TheStreet.com Q3 2008 Earnings Call Transcript

TheStreet.com (TSCM)

Q3 2008 Earnings Call

October 29, 2008 4:30 pm ET

Executives

Becky Updegraph - Investor Relations

Thomas Clarke - Chairman and Chief Executive Officer

Eric Ashman - Chief Financial Officer

Analysts

Colin Gillis - Canaccord

Richard Fetyko - Merriman Curhan Ford & Co.

Mark May - Needham & Company

Michael Moskoff - MRM Capital

George Grose - American Capital Partners, LLC

William Morrison - ThinkEquity Partners

Brian Murphy - Sidoti & Company

Presentation

Operator

Welcome to the Q3 2008 TheStreet.com earnings conference call. (Operator Instructions) I would now like to turn the presentation over to your host, Ms. Becky Updegraph, Head of Investor Relations. Please proceed.

Becky Updegraph

I’m going to start with some required language and then turn it over to our CEO.

Some of the statements made on this earnings call not related to historical fact may be deemed to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements which may concern TheStreet.com’s financial performance, as well as its strategic and operational plans, are subject to risks and uncertainties that could cause actual results to differ. The company undertakes no duty to update any such statements.

The risks and uncertainties are described in the company’s SEC filings which are on file with the SEC and available at its website at www.sec.gov. Additional information will also be set forth in TheStreet.com’s quarterly report on Form 10-Q for the quarterly period ending September 30 2008 which will be filed with the SEC in the near future.

I now turn the call over to Tom Clarke, TheStreet.com’s Chief Executive Officer.

Thomas Clarke

Thank you, Becky. Thank you for joining us today to review our Q3 2008 financial results. I will review our overall performance for the quarter and then turn the call over to our CFO Eric Ashman.

It is safe to say that we are operating in an environment that has as its hallmark rapid change in volatility to such a degree that few of us have witnessed before. As online advertising demand softened in the quarter, we remained focused on investing in our growth initiatives and delivering on some major product enhancements that will enable us to emerge stronger and more diverse when conditions improve.

So the real question is how to maximize success going forward. As we weather this cyclical economic downturn, the strategy that we will employ has, as its foundation, many of the initiatives that we began in the past few quarters. In reviewing some of these strategies, we were very opportunistic to raise cash when we did. The result is that we have a very strong balance sheet.

With $80 million in cash, no debt and with more than $16 million in deferred revenue, we are well capitalized. In an environment where cash is king, we are positioned to utilize this asset to build greater market share as we further develop our core strategies. In raising this cash, acquisitions was certainly on our mind. However, the disconnect we have seen between public and private valuations has us waiting for better opportunities in 2009. In the interim, we will continue to focus on further enhancement and fuller integration of our current properties while the market revalues itself.

I am confident that in this environment, companies that did not or are currently unable to raise cash will provide us with ample opportunity for strategic alliances or acquisitions.

In reviewing our third quarter performance, it is very much a story of revenue shortfall. Bottom line results on both a sequential and year-over-year basis were adversely affected as revenues slowed. As the quarter unfolded, we made two critical decisions that will have an impact on our longer-term growth and success.

We maintained premium pricing across our network for display advertising, and actually began to increase pricing at Promotions.com as we focus that business on the larger, global brand opportunities that can deliver scale and higher margins. We also continue to focus on delivering full price subscription services, including new services that continue to be priced above our current average selling price.

Second, we continue to invest in the parts of the business that we believe will drive our future growth. Like many others, we were hit by the speed at which this money market deteriorated. As we have discussed in the past, our network of sites has almost exclusively focused on display advertising. One of our goals has been to reduce this dependency while moving our offerings into a more performance-based structure. We have launched a hyperlink model on BankingMyWay in partnership with Informa, bringing this new business model onto TheStreet.com network. We have worked with Geezeo to launch their financial products marketplace, bringing the lead-gen revenue model into play as well.

Let me now talk specifically about Promotions.com. The fall-off in business due to the worsening economic environment really took its toll. Revenues slipped from $3 million in the second quarter to $1 million in the third. Promotions.com has built up a roster of larger brand clients that verbally commit to a certain number of promotions to be created and run throughout the year, which serves as the foundation of our forward-looking projections for that business.

These campaigns are the largest and most profitable within the Promotions business. Although the relationships with clients remain intact, cancellation of a large number of these campaigns and postponement of others throughout the third quarter decimated its revenue. In conducting a full review of its cost structure, we have already taken aggressive steps to boost profitability and will continue to identify more opportunities to enhance financial performance. We continue to believe that Promotions is a valuable asset to the company. Promotions works with our large advertisers to develop custom ad solutions and campaigns, a process that will continue to help us increase our ad revenue. Promotion’s strong pipeline and a recent win of several marquee accounts gives us reasons for optimism as we approach 2009.

In this environment, it is important to note the benefits of our subscription business. As many of you are aware, I have been a strong supporter -- and at times, defender -- of this business as part of a multiple revenue stream model.

Our subscription business throws off a lot of cash and provides a strong, consistent stream of deferred revenue. I remain a believer in this business and we will continue to introduce premium subscription services, such as the recently introduced Biotech Select Newsletter in early September. This new product introduction and some new marketing initiatives allowed us to see growth in this segment during the month of September and this trend has carried itself over into October.

I would also like to talk about some of the newer areas of our network that are poised to help accelerate growth. To capitalize on the progress we have already made on some of our newer properties, we brought on board a general manager to lead BankingMyWay. With a diverse background in business development as well as operations, I have great confidence that he is the right leader to drive the future growth of BankingMyWay.

In addition, now that MainStreet.com 2.0 has launched, we have built on that success by hiring a new general manager with strong entrepreneurial credentials to further the strategy of combining quality partnerships with superior, internally-generated content. I expect each of these experienced pros to help us enhance and further integrate our current properties, as well as to lead the expansion into additional revenue models that will further contribute to our success.

We have one corporate governance item of note. The board of TheStreet.com has separated the positions of Chairman and Chief Executive Officer. Effective immediately, co-founder Jim Cramer has been appointed Chairman. This will allow me to focus 100% on the business during these difficult economic times.

Now I will turn it over to Eric Ashman, our CFO, to review the financial performance of the company in more detail.

