Krall out as Avid Technology President and CEO
By Ken Kerschbaumer
Avid Technology President and CEO David Krall is stepping down at the end of July and will be replaced by Nancy Hawthorne, current board member and former chairman, as the company’s interim CEO. The board begins an immediate search for a new CEO. Krall will be available as a consultant to the company during the transition period.
The move comes after a challenging few years at Avid when the company was attempting to integrate a number of companies it acquired, including Pinnacle Systems. Pinnacle Systems brought with it expertise in graphics and storage technology but also a consumer editing system division that placed Avid immediately into the consumer retailing market. The company’s stock has also fallen roughly 50% from its high in 2005 to just above $31 (it’s currently at $37.39).
“Avid Technology has experienced tremendous growth in recent years, through new technology introductions and strategic acquisitions that have broadened the company’s product portfolio and bolstered its position in adjacent digital content creation markets,” said Krall, who has served as president, CEO, and board member for the past seven years. “With Avid’s twenty-year track record helping customers to create and distribute the world’s most compelling media – and numerous opportunities to expand across an increasingly diverse marketplace, the time is right for new leadership at the helm. I’m proud to have played a role in helping Avid become a leading technology and services provider that truly powers the world of digital media and entertainment – and would like to thank every Avid employee, customer, shareholder, and business partner for the contributions they’ve made to the company’s success.”
The challenge for the new president and CEO will be to figure out a way to enhance the company’s presence in the broadcast and post-production community while fending off Apple’s low-cost editing systems. Apple, which is rumored to have become interested in the nonlinear editing market only after Avid embraced the PC platform, has continued to make inroads into the professional user market, undercutting the pricing structure of editing systems from Avid and other manufacturers.
Commenting on behalf of the board of directors, current chairman Pamela Lenehan, said, “David has been instrumental in transforming Avid Technology’s business – and keeping it at the forefront of the digital media revolution. He has helped direct the company’s efforts to revitalize its postproduction business; secure a leadership position in broadcast news production; grow its audio business through market expansion and product development; and enter the consumer video and audio markets through acquisition. His dedication and loyalty to Avid have been unwavering – and we thank him for establishing a rich foundation upon which the company can build an even brighter future.”
Hawthorne, who currently serves as CEO of the financial advisory and investment firm, Clerestory LLC, has been a member of the Avid board of directors since 1997 and has worked closely with Krall and the Avid senior management team as the company has diversified its business and more than doubled revenues in the last five years.
“Nancy’s knowledge of Avid’s day-to-day business – plus her strong financial background and broad expertise with large companies – will serve the company well during this important leadership transition,” said Lenehan. “We’re fortunate to have Nancy engage in this role as we begin our search for a new CEO.”
Previously, Hawthorne was the chief financial officer of Continental Cablevision, Inc. from 1992 to 1996, where she was responsible for treasury, mergers and acquisitions, investor relations, accounting functions, and oversaw the company’s financial strategy and capital markets activities. Following Continental Cablevision’s merger with US West Inc., she became an executive vice president of the merged company, MediaOne.
Avid, which reaffirmed its Q2 guidance of $220M to $230M in revenue and non-GAAP EPS of $0.15 to $0.20, plans to release its financial results for the second quarter ended June 30, 2007 on Thursday, July 26, 2007.