In its announcement to the financial sector yesterday, Avid have published savings of up to $68 million in “efficiency gains” as well as “a new $105 million secured credit facility to enable the company to complete its “financial and operational transformation, on track and scheduled for completion by Mid-2017”.
They herald some of these savings as a result of its products that they have built around the Avid Everywhere vision, which Louis Hernandez, Jr, Chairman, President, and CEO of Avid describes as “to build our portfolio of products as applications on a single platform, the Avid Media Central platform has been central to our strategy to solve the industry’s most important issues with greater innovation, flexibility and efficiency. For Avid, 2016 will be marked by a focus on additional platform-enabled growth and efficiency initiatives, which will demonstrate our ability to generate a meaningful financial return for our shareholders. We are on track to complete Avid’s transformation by the middle of 2017 and position the Company for long-term sustainable and profitable growth”.
Avid have stated that they are completing the final phase of what they describe as a “talent alignment and facilities rationalization program where Avid is putting the right people in the right roles in the right locations with the right cost structure which will position Avid for the end of its transformation in 2017. In connection with this effort, redundant offices will also be closed or downsized. Personnel related savings account for two-thirds of overall efficiency gains. Many of the personnel related actions have already been completed with savings expected to be realized on an accelerated basis with each successive quarter. The remainder of the efficiencies will be achieved through consolidating and darkening under utilized facilities and further rationalizing spend on external vendors".
It would appear that the “cost efficiency program” has enabled Avid to negotiate a “five-year $105 million senior secured credit facility”. They have announced that the “proceeds from the term loan will be used to replace the Company’s existing $35 million revolving credit facility, finance the Company’s efficiency program and other transformation initiatives, and provide operating flexibility throughout the remainder of the transformation in this period of heightened market volatility”.
You can read the full announcement here but be ready for a lot of company and financial speak. This announcement is aimed at the financial markets and so it is in an appropriate language for that sector.
What do you make of this? Do you think Avid are finally turning themselves around? Can we read anything into the way Avid describe themselves to the finanical sector as “a leading technology provider for the creation, distribution and monetization of media assets for global media organizations, enterprise users and individual creative professionals”.