Eric Ashman

Thanks, Tom. As Tom mentioned, while we achieved a number of strategic goals throughout the third quarter, our financial results were adversely affected by the macroeconomic environment. While total revenue for the third quarter of $16.7 million represents an increase of 4% over revenue of $16.1 million reported for the third quarter of 2007, total revenue was down 15% sequentially and was significantly lower than we had anticipated.

On a sequential basis, the company saw a $2 million decrease in Promotions.com revenue as verbal approvals on campaigns failed to convert to signed contracts for the quarter. In the advertising business, the economic headwinds diluted the usual end of quarter demand and led to some campaign cancellations, leading to a sequential decrease of more than $900,000. With a $2.9 million revenue shortfall and costs virtually flat -- excluding $650,000 in one-time charges -- the bottom line clearly suffered.

On a year-over-year basis, the company swung from a profit of $3.8 million, excluding the impact of a non-cash income tax benefit of $16 million taken in the third quarter of 2007, to a loss of $1.1 million in the third quarter of 2008. The increase in advertising revenue of 18%, while respectable in this environment, was not sufficient to overcome the $2.2 million year-over-year reduction in revenue from Promotions.com in our subscription services business. This revenue shortfall, coupled with an increase in sales and marketing expense of $900,000; an increase in depreciation and amortization of $800,000; reduced investment income of $200,000; and a one-time charge of $650,000 accounts for the bulk of that swing.

As the economy and the stock market experienced a series of shocks throughout the third quarter, it became clear that TheStreet.com network was a place to go to get the answers for the questions on people’s minds. To that end, we had a record 8 million average monthly unique visitors in the third quarter, an increase of 27% over the prior year and the largest average monthly unique visitor total we have ever delivered.

We continue to believe in our long-term strategy to develop a network of sites that connects our audience to topics focused on all things money; a diversified revenue model that includes an increasing percentage of performance-based advertising will deliver future revenue and profit growth.

I now want to take a few minutes to provide a little more color on the quarter. Taking a closer look at revenue, marketing services -- which includes advertising and the interactive marketing services business of Promotions.com -- totaled $6.5 million for the quarter, a decrease of 7% over marketing services revenue of $6.9 million recorded for the same period last year.

We delivered advertising revenue totaling $5.4 million, an increase of 18% over the $4.6 million in the prior year. Consistent with what we saw in the second quarter, the display advertising business saw little, if any, incremental increase in spend as the quarter progressed.

More importantly, as we moved deeper into September we began to experience cancellations from both our financial and non-financial advertisers both for third and fourth quarter campaigns and our visibility became less and less clear with respect to the rest of the year. At this point, it is safe to say that we have very little visibility into online ad spend for the rest of the year or for 2009.

When we look at how the quarter played out with respect to our advertising revenue, the engine that has powered our growth in prior quarters suffered in Q3. Advertising revenue from non-financial advertisers was down 8% year over year and represented 38% of total ad revenue, down from the 49% of total ad revenue in the third quarter of 2007.

While we believe that MainStreet.com will ultimately be a mass consumer personal finance platform that will attract a growing base of non-financial advertisers, MainStreet is still less than a year old and at this stage, isn’t large enough or mature enough to offset the broader weakness we saw in the quarter.

Having said that, advertising revenue from financial advertisers was up 42% year over year as financial advertisers aggressively sought out the value targeted demo on TheStreet.com. We had 84 total advertisers on our network of websites, down from 97 advertisers in the third quarter of last year. The 16 new advertisers we added in Q3 were also down from the 20 new advertisers we added in Q3 2007 and the 35 new advertisers we added last quarter.

As I mentioned earlier, we had a record 8 million average monthly unique visitors in the quarter, with strong growth across our entire network as more people came to our properties to find the investing and personal finance tools they need in these uncertain times. We delivered 225 million page views in the third quarter as compared to 206 million in the second. Monetization of those pages views showed strong year-over-year growth, as we delivered a revenue-per-thousand page views of $24.21 in the third quarter of this year, an increase of 69% over the last year.

One of the areas of focus for us continues to be developing organic traffic growth and our efforts with respect to search engine optimization are starting to pay off. Traffic from SEO in Q3 represented 7% of total traffic in the quarter, up from just over 5% in the second quarter. In September, traffic from SEO reached 9% of total traffic and those trends have continued into the fourth quarter.

With respect to Promotions.com, as we have already discussed in this call, the shortfall in revenue in Q3 in this business had a significant impact on our overall financial performance. Total revenue from Promotions.com fell to $1 million in the quarter from the $3 million we delivered in Q2. I won’t repeat what Tom has already discussed about this business except to say that we continue to focus on its performance to ensure that the cost structure of the business is properly aligned with our expectations for revenue in 2009.

Turning to paid services -- which include subscription, syndication, licensing and information services revenue -- total paid services revenue was $10.2 million for the quarter, an increase of 11% over the third quarter of 2007. Subscription bookings for the TSE subscription services business in the third quarter totaled $6.6 million, a decrease of 5% from the $6.9 million we booked in the third quarter of last year and the number of subscribers decreased by 8% to approximately 79,000.

Deferred revenue reflects revenue associated with our various businesses, including the subscription services, RateWatch and Promotions.com that we will recognize in future periods. We had total deferred revenue of $16.1 million at the end of the quarter, a 19% increase from the prior year. Deferred revenue specifically related to TheStreet.com subscription products decreased 4% to $11.6 million from the $12.1 million at the end of the third quarter last year.

Syndication, licensing and information services revenue, which includes revenue from the RateWatch business acquired in November 2007 totaled $2.8 million for the current quarter, an increase of 231% over the same period last year. Excluding the impact of the revenue from RateWatch, syndication and licensing revenue was $1.1 million, an increase of 26% over the prior year.

With respect to our expenses, as we’ve discussed on previous calls, we expected total expenses in Q3 to be flat as compared to total expenses in Q2. We incurred one-time charges in the quarter totaling $650,000 including an increase to our bad debt reserve and one-time legal and severance costs associated with restructuring efforts executed in the third quarter. Excluding these one-time charges, total expenses were down 1.2% sequentially.

This does not mean that we are standing still when it comes to focusing our investment in the areas with the greatest potential future return and targeting efficiencies in the more mature parts of our business to generate savings. We’ve reduced our level of search engine marketing spend to target ROI-positive audience development initiatives, even as our traffic from natural search and other organic means have driven record traffic.

