Tom Fitzsimmons - Director, Investor Relations Louis Hernandez - President and Chief Executive Officer John Frederick - Executive Vice President, Chief Financial and Administrative Officer

Buzz Zaino - Royce & Associates Russell Lynde - Park West

Good day and welcome to the Avid Q2 2014 Earnings Conference Call. Today’s conference is being recorded. (Operator Instructions) I would now like to turn the conference over to Mr. Tom Fitzsimmons. Please go ahead. Tom Fitzsimmons - Director, Investor Relations: Good morning. I am Tom Fitzsimmons, Director of Investor Relations for Avid. I’d like to welcome you to today’s call. With me today are Louis Hernandez, Jr., Avid’s President and Chief Executive Officer; and John Frederick, Executive Vice President, Chief Financial and Administrative Officer. Before we get started, we wanted to note that during this presentation we will be making forward-looking statements, including among others, statements related to our recently filed financial statements, future performance related to revenue, operating expenses, earnings, bookings, backlog and free cash flow, our future strategy and business plans, our product plans, including Avid Everywhere and our objective to obtain relisting on the NASDAQ stock market. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Also these statements are based on expectations as of today, October 21, 2014 and we expressly disclaim any obligation or undertaking to update or revise these statements whether as a result of new information, future events, or otherwise. Please review the description of these statements and the risk factors described in our reports filed with the SEC. In addition, we have presented a number of non-GAAP financial measures that we use to monitor our business, including non-GAAP operating results, adjusted EBITDA, and free cash flow all of which are defined and reconciled to comparable GAAP measure in tables accompanying the release of our results. These non-GAAP measures reflect how Avid manages its business internally. Our non-GAAP measures may vary from all other companies presenting non-GAAP measures. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. Our non-GAAP information supplements and is not intended to represent a measure of performance in accordance with or disclosures required by generally accepted accounting principles. When analyzing Avid’s operating performance, investors should not consider these non-GAAP financial measures as a substitute for net income or other measures prepared in accordance with GAAP. We also reference bookings and backlog, operational metrics we use to measure our business. Our definition of bookings and backlog are included in our SEC filings and financial press releases. You may replay this conference call by going to the Investor Relations page of our website and clicking on the Events and Presentations tab. And now, I would like to turn the call over to our President and Chief Executive Officer, Louis Hernandez, Jr. Louis Hernandez - President and Chief Executive Officer: Thanks, Tom. Good afternoon, everyone and welcome. We are very pleased to have accomplished yet another major step in our journey with the filing of our Q2 results, which now brings us current with our SEC filing requirements. As I mentioned on our last call, John and his team have done a tremendous job in driving this long process to a close in a timely and methodical manner. We have also filed our application for re-listing with NASDAQ and believe we could be trading on NASDAQ later this quarter. Since our current management team joined Avid less than two full years ago, not only we have been busy with this unexpected restatement, but we have also made significant progress on our ambitious transformation strategy. As you recall, we completed an intense initial evaluation in the company, formulated a strategic vision and went immediately to work in executing the strategy. During our last call, I reviewed our insights on the changing industry dynamics and those critical pain points that are impacting our business models for our customers. I also discussed the sizable economic opportunity for Avid as we help solve those problems and reassert our role as the industry thought leader. I went into some detail about our strategic vision, our three-phase transformation designed to address the key industry pain points, while driving improved growth and profitability here at Avid. Well, today, I would like to give you an update on how we are doing in executing that strategy and our growth plans. I will start with sharing some key financial and operating metrics, which we believe will provide some insights into how our plan is working. I will touch on a few new product and service announcements that are designed specifically to leverage the power of our industry defining platform and examples of some of our customers who are benefiting from the Avid Everywhere Vision enabling them to solve some of their most painful issues. And finally, I will talk a little more about the competitive landscape and how that impacts our plan, specifically as it relates to our cloud and subscription offerings. I would like to review some selected financial and operating information, which offers some insights into how we are progressing with the execution of the strategic vision I talked about before and John will be expanding on those in just a few minutes. Based upon the results that we have seen so far and our outlook we are