Orthofix International N.V. Q4 2008 Earnings Call Transcript

Feb.12.09 | About: Orthofix International (OFIX)

Orthofix International N.V. (NASDAQ:OFIX)

Q4 2008 Earnings Call Transcript

February 12, 2009 4:30 pm ET

Executives

Dan Yarbrough – VP, IR

Alan Milinazzo – Group President and CEO

Brad Mason – Group President, North America and President, Blackstone Medical, Inc.

Bob Vaters – EVP and CFO

Analysts

Gerald [ph] – Thomas Weisel Partners

Michael Matson – Wachovia Capital

Josh Jennings – Jefferies & Co.

James Sidoti – Sidoti & Company

Stan Manny [ph] – Manny Family Investments [ph]

Bill Plovanic – Canaccord Adams

Operator

Good afternoon. My name is Julie Anne and I will be your conference operator today. At this time, I would like to welcome everyone to the Orthofix International Financial Results for the Fourth Quarter and Full Year 2008 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer period. (Operator instructions) As a reminder, ladies and gentlemen, this conference is being recorded today, Thursday, February 12, 2009. Thank you.

I would now like to introduce Mr. Dan Yarbrough, Vice President of Investor Relations of Orthofix. Mr. Yarbrough, you may begin your conference.

Dan Yarbrough

Thanks, Julie Anne. Good afternoon, everybody, and thanks for joining us today to discuss Orthofix International’s financial results for the fourth quarter and full year of 2008, and our financial guidance for 2009.

During this call, we will be making forward looking statements that involve risks and uncertainties. All other statements than statements of historical fact are forward looking statements, including any earnings guidance we provide, any statements about our plans, beliefs, strategies, intentions, expectations, objectives, goals or prospects. Factors that could cause actual results to differ materially from these forward looking statements made by us on this call include the risks disclosed under the heading “Risk Factors” in our 2007 Form 10-K and subsequent Form 10-Qs filed with the SEC.

With me today’s call are Orthofix’s President and Chief Executive Officer, Alan Milinazzo, our Group President of North America and President of Orthofix Spine, Brad Mason, and our Executive Vice President and Chief Financial Officer, Bob Vaters.

At this point, I’ll turn the call over to Alan.

Alan Milinazzo

Thanks Dan, and good afternoon, everyone.

We have got a lot to cover on today's call, so let me outline the three key points we will talk about. First, we will start with our fourth quarter 2008 results, including the improved sequential performance at Blackstone. Second, Brad will give us an update on operations at Blackstone, including what we believe will be the drivers for achieving operating profitability at Blackstone in the fourth quarter of 2009. And third, Bob will give us some details on our fourth quarter 2008 results, and also talk about expectations for the full year 2009.

Let me start off with our fourth quarter results beginning with the top line. Total revenue was 132.3 million, which was up 3% over the prior year, but increased 6% on a constant currency basis. Our Q4 revenue was in line with our guidance of 130 million to $135 million despite the unfavorable impact of foreign currency rates totaling approximately $4 million. Looking at our individual additional results, sales of our orthopedic products grew 7% as reported, but increased 16% on a constant currency basis after excluding the impact of stronger dollar against other currencies during the fourth quarter. We continue to see strong results from several areas within our orthopedic business.

Physio-Stim, our bone growth stimulator, primarily sold in the United States to help heal non-union fractures grow 20% in the fourth quarter and was up 14% for the full year. Sales of our internal fixation products increased 35% in the quarter and were up an impressive 50% for the year. And revenue from our deformity correction devices rose 16% in the quarter and 25% for the full year. As you can see from comparing our reported fourth-quarter growth rates with our full year increases, there were some negative impact from the strengthening of the dollar against other currencies during Q4. Again adjusting for this on a constant currency basis, our total orthopedic revenue grew a strong 16% in Q4, and was up 12% for the full-year.

As we have been discussing publicly, we believe the growth rates we achieved in our orthopedic business in 2008, which were significantly in excess of the overall market growth rates, were a direct result of some of the strategy changes we implemented early in the year. Having said that, we expect top line growth in 2009 to moderate from 2008 but remain slightly ahead of market growth rates.

Looking next at our sports medicine business, fourth-quarter revenue was up a reported 6%. However, after adjusting for the sale of our infusion pump line for the first quarter of 2008, the year over year growth was approximately 11%. This included growth of 12% in our functional knee bracing and 15% in our cold therapy lines. Our growth rates in this division were also significantly higher than the sports medicine market overall which runs more in the mid single digits. As I have said on other occasions, these terrific results are the result of a strong and stable distribution system, as well as a few outstanding new product introductions, a theme that will come up again as we talk more about our Blackstone business in 2009.

Moving on to our spine division, once again we delivered above market growth rates in sales of our spine stimulations devices, which are up 12% in the quarter, and 11% for the full-year. We continue to see year over year increase in both the number of physicians prescribing our stimulators, which increased 7.5%, as well as the average number of prescriptions per physician, which was up 11%. As a reminder, we still have the only FDA approved cervical stimulator for spinal fusion on the market, and we estimate our total spine stimulation market share to be in the mid 50s.

With regard to our Blackstone unit, which is the implant and biologic portion of our spine business, our revenue was down 7% year over year, but importantly increased 9% sequentially from the third quarter. We are very encouraged by the sequential growth as we believe it demonstrates the effectiveness of both the tactical and strategic steps we have taken to correct the course of the business in 2008. In fact, the average daily sales trends for our implant business have been improving steadily since the month of September, which gives us a high level of confidence that the distribution group has successfully stabilized and our surgeon customer base has effectively been re-engaged.