We continue to reduce the cost of developing new content, building upon the greater leverage of evergreen content and content from partners that comes at little cost to us, adding to the award-winning content that we have built our reputation upon.

In the third quarter, adjusted EBITDA, excluding stock compensation expense, was $1.2 million, a decrease of 74% from adjusted EBITDA of $4.5 million for the third quarter of 2007. We incurred a net loss attributable to common stockholders for the third quarter of 2008 of $1.2 million on a loss of $0.04 per fully diluted share. This quarter, the company continued its third year of quarterly dividends of $0.025 per share.

Turning to our margins, our adjusted EBITDA margin was 6.9% as compared to 23.2% in the second quarter. Our stated goal for this year had been to deliver sequential adjusted EBITDA margin expansion throughout the year. Clearly we did not achieve this goal in Q3.

We ended the quarter with $80 million in cash and marketable securities and no bank debt, with free cash flow effectively neutral for the quarter. As we think about the fourth quarter and the challenges our business might face in 2009, our plan is to balance our continued investment and our growth strategy with an ongoing focus on our expenses across the business to continue to run the business free cash flow neutral. This will ensure that regardless of the short-term prospects for the online advertising and subscription business, TheStreet.com will be extremely well positioned to take advantage of the turning tides when they come.

With that, I will turn the call back to Tom.

Thomas Clarke

Thanks, Eric. As we enter the fourth quarter, we do so with limited visibility on our revenue. There is no doubt these are unprecedented economic times, which create uncertainties that can only be addressed through a disciplined approach to how we balance our investments and our cost management. Our cost structure review will be deep and we believe it will result in a reduction in both headcount and non-headcount related costs.

One place we do have visibility, however, is on our strategy which is to have content that focuses on money. While it’s a great place to be at any time, now is the ultimate time to have a network that is “all things money”.

Furthermore, we have always been committed to deploying multiple streams of revenue and today we generate income from a variety of models including display, performance-based, interactive campaigns and paid products.

Unfortunately, we are no strangers to the turmoil in the advertising markets. Back in 2001, we did not have the luxury of a strong balance sheet or a business model that had multiple components working. Today, we have balance sheet strength, multiple revenue business models and many positive initiatives that are working. I am confident that our team and our strategies are right and will position the TheStreet.com for long-term growth and increased shareholder value.

We will now open it up for any questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Colin Gillis - Canaccord.

Colin Gillis - Canaccord

Can you give us some color as to how the months in the quarter shook out and did you see a sharp uptake in cancellations around the September 15th period? And if you can give any color about what you've seen in October just in terms of acceleration of those trends, that would be helpful, too.

Thomas Clarke

Yes, Colin, we did see, as we got into September - I mean, it kind of exacerbated itself even more than what we had kind of seen in the beginning of September. So I would say that, as we got into the month, the latter part of September, certainly we saw more falloff, more cancellations of programs, all kinds of industry, .com advertising side for campaigns that were committed and also on the Promotions side, where you have large brand clients that had campaigns that were out there that they didn't pull going forward.

I can't say that we've seen that it's accelerated itself in October, but it's kind of kept the same level. I don't think it's gotten any worse, but I can also tell you it hasn't gotten any better. So I don't think it has thawed yet and I think that there's, you know, little visibility we have as this thing plays out. And I think part of it is the macroeconomic environment as these companies are trying to decipher, you know, whether they go out with campaigns or messages or not. As you can see with the auto industry and some of the financials, I mean, there's been significant pullback in those areas.

Colin Gillis - Canaccord

Are your clients giving you any color as to how they're thinking about their '09 budgets? Has the budget process been set? Is the expectation for budgets to be reduced across the board?

Thomas Clarke

I think that they don't have any color, to be honest with you. I mean, especially when a lot of these campaigns are going through agencies and then the agency goes out and buys and places, I mean, right now the agency says we don't know. We don't. You know, there is - they have a level, but they don't know what that level is and there's no clarity on the level. And I think you're not going to see that until you get much closer to the end of the year. I think that most companies are kind of reevaluating their budget process all the way.

And I think, again, going back to some of the things we do have, I think that one of the areas where we have seen kind of a little bit of a turnaround is in the paid subscription business. So one of the things that we have in our arsenal is the fact that, as things get more difficult in the marketplace, some of the areas we have seen there's an uptake is in our subscription process. We had a good September. October seems to be trending well.

And with the introduction of the performance-based model on BankingMyWay and Geezeo, we've also seen some initial early positive results. I don't want to make a trend out of it, but I think that those are areas that are there. So I think all in all that's kind of where I think the landscape is.

Colin, one other thing. You know, in the promotions business, I think it's very important for us, if it didn't come across, to say that we hired a couple of salespeople in June, as most of you know who follow us. We added another salesperson in the third quarter. I have not seen a business that’s got a better pipeline.

Having said that, that pipeline hasn't kind of manifested itself in signed contracts with promotions. Even with long-term clients who had campaigns that they committed to, a lot of them just came off the board completely in the third and part of the fourth quarter. But we just won a nice deal from a major brand client. Who knows, maybe there is some thawing out that will occur. But we'll keep our eye on it.

Operator

Your next question comes from Richard Fetyko - Merriman Curhan Ford & Co.

Richard Fetyko - Merriman Curhan Ford & Co.

I'm curious on your statement that the financial services category, you saw some strength in. Could you characterize what kind of advertisers in that vertical you dealt with? Are these online brokers or even outside of the brokers? That's kind of been your core group, but you've seen strength outside of that as well from banks, commercial banks?

Thomas Clarke

Well, again, the ones that we typically have, you know, obviously strong in the online broker area. Some of the other things we've seen are just bigger brands. And I think what you're going to see is that as the financial services market finds a footing somewhere with all these acquisitions and stuff, I think - or I hope - we see, actually, as we get into '09 a re-branding of some of these large brands now. Because you've seen a lot of combinations of different companies, and I think that part of what will happen will be a branding message as we go into '09.

Operator

Your next question comes from Mark May - Needham & Company.

Mark May - Needham & Company

If I recall last year third quarter was also challenging, but it bounced back seasonally in the fourth quarter. I guess this time feels a little different, but do you think you'll see the seasonal uptick this year?