raising our 2014 guidance for adjusted EBITDA and providing a range for both bookings and free cash flow. The increase in adjusted EBITDA guidance is the result of better than expected conversion of bookings to revenue and improved product mix and continued execution of our cost saving initiatives. During the first half of 2014, we observed an improvement in the rate of bookings that were converted to revenue, which we believe represents a trend that we will continue to see for the remainder of the year. The improved product mix is driven by an acceleration of bookings in our newer higher growth and higher profitable products and conversely lower bookings in the deemphasized or less profitable products. You may recall from our last call that we discussed how overall bookings have stabilized after a period of inconsistency and decline. We also described soon after joining the company how we completed a product rationalization analysis. And to give you a little more detail, this included determining which parts of the value chain we are growing, which parts we are participating in, which products led to higher cross selling and what the profitability profile was for each of the related products and our service offering. And it was based on this analysis that we began to deemphasize lower growth and less profitable products and emphasized and also build products that were designed to generate higher growth and higher profitability. The success of this strategy has resulted in more profitable product mix that I described earlier. And if you give effect to those products that we have been deemphasizing, the bookings growth has increased well above industry growth rates. As a result while overall bookings are muted by lower bookings from less profitable products, the mix provides greater comfort towards accelerated adjusted EBITDA. On the costs side we continue to see a positive impact from our cost savings initiative as our adjusted operating costs continued to decrease. In fact, non-GAAP operating expenses had decreased by $3 million over the last six months. We see an opportunity for additional cost savings as most of the efforts that we have done so far have been focused on non-personnel expenses preserving our resources to execute on our strategy. And we think there is more of such expenses available to reduce. Now, revenue visibility has also increased as backlog from transactions after 2010 have increased by about $34 million or 9% since the end of 2013. In addition, new platform sales of Avid Everywhere are more than double the comparable period and the newly launched subscription bookings have shown impressive initial adoption, reflecting broad acceptance of our strategy. Now, you may recall that the Avid Everywhere product strategy allows us to deliver existing products more efficiently, add new products in higher growth areas and makes it easier to cross sell and up-sell. Now Avid Everywhere is ideally suited for our larger enterprise clients, but it also allows us to more aggressively price and package our solutions to the independent professional market. So this flexible pricing structure for subscription and cloud-based delivery options will also increase our recurring revenue. Now a good example of the Avid Everywhere related surge is the momentum in platform unit sales. Through June of this year, platform unit sales on a trailing 12 month basis have more than doubled the same period of last year, reaching nearly 1000 units, all of which represent opportunities to expand our participation in our customers’ technology spend. And a significant portion of these sales are some of the largest and most influential media organizations in the world who seem to be adopting our platforms the soonest. As you recall, we self-launch our subscription offering for Media Composer just a few months ago. And we have been pleased so far with the adoption even without the help of a formal marketing campaign. Our subscription and cloud offerings allow us to address the need of the independent professional market in a way that can be priced and packaged more competitively to that market. Now, just imagine for a minute if somebody can use the same tools that are used for television shows such as Game of Thrones or movies such as the Life of Pie or Gravity for only $49 a month via the cloud. Historically, we have seen independent professionals who felt abandoned by Apple with Final Cut Pro or maybe they turned Adobe as they were the only viable down-market option. Most in the industry appreciate that few can match the capabilities and breadth of Avid’s offerings, but without a cloud or subscription option, they were largely priced out of using the best-in-class Avid product suite. Well, now with Media Composer offered on a subscription basis, those same professionals have the ability to access the best tools with the pricing model that works for them. So, we will be more actively marketing the Media Composer towards the end of the year and more completely in early 2015 when additional modules at the Avid suite will be made available creating what we feel will be the most comprehensive cloud-based suite in the industry well beyond the simple creative tools that some of our competitors offer. Now, you will also note that the first of our cloud-based subscription offerings will be what we consider to be anchor products, such as Media Composer, because this will not only allow us to drive revenue for new markets, but will also