Good morning and welcome to Spok’s Fourth Quarter and Year End Investor Call. Today’s call is being recorded. Online today, we have Vince Kelly, President and Chief Executive Officer; Shawn Endsley, Chief Financial Officer and Colin Balmforth, President of the company’s Operating Company. At this time for opening remarks, I will turn the call over to Mr. Endsley. Please go ahead, sir.

Good morning. Thank you for joining us for our fourth quarter and 2014 year end investor update. Before we discuss our operating results, I want to remind everyone that today’s conference call may include forward-looking statements that are subject to risks and uncertainties relating to Spok’s future financial and business performance. Such statements may include estimates of revenue, expenses and income, as well as other predictive statements or plans, which are dependent upon future events or conditions. These statements represent the company’s estimates only on the date of this conference call and are not intended to give any assurance as to actual future results. Spok’s actual results could differ materially from those anticipated in these forward-looking statements. Although these statements are based upon assumptions that the company believes to be reasonable, they are subject to risks and uncertainties. Please review the risk factors section relating to our operations and business environment, which we compete contained in our 2014 Form 10-K, which we expect to file later today, and related documents filed with the Securities and Exchange Commission. Please note that Spok assumes no obligation to update any forward-looking statements from past or present filings and conference calls. With that, I’ll turn the call over to Vince.

Thanks, Shawn, and good morning. We’re pleased to speak with you today about our fourth quarter and 2014 operating results, what we believe of an outstanding year for Spok. Key accomplishments during the past year included strong performances for both our software and wireless sales teams, integration of our two operating subsidiaries, expansion of software sales in both international and domestic markets, continued improvement in wireless subscriber and revenue trend, implementation of our rebranding program and new corporate name and strengthening of our senior management team. On a consolidated basis, we met or exceeded our internal expectations, as well as our external financial guidance for revenue and operating expenses. We also made significant progress last year toward our goal of becoming consistently growing business and long-term provider of critical communications solutions. In addition to these important achievements, consolidated revenue for the fourth quarter increased for the second consecutive quarter. Software revenue and bookings reached an all-time high and our backlog and pipeline remained very strong at year end. At the same time, wireless trends continue to improve as paid return reached its best level in more than a decade and we ended the quarter ahead of our operating goals for total revenue and gross placements. Overall, we met or exceeded virtually all of our operating goals, enhanced the product offerings, expanded our market reach, strengthen our balance sheet, operate profitably and once again returning capital to stockholders in the form of cash dividends and share repurchases. Shawn and Colin will provide details on our financial performance and operating activity shortly, but first I want to review some other key results for the fourth quarter and 2014. Number one, continued demand for our software solutions in wireless services resulted in consolidated revenue of $200.3 million for 2014, a decline of only…

Thanks, Vince. Before I review our financial highlights for the fourth quarter and 2014, I would again encourage you to review our 2014 Form 10-K, we expect to file later today as it contains far more information about our business operations and financial performance than we will cover on this call. As Vince noted, we were pleased with our overall operating performance for the fourth quarter and 2014 along with the substantial progress we made toward meeting our long-term business goals. Record high software revenue and bookings along with improving wireless trends contributed to positive cash flows and a strong balance sheet at year end. In addition, results were consistent with our previously announced financial guidance for 2014. Given this performance, we believe we are well-positioned for another successful year in 2015. In the interest of time today, I want to review our fourth quarter income statement on a line-by-line basis. Since much of that information is contained in our news release schedule and federal filings. However, to the extent you ask specific questions about our quarterly financial results, we glad to address them during the Q&A. Rather I want to focus instead this morning on four specific areas and may be of interest. They include first, a review of certain factors that impacted fourth quarter revenue. Second, a review of selected items that impacted fourth quarter expenses, third a brief review of deferred tax assets in the status of our valuation allowance along with other balance sheet items and fourth, our financial guidance for 2015. With respect to revenue for the fourth quarter, total revenue was $51.3 million, our highest quarterly revenue for 2014 and with the second quarter in a row in which consolidated revenue grew quarter-over-quarter. Of the total, software revenue reached a record $19.6 million, wireless…

