Good day, ladies and gentlemen, and welcome to TASER International’s Fourth Quarter 2013 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions). As a reminder this conference call maybe recorded. I would now like to turn the conference over to, Mr. Rick Smith, Chief Executive Officer. Sir, you may begin.

Thank you and good morning to everyone. Welcome to our TASER International’s fourth quarter 2013 earnings conference call. And joining the call remotely today is, I have an opportunity to address over 300 Chiefs of Police at the California Police Chiefs Conference. So as can happen when doing these things remotely, there’s some risk of technical issues in which case Dan will deliver the entire call today, but let’s hope that doesn’t happen. So before we get started I’m going to turn over to Dan Behrendt our CFO to read the Safe Harbor statement.

Thank you Rick. Statements made on today’s call will include forward-looking statements including statements regarding our expectations, beliefs, intentions or strategies regarding the future, including statements around projected spending. We intend that all such forward-looking statements be subject to the Safe Harbor provided by the Private Securities Litigation Reform Act of 1995. The forward-looking information is based on current information and expectations regarding TASER International, Incorporated. These estimates and statements speak only as of the date in which they are made, are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. All forward-looking statements that are made on today’s call are subject to risks and uncertainties that could cause our actual results to differ materially. These risks are discussed in our press release we issued today and in greater detail in our Annual Report on Form 10-K for the year ended December 31st, 2012, under the caption of Risk Factors. You may find both of these filings as well as our other SEC filings on our website at www.taser.com.

Thank you Dan. As a reminder we are going to be accepting some questions via twitter during the Q&A portion of the call, which can be submitted using the hash tag #TASR_EARNINGS. That’s TASR_EARNINGS after the hash tag. To follow up on our updates on Twitter during the call you follow the account at TASR_IR. We’ll be posting graphics and commentary during the call. And for those of you without Twitter all updates and graphics will stream directly to our Investor Relations website at investor.taser.com. I’m eager to share with our investors the results of the hard work from the past year on today’s call. First off, we hit a record in terms of revenues for the second quarter in a row recognizing $40 million on a consolidated basis. This marks the eighth consecutive quarter of year-over-year top-line double-digit growth. And 2013 was the second year in a row for record revenues with nearly $138 million. We’re working hard to execute our strategy to grow the top line and invest in the right opportunities. And I think the fourth quarter 2013 as a whole, our evidence that are efforts are working. Our view to progress leads to TASER’s three core strategies today. First the CEW upgrades, second International and third dating dominant market share in the cloud computing and aware able technology space for public safety. To start I’d like to share the traction in the EVIDENCE.com and Video segment. So EVIDENCE.com and AXON bookings saw its second consecutive quarter of bookings in excess of $5 million. For the full year of 2013 bookings grew $10.7 million or 282% to $14.5 million. EVIDENCE.com and Video segments GAAP revenues in the fourth quarter grew 33.6% to $2.5 million compared to last year’s fourth quarter. We think this is EVIDENCE of the…

Thanks Rick. As Rick said in the fourth quarter consolidated sale were $40 million, a 24.6% increase from the fourth quarter of 2012. The increase in sales is primarily driven by the continuation of the upgrade cycle with agencies upgrading to the new X26P and X2 Smart Weapons, combined this attributed $15.9 million in the fourth quarter. AXON cameras and EVIDENCE.com sales also grew by $0.5 million to $1.4 million in the fourth quarter of 2013. And sales of our cartridges increased to $1.5 million in the fourth quarter result as a result of several year-end distributor stocking orders like our X26 revenues declined by $0.6 million in the fourth quarter result of agency integrated in this smart weapons platform. There are still some international federal customers who continue to purchase the X26 because they’re selling CEWs improve for their market application. We’re working with these customers to get them the review and [indiscernible] 8.18, 3 smart weapon platform. Historically we’ve been announcing the percent of the installed basis upgrades to their legacy weapons to the niche smart weapon platform each order. However we feel that the trade in credit as its declined over the last year more customers are choosing to upgrade weapons outside our formal program and therefore not making into our metric. Due to this we would no longer be tracking this metric publicly, but we still feel that the upgrades are still a large opportunity for us as evidence by the fact that we continue to see very strong sales in North America and in the new weapons but it’s – it’s becoming a less meaningful measure as that upgrade credit is dropping, agencies chose to upgrade outside our program. Gross margin for the third quarter was $25.6 million or 63.8% of revenue which is up…