create a platform for future cross-selling in these new market opportunities. Now, as a reminder, we will continue to offer flexible license alternatives in addition to the subscription cloud offerings and we predict that larger enterprise clients will more carefully adopt the newer pricing models, while the independent professional market will likely be the early adopters of our cloud and subscription offerings and that’s what we are seeing so far. In addition to our expanded product suite, we are engaging more deeply with our community, which is an important part of our strategy to provide a better return on investment by having a clear view of the clients’ needs led by an impressive group of leaders in the industry, such as Richard Friedel, who is the EVP and GM of FOX Networks; David Rabinowitz, the SVP of Technology for Univision; Barak Moffitt, who is the Head of Strategic Operations for Universal Music. A good measure of our community engagement is the membership in our Avid Customer Association or the ACA, which hopefully you have heard about by now, it’s been talked about quite a bit in the industry. And we are excited to report that we now have over 1,300 members compared to the 800 or so we had back in April when we first launched the ACA. Let me move over now to product innovations and I would like to share just a few of our newer Avid Everywhere platform enabled innovations that we announced last month and how these can drive growth while supporting a more efficient business model for our customers. Now, just to remind you, you may recall that sharing common services on a single platform that can run both our applications and third-party applications is what makes everything more efficient and more integrated. And this is what has really captured the excitement about the industry to have the shared common platform, the Avid MediaCentral Platform. And let me give you a couple examples of why this is so powerful? So, let me take something that we recently announced called the Avid Resolution Independence. It’s an example of this strategy on full display. So, you probably know that the world is adopting higher and higher resolution to make the media experience richer. So, imagine for a minute that a change as simple as 4K will require every vendor in the value chain to make investments. So, from the camera manufacturer to the vendors involving the entire production process, even the consumer electronic manufacturers, so you at home can enjoy that 4K experience. In fact, just last month at IBC, almost every vendor had something to say about their proprietary approach to the 4K upgrade. So, every vendor has to address it in the value chain. And our customers after making this significant investment gets to look forward to the next costly upgrade when 8K comes around. And they basically throw out everything they have invested in and they do it all again. And this is how our industry works and one reason why the business model is under so much pressure. Well, with that Avid MediaCentral Platform that I discussed, this allows us to take a totally different approach to solving the problem at the platform layer. We can solve it once and allow it to be available for everyone. Now, Avid Resolution Independence is a foundational solution to this high resolution problem. Let me explain how it works. We basically address this at the architectural level. So if you think about your smartphone and the shared services that each of the apps have, this is underneath it all, so that each app can take advantage of the shared service. That’s how we saw the actual architectural level. It is a more – it scales fluidly with any resolution across the entire workflow, so that may mean 4K today, 8K tomorrow and who knows 64K, even 128K, there is really no architectural limit, it recognizes where you are on that journey and adapts to it either in proxy or native. So this is a pretty dramatic breakthrough on how to save the industry a lot of money, much more efficiently and still solve this transition that we’re in. So remember, a fundamental part of Avid Everywhere is choice and flexibility and this is what we are delivering with Avid Resolution Independence. The MediaCentral Platform is agnostic to resolution and demonstrates we think a quantum leap forward in this age of rapidly accelerating resolution. And you probably begin to appreciate it’s just much more cost efficient, it’s a more sustainable option for our customers to keep pace with this accelerating technology. So I’m not going to go over long list, but another innovation that I thought you might be interested in that demonstrates the power of the platform is something we call the connectivity toolkit. Now, let me again remind you of the problem. The problem is that you know this is such a fragmented industry with so much proprietary technology. The industry is spending a disproportionate amount of their budget just keeping everything connected. And with things such as 4K it just exacerbates the problem. So we wanted to end this issue with a simple yet powerful set of tools. So we launched a technology toolkit that allows anyone to connect to one of the most broadly used media technology platforms in the world simply and easily. The initial response had been overwhelming with hundreds of companies wanting to use this capability to connect to our platform and integrate more seamlessly. We have recently revealed the first set of certified partners who have leveraged