Thank you, Shawn, and good morning. The fourth quarter and 2014 was another record setting quarter as well as our highest quarterly software bookings to-date. Our sales and marketing teams helped us close Q4 with software bookings of $22.3 million. Included in this figure is 125% increase in new logo business from the fourth quarter of 2013. In total, 2014 bookings were up 23.7% over 2013 with an overall increase of 62.4% in new logo software bookings over the previous year. Our long time customers continue to place their trust in us by returning for upgrades to their existing applications, adding new products and expanding that portfolio of communication solutions. For example, a mid-sized northwestern hospital needed a solution to help keep patient data secure and protect patient privacy while getting providers an easy way to communicate with one another. Already a customer for our contact center solution, this hospital selected Spok a secure texting application, Spok Mobile, because of that positive experience with us, the application device diagnostic design and our ability to offer guidance and expertise around communication strategies. A mid-sized southeastern hospital added our clinical alerting solution to their product portfolio after patient exit surveys noted dissatisfaction with nurse responsiveness. To decrease response times and improved patient satisfaction, this hospital seeks to send messages from their nurse call system directly to the staff’s wireless communication devices. At a small specialty hospital on the East Coast, also added our clinical alerting solution. This robust software is used by our customers to route myriad device, alarms and alerts. In this instance, the customer will centralize alerting for 24 different building monitors including supply systems sensors for oxygen, medical air, nitrous oxide and both gas and liquid nitrogen. They want notification of service disruptions to appear directly on staff monitors…

Thank you, Colin. Before we take your questions, I want to comment briefly on several items that may be of interest. First, discuss our current goals with regard to our operating margins, second, briefly update you on our current capital allocation strategy and third, review our business outlook and key initiatives for 2015. With respect to our current goals for operating margins, our target is to run at an EBITDA margin up 20% or better. That is where we expect to be for both the first quarter of 2015 as well as the full year. During 2014, our growth and expansion led to increased investment costs in developing new solutions for delivery in the public safety segment that we believe can be leveraged in the future. As an example, we’ve recognized many of our wins in the several military space required common solution that allow for better efficiency going forward along with improved supportability and consistency in customer service. Additionally, our fourth quarter professional service cost was higher due to our increased use of more costly third-party professional service providers help deliver on customer commitment as evidenced by our fourth quarter software revenue results. Note our software revenue was up $2.7 million over the third quarter. We’ve recognized this during the quarter and put plans in the place to rebalance our resources in 2015 and do more with our internal service teams. Those plans are already bearing fruit in terms of our margin improvement which we’ll talk about next quarter. Further, our equipment costs were higher in the fourth quarter due to a number of deals that included a higher ratio of third-party hardware and software, which generally have lower margins in our typical software license heavy deals. We made a number of changes to how we approach bidding these…

[Operator Instructions] We’ll take our first question from Rich Murphy with Cross River. Your line is now open.

How you guys doing. I’ve got a question on the guidance for 2015. How should we look at that revenue growth in terms of, are we looking at about a 5% decline, continued decline in the wireless, and Amcom growth at 10%? And I have a follow-up after that.

Yes, Rich, we don’t break out the guidance by the wireless versus the software, I mean you can look at the trends and probably come up with the pretty good approximation and you probably are fairly close right there. Our guidance for revenue this year, it’s interesting if the same range of consolidated revenue that our guidance was for last year, so we’ve been in a business that for the last 10 years has been primarily a wireless business supported by paging infrastructure, and as you know paging has continue to erode over the years, although that rate of erosion continues to slow, but every year, our revenue in total was going down. So from a management perspective, it’s nice to see revenue finally starting to stabilize a bit and then obviously our goal is on a consolidated basis to have revenue that grows on a year-over-year fashion and we’re very much focused on that as a strategic outcome and so far so good.

And on the Amcom, in all of the stuff you talked about on marketing type, it seems all very positive, and you had 30% growth in the Amcom business from 2012 to 2013, that was around it looks like a slower growth this year, around 3%. Is this going to be a lumpy, I’m just going to trying to understand that, it seems like a very big adjustable market, the healthcare space. How do I view, since it is a relatively new company, the type of growth expectations?

Well, our bookings group quite a bit this year which when I look at our business, and I think about what’s important, operations bookings for 2014 was over $45 million and in 2013, it was $35 million. So, we sold a lot this year relative to past years and ultimately bookings, when the products and solutions get installed and the revenue gets recognized, bookings turn into revenue. So, we’re very happy with how the software business is growing. It’s doing what we expected it to do, and it’s beating its plan for revenue, and that’s what’s it really matters.

And so I should look at bookings, is bookings a good lead indicator, essentially?

Absolutely, yes.

Okay. Could I ask one more question?

Yes, go ahead.

On the capital allocation, you have $107 million in cash, you talked about M&A, you’ve done a good job on obviously, the dividend side you seemed to mention a little more on this call about the special dividend. I’ve been with the stock a long time. I was used to the dollar special dividend at the end of the year. The business – just from your guidance, you business is going to generate about $45 million in EBITDA with a $170 million in cash. What would preclude you from and I guess how are you thinking about that cash balance with a business that generates a lot of cash? And you said, I guess in relation to your comment that you think the dividend ratio is sufficient.

