Avid Technology, Inc. (AVID: Quote), a provider of digital media content-creation products, said Monday it will sell its consumer businesses and cut about 20 percent of its permanent workforce. The moves are part of the company's efforts to focus on its Media Enterprise and Post & Professional customers and to drive improved operating performance.
Avid also said in a filing with the SEC that effective today, Kirk Arnold will cease to serve as the company's executive vice president and chief operating officer. In addition, Jason Burke, vice president of finance and principal accounting officer, will end his employment with Avid, effective August 10, 2012.
Avid's COO, Kirk Arnold, led the company's product development and management, sales, marketing, support and services functions. Prior to joining Avid in February 2008, she was CEO of Keane Inc, a global consulting and outsourcing company.
Aronld's extensive background in technology management includes leadership positions at Fidelity Investments, venture-backed start-up NerveWire, Inc. and and Computer Sciences Corp.
As Vice President of Finance, Jason Burke oversaw all of Avid's accounting, financial planning and analysis groups worldwide. Prior to joining Avid in May 2010, he served as CFO of the Business Analytics Division of IBM.
Prior to IBM's acquisition of Cognos, Burke held several senior finance positions at Cognos. Earlier, he had worked for Deloitte & Touche, in their assurance and advisory services group.
Burlington, Massachusetts-based Avid said it will sell its consumer audio and video product lines for total estimated proceeds of about $17 million. The two product lines contributed about $91 million of the company's 2011 revenue of $677 million.
Avid will sell its consumer audio products to inMusic, the parent company of Akai Professional, Alesis and Numark, among others. The company will sell its consumer video editing line to Corel Corp., a Canada-based consumer software company. Both transactions are expected to close Monday.
Avid intends to reduce the number of its employees as it streamlines operations. About 20 percent of the company's permanent employee base will be impacted by the divestitures and headcount reduction plans. The company expects the annualized cost savings, excluding product material cost, to be about $80 million.
Avid currently expects to incur a restructuring charge of about $19 million to $23 million related to these actions. The company expects to complete the reduction in workforce and related actions during the third quarter of 2012.
Avid expects the proceeds from the sale of these product lines will offset most of the restructuring charges in 2012. In addition, the company expects overall gross margins to improve in the second half of 2012 and further improve in 2013 due to favorable product mix and cost reduction efforts.
In Monday's regular session, AVID is trading at $7.34, down $0.09 1.21 percent on a volume of 14,248 shares.
| || |
| To receive FREE breaking news email alerts for Avid Technology Inc and others in your portfolio|
by RTT Staff Writer
For comments and feedback: email@example.com