this connectivity integration to seamlessly join the platform and make their products available in the Avid marketplace using the connectivity toolkit. So now customers can make technology decisions knowing that these partners are already integrated with Avid’s products and enjoying the benefits of that shared MediaCentral Platform without having to pay for expensive and cumbersome interfaces. In fact, the vendors that are connected to the platform can take advantage of that Avid resolution independence that I just described earlier, that’s solving their own resolution issues again by sharing the capabilities of a common platform. And for Avid, it allows us to participate much more broadly across the workflow to clearly demonstrate the value proposition and to extend our product offerings to include those of our partners in a efficient and highly repeatable manner. So we’ve made all kinds of other product announcements, there are too numerous to mention, but I did want to mention to touch on one last item, which is on our services side. Our global services organization unveiled the Avid Advantage, which is setting a new standard for services in our industry. Digital media technology services is around a $21 billion market and growing and in fact we are seeing more and more clients proactively look to us to support them in maximizing their workflow productivity, because we have such a comprehensive suite. And in some cases they actually want us to manage their infrastructure for them. So with the strategic nature of Avid Everywhere vision, we are seeing larger and more complex discussions with clients who are looking for services that complement our product suite. And we see this as yet one more opportunity to deepen relationships with customers and better access a large and growing market. Alright, so let me give you a couple of examples, we think that the value proposition is probably best told through examples of how our customers are using our products to solve their most painful issues while driving more meaningful participation across their workflow. And we are excited that the units that I talked about, the adoption is very broad and deep adoption in almost every part of the world, from Brazil to Qatar to New Zealand to Chad to Korea to Kurdistan and it’s really across all segments broadcast, station groups, film, audio, et cetera. I mean we are talking about customers like Al Jazeera, Sinclair Broadcast, ITV, Grupo Televisa down in Latin America, NBC, TV Global all of these clients have adopted major components of Avid Everywhere. And so, let me give you a couple of examples real quick. So let’s take dock10, dock10 is a leading European media service provider of cutting-edge content, creation, management and distribution services and they run what many consider the most technically advanced high definition production facility in Europe. That’s why I mentioned them. They have implemented a fully integrated end to end workflow all focused on the MediaCentral Platform. The new Avid workflow covers the entire content lifecycle from studio to post production, all the way to archive and distribution, just what we talked about with Avid Everywhere because this enables dock10 to greatly extend the reach of their business by allowing collaboration with geographically dispersed teams via the cloud, all working in real-time on projects that are housed in their highly resilient, secure and protected UK headquarters. We will give you one more example, closer to home here CBS News, they are adopting Avid Everywhere to fuel their upcoming CBS Interactive project, a much talked about next-generation project web streaming channel that will produce original content and repurpose existing content to fill a 24-hour interactive news channel. Now CBS News has adopted the Avid MediaCentral platform for ingest and play out news production, remote collaboration and content distribution across multiple social media and online video platforms such as Brightcove, YouTube, Twitter and Facebook all using Avid Everywhere. These customers’ success stories demonstrate we think the opportunity for Avid is more and more media enterprise and professionals to get on the platform. Now as many of you know we service some of the largest media companies and most renowned creative professionals in the industry mostly for broadcast video and audio, but we also have a pretty strong client base in both government and education. Now the Avid Everywhere approach allows each of these groups to tailor the offering for their unique needs in a much more efficient way. But I wanted to touch on some of the advantages Avid has. You see some of the major advantages that we offer include a comprehensive suite that extends well beyond linear editing. It includes creative tools for audio, for songwriting, for broadcast, for video, in addition providing tools to help with distribution, asset management, production management and a wide range of storage options. With our MediaCentral platform and applications such as Media Composer and Pro Tools to be offered through both on-prem and out – and cloud basis, we think we are very well positioned to participate in that growth. Alright, so hopefully you found this update helpful and share our excitement over the economic opportunity ahead of us. We are very pleased to be current with the SEC reporting and look forward to trading on NASDAQ again here in the near future. You can see that we have been making progress