And kind of a related question, as Richard said, financial advertising held up well in the quarter. Given the quality audience and inventory you have and strength in that vertical, can you lean on some of our financial accounts in this quarter to improve your sell through? Maybe it kind of hit you unexpectedly in September, but is there anything you can do to lean on some of your better financial other accounts to improve sell through?

Thomas Clarke

Yes, let me take the first part of the two-part question. You know, look, the third quarter in general has some seasonality to it. I don't think that that's a secret. And I think we're at the vortex of what happened. You've had an imploding financial market with the seasonality there, and it all kind of came together in that third quarter.

So I think what you're asking for is what is the visibility going into the fourth quarter and, with our strong relationships with some of these financial advertisers, can we lean on them. I'm going to say, Mark, to be perfectly honest, that our visibility is limited at this point.

We tend to have very open dialogues with our advertisers so, on the question of leaning on them, I think more of it's going to depend on where they are in their own budgeting process as we go into the year, because I think that at least nobody that we're talking to is thinking that '09 in most of the regular business is going to be a banner year for them. So I'd rather say that our visibility is limited. I'm hoping there's sequential improvement, but at this point I couldn't tell you whether that was going to happen or not.

Mark May - Needham & Company

On Promotions.com, what's the breakeven quarterly revenue run rate there and what specifically are you doing from an expense level to readjust at Promotions?

Eric Ashman

Well, we're looking at Promotions in two ways. One is that we're - I think I mentioned this in my piece - really making sure that they're focused on the higher revenue, the bigger brand opportunities. The type of campaign and the account they just won is going to be the sweet spot of where that business is focused going forward.

And we have already continued to look at headcount to ensure that the cost ultimately align with the size of the business that we think it's going to be going into 2009. The challenge with that, obviously, is the amount of visibility that we have and where ultimately we think they'll land from a run rate going into Q1.

Their breakeven is, without going into real specifics, it's a little bit higher than where that $1 million run rate is right now. And as I said, we made some adjustments in Q3 and we're looking to make some additional adjustments as the quarter plays out.

Mark May - Needham & Company

If I back out the $650,000 one-time in Q3, I think your OPEX is around $9 million. I think that's right. Will that likely be up, down or flat in Q4? That's at least something I think you can control and you might have some visibility in, so just curious on that front.

Eric Ashman

It'll be flat to down, so we're looking for opportunities to take that down a bit. It'll just depend in terms of at what point in the quarter we make some decisions in terms of certain costs. But there's an opportunity for that number to come down a little bit. It won't change dramatically.

And I think it's - you know, one of the things that I wanted to make sure I made clear in my prepared remarks and I'll make it again here is that, as we think about costs in Q4 and going forward, to the extent that the environment continues to stay as challenging as it is, then we'll manage the business to the concept of free cash flow neutral. And that's essentially where the business was in Q3, and so we're trying to measure our expectation of revenue in Q4, revenue in 2009, to make the adjustments that are required to stay in that range.

Thomas Clarke

Mark, just another point - and I think it's important and it probably comes into your line of questioning - is the fact that, you know, in the Promotions business in particular, even in our own display business, we held pricing. We didn't think that it was a good precedent.

So to the extent that you did think you had a bounce back in any fourth quarter or future quarters in '09, we thought that there was a level of requirement that we had for people who really do business with us, especially in the Promotions business, because once you really go down the path of lowering the price, it's very difficult to get it up. And in an environment where cost management is going to be critical for our success, we thought we had to do that.

On another point - and I think this goes to our overall cost deep review of everything we do as a firm - the one thing I can assure you is we will not decimate this firm from a cost structure because it's not a question of if, it's a question of when it returns. And the fact of the matter is that we've got $80 million in cash. We are very solid. This isn't like, you know, back in 2001 and, unfortunately, I had to live through that period.

It's that we've got a lot of things that are working. We happen to be in the vortex of things that all came together and created a difficult environment for us, but we feel very strong about the movement we have into these performance-based advertisers. We've made some changes in our marketing on the sub business and have been successful. We've just launched another very successful product. Our advertising on TheStreet.com did go up 18%; I think that's a pretty good number in this environment.

So we know we have a site that people want to advertise to, and we're going to be more consumer friendly and more open to partnerships going forward than we probably have in the past. So when I add that all together, I feel pretty optimistic about the fact that we may be in for a period where we have a couple of quarters that are difficult, but certainly the long-term future of the company is not in question.

Mark May - Needham & Company

I'm assuming that Jim Cramer does not have a ton of spare time on his hands these days. With him taking on this added role, will that require him to diminish any of his other activities, either at the company or outside companies?

Thomas Clarke

Well, let me put it this way. Jim travels in circles where he's got access to some of the brightest minds and CEOs in the country who'll call him and ask for his advice and stuff like that.

And at a Board level, when we were talking, Jim was saying I've got these ideas; how can I get more involved? And while I don't know whether it's going to diminish - and I don't want to speak for Jim on his other commitments - Jim has always been committed to this company. He wants to see it do well. And he brings it a lot of strategic ideas and knowledge that some of the circles that maybe we don't travel in, he can bring us an external expertise that I think we can take advantage of.

So that's really the overall input that Jim will have with us, so we really - I look forward personally to strategizing with him, looking at ideas that he has in the market. He's certainly, a very entrepreneurial, out of the box thinker, and I think that that will benefit me personally and the entire firm.

Operator

Your next question comes from Michael Moskoff - MRM Capital.

Michael Moskoff - MRM Capital

Can you give me a couple of stats first? Regarding the renewal rates, I believe last quarter the monthly was 91% and the annual was 64%. What was it this quarter?

Eric Ashman

Yes, we've been staying in that range. The monthly was about 90% and the annual was 65%. So we've been pretty pleased that those net retention rates have actually held pretty strong throughout this period.

Thomas Clarke

And Mike one thing, since I know this is an area of interest. Our annual subscriber, they ticked up a little bit as monthly ticked down. So we're pushing more people into an annual subscription, which obviously carries with it a better deferred revenue stream for us as we go forward.

Michael Moskoff - MRM Capital

And you had said last quarter was 84%. Did it go higher to like 85%?

Thomas Clarke

It did.

Eric Ashman

It's 85% at the [inaudible] rate.

