Good day, ladies and gentlemen, and welcome to the Fourth Quarter and Fiscal Year 2014 Digi International Earnings Conference Call. My name is Kim, and I will be your operator for today. At this time all participants are in listen-only mode. Later we will conduct the question and answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Steve Snyder, Chief Financial Officer. Please proceed.

Good afternoon and thank you for joining us today. Before Joe give you our business updates, I would like you remind you about a few administrative items. First, we issued a press release regarding our quarter and full year results earlier today. If you do not have a copy of our earnings release, you may access it through our Investors website at www.digi.com. Second, I would like to remind you that some of the statements that we’ll make on this call are forward-looking. These statements reflect our expectations about future events and operating plans and performance, and speak only as of today's date. These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause our actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under the heading, Forward-Looking Statements in our earnings release today and under the heading Risk Factors in our 2013 annual report on Form 10-K and subsequent quarterly reports and other filings with the SEC. We undertake no obligation to update publicly or revise these forward-looking statements for any reason. Finally, certain of the financial information disclosed on this call or in our earning release include non-GAAP measures. The information required to be disclosed about these measures, including reconciliations to the most comparable GAAP measures, are included in the earnings release. The earnings release is also an exhibit to a Form 8-K that was filed earlier and can be accessed through our website. Now I would like to introduce Mr. Joe Dunsmore, Chairman, President and CEO.

Thank you, Steve, and welcome to the call, everyone. Now for to report on our business, we are very pleased that our fourth quarter revenue of $51.6 million reached the midpoint of our guidance of $50 million that we provided on our call at the end of the last quarter. Earnings of $0.02 per share were towards the low end of our GAAP guidance range. Hardware sales exceeded our expectations and services revenues were flat sequentially but close to our expectations for the quarter. Hardware sales were led by all time high quarterly sales of growth of hardware products and also bolstered by sales from our mature product lines that surpassed our expectations to the third straight quarter. Our cellular product line led the growth of 15% sequentially and 31% from last year’s fourth quarter. Additionally, we have the strongest RF products sales quarter since Q2 2012. Mature product sales in Q4 were down 0.4% sequentially but increased to 1% year-over-year. Sales of our services offerings remain flat primarily due to softness in our CRM consulting business, the under utilization of consulting labor that had been retained for higher expected sales from our CRM business was the main driver that led to lower than anticipated overall gross margins in the fourth quarter. We continue to expect a modest revenue wrap to occur in our services business through fiscal 2015. This is fuelled by more robust sales pipeline driven by a group of new sales account managers that we’ve hired earlier this year and are now fully on boarded. In Q4, we landed notable deals across multiple industries including transportation, medical, retail and industrial. For example, a very large public transit system in North America planned to deploy our cell routers for cellular connectivity in new passenger payment systems. Also, a…

Thank you, Joe. I’ll start with my comments on our fourth quarter financial performance. As Joe indicated, we are pleased with how we ended the year, an attraction we saw in our top line during the fourth quarter. Our revenue for the fourth fiscal quarter of 2014 was $51.6 million. This was a slight increase of last years’ fourth quarter. It also is the highest quarterly revenue number we’ve reported since 2011 and a sequential increase of 7.8% from the third quarter of 2014. These are very good metrics. As a group, the growth hardware products were up by 9.4% in the quarter from the prior year. This growth was driven primarily by cellular gateway products. Mature product sales were very stable and registered an increase of 1% on a year-over-year basis. As Joe mentioned, our service business was challenged throughout the year, while our service revenues looks flat sequentially in the beginning of how where we had anticipated we experienced a 31.8% decrease from the year ago quarter mostly attributable to challenges within our CRM business. Geographically, we saw strength in North America. Total revenue in North America was up 3.6% year-over-year. Product sales up 13% in the quarter from a year ago partially offset by the decline in services. Internationally, all geographies except Europe were up on a year-over-year basis. Europe had its best quarter of the year this quarter but was down on a year-over-year basis due to our particularly strong fiscal 2013 fourth quarter. Gross profit was $23.6 million or 45.8% of revenue in the fourth quarter of 2014 compared to $26 million or 50.5% of revenue a year ago. Our gross profit decrease is primarily a result of two factors: service margins were up slightly on a sequential basis but continued to lay down an…

[Operator Instructions] Your first question comes from the line of Mike Walkley from Canaccord Genuity. Please proceed. Michael Walkley – Canaccord Genuity: Great thanks. Steve just building on the guide for the full year, can you help us with how to think about maybe the gross margins for the three divisions and how they might trend for the year?