on our transformation strategy and pleased that it’s showing up in our results. The increasing guidance for adjusted EBITDA is a reflection of the acceptance of our strategy in the market and despite the results so far, we are still very early in our journey in solving the industry’s most important issues, leveraging our brand and distribution in a way that we think will create higher growth and higher profits. Now, I would like to thank again our investors for their patience and support. Since we had our first business update call about a month ago, we have had a chance to talk with many of you and are genuinely appreciative of the support and great feedback we have received. We look forward to continuing these discussions in person in the coming months. And in fact we are planning on embarking on a comprehensive and intensive schedule of one-on-one and small group meetings to make a more direct connection with you and share our vision for the industry and Avid’s opportunity for value creation. Alright, with that I would like to introduce John Frederick, our Executive Vice President, Chief Financial and Administrative Officer to review more detailed financial results. John? John Frederick - Executive Vice President, Chief Financial and Administrative Officer: Thank you, Louis. As you could imagine we are pleased to have filed our second quarter results and now be current with our ongoing SEC requirements. The team has been working extremely hard to get to the significant milestone and we look forward to moving forward in a more normal cadence of financial reporting. I would also like to echo Louis’ comments and thank the investor community for their patience and support throughout this process. So before I discuss the results I wanted to touch on the status of our NASDAQ listing. On October 8, we filed our application for re-listing on the NASDAQ Stock Exchange. Since this is the NASDAQ process, we can’t provide definitive timeframes for conclusion, but we do believe that we can be re-listed before the end of the year. Now, turning to the business, we have talked a lot about our strategic vision and about our three-phase operating transformation designed to create value through both growth and efficiency. Because there is so much happening in a relatively short period of time, it’s important to identify the right metrics to accurately measure performance. On our last call, we discussed how bookings, adjusted EBITDA and free cash flow were all effective measures to gauge our performance. We believe that our Q2 results, demonstrates good progress. Bookings for the second quarter were $128 million, a 6% increase over the same quarter of last year and the fourth consecutive quarter of growth. On a trailing 12-month basis, bookings increased about 4% annually. It’s good to see that bookings have stabilized over the past few quarters. And in fact, we have seen above market growth rates in these product lines that are central to the Avid Everywhere framework. This growth has been muted somewhat by a number of product lines, which we have deemphasized as they were low in low growth segments or low margin or not strategically relevant in the long-term. An example of strategically important product lines includes our platform products. On a unit basis, sales of our platform products in the last 12-month period are more than double to comparable period. Our solutions are designed to address some of the most intense industry pain points with platform sales are relatively small, but an absolutely key anchor component of our overall solution sale. Outside of the platform which is usually about 8% to 10% of our total deal value, the typical deal includes many of our other products like editors, media ingest buyout servers and storage. Thus, deal size can be comparatively large. And in fact, a larger and larger portion of our overall bookings are generated from transactions that include the platform. In Q2, about a third of our bookings came from deals that included the platform, which is up from about 16% in the preceding year. These platform sales not only helped fuel current bookings growth, but also serves as an anchor for future cross-selling, which is a major component of our growth strategy. However, larger deal sizes have led to longer sale cycles that is more typical of an enterprise solution sales cycle. This longer sales cycle coupled recently with the elongation of the restatement has added to bookings variability. Adjusted EBITDA was $10.7 million for Q2 and about $30.7 million for the first half of 2014, and approximately $70.1 million on an LTM basis. As we see growth from higher margin products and continue cost improvements, we have gained more confidence in our view of 2014 estimated adjusted EBITDA. We continue to believe that 2014 establishes an adjusted EBITDA for, from which we can expect to improve. Free cash flow was a positive $2.7 million as compared to a use of $2.7 million in the same quarter last year and up significantly from the first quarter 2014 free cash flow use of $14 million. Contributing to both positive adjusted EBITDA and free cash flow results was a continued decline in operating expenses. As a demonstration of our operational efficiency, second quarter non-GAAP operating expense was down sequentially and year-over-year by about 2%. As Louis discussed, we also believe there are some key – additional key operational metrics that will translate directly into value creation, namely