Michael Moskoff - MRM Capital

And PP&E was up a little over $1 million. What was the reason for that?

Eric Ashman

You're talking about depreciation and amortization? Is that your question?

Michael Moskoff - MRM Capital

Yes.

Eric Ashman

There were a couple of things. Remember that if you go year-over-year you've got amortization expense that's related to acquisitions that we did, so you've got about $550,000 of amortization expense associated with Promotions and Bankers Financial.

You also have the depreciation - and we talked about this on the last call - associated with many of the initiatives that we were working on last year that launched at the beginning of '08. So depreciation on the redesign of TheStreet.com, depreciation on the launch of MainStreet, as well as some more related projects. So many of those things hit. We talked about that in Q2 as well and that's what drives much of that increase.

Michael Moskoff - MRM Capital

Out of the 84 total advertisers, now you said financial advertising held up well. Can you categorically break down what those 84 consist of?

Eric Ashman

Just split between financial and non-financial?

Michael Moskoff - MRM Capital

Yes. I mean, like if it's non-financial, what would be the breakdown of the categories of nonfinancial?

Eric Ashman

Well, it's almost 50/50 in terms of the split between the types but the revenue from nonfinancial is lower. I think I mentioned this in my remarks. It's that revenue from nonfinancial advertisers was 38% in the quarter. The split in the number of advertisers is split 50/50, but I think it speaks to the weakness in the overall campaigns from the nonfinancial advertisers in this quarter. The number of advertisers came down a bit sequentially, but the spend per advertiser came down as well.

Thomas Clarke

Mike, one thing. Maybe I could add a little color into this since I know this is an area of interest. And I want to say this clearly. I'm not saying these types of RFPs are going to come to fruition. But the type of RFPs we're seeing today happen to be from old-line companies that are talking about - and their campaigns seem to be related to the fact  hey, we're still around. Okay?

So if you think of some of the old line, whether insurance companies or financial companies, that may have been hit in this economic period, the branding that we're seeing or the RFPs we're seeing now that they have 409 seem to all be related about the fact that they're branding messages that say hey, we're still here, we're still in business, we still can provide you with a level of service that is not surpassed by any. So when you think about the advertising world, those are some of the things we are seeing.

Michael Moskoff - MRM Capital

What's interesting - as you know, I've been on the site since inception and I've been on these calls forever - and when I look at the miserableness of the financial markets, your pages went from - two quarters ago it was, I believe, like 6.3 per month, I believe?

Eric Ashman

You're talking about unique visitors, Mike?

Michael Moskoff - MRM Capital

Yes.

Eric Ashman

That's right, 6.3 million in Q1.

Michael Moskoff - MRM Capital

Then it was 7.2 and now 8 million plus, which I guess means that the more miserable things are, the more people want to find out about what's going on, which is pretty interesting.

But be that as it may, when you look at that and you look at the subs also held up versus, like you said, going back to '01, when things were a little chaotic and things were a little more new, MainStreet.com, do you foresee that still to be strategic? And as well as this Promotions thing, because I've been accustomed to just - prior to this, I'm not as familiar with the Promotions as far as just using the sites. I use the business. I see how well it's doing, whatever, and the info that's displayed from it.

I'm just trying to get a picture. At what point do you bite the bullet on XYZ?

Thomas Clarke

Great question, Mike. I think that it's a question that has to be asked, and I'm glad you asked it. Let me tell you how I view some of those properties and maybe that'd give you some insight.

And I would tell you before I answer that that these are things that obviously, as the person who runs the company, we will review and evaluate. And if we think at any such period of time that they're not strategic to our business or that we can't make it worse, there's no pride involved in this, in fact, saying that hey, we're moving in a different direction. Mike, you've been a around a long time with me. You know we did that with IRG. So we're not afraid to say hey, it didn't work or it did.

Having said that, let me take the first one, MainStreet. I am a firm believer that the broadening of the content set to a more personal finance-orientated environment is critical for to growth for TheStreet.com. And the reason why I say that, Mike, goes back to - if you go back to any of the times where we've had economic turmoil. So let's go back to the '87 crash.

If you go back to the '87 crash and you look at what happened, we blew out a generation of investors, okay? And what happened was if you went back then and you looked at the number of investment clubs in the United States or you looked at any of the other metrics of people who were investing, you could basically have cut it in half, okay? And that's what you were left to.

You know, I think you're in a period of time where we're also blowing out a certain number of investors, but I think those people - because if you think about the way the world has evolved with no more defined pension plans and everything's going to 401(k)s or self-directed investment that it won't be as severe as that - but that there's a knowledge of personal finance information that they have to gather.

And we believe that that's not as well suited on TheStreet.com site because what we do know is this: When people come to TheStreet.com - and I appreciate your comments about more and more of them coming in this environment - they're coming to understand what is going on in the economic market. They want to know about their stocks. They want to know about their mutual funds. They want to know about their ETF.

But it's not a place that they want to really think about their career. It's not a place where they want to think about job opportunities or insurance or health care or any of the other things. And I believe MainStreet is going to be that forum, and we're really bullish about the fact. And we know from advertising demand that there is an enormous amount of pent-up demand for a site such as MainStreet.

So I think it's critical. As we mentioned in my prepared remarks, we've just hired a new General Manager with the launch of MainStreet 2.0. Keep an eye on it. It's going to be significant, and I think it's going to be very successful for us.

Let me move over to Promotions for a minute. Look, Promotions had a difficult quarter. There's no way to couch it or say it in any other way. Are we concerned? We are concerned. But to tell you the truth, I've been in sales myself. I've looked at the pipeline. The pipeline is very robust. I think strategically when we hired the salespeople in the second quarter and another one in the third, we did so with the idea of building this robust pipeline.

Having said that, it didn't come to fruition with campaigns. It kind of fell off the map. And these are long-time clients where we were supposed to do 80 promotions, let's say, over the course of a year, and now it looks like we're going to wind up doing 40. So that just gives you some of the magnitude of what got pulled in the kind of third going into the fourth quarter.

Look, our eyes are on Promotions. We are very bullish about the business. We are bullish about the management team that runs that business and the people that we have running it. Having said that, we took very aggressive course controls to align the course with the revenue opportunity we see. It's going to be an area that we stay very close to over the next couple of years.

