Melanie Caponigro - Director of Accounting Simon Nynens - Chairman and CEO Bill Botti - Executive Vice President Kevin Scull - Vice President, Chief Accounting Officer

Good morning, ladies and gentlemen and welcome to Wayside Technology Group conference call. At this time all participants are in listen-only mode. Later we'll conduct a question and answer session. Please note that all callers are limited to one question each. [Operator Instructions] As a reminder ladies and gentlemen, this conference call maybe recorded. I would now like to introduce your host for today’s conference, Melanie Caponigro. Ms. Caponigro, you may begin your conference at this time.

Thank you and good morning. Welcome to Wayside Technology’s Fourth Quarter 2014 Earnings Call. Before turning the call over to Simon Nynens, the Company’s Chairman and CEO, I'll dispense with the customary cautionary language and comments about the webcast for this earnings call. We released earnings for the fourth quarter at approximately 5:00 PM Eastern Time, Thursday February 5, 2015. The earnings release is available at the Company’s Investor Relations Web site at waysidetechnology.com. Today’s call including all questions and answers is being webcast live and a rebroadcast will be available at www.waysidetechnology.com/earnings-call. This conference call and the associated webcast contain time-sensitive information that is accurate only as of today, February 6, 2015. A detailed discussion of risks and uncertainties are discussed in our Forms 10-Q and also in greater detail in our Forms 10-K. Wayside Technology Group Inc. sees no obligation to update and does not intend to update any forward-looking statements. Now, I would like to turn the call over to Simon Nynens.

Thank you, Melanie and good morning to everybody. Q4 revenue increased 5% in Q4 to 94.1 million, gross profit decreased to 11% and income from operations decreased 22%. For the year revenue increased 13% to 341 million, gross profit increased 2% and income from operations decreased 6%. In this year-to-date results are included severance and onetime expenses of about $400,000. In addition we invested in expanding our sales and support staffs and we added a field sales team all to support the great growth of our Lifeboat division. Our Lifeboat division represented 85% of our revenue in 2014. Cash and long-term receivables were 31 million and represented 78% of equity or $6.29 a share as of the end of December 2014. Working capital amounted to 79% of equity also at the end of December. Our Lifeboat division continued to perform very well, revenue was up 28% in Q4 and margin was up 8%. For the year, revenue was up 22% and margin was up 10%. Our TechXtend division underperformed significantly as compared to last year, revenue was down 57% and gross margin was down 50% for the quarter. For the year, revenue was down 20% and margin was down 19%. Let me start with TechXtend, we had the opportunity to close several large deals in the fourth quarter of 2012 and 2013, yet unfortunately we did not have the same opportunities this year. These deals were flexible payment plan deals, meaning they typically relate into long-term receivables. As a result of the lower volume cash increased as you saw on our balance sheet. Lifeboat performed very well in Q4, our margins stabilized and went up versus the first three quarters and we were able to further expand our reach. Looking at the future, we have realigned our sales forces in…

Thank you, Simon. As noted in our release, this was the tail of two quarters and the Lifeboat business grew over bust 28%, while our TechXtend segment retracted 57% when compared to the last year due to a decrease in our extended payment term transactions. Our investment and growth strategy in Lifeboat is beginning to show return as demonstrated by the 20% growth in the quarter with an 8% increase in GP as a result of our increase sales volume. TechXtend's overall business remains solid except for the extended payment term business which are traditionally large transactions. As stated previously we're focusing our efforts in TechXtend in New Jersey and the northeast and are beginning to see more solution opportunities that include higher margin opportunities. The new field sales organization brought on in Q3 and Q4 within Lifeboat are a big part of our increase expenses in Lifeboat, but are responsible for recruiting a combined 284 new resellers to the Lifeboat that should provide a good return in 2015. We're actively seeking partnerships with select vendors as part of our strategy to become more solutions oriented, similar to our announcement last week of a partnership with [indiscernible] storage. We continue to manage our expenses and build our product portfolio to help achieve our continued growth targets. Thank you. Simon, back to you.

Thank you, Bill. Kevin Scull will now report on the financial numbers, Kevin?

Thank you, Simon and good morning to investors, analysts and employees. I will discuss our fourth quarter financial results, both on a consolidated basis as well as by business segment. Net sales for the quarter were 94.1 million. This is compared to 89.9 million last year, representing a 5% increase on a consolidated basis. Sales for our Lifeboat Distribution segment were 83.8 million and represent 89% of our total revenues during the quarter. Lifeboat sales reflected 28% increase compared to Q4 last year. The increase in sales in the Lifeboat segment was mainly the result of the strengthening of our account penetration and the addition of several key product lines. Sales for our TechXtend segment were 10.3 million, compared to 24.2 million in Q4 last year, representing a 57% decrease. The decrease in sales as mentioned was primarily due to a decrease in our extended payment term sales transactions in the current quarter. On a consolidated basis, our gross profit was 7 million compared to 7.8 million for the fourth quarter of 2013 representing 11% decrease. Our gross profit margin for the quarter was 7.4% compared to 8.7% last year. Lifeboat Distribution’s gross profit for the quarter was 5.7 million, this compared to 5.3 million last year, representing 11% increase. This increase was primarily due to higher sales volume in the current year. Our TechXtend segment's gross profit was 1.2 million and decreased by 50% as compared to the prior year. The decrease in gross profit was primarily due to decreased extended payment sales transaction in the quarter. Vendor rebates and discounts for the quarter amounted 500,000 or 0.5% of net sales compared to 700,000 or 0.8% of net sales for the prior year. Total selling, general and administrative expenses were 4.2 million compared to 4.3 million in the prior…

Thank you, Kevin. Operator we can now start with Q&A session.

Thank you. I thank everybody for their interest in our company. We look forward to reporting our first quarter results in April of 2015.

Ladies and gentlemen, this concludes today's conference call. You may all disconnect at this time and thank you for your participation.