Thank you. [Operator instructions]. And our first question comes from Steve Dyer from Craig Hallum, your lines open please go ahead. Steve Dyer – Craig Hallum Capital: Good morning guys, very nice quarter.

Thank you Steve. Steve Dyer – Craig Hallum Capital: On the welcome side of the business we’ll start there and I know you’re not going to give out kind of a percentage upgraded anymore, but I don’t know whether you used the base fall analogy or what but how would you sort of I guess [indiscernible] anecdotal and how the upgrade cycle is progressing?

Hi Steve, this is Dan. I think we’re really happy with where we are right now. I think a lot of the strong results received, especially in our North American business or directories also of that upgrade cycle. So I’d say from a baseball perspective we’re still in the early innings. I think that we’ve discovered as we’ve produced that training. I think the good news is we’re seeing lots of trading activity but we’re seeing less of our customers actually choosing upgrades through a formal program that’s going ahead and finding the unit because it at this point the bundle we’re selling, it’s kind of worked the economic. In some cases they decided they’d rather just buy the TASER without the warranty and not get the trade-in credit. So we, out of the growth engine for 2014, that there’s a good part of the market, and I’d say the majority of the – still will be upgraded so I think we still think that can continue to provide plenty of growth for the company. Steve Dyer – Craig Hallum Capital: As you look at the number of handles in the field, they’re over five years old. Is that number still growing by the day or has the upgrade got to the point where the average so to speak is now started to shrink?

Yeah I think we’ll probably still say we’re probably still seeing some growth in the total number of units over five years old, just because we’re getting into some strong sales here five years ago. But you know I think even at a steady pace there’s still a large opportunity for us where if we can for upgrade anywhere from say 12% to 15% of that over 15 year cover, over five years old each year. That’s going to provide very strong base for the North American business. Steve Dyer – Craig Hallum Capital: And then lastly on the video business it sounds like you’re going to end the life of the X26 are you also going to end the life of the cartridges at that point in time or will there be a tail there as well for a while?

Yes so for the X26, the life of the X26 trial is in 2003. We’ll not sell that commercially after 2014 but we’ll continue to support that program from our warranty perspective through the end of the decade. The cartridges for the X26 like the product the X26P uses that same cartridge. So we’ll continue to sell that cartridge for the foreseeable future because the new platform will take the same cartridge. Steve Dyer – Craig Hallum Capital: Okay. Jumping to the video business, it looks to me, at least what I can tell that almost anybody that announces a vendor you’re winning the vast majority of those fields. Do you have any kind of a win rate that you’re willing or able to share that you’re using and you’re marketing in the sales process?

[indiscernible] that we can share. I think we’re very satisfied and I think we’re getting as competitive situation as we think that the customers are really appreciating towards the end of the solution And – we can differentiate the data transfer machine which makes the, ejects the video, significantly more efficient than anything, any product we’re competing against. And then there’s low customers especially larger agencies which is that really are getting that message well and people are doing a good job delivering that message. Steve Dyer – Craig Hallum Capital: And I guess that teams like 2013 was sort of the year that the video solution moves from a bunch of smaller agencies using it to at least getting on the radar of the larger agencies. Do you view 2014 as the year you start to see some real meaningful deployment of the large agencies or are you not there yet?

Hey Rick do you want to take that one, I know customers out in the field?