One thing about Promotions, it's kind of a three-legged stool, Mike, if you go back to when we first bought it. So if you think about why we did it, we did it because number one, we wanted to ask - and to help with our technology platform and have all these properties run off a common infrastructure, which has been accomplished.

Two, on TheStreet.com advertising side, the area that is becoming more and more prevalent is the fact that these interactive custom solutions are becoming more and more a larger part of the offering we have to have for our customers. They contribute to the 18% growth we had in the business. So while we can look at their business and say it did fall off the map from a revenue perspective, they are integral in helping us grow on the other side.

And the third stool is the fact that I kind of like the diversification because I still believe in the trend and I think it's coming more - you hear Verizon just say it two weeks ago  that the large advertisers are going to go directly to the publishers. Unlike in the print world, where you need media intervention, in an online world the companies or the large marketers seem much more capable of working directly with a publisher to set up their campaigns. This sets us up nicely for that business.

So when I go back and look at the tenets of why we did it, I still feel very comfortable about that the reason we did it is right. But I think you have to think about the fact that we didn't have a good quarter, we're going to keep an eye on it. You have my word that this is a business we're going to watch. And if we ever got to the point where we thought it wasn't going to be strategic, then we would make the appropriate decision.

Michael Moskoff - MRM Capital

You guys said that - I think, Eric, you said that you're looking to be next quarter free cash flow neutral. Is that right?

Eric Ashman

That's right. I mean, in this environment, it's where we ended up in Q3, essentially free cash flow neutral. And when we think about, you know, the discussion around the adjustments to the cost base of the business and how we'll run the business in this environment, ultimately that's where we feel an appropriate target lies.

And that creates a balance for us between making the appropriate decisions in terms of cost and balancing cost with the overall revenue line of the business, but allowing us to ensure that we continue to invest in the areas of the business that drive the prospects of future growth. So that is how we're looking at the business at this point in time.

Thomas Clarke

Mike, it really goes back to what I said earlier. It's not an if scenario that it comes back; it's a when scenario it'll come back. So by taking the stance of being cash flow neutral, I know we're not decimating anything now. Where I'd hate to be behind the eight ball, I'd like to emerge with greater market share. I think you're starting to see it with traffic, that some of the initiatives we have put into place over time are working. It is our goal to be a top property in this space.

Michael Moskoff - MRM Capital

And the amount of shares outstanding with that preferred, is it a little over 36 million? Is that correct?

Eric Ashman

Well, generally speaking, the fully diluted in prior quarters has been reported about 34.5 million. It's worth noting, since you asked the question, that the fully diluted share count in the Q3 calculation is about 30 million and that's because when, given the fact that we reported a net loss, you go back to a calculation that is similar to basic.

Michael Moskoff - MRM Capital

And also the exercise price of that preferred, isn't it like 14 and change?

Eric Ashman

The preferred is $14.26, that's correct. That's the value of the investment that we took at the time that we did the investment the last fourth quarter.

Michael Moskoff - MRM Capital

All right, so you guys have got over $2 a share in cash, right? It would have stopped trading below $4.

And the question that I have is: If, for whatever reason, we have  the lack of visibility, obviously, is going to probably remain for the rest of the year from everything I'm hearing, not only from you, from everyone else also on the Street, from all these conference calls - if for some reason the market next year is all over the place and we have another miserable kind of year, I would hope - correct me if I'm wrong - that you guys are going to run a tight ship until you guys see any kind of avenue where you shouldn't.

Thomas Clarke

Correct.

Michael Moskoff - MRM Capital

Because, when you get out of this, like you said, it's just a matter of time. If you're getting subscribers of, you know, 6, 7, now 8 million per month, the worst we get, it's showing that people are interested in their money and they're interested in coming to you. So I just want to hope that the conservativeness that you've displayed in the past per se continues.

Thomas Clarke

You have it. I mean, it's what we said and we plan to stick to it.

Operator

Your next question comes from George Grose - American Capital Partners, LLC.

George Grose - American Capital Partners, LLC

I guess my question is with your cash balances. I mean, with valuations, both private and public markets coming down, do you see yourself being more, I guess, aggressive in that field now?

Thomas Clarke

You know, George, first of all I think that we've been on the sidelines for awhile now because the disconnect that we saw between public and private was something we couldn't make heads or tails of, to be honest with you.

Whether that leads us to, you know, certainly short term I would say that I want to see how this thing plays itself out. As I said in my prepared remarks, I think that we were very opportunistic when we had our strategy. One of our strategies was to raise cash for acquisitions. We were fortunate to do so at a time where we got a very high valuation for it.

Having said that, I think that there are companies out there and certainly ones we're talking to today who were not as fortunate or do not have as strong a balance sheet, did not raise any capital, and in this environment, let's face it, you're not going to raise any capital.

There are strategic partnership opportunities that may avail themselves to us that weren't available before or there might be some acquisitions, but frankly, until there's some visibility about what we see in the marketplace, I think we're more attracted to strategic partnerships than we are to acquisitions.

George Grose - American Capital Partners, LLC

And I guess as Promotions.com, I just remember back in, I think in Q1, you sort of shut them down a little bit to focus on your internal site launches. Did that have any impact on the results this quarter or is it just simply the advertisers pulling their campaigns?

Thomas Clarke

Well, you know, it's hard to sit here and say it would have no impact. But if you look back, the second quarter for Promotions was a strong quarter. So I think that, when you do that, you do miss a sales cycle. So I think that it had some impact. Do I think that was the reason why their revenue fell off the cliff? No, I think that the canceling of campaigns, the commitments that were made that weren't then fulfilled, I think that had as much to do with it as anything else. But it would be foolish for me to say that it didn't have at least some impact in the process that went on.

George Grose - American Capital Partners, LLC

And is there a lot of large customers in that business?

Thomas Clarke

There are. I mean, whereas TheStreet.com advertiser, some of them are large, they're dwarfed by the size of the kind of customers you get in the Promotions business because these are the large consumer brand companies. Two, for example, that have been clients for a long time are McDonalds and Kraft, and both of those are the size companies that are similar to what you see in that environment.

Eric Ashman

George, I think it's worth to say as well that - so the relationship you have with a big client is you end up doing a master overall relationship agreement, and then throughout the year statements of work come through for different campaigns that will play out across the year. And so it's easier for them to start pulling those SOWs.

