Avid Reports Third Quarter Results.

Business/Technology Editors

TEWKSBURY, Mass.--(BUSINESS WIRE)--Oct. 18, 2001

Avid Technology, Inc. (NASDAQ:AVID) today reported its financial results for the third quarter ended September 30, 2001. Revenues for the quarter were $102.3 million. Net loss for the quarter was $14.2 million or $.55 per share including amortization of acquisition-related intangible assets, and restructuring and other costs, net. Excluding these items, Avid would have reported a net loss of $801,000 or $.03 per share for the third quarter of 2001.

For the nine months ended September 30, 2001, revenues were $329.8 million. Net loss for the nine-month period was $39.5 million or $1.55 per share including acquisition-related amortization, and restructuring and other costs, net. Excluding these items, Avid would have reported a net loss of $292,000 or $.01 per share for the first three quarters of 2001.

"The difficult but important cost-savings actions we took early in the quarter proved effective at meaningfully lowering our expense base," said David Krall, Avid's president and chief executive officer. "Through these actions, we were able to mitigate the effects of the weakening economy and deliver better-than-expected bottom line results. We also strengthened our balance sheet by reducing our accounts receivable days sales outstanding, increasing our inventory turns and adding more than $10 million to our cash balance."

Krall concluded, "In addition, we continued to deliver on our product roadmap in the third quarter, introducing a range of products designed to improve Avid's integrated solution set and to help our customers work faster and more efficiently."

Avid's new product introductions during the third quarter included:

- Avid Unity(TM) LANshare 1.0 - a low-cost, Ethernet-based shared-storage
system, providing an entry into Avid's collaborative workflow environment;

- Avid(R) NetReview(TM) 1.0 - a secure LAN- and Internet-based tool, which
integrates reviewers into the Avid content creation process;

- Avid Unity MediaNet 2.1 - which expands the Avid Unity workgroup to
Ethernet-connected systems, increasing the broadcast news client count to 50
simultaneous systems;

- NewsCutter(R) XP and NewsCutter XP Mobile - new versions of nonlinear news
editing systems that support the 4:1:1 PAL video format most commonly used in
European and other international markets; and,

- SOFTIMAGE(R)|XSI(TM) 2.0 - the latest version of Avid's flagship 3D product
which brings significant new capabilities to animators, Web authors and game
developers.

Conference Call

A conference call to discuss Avid's third quarter 2001 financial results will be held today at 5:00 p.m. EDT. The call will be open to the public. The conference call can be accessed by dialing 800-289-0730 and referencing confirmation code 568159. The call and subsequent replay will also be available on Avid's Web site. To listen via this alternative, go to the investor relations page at www.avid.com for complete details 10-15 minutes prior to the start of the conference call.

About Avid Technology, Inc.

Avid Technology, Inc. delivers the solutions that Make, Manage and Move Media(TM). As a recognized digital standard for professionals who Make the world's media--from video, audio and film to animation, special effects and streaming media--Avid's products are used to make more television and news shows, commercials, music videos and CDs, corporate/industrial productions and major motion pictures combined than any other nonlinear editing manufacturer in the world. Now, building on its Oscar(R), Grammy(R) and Emmy(R) award-winning heritage in creating content, Avid is extending its reach by redefining how digital media is shared, stored and distributed. To Manage today's increasingly rich collection of dynamic media, Avid provides powerful servers, networks and media tools to help customers search files, share media and collaborate on new productions, both locally and globally. Avid's solutions also empower users to easily Move media, whether on air, over cable or satellite or through the Internet. Like no other media company today, Avid's end-to-end solutions span the continuum of media creation, management and distribution. The company's corporate headquarters are located in Tewksbury, MA. More information about the company is available at www.avid.com.

The above release includes forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1996, including statements about products and functionality, and size and growth of existing markets. There are a number of factors that could cause actual events or results of operations to differ materially from those indicated by such forward-looking statements, such as market acceptance of Avid's products, further weakening of worldwide economic conditions and the other factors set forth under the caption "Certain Factors That May Affect Future Results" in Avid's Form 10-Q for the quarter ended June 30, 2001 and other filings with the Securities and Exchange Commission.

(c) 2001 Avid Technology, Inc. All rights reserved. Avid, NewsCutter and Softimage are registered trademarks and Avid Unity, Make, Manage and Move Media, NetReview and XSI are trademarks of Avid Technology, Inc. Oscar is a registered trademark and service mark of the Academy of Motion Picture Arts and Sciences. Emmy is a registered trademark of ATAS/NATAS. Grammy is a trademark of The National Academy of Recording Arts & Sciences, Inc. All other trademarks contained herein are the property of their respective owners.

AVID TECHNOLOGY, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)


                        Three Months Ended        Nine Months Ended
                           September 30,             September 30,
                        2001         2000         2001         2000

Net revenues        $ 102,281    $ 121,292    $ 329,849    $ 349,946
Cost of
 revenues              50,444       60,303      160,473      171,495
   Gross profit        51,837       60,989      169,376      178,451

Operating expenses:
   Research and
    development        19,630       20,890       64,785       61,160
   Marketing
    and selling        27,614       29,989       88,880       89,909
   General and
    administrative      5,299        6,070       17,699       21,083
   Restructuring
    and other
    costs, net          8,303         --          8,549         --
   Amortization
    of acquisition-
    related intangible
    assets              5,088       14,862       30,640       54,454
     Total operating
      expenses         65,934       71,811      210,553      226,606

Operating loss        (14,097)     (10,822)     (41,177)     (48,155)
Interest and
 other income, net        605          849        3,996        3,126
Loss before
 income taxes         (13,492)      (9,973)     (37,181)     (45,029)
Provision for
 income taxes             700        1,250        2,300        3,750

Net loss            ($ 14,192)   ($ 11,223)   ($ 39,481)   ($ 48,779)

Net loss per
 common share -
 basic and diluted  ($   0.55)   ($   0.45)   ($   1.55)   ($   1.99)

Weighted average
 common shares
 outstanding -
 basic and diluted     25,745       24,794       25,513       24,480



AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(in thousands)
                                           Sept. 30,     Dec. 31,
                                              2001         2000
                                          (unaudited)
ASSETS:
Current assets:
   Cash and marketable securities          $ 76,418     $ 83,206
   Accounts receivable, net of
    allowances of $11,927 and
    $11,384 at September 30, 2001
    and December 31, 2000, respectively      75,537       90,047
   Inventories                               21,667       21,102
   Prepaid and other current assets          11,864       11,750
       Total current assets                 185,486      206,105

   Property and equipment, net               26,532       26,136
   Acquisition-related intangible assets      3,993       30,316
   Other assets                               1,638        3,925
       Total assets                        $217,649     $266,482

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
   Accounts payable                        $ 17,665     $ 28,775
   Accrued expenses                          53,814       55,962
   Deferred revenue and other
    current liabilities                      28,687       24,783
       Total current liabilities            100,166      109,520

   Long term liabilities, less
    current portion                          13,594       13,449

   Purchase consideration                       463        5,663

      Total stockholders' equity            103,426      137,850

      Total liabilities and
       stockholders' equity                $217,649     $266,482