWS Clients NewsCutters Instinct Clients On-air Workflow - Editing CaptureManager ISIS / Interplay Command Satellite Feeds AirSpeed AirSpeed Broadcast Deko iNEWS Servers ACM Web & Other Channels Camera Crews iNEWS Clients NewsCutters Instinct Clients On-air Workflow - Distribution
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