But what's important is that those overarching relationships still remain. And so, just as easy as it is for them to pull it, ultimately, as things improve, they can come back in with a relationship that has already been established and is in place.

Operator

(Operator Instructions) Your next question comes from William Morrison - ThinkEquity Partners.

William Morrison - ThinkEquity Partners

Tom, as you mentioned, I think, several times in your remarks, you, for better or worse, have been through this before. And I'm wondering if you could just talk maybe a little bit more qualitatively. I know that the company's in much better financial position today than when the bubble burst, but can you comment qualitatively on how the market's feeling to you the last month into October compared to the initial part of the downturn when the bubble burst. Is it better, worse, or roughly the same?

Thomas Clarke

Yes, I don't think it's worse, Bill, and I don't think the recovery is going to take as long. I don't think the cycle is going to be that long in recovery.

Having said that, I'd put some caution into it. We were surprised how quickly it kind of eroded in September. We're not seeing any worsening of that in October. We're not seeing it eventually better, either.

But I think the recovery will be shorter and I think that, as we get closer to the end of the year and everyone goes through their budget process, I think everyone's budget process  you know, typically at this time of year a lot of people already know what their '09 budget looks like. They know what their campaigns look like. They know what their message is going to be. And I think the big difference that I see right now is that that's not in place.

I think you can go to almost any sector - you can look at technology, you could look at travel, you could look at auto - and I think you used the word chaos, but I that there is an uncertainty about what the message is going to be or where they're going with their campaigns. And I think that's what's delaying everything.

William Morrison - ThinkEquity Partners

And then for Eric, on the free cash flow breakeven, what do you expect on CapEx in the fourth quarter?

Eric Ashman

CapEx will probably run - it's been coming down quarter-on-quarter. It'll probably moderate very similar to where we were in Q3. So, you know, in Q3 we did about $1.9 million in CapEx. That's been our run rate. It was about $1.1 million in Q2 and somewhere in that range is probably where we'll continue to lie.

William Morrison - ThinkEquity Partners

And then for next year should we expect that quarterly run rate to come down or stay?

Eric Ashman

It'll probably stay in that $1.25 to $1.75 million range. I think we talked about this in an earlier call. We'll continue to do the things - we don't currently have anything in the plan in terms of building new sites; we don't have any significant launches as we did in 2007. But there is a sustained level of investment across the business in terms of infrastructure as well as across the properties that we'll continue to drive quarter-to-quarter.

So at this point, we'll continue to - and also be able to look at this as the quarter plays out and as we finalize our own plans, which will ultimately be based on what we think will happen next year, but our current thinking is that it will run at about this level next year as well.

William Morrison - ThinkEquity Partners

And then is it safe to assume, if you're going to run at free cash flow breakeven and adjusted EBITDA's a good proxy - if we assume that's a good proxy - for cash flow that you plan to be adjusted EBITDA positive on a quarterly basis?

Eric Ashman

That's correct.

William Morrison - ThinkEquity Partners

And on Promotions you mentioned a couple of times about the pipeline, Tom. I'm just wondering if you could maybe give us a stab at what we should expect next quarter even if, you know, should we expect it to be up or down? It sounds like from your commentary just a minute ago that it's trending around kind of the same level it was towards the end of the quarter.

Thomas Clarke

Yes, Bill, again, the visibility there is very limited. I would say it'll trend where it's trending. Right now I couldn't tell you whether - I think it'll be where it could be right now. I don't think it might, unless something - look we just had - you know, if you would have asked me this question two weeks ago, before we just got this seven-figure revenue campaign, I would have said to you it would have been down.

So I don't know if that's a signaling that people, as they go through their budget process, are coming out of it with ideas and then have some things, there's been a thawing of maybe the hold on some of the campaigns that were out there that got pulled. I just don't have enough visibility. So I would tell you that it's probably - let's say it's flat for now.

William Morrison - ThinkEquity Partners

Your stock obviously, even if you take a big cut to EBITDA next year, looks pretty cheap. You've got a lot of cash and certainly as a percent of your market cap. Have you guys thought at all more about a stock buyback?

Thomas Clarke

You know, it's something that we think about all the time. It's a topic of conversation that we have. I'll give you my personal take on this.

I think we're in an environment where cash is king. I've not talked to as many people where I felt that available cash for investment or any of the other things is as tight as it's ever been. That's one thing that I can tell you that's much different from even back in the bubble days. I always felt there at some point you might give a lot away, but you could get cash. Now I don't even know if you could get the cash.

So I think that we're going to look at it when it makes sense. As you said, we've got a great balance sheet. We've got a lot of cash. We'll certainly evaluate that at the time but right now my personal opinion is that cash is - we should hubbard as much as we can of it. It'll present tremendous opportunities for us in the next few months as we get a little visibility into the business. And if our stock did get to a level where it made a lot of sense, then we would be there.

Operator

Your next question comes from Richard Fetyko - Merriman Curhan Ford & Co.

Richard Fetyko - Merriman Curhan Ford & Co.

With respect to Promotions.com's pipeline, could you just kind of tell us what you mean by pipeline?

Thomas Clarke

Pipeline is the - it contains two elements. So it's the number of presentations that we've made where we've been asked to come back and then take it to the next level in formulating a plan or a strategy around a marketing campaign that they've given us. So it's not just having a meeting where I said oh, I had a meeting with XYZ Brand company. It's really taking it to the next step, where they've given indication they like what we've said. They wanted to see a statement of work as to what the fulfillment of this promotion might look like, and then we kind of did that.

And Richard, as you know, the way this business kind of works, it's kind of a - it might give you some semblance into a thing. It's kind of a two-part process, right? The promotion is one aspect, right? So the company then, the promotion goes out and it builds this promotion for the company. But then there's a buying, right? So then the company goes out there and buys the media space for this promotion. So to the extent that you see what happened in the display market, it's not surprising that it comes after the fact of what happens.

And one of the things I think we are going to see is that in the pipeline at least initially  now, it hasn't transferred to business yet, but we hope it will - is that we're replacing in some ways some competitors on long-term accounts. As people are re-looking at the opportunities they had and the money that's being spent on these, I think Promotions is a unique area because they take a campaign or a promotion from start to finish. They can create it, they can host it, they can do the whole thing. So I think there's opportunities there that are created by the chaos that we're kind of going through.