What we said this year is that we would return $26 million in capital of our shareholders, so that would be a big percentage if you will the free cash flow that the company generates is only about $11 million of that and I’m using round numbers, is the recurring dividend. So, the other $15 million would be to share repurchases and/or a special dividend and we wouldn’t make a decision to pull the trigger on the special dividend to round the end of the year as we have the share repurchase plan function. So that’s how we’re thinking about that, yeah, that does mean our cash balance in total, we’ll grow during the year even after distributing $26 million to our shareholders. We’re using that as I said in my prepared comments, there are other things we might do, we might do a more aggressive stock buyback, we might do extra special dividends. We might do an acquisition. We’ve been disciplined on acquisitions. I will tell you that we’ve look at a lot of companies, I’m sure this is no surprise to anybody, but there is a lot of financial sponsors out there, there is a lot of cash out there, chasing deals on the private side, and the private market valuations have gotten really high, almost bubbly from my perspective and in some cases quite frankly, so we haven’t pulled the trigger on some of those obviously for those reasons. So we are watching this very closely, we will continue to look at it. We think we are giving back a lot of capital this year, but we know we run for shareholders, we are a shareholder friendly company, and we will continue to evaluate that.

Great, thanks. Good quarter, guys.

Yeah thank you very much.

[Operator Instructions] We will take our next question from Josh Paulson with Claragh Mountain. Your line is now open.

Yes hi, good morning.

Hi Josh.

I was wondering if you could comment on, let me think in your modeling for software sales will surpass your wireless revenue, I realize this will probably be a few years down the road. I wanted to hear your thoughts on long term growth of your software business, and a decline or a more stabilization of your wireless revenue.

You know you are on the right track, let me just say that each year we managed to work very hard, in the fall, we complete what we call our long range plan, which is a five year, it’s more than a five year forecast, it’s much more than a set of projections because it includes a lot of market competitive information, who are the players are out there, we really kind of break everything down by product analysis. So we actually have that, however we only provide guidance on an annual basis, and so you know we don’t say here is what we expect to be two year from now, or three years from now. Obviously, the focus of this business is to grow on an aggregate basis. And we had a Board meeting yesterday and I told the Board management team that those are not for the software revenue to hurry up and exceed the wireless revenue. We absolutely want that to happen, but we want to keep that wireless revenue as long as possible as well. You know we go into big customer accounts, in the old days, we’d go – I don’t want to name the specific accounts because we’re probably not allowed to, you know you go to a nationally recognized healthcare institution, and you will be having a meaning, and they were customers who both our software and wireless, and there would be six people from our company in the meeting because you’d have three people from the software side and three people from the wireless side, and the CIO would look at you and say, why do we need all these people from Spok, and back in those days, it was USA Mobility and Amcom, why do we need all these people. Now we don’t do that, we have got one integrated sales team, we send less people into those meetings, and we service everything, so at some point, yeah, software is going to exceed wireless, but we want to keep that wireless as long as possible. We will continue providing guidance on – annual guidance, we have been pretty good at beating the midpoint of that guidance. In finest spot, the midpoint of that guidance is not far off from you know kind of how we are forecasting and then we worked very hard to beat that forecast. So I hope that gives you a little window into how we think about the business and how we are managing it.

Yeah indeed, I have follow-up as well, if it’s all right. So I was wondering if you could comment on, I know you talked a little bit already about the deferred tax asset, but I was wondering when do you expect to use the remainder of that, current deferred tax asset.

So we’ve been – I’d say, it’s fair to say relatively conservative with respect to releasing the valuation allowance and the deferred tax asset. That I think is going to change over time, we are now in I guess it’s couple of years in a row now where we have gotten better results with our software top-line than what we had forecast internally. And so we are building I think a confidence in our ability to understand and know that business. We had been very, very good on the wireless side in terms of being able to forecast and hit numbers and beat numbers, and on the software side, you know bookings, things like that could be a bit lumpy, and it’s a little bit different of the business, not always is predictable. We have done a number of things over the past couple years to make it more predictable and now it in fact it is, and we are getting better at that. So I’d imagine that each we will take a look at that and we look at it on an annual basis, and we can use a little bit lower of a discount rate, we can use a little bit longer of a projected term, and probably take some of that allowance off over time.

Great thanks.

Yeah.

And it appears we have no further questions at this time. I’ll turn it back to Mr. Vince Kelly for any closing remarks.

Sure. Thanks very much for joining us. We look forward to speaking with you again after we release our first quarter results. That will probably be in about 60 days. So everyone have a great day, and hopefully this is the last snow storm most of us in the country get this year. We will talk to you soon, good bye.

This does conclude today’s teleconference, you may now disconnect. Thank you and have a great day.