Yeah. We do expect this year to larger deployments then we’ve seen historically. There are a number of RFPs on the street right, for the 1000 or 2500 unit sort of ranges. We’ve been actively engaged with those accounts. And we think we’ve got a very good shot at them whilst we’re hearing a lot of rumbling and activity internationally on cameras. That is a number of our PDOs that are coming out there as well. We think we’ve got a very good shot at. So coming into this year, we see several deals that are larger than anything you’ve sold to date. And are in the pipeline as you know it will all be disclaimer language here about the inherent riskiness of those that and are not in the bag until we’ve got them. But we certainly do see the opportunities are getting larger and I think that’s a function of some of these agencies moving from the test this out to okay we’re going to make this part of our standard operations. And we hope to see that continue through the end of the year. Steve Dyer – Craig Hallum Capital: And internationally it was always my understanding that you know having a data center or the data itself. How in this country was sort of a big deal for a lot of countries is that sort of receding a little bit or because I’ve seen a lot of the stuff internationally as well and was not sure how much you guys think you can play there?

Yeah. We certainly think we can play, we have – running in Amazon data centers and Brazil and in Europe. And I believe we have one up and running or we’re close in Australia. We’re managing to work that they do have data centers around the world and we can at very low cost bring up additional instances. Those are mostly being as read as support field trials, we’re certainly in discussions with some of the larger international agencies that they want to see the data in their country and may not, and maybe frankly some discomfort even around using an American vendor I’ve just given all the PR about what’s been happening with the NSA. So the good news for us is Amazon’s getting sort of market share clout, but there are a number of competitors that are arising. That are making it a goal of theirs to make it easy for Amazon customers to deploy on the competing cloud that are local companies in some of these different countries. So we haven’t done that yet, but we do have plans in place of ... we’re not going to be losing business or shut out of these countries by the fact that we’re going to require these sort of data. We do have a very strong preference to work with our customers. Not to try to... house the data on-site, there’s just a whole bunch of challenges in doing that. Foreseeing that most customers are getting comfortable, that if we get it in country, that we’d be able to use a reputable local cloud provider. Again those deals are... we haven’t announced any of those because we haven’t closed any substantial deals. Actually we’re more in test mode. So those are challenges that I think we’ve got a number of ways we can work through them. Steve Dyer – Craig Hallum Capital: Thank you, I’ll hop back in the queue.

Thanks’ Steve.

Thank you. Our next question comes Greg McKinley from Dougherty. Your line’s open please go ahead. Greg McKinley – Dougherty and Company: Gross margin, so those have been continuing to improve. Can you just remind us where you were with trade-in credits, where you are now, where you see the company migrating to over the course of this year? And then maybe comments as well the degree to which your direct sales efforts are expanding those margins, and where we are in the process of that playing out?

Yeah, so we started the year with about $130 or so in r credits. We’ve kind of worked that down throughout the year, so we’ve been having sort of incremental reductions each quarter in order to create sort of urgency for our customers. And one of the things we announced earlier, one of the earlier calls was the fact that the market to understand what that proper sort of upgrade credit amount is which tell us important to have some kind of upgrade credit available for customers to encourage them to take weapons that are over five years old but still in working order. And sort of make some guy see his weapon. So you can see that it’s important I think what the new program get – $185 we’re selling the upgrade today but we’re also pre-selling the next upgrade at five years. And I think it’s good for our customers to take this capital expense and turn it into operating expense. And it’s good for us in order to have that predictability of knowing that you’re going to get a customer to upgrade in five years versus having to try to resell them on an upgrade opportunity. So I think it’s certainly we’re the company has increased prices again in 2014. We’re sort of taking sort of inflationary side price increases to our product across the board each year. And I think our customers understand that. And certainly we’ll continue to, to help to maintain this margin – but once they will see a little bit on a consolidated margin business – basis is that as the business scales up and we’ll have a little bit of a mixed pressure in that the video products. We did, well we lowered the prices, for the hardware we think that hoping the drive adoption which is great – as you know there’s not as higher margin on the camera sales, the real margin for us from our camera service opportunity. So we may as benefit as scales up we may see little bit of a mix shift as the video becomes more bigger part of the total but we certainly feel like it is fair to – add above 60% on a go forward basis. Greg McKinley – Dougherty and Company: And deciding to capture – you started the year at 130, were did you end the year at?