So that's kind of what I mean by the pipeline.

Richard Fetyko - Merriman Curhan Ford & Co.

So you're saying you're getting invited to follow up meetings within the pitching process. In some cases, you're deep into planning. But then will fall short of the actual media buying?

Thomas Clarke

Right, because the process doesn't go to conclusion. Something happens, maybe the company changes its marketing plan or decides that that's not a marketing plan they can do in this environment because they're concerned about the consumer appetite for it at this point. So it's really - that's what's kind of happened.

So when I talk about the pipeline and why I feel good about it, it's because we're at the table. We're at the table with very large brand advertisers that in the past we weren't at the table with. And to me, when you're at the table and you get invited back to think about it, ultimately - I'm not saying it transfers into all of a sudden we're going to have 1000% growth, but I think the opportunities are there and we're becoming well known.

And that's what I also said earlier about I don't want to decimate the business because I know it's coming back. It's not an if if it's going to come back. It's going to come back and it's a question of when and are we positioned as best as we can be to do that. And I think with a strong balance sheet, with multiple revenue streams that we can do now, with traffic that's going up across our network of sites and the fact that we have good products, whether it's on the subscription side or whether it's the product that Promotions produces for these brand advertisers, I like where we sit.

I'm not happy about our results. I don't think anybody would be. But I think when I look at this - and I think Bill Morrison's question earlier, I don't think the cycle will be as prolonged as it was back in 2000 and 2001.

Richard Fetyko - Merriman Curhan Ford & Co.

Eric, you mentioned you want to stay pretty cash flow neutral. Is that after CapEx?

Eric Ashman

Yes. Yes, it is. So extend the definition of free cash flow and so, yeah, as we define it, it would be.

Richard Fetyko - Merriman Curhan Ford & Co.

And with respect to dividends, now that you're sort of in the cash preserving mode, have you given consideration of canceling the dividends?

Thomas Clarke

Well, you know, let me - the practice of us having a dividend in the first place was, you know, the current tax regime kind of made it nice and we felt that as we were conserving cash we kind of were returning some to our shareholders to compensate them to some degree of the cash we were holding.

Having said that, I think that it's something we have. We talk about it all the time. We're in a strong cash position. We don't have to go out and borrow money to pay for a dividend or something like that. But I think if economic conditions didn't improve, everything is on the table. I think you look at all your costs that you have in a business and then you make the proper evaluation at that time. So that's how I would answer that.

Richard Fetyko - Merriman Curhan Ford & Co.

Within the non-financial advertising group of advertisers that you saw a pull back from, was there any specific, I mean, I don't know, was there a pattern? You mentioned travel, tech, auto, I mean, was it really across all retail, across all the verticals?

Thomas Clarke

It was kind of across the board. I can't tell you that one category was more prevalent than the others. It kind of was a - they all woke up one day and said whoa, we're in a bad market here. Let's all kind of pull back. So I think it really was across the board.

Operator

Your next question comes from Brian Murphy - Sidoti & Company.

Brian Murphy - Sidoti & Company

Eric, could you remind me what percentage of subscriptions typically get renewed in Q4? And also how many salespeople did you have at the end of Q3 and do you expect that to be flat going into '09?

Eric Ashman

We've never broken out the subscription pool as it breaks quarter to quarter, but what I can tell you is that there is a cyclicality to how the subscription business works. Q4 is a pretty good quarter. It's one of the stronger quarters of the year, along with Q1. And so you will get a larger increase in renewal pools as the end of Q4 plays out and you'll see that as well in Q1, and then it'll come back down again.

Having said that, what we've been really pleased to see throughout this year is that our renewal rates on the subscription products have really held true. I think we talked about this on the Q2 call.

The challenge we've seen on the subscription business has been one of acquisition, acquiring new subscribers to the products. And I think Tom mentioned this in his comments. One of the things we've been really focused on is to tighten our approach to marketing in our marketing channels, and we have seen in September and we've seen this play out into October, is that we've been able to improve our acquisition rates.

Whether that's a long-term trend or not, we don't know. But certainly we've been able to move the needle there while still maintaining our retention rates. We've been really pleased about that.

Brian, what was your second question again?

Brian Murphy - Sidoti & Company

Just on the sales force, how many sales heads you have at the end of Q3 and, I guess, where do you want that to be going into '09?

Eric Ashman

Yes, Q3 the ad sales team was the same, basically the same as it was when we came out of Q2. We had about 20 people on the team. Our expectation at this point is that we'll probably hold at that level for now. So again, we're always looking at everything, but that's our current expectation.

Operator

Your next question comes from Colin Gillis - Canaccord.

Colin Gillis - Canaccord

Could you refresh me about the shareholder rights plan?

Thomas Clarke

What specifically, Colin?

Colin Gillis - Canaccord

Do you have one?

Thomas Clarke

Yes.

Colin Gillis - Canaccord

And are you wedded to being a public company?

Thomas Clarke

That's a great question, Colin. I appreciate you asking that. I think that we are always looking to maximize shareholder value, so whether that's best suited in a public entity or a private entity, I leave it to kind of the market to determine that. But my only focus is really doing what's best for the shareholders.

Operator

Your next question comes from Michael Moskoff - MRM Capital.

Michael Moskoff - MRM Capital

Just regarding this dividend thing that that guy just asked, I would strongly urge you to just keep it because you have the cash and, with money market rates going to 1% today, 2.5% is not too bad. And it's something that you guys should just keep. What can I say?

Thomas Clarke

Yes. Thanks, Mike. You know, it's obviously something that - you know, when you're a public company and you announce a dividend, you don't go into it lightly. You don't announce it with the idea that, in a quarter where you have bad results, all of a sudden you cut it. So I think that it's something we always evaluate.

Operator

Ladies and gentlemen, it appears we have no more questions in queue. I'd like to turn the call over to Tom Clarke, CEO, for closing remarks.

Thomas Clarke

Well, I'd like to thank everybody for being on the call today, and I appreciate the questions and look forward to talking to you again in the future. Thank you.

Operator

Thank you for your participation in today's conference. This concludes our presentation. You may now disconnect and have a good day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: [e-mail]. Thank you!