Sure. Generally, we expect to see stabilization in a modest uptick in the product side. We expect to see a more substantial gross margin percentage increase on the services side. On the whole, I’d say stable to modest uptick. But not just to recall Mike, not returning to fiscal 2013 levels. Michael Walkley – Canaccord Genuity: Okay and with that type of outlook would that kind of back into maybe flattish year-over-year absolute OpEx levels?

That actually would a modest increase. Michael Walkley – Canaccord Genuity: Modest increase. Okay, great that’s helpful. And then just on some of the new announces during the quarter, the transport deal that seems like a nice deal. How big do you see that market potential and can you maybe size that deal for us and was it an impact to the current quarter, is it more in the bookings for the future growth?

Yes, so that deal is a nice deal for us. In general what we are saying is with the transport product line we seeing real robust growth. I think in the neighborhood of 30%, when you look at the entire cellular product line including transport and our cell gateways year-over-year, so real robust growth with really strong momentum with the gateway and router business. Transport specifically, the cell routers we’re targeting key markets, the utility space, transportation, retail and in transportation specifically there’s lot of interesting deals that we’re working on. This one, to give you a sense of deal size, it’s a good size deal. It’s over a million revenue and we’ll begin to see that revenue this year. It’s a real interesting application. We see a lot of these types of applications for cell routers in buses, in subways, in these types of systems so we’ve won many, many deals in this particular segment so and these deals tend to be pretty good size. Michael Walkley – Canaccord Genuity: And just building that are these, upgraded these cellular technologies to current customers or these competitive deals you’re winning from like a Novotel or somebody else in the market?

While these tend to be new deals, new customers. Michael Walkley – Canaccord Genuity: Okay then, thank you. And maybe just one last on the services and then I’ll pass it on. Can you update us there just on I know you have some things in the works and if you are keeping the people there for utilization but any color on some projects and how they are coming together, just give us some light on gross margins?

Yes, so that’s an excellent question Michael. I wanted to spend a little more time talking about this. So, to give you a sense of why we’re in a flat time period here with the services business, 20-20 hindsight is always wonderful. So, as we look at what we’ve seen is that we had a big focus on trying to drive building the sales organization at the same time they we’re building the ability to provide facility with the technical consultants, the business analysts etcetera that we need for these types of deals. And what we found was, the sales ramp up, bringing a sales team on board and getting them fully on boarded and effective took longer than what we expected and so we’ve been on a time period where we’ve had more fulfillment resources than we need at the moment as we’re ramping up the sales capability. Good news is we’re starting to see the benefit of having the sales people fully on board and we’re now seeing the beginning of a sales pipeline ramp in that business. So, we feel like as we look at the next quarter it’s looking flat to up and if we look at out further it’s looking, the pipeline is looking optimistic that we can expect a ramp up in sales and better utilization of those resources. When you look at the color underneath that what are the kinds of deals that we’re seeing, we’re seeing some significant deals. I’d say it’s exactly the way we’d like it to be. Most of the deals or majority of the deals are service club, where we’ve got a very strong brand. We’re a platinum partner with sales force, at dream force we won the innovation partner of the year for our service club implementation with the Lawgreens and we’re the first to achieve Service Club Masters certified status of any partner. So, the way I would color it is, it tends to be service club customers that are ramping, it tends to be right now 18-20 existing follow on deals, 20% new deals and we’re feeling that pipeline begin to ramp. Michael Walkley – Canaccord Genuity: Okay sounds great. Thank you.

[Operator Instructions] The next question comes from the line of Howard Smith from First Analysis. Please proceed. Howard Smith – First Analysis Securities Corporation: Yes, good afternoon. Just wanted to follow up on a kind of a discussion on services side and having the people on the bench, so to speak. If you are looking to have 5% to 15% growth which is I think what I heard on the services line, and we think about that layers in? Do you get the utilization with the people you have at those types of levels or is there some further adjustment that might need to be done?

Yes, we believe that if we maintain at this level and we get 5% to 15% growth that will begin to see gross margins averaging up into the 30% and above kind of range and then continuing from that point of time. We think we can get there fairly quickly. Howard Smith – First Analysis Securities Corporation: Okay that was really my only question. Thank you.

All right. Thanks Howard.

[Operator Instructions] Thank you ladies and gentlemen, that concludes our question and answer session. I will now turn the conference back to Joe for closing remarks.

Thank you. This is my last quarterly call with all of you. I want you to know that I thoroughly enjoyed working with all of you throughout the years. This is I think my 60th call and I will see you on the golf course. Thanks.

Ladies and gentlemen that concludes today's conference. Thank you for your participation. You may now disconnect and have a great day.