Avid Technology reports record results for third quarter 1995.

TESKSBURY, Mass.--(BUSINESS WIRE)--Oct. 26, 1995--Avid Technology, Inc. (NASDAQ: AVID) today reported revenues of $114.4 million for the third quarter ended September 30, 1995, an increase of 86 percent over $61.4 million recorded in the third quarter of 1994.

Both periods include the results of Digidesign, Inc., which was acquired on Jan. 5, 1995. Earnings per share in the third quarter of 1995 were $0.43, an increase of 72 percent over $0.25 in the same period of 1994. For the nine month period ended September 30, 1995, revenues were $296.7 million, an increase of 88 percent over $158.2 million recorded in the first nine months of 1994. Earnings for the first nine months of 1995 rose 13 percent to $0.71 per share from $0.63 per share in the comparable period of 1994. The results for the first nine months of 1995 reflect the effects of a one-time charge incurred in the first quarter in connection with Avid's acquisitions of Digidesign, Inc., Elastic Reality, Inc. and Parallax Software. Excluding this one-time charge, earnings for the first nine months of 1995 were $0.96 per share.

Curt Rawley, Avid's President and Chief Executive Officer commented, "In the third quarter we achieved our eighteenth consecutive quarter of record revenues and the highest level of quarterly net income and earnings per share in the Company's history. Sales for all product lines were strong, and I am pleased to report that Media Composer. sales topped 1,000 units for the first time in a single quarter. We also introduced Real Impact , our first PC-based multimedia editing software targeted at the corporate and multimedia production markets.

"During the quarter we signed a contract with DreamWorks SKG to jointly develop an all-digital, computer animation production process for feature films," continued Rawley "and we furthered several strategic relationships. For the highest end of our markets, we signed an agreement with Silicon Graphics to further our development efforts in delivering products for the broadcast and post-production markets. We completed a multi-million dollar agreement with Apple to extend our offerings in desktop editing both in our mid-range professional markets and in emerging mass markets. Regarding our disk-based camera effort, Ikegami strengthened its financial support for this critical project.

"We are pleased to have completed our recent 2 million share public offering of Avid Common Stock, which raised $85.5 million in net proceeds for the Company. And, while we are gratified by these strategic alliances and the robust demand for our products, we intend to continue to focus on tight expense control and the management of our balance sheet," concluded Rawley.

Avid Technology, Inc., headquartered in Tewksbury, Massachusetts, is an international developer and supplier of comprehensive solutions for capturing, creating, editing, and distributing digital media. Avid is a pioneering developer of nonlinear film, video and audio editing software and hardware and networking technologies for applications ranging from desktop video and post production to broadcast news. Avid's products are sold through direct sales offices and a network of distributors and resellers around the world. Avid and Media Composer are registered trademarks, and Real Impact is a trademark of Avid Technology, Inc..

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

                           Three Months Ended    Nine Months Ended
                             September 30,         September 30,
                            1995       1994      1995        1994
                              (unaudited)          (unaudited)

Net revenues              $114,377    $61,372  $296,719    $158,240
Cost of revenues            56,408     29,725   144,119      74,322
   Gross profit             57,969     31,647   152,600      83,918

Operating expenses:
   Research and development 12,834      6,997    38,184      18,339
   Marketing and selling    27,747     15,902    74,854      42,442
   General and
    administrative           4,459      3,034    12,803       8,490
   Merger costs                                   5,456
       Total operating
        expenses            45,040     25,933   131,297      69,271

Operating income            12,929      5,714    21,303      14,647
Interest income (expense),
 net                           (53)       431       720       1,266
Income before income taxes  12,876      6,145    22,023      15,913
Income taxes                 4,122      1,716     8,097       4,666

Net income                  $8,754     $4,429   $13,926     $11,247

Net income per common share  $0.43      $0.25     $0.71       $0.63

Weighted average common and
common equivalent shares    20,344     17,954    19,487      17,774
outstanding

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AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(in thousands)

                                 September 30      December 31
                                    1995              1994
                                 (unaudited)
ASSETS:
Current assets:
   Cash and marketable
    securities                     $105,420          $36,670
   Accounts receivable, net of
    allowances of $5,328 and
    $3,155 in 1995 and 1994,
    respectively                     92,836           54,805
   Inventories                       52,834           32,401
   Other current assets              18,835           14,555
       Total current assets         269,925          138,431

   Investments in marketable
    securities                                        15,221
   Property and equipment, net       46,941           26,377
   Other assets                       7,297            2,145
       Total assets                $324,163         $182,174

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
   Accounts payable and accrued
    expenses                        $44,190          $34,630
   Deferred revenue and other
    current liabilities              36,221           17,288
       Total current liabilities     80,411           51,918

Notes payable                         2,997            2,369

 Total stockholders' equity         240,755          127,887

       Total liabilities and
        stockholders' equity       $324,163         $182,174

CONTACT: Scott Higgins, I.R. Dir., [phone]

Patrice Burkett, Corp. Comm. Mgr., [phone]