platform unit sales, ACA member growth and subscription adoption. We believe it’s important for us to measure platform sales as it informs us about our ability to deeper penetrate our customers’ wallet. While important and it’s still a little premature to disclose subscription metrics since we launched that late in Q2 and we anticipate cheering our progress on this once we have a few more data points behind us. All of these financial and operational data points correlate to the success of our initiatives and reflect the hard work of the team over the past 18 months to move beyond this first phase of our operating transformation. So, I will now shift to our operating results on both a GAAP and non-GAAP basis. As a reminder, the tables in our press release provide a description and reconciliation of non-GAAP to GAAP results. As we discussed in some detail during our last call, the impact of the burn down of pre-2011 deferred revenue is meaningful. In the second quarter, we had approximately $24 million of revenue from pre-2011 transactions, down from $31 million in the second quarter of 2013. This $7 million decrease can obviously mask the underlying performance for revenue, gross margin as well as operating performance. Revenue for the second quarter of 2014 was $124.6 million as compared to $141.3 million from the second quarter last year. This year-over-year decline is attributable to the pre-2011 revenue burn down and the timing of revenue recognition related to certain transactions that shifted to the third quarter. For the second quarter of 2014, GAAP and non-GAAP gross margin were 59.5% and 59.7% respectively compared to GAAP and non-GAAP gross margins of 61.2% and 61.7% respectively in the same period last year. The decline primarily related to the lower pre-2011 revenue amortization. Although we did see an improvement in our direct product margins on bookings on a year-over-year basis and expect that trend to continue as we experience higher growth in some of our more profitable product lines, GAAP operating expenses were $76.6 million essentially unchanged from the same period in 2013. Second quarter GAAP operating expenses included approximately $6.7 million of restatement related expenses. Non-GAAP operating expenses were $67.7 million in the second quarter of 2014 as compared to $69.1 million in 2013. This decline in non-GAAP operating expenses is attributable to savings resulting from operational initiatives primarily related to lower headcount and personnel costs as well as cost savings generated by our efforts on managing indirect procurement. So, as an example, our companywide travel and entertainment expenses were down about 12% for the second quarter as compared to the prior year. Partially offsetting this reduction was an increase in marketing costs related to the Avid Connect Event just prior to NAB. If you remember, this was our first Avid Customer Association or ACA event at which we launched Avid Everywhere. As we mentioned before, ACA is one of our strategic pillars and a key area for growth for us. For the second quarter of 2014, non-GAAP operating profit was $6.7 million as compared to $18.2 million in the same period in 2013. On a year-to-date basis through June 30, 2014, non-GAAP operating profit was $22 million as compared to $32 million in the first half of 2013. I would note that the $10 million decline in the first half non-GAAP operating income includes $15 million less of pre-2011 deferred revenue amortization. So, next I would like to turn to the balance sheet. At June 30, 2014, our cash balance was $23 million, with $5 million drawn on our credit facility for working capital purposes. We expect to repay all amounts under our credit facility during the fourth quarter of 2014. Restatement related payments continue to impact our cash balance and we expect about another $14 million to $16 million of these payments from June 30, 2014 forward. The majority of these payments will occur in 2014, but there could be some residual payments that carryover into the first quarter of 2015. Accounts receivable as of June 30 was $49 million representing a DSO of approximately 36 days which compares to a DSO of 39 days in the first quarter. It’s important to note that until the amortization of pre-2011 revenue dissipates, changes in DSO may not be representative of working capital management effectiveness. Inventory at the second quarter was $55 million, which reflects a reduction of over $5 million from the end of 2013 and approximately $8.5 million from the same point last year. Our inventory continues to trend down as we improve our sales forecasting process and become more efficient with our supply chain. Our annualized inventory turns for the second quarter were 3.7 turns as compared to 3.4 turns in the same period last year. Deferred revenue as of June 30, 2014 was $430 million, which compares to $467 million at the end of 2013 and $514 million at the end of June 30 last year. Deferred revenue was lower due to the amortization of pre-2011 transactions masking growth for more recent sales activities. In fact, our deferred revenue balance at June 30 included a $126 million related to pre-2011 revenue as compared to $150 million at March 30 and a $176 million at December 31, 2013. Backlog as of June 30, 2014 was $543 million as compared to $559 million at the end of 2013. After normalizing for the impact of the pre-2011 deferred revenue backlog of $417 million increased by $34 million or 