85. Greg McKinley – Dougherty and Company: 85. And then, but if the purchase, a sort of TASER Assurance Plan, they’re getting an $85 credit for the new TASER plus $100 credit for when that users replace five years from now is that what you said?

No it’s actually – what they get is, they get this is starting in the first quarter. They get $85 and if they choose to also sign up the TASER Assurance Plan they also get $100 off their first payment for their next TASER so $85 immediately. And then say the payments are $200 a year for a five year, that first payment is $100 instead of $200 towards their next TASER. Greg McKinley – Dougherty and Company: Okay.

This is Rick just to clarify on that the net sale, like if we for rounding purposes say it’s a $1000 sale if they just take the trading credit. They’re going to be getting a $1000 less $85, so they did with that $915. If they take the additional $100 by signing up for TAP then there’s going to be the $200 initial payment to get on the TAP plan. And they get the 185 off that but the cash sort of at the time of purchase goes up from $915 to $1200 less $185 gets you to actually a $1015. Greg McKinley – Dougherty and Company: Okay. That’s helpful can you give us a sense for maybe the number I guess I could probably go back and compute it but the number of licenses that you’ve booked now with EVIDENCE.com. And maybe because I know you give us your booking rates I think that also includes the AXON hardware sale. Can you give us a sense for maybe how many licenses have been booked for EVIDENCE.com and what the aggregate booking value of that software sale has been? So we get a sense for future revenue recognition off of the basis that exist today.

Yeah we probably can’t go to that level of granularity I could tell you right now on the balance sheet there’s we’ve seen the deferred revenues associated with the video business actually increased from last year by about $2.7 million. The booking number includes future invoice amount as well. That’s not when we book $5 million in a quarter – we don’t always invoice that full $5 million some of that maybe, if somebody starts a three year deal with me. I’ll be like customer initially and then and the anniversary of year one and year two for that three year deal, so some of those bookings would be invoiced in the future. But as far as the total license count we’re providing the unit sales each quarter. If this business continues to evolve, what – we’re going to continue to look for what the metrics are. We’re using the sort of to manage the business and we’ll share that as appropriate in the future.

This is Rick. Just add little more color to that. We just wished to a per user seat model in the fourth quarter, prior to that we were doing a per camera model. And so it’s a little hard for us to blend those two together. So as we get people off the per camera model and on to the per user model we’ll have little more clarity around to how to best characterize the numbers of seats. Greg McKinley – Dougherty and Company: And so Rick by that do you mean for example there might be three shifts occurring during the day that would use that individual camera for eight hours per in the past you’re selling one license for that camera but now you’re selling three. But the virtual users know that.

Correct wherein before we had a model where we included the first year free. And the price of the camera we’ve now bifurcated that. And so we’ve been able to lower the net per license cost to the customer. Now we’ve moved to a per officer for exact reason you just talked about. Greg McKinley – Dougherty and Company: Okay. And then I know you just made reference to your Brazil distributor, disagreement is that, how important is that in terms of you tapping the opportunities in the market I know one of things that people are focused on is obviously some big emerging events, world sort of stage events in Brazil over the next couple years. How you feel about your opportunities in Brazil in sort of resolving any distributor issues there?