9% from the end of 2013. In addition to the three metrics that we discussed earlier, we believe the backlog is another positive indicator reflecting our improved revenue visibility. So now that we have discussed our progress through Q2, I will provide some updated guidance for the full year 2014. Specifically, adjusted EBITDA is expected to be in a range of $64 million to $72 million or approximately 12% to 13% of revenue, up from $58 million to $65 million prior – which represents our prior guidance. We continue to believe that this margin represents a floor from which we can continue to improve over time. Annual bookings are expected to grow between 0% and 3% as compared to the point estimate of 3% growth we previously shared. And we expect free cash flow generation to be in a range of $15 million to $20 million as compared to the point estimate of $20 million in our last update. The increase in guidance for adjusted EBITDA really is just a reflection of our improved expectations of bookings conversion to revenue and from higher product margins and continued cost reduction realization for the remainder of the year. These updates to our bookings and cash flow guidance reflect a few learnings. First, as Louis mentioned earlier, growth in our newer, higher margin products is accelerating and contributing more to the bottom line. However, as we rationalize our product portfolio and deemphasize less profitable products, it’s having a temporary drag on our overall bookings growth. Second, as we become more strategically relevant to our customers by providing solutions that address some of the industry’s most intense pain points, average deal sizes increased and the selling cycle now is more like a traditional enterprise selling cycle thus longer and has more period to period variability. This combined with the elongation of the restatement began to have a more meaningful impact on certain deals as customers were deferring decisions until we either file the restatement became current with our filings or we are successfully re-listed on NASDAQ. As we have successfully achieved two of the three milestones and expect to be trading on NASDAQ again by the end of the year, we therefore anticipate that this is a temporary phenomenon and will impact our long-term growth outlook. It’s also noteworthy that revenue on the larger deals often is deferred until certain milestones are achieved. So, it doesn’t have as much of an effect on Q4 adjusted EBITDA. As we see a trend towards larger deals becoming more prevalent, we feel it’s prudent to reflect some of this variability into our bookings and free cash flow guidance. I will briefly touch on some other updates to guidance that support our three primary metrics. Due to improved bookings conversion of revenue, we now expect that 2014 revenue to be down 3% to 5% from last year compared to the 5% point estimate that we provided in our previous guidance. We also expect that non-GAAP gross margins to be between 59% and 60% due to accelerated growth in our higher margin products. Our non-GAAP operating expense guidance remains unchanged at $265 million to $275 million. However, we expect to be trending towards the lower end of that range. We would expect our GAAP to non-GAAP adjustments to be approximately $26 million to $30 million unchanged from our prior estimates. As a reminder these items are associated with costs around the restatement, restructuring expenses, stock-based compensation and amortization of intangibles and related tax adjustments. As we approach 2015, we expect continued execution of our transformational strategy and further operational improvements to transfer into increased bookings and higher adjusted EBITDA margins. As I mentioned earlier, we have enjoyed talking with many of our investors and we really received some great feedback, including the desire for more direct interaction with the management team. And as you heard Louis say, we currently believe the most meaningful approach to engaging with the investment community is really through in individual and small group meetings. And as a result, we have decided to refocus our efforts on these sorts of meetings, so our investors can get to know us more personally. So, we will be sitting out on the road later this fall. Consequently, we are going to defer plans to host an Investor Day until 2015. With that, I will turn it back to Louis for some closing remarks. Louis Hernandez - President and Chief Executive Officer: Great. Thanks, John. Well, as we enter the last quarter of 2014 we are pleased with the progress to-date on executing our strategy and we think that lays the solid foundation for future growth. We believe that our sharp focus on sustainable growth and efficient cost structure and disciplined investment in our businesses on those areas to provide the highest return on capital, combined with the company’s transformational approach to succeed in the evolving competitive landscape offer unique and compelling value creation opportunity. You are going to imagine we are pretty happy to be current on the SEC filings and look forward to trading on NASDAQ in the near future. The increase guidance on adjusted EBITDA also represents what we believe to be a floor and provides strong value opportunities going forward. So on behalf of the entire Avid management team, thank you again for your support and we look forward to talk with you again soon. And at this time we will be happy to take questions. Operator?

Thank you. (Operator Instructions) Our first question comes from Buzz Zaino with Royce & Associates. Buzz Zaino - Royce & Associates: Good afternoon. Could you help us out a little bit with the recognition of revenue especially as we are going to define bookings and backlog on the new ways that you select your revenue?

So, really the key change between historical accounting methods and the current accounting methods really ends up in – it really ends up being the deferring revenue and recognizing it on an amortizing basis over the period of service that we are providing to our customers. So said differently, there is roughly say 70% of our products that we have recognized today like we did under the old model and about 30% of our revenue is being deferred and amortized generally over a fairly extended period of time say anywhere between say 18 months and as much as seven years. Buzz Zaino - Royce & Associates: Okay. Secondly, when would you be reporting third quarter numbers?

So we anticipate that we are going to be filing our third quarter results on a current basis that basically means that we will likely take advantage of the five-day automatic extension under the 12b25. So, essentially will be on time and getting back to a normal are reporting cadence. Buzz Zaino - Royce & Associates: Okay. And as you look at your growth going forward, your cash is much diminished, how are you ranging your banking facilities?

So, as you may have heard or we mentioned earlier, we expect to be fully paid off on our revolver before the end of the year. The real drag on cash over the past 18 months has been restatement related costs. They have been pretty substantial. We expect that the total costs associated with the restatement to be give or take roughly around $45 million. So you can imagine the impact on cash. Buzz Zaino - Royce & Associates: Okay. Lastly, I may have understood or misunderstood your comment on your EBITDA for the year, you suggested that would be a floor and that would then for – you would deduct from that that you would expect next year to be higher than that number?

Yes. So, we expect that our EBITDA margins to really be a floor and really be something that we can grow on a – grow of that. So that’s kind of a 12% to 13% roughly EBITDA as a percentage of revenue floor. The good news is, as we have been selling more of the platform related products, margins have been higher and that really adds to our confidence on the go forward, to be – to really set that EBITDA floor around that range.

But it’s just more directly, you understood that correctly. Buzz Zaino - Royce & Associates: Okay.

We expect that to be the floor and based on what we have seen so far the mix and the other things we have talked about, we think there is upside to that. Buzz Zaino - Royce & Associates: Thank you.

And next will be Russell Lynde with Park West. Russell Lynde - Park West: Hi, can you hear me?

Yes.

Clear, Russell. Russell Lynde - Park West: Hey, how are you? Just following on the previous line of questions, so I think you have said you expect your EBITDA margin this year to be 13%. And that includes $92 million of basically 100% margin revenue from pre-2011, is that correct?

Yes. Russell Lynde - Park West: So, to keep margin flat, you need to at least keep up with the decline in that amortization, correct?

That’s correct. So the burn down, the incremental burn down is say give or take $30 million and we have been – as you have seen we have improved bookings and the bookings that were – that where we are receiving growth are in places where we have higher margins, read for instance software. Russell Lynde - Park West: Right. So, in other words I think next year you have a $24 million headwind or something like that on a year-over-year basis from that burn down?

It’s a little bit high but it sort of sounds it’s about right. Russell Lynde - Park West: Okay. So, you have to – EBITDA has to grow by – yes, I mean EBITDA has to grow by at least that much for you to have flat margins essentially?

Yes, so essentially we would expect through the end of this year, revenue to be slightly down and our EBITDA margin to the percentage of revenue to be around 12% to 13%. We expect that to continue into 2015. Russell Lynde - Park West: But EBITDA margins have to be a lot higher next year for EBITDA to be flat, because revenues can be down?

So, we are saying that EBITDA margins set the floor, not EBITDA, not on absolute… Russell Lynde - Park West: Got it. EBITDA margins, that’s okay. And then, my other question is, you guys raised at the midpoint your EBITDA guidance for this year, $6.5 million, but lowered your cash flow at the midpoint by $2.5 million. Can you just help us bridge, what’s going on there?

Sure, it’s a great question. So, we are first of all – we are pretty pleased to see the convert – better conversion of bookings in the revenue and we are certainly happy with the higher margins related to the platform products and lower costs. So that’s helped, fuel our confidence around EBITDA guidance, but as you can imagine, one of the things that impacts cash is going to be bookings and the timing of bookings and as the selling cycle has elongated and how it’s been impacted by the restatement. We have revised our bookings guidance to 0% to 3%. And so what you can reasonably expect is, timing of bookings has an impact on cash flow, which is why EBITDA is higher and cash flow is slightly lower. Russell Lynde - Park West: With better margins and faster revenue recognition, it should have an impact on cash flow as well, right?

Yes, also bear in mind that our revenue recognition model is impacted by the roll in of the deferred revenue. So, at least as we sit here today, EBITDA isn’t as direct of a cash flow predictor as bookings is. Russell Lynde - Park West: Got it, okay. Thanks for taking my questions.

You are welcome.

Thanks Russ.

Thank you. That does conclude the question-and-answer session. And I will now turn the conference back over to Mr. Fitzsimmons for any additional or closing remarks. Tom Fitzsimmons - Director, Investor Relations: Well, thank you all for joining today’s call and we look forward to speaking to you soon. Thank you.

Thank you. That does conclude today’s conference. We do thank you for your participation today.