Bill I’ll take that one. So the issue with the – distributor we terminated the agreement, guys we didn’t believe that maybe who is going to be able to get the job done. And we believe there were breaches of the agreement. He obviously doesn’t see it that way. So the risks with these trial is pretty much just that we had hit for some damages. We don’t see it impacting our presence in Brazil. We see that we’re in a much stronger position with the team that we have addressing the Brazilian market than we were with our former distributor. So I wouldn’t think about in terms of imputing our ability to operate in Brazil. It’s just risk. You never know what the jury is going to do and we’re in trail right now. In terms of the opportunities in Brazil we see there’s obviously a lot of opportunity we’ve had lot of interest around the cameras. We’ve not yet been able to get the government to improve our plan to bring up a local manufacturing partner so that we can reenter with the weapons. There’s tremendous amount of pressure from our customers the police agencies down there, are clamoring the TASER devices back in country. They are not happy with the local competitor which one – that’s what lead to the block for us to be able to get import licenses. So there’s lots of customer pressure, we’ve been aggressively working the market. It really just comes down to politically, when we can get the approvals to start reselling in the market. We think there’s a lot of demand and there is anything that requires regulatory approval, an approval at high government level. It’s not really predictable if and when we’re going to get that approval but we’re working pretty hard. Greg McKinley – Dougherty and Company: Thank you.

Thank you. Our next question comes from Glenn Mattson from Sidoti. Your line is open. Please go ahead. Glenn Mattson – Sidoti & Company: Yeah hi good morning everybody. Just a question about the TASER CAM that’s kind of the older legacy product, we did see that go down this quarter which probably was pretty back from the video product sales. Are we starting to see kind of natural cannibalization of that product? And is that something to expect to continue throughout ‘14 or to accelerate it at all?

This is Dan. I think the TASER CAM I think lot of the TASER CAM sales are driven by agencies or even countries that are sort of mandated that when they buy a TASER they opt to buy the TASER CAM with it. We certainly see the AXON Flex and AXON Body having a higher utility and really been sort of better value for customers which gets the ability to cash every eventful gain. The adverse all the events that involve the TASER and certainly one of the things that we see if the video product is – is having they opt this perspective with the whole of that TASER CAM doesn’t do as good a job of doing that because you only capture from when the TASER comes, lots of things happened before that. So we did bother certainly like to see our customers migrate to the AXON Body and Flex because we think it’s a – provides a higher utility of our value for them. Yeah we wouldn’t be surprised to see overtime the market shift over to the newer product. Glenn Mattson – Sidoti & Company: Okay is there any way you can explain there seems like there was a bit of surge in that in Q3 and then even Q4 was down, still a decent quarter for TASER CAM. Is there a way to explain what happened there it was just – just serious orders came in?

Yeah actually Q3 was driven by one significant order, international order where they do mandate the TASER CAM for any of the TASER purchases for that market. So we saw that in Q3 it’s just the International business that, little bit lumpier so it’s that sort of one large order that drove much more to that change. We did see again a number of customers that continue to buy the TASER CAM it’s a good product. We redid that product over the last year in order to create the new features and functions for that but again I think it’s just really very customer specific. Again its, in lots and lots of places what we try to view is, in places where they have those rules in place they have to buy a TASER camera we’re trying to get them the sort of – those for that instead of just need to buy an officer video camera with the TASER because we think that’s the better, better utility and better value for. Glenn Mattson – Sidoti & Company: Okay and then last thing on the investments in internationals, it’s still kind of the big three markets that surveyed you’re going after UK France and Brazil. Is any other new areas that you’re – you’re also investing in?

Yeah we’re continuing yeah those are the primary that, that’s – in Europe and Brazil but we’re investing really around the world as far as capabilities west side marketing collateral, trade shows type expenses. And really just working sort of hand to hand with the distributors to make sure that we support them and some people are appropriate to help them to grow their businesses as well. Glenn Mattson – Sidoti & Company: Okay, great. Thanks.

Thank you.

Thank you. And I’m showing no further questions at this time. I’d like to hand the conference over back to Mr. Rick Smith for closing remarks.

Thank you everybody for your time this morning. Obviously we’re very proud of the hard work our team did. It’s not every day you to turn in result like this, but as report the 2014 we see lots of indicators. Again there’s an opportunity for the EVIDENCE.com and AXON to really go mainstream. We’re seeing a lot of opportunity internationally on both sides of the business. Were very excited to be, – looking forward to a great call a year from now. And thanks for – stuck with us over the years as we made the investments that have made 2013 possible. And everybody have a great day.