As we announced yesterday, due to the continued and in fact accelerated progress we've made along with our partners MTF since entering the commercialization phase of our collaboration on Trinity Evolution, we have once again moved up our expected introduction of this new allograft. We now expect to begin our limited market release of Trinity Evolution on May 1, two months earlier than previously announced, and we expect to have it broadly available around the country by July 1. Recall that we will be able to provide this product to both our spine and orthopedic customer base, which we believe, will create ongoing demand from both specialties.

Moving next to our bottom line results, we reported a GAAP loss of $717,000 or $0.04 per share. Excluding certain items, our adjusted net income was $6.8 million or $0.40 per share, which was above the range of guidance we gave for the quarter and represented a 77% increase year over year in adjusted net income. Additionally, our adjusted net income, excluding specific non-cash items, was 9.5 million or $0.56 per share, which is also above the range of guidance we gave for the fourth quarter.

That's a high-level review of our fourth quarter results. At this point, I would like to turn the call over to Brad Mason for a more detailed update on our progress at Blackstone. As many of you remember, Brad was appointed as our Group President of North America last summer, and he has actively been running the Blackstone business since August of last year. Brad?

Brad Mason

Thanks, Alan, and good afternoon, everyone.

Although my scope of responsibility includes all Orthofix businesses in North America, since we have a lot to cover today, I will focus my discussion on Blackstone and specifically three main areas. First, the improvements in Blackstone's sequential performance in the fourth quarter of 2008; second, a status report on our distribution network, our new product launches, and the reorganization plan we announced on our last call; and third, the key elements of Blackstone's path to profitability in the fourth quarter of this year.

As Alan mentioned, we were very pleased with the sequential improvement at Blackstone during the fourth quarter. While we didn't expect to beat the strong fourth-quarter revenue results of 2007, we were confident that we would begin to see the benefits of the steps we have taken over the last six months to stabilize and strengthen our business. The 9% sequential increase in revenue was driven by 23% growth in biologic sales, but more importantly, it also included an increase of 9.5% in our sales of higher margin thoracolumbar implant devices. This revenue growth was even more encouraging when we consider that our key new products have not yet been launched in Q4, and therefore were not reflected in those sales.

We believe that Firebird, our new pedicle screw system and Pillar SA, a unique standalone interbody spacer, will provide additional positive momentum within our distribution network and our customer base after their full market releases in the weeks ahead. Both products have received very strong reviews during our physician preference evaluations. We also expect the positive momentum to accelerate when we begin making Trinity Evolution available to our surgeon customers by the beginning of May as Alan noted a few minutes ago.

Blackstone's gross profit margin also increased sequentially, even after adjusting for the inventory reserve taken in Q3. This was primarily due to the growth I just mentioned in the higher margin implant devices. Additionally, Blackstone's normalized operating expenses were also lower in Q4 than in the prior quarter, after adjusting for the non operating items we previously discussed with you. Those items include the non-cash impairment charge and the management transition cost we incurred in the third quarter, fourth quarter expenses we previously discussed that were associated with the reorganization plan at Blackstone, and the MTF cost we recorded in connection with the completion of the development of Trinity Evolution during both the third and fourth quarters.

There are three operational areas that I want to quickly address. Number one, I am very happy with our Blackstone distributor partners at this time. We had no turnover in Q4 other than a few small territories that we chose to change out. There are still a number of markets around the US where we do not have representation and we will continue to expand our distribution network as opportunities arise. As a matter of fact, we have a few new distributors joining us this quarter.

Number two, in addition to Firebird and Pillar SA, we're expanding the full launch of the Ascent LE our latest posterior cervical spine system. We are also expanding the enrolment in our Advent cervical disc trial as planned, as well as focusing on several other existing exciting product development projects. One of my goals has been to cut down the number of projects we are working on, so we can better focus on the highest priorities.

And number three, our reorganization and consolidation project is right on schedule and moving forward as planned. Q4 2008 costs were as projected and we expect that trend to continue. We are still scheduled to move to the Springfield facility to Texas this summer and in Q1 of 2010 the Wayne, New Jersey operations will be relocated to our new Dallas area facility, which will soon be under construction in Louisville, Texas.

Before I wrap up my comments, I would like to discuss what we believe will be the drivers to achieve quarterly operating profit at Blackstone in the fourth quarter of this year. The plan I will describe has been carefully prepared by a cross-functional team, which is also responsible for delivering the results we are forecasting, and has a significant part of their compensation based upon achieving these results. We believe there are three primary keys that will drive operating profitability at Blackstone by the end of the year. One is revenue growth. The second is gross profit margin improvement. And the third is lower SG&A ratios as a result of leveraging the expected revenue growth and the positive impact of the reorganization and consolidation plan.

Let's talk about each one of those in more detail starting with revenue growth. As we previously announced, we expect full-year revenue growth at Blackstone of 8% to 12%. This will be driven not only by significantly improved stability and a greater focus within our distribution network, but also by new product introductions, including our Firebird pedicle screw system and the Pillar SA interbody spacer during the first quarter, and the additional positive impact of the introduction of Trinity Evolution in the second quarter. While the service fee that we will receive for Trinity Evolution will be about 70% of the average selling price we currently receive for our Trinity allograft, based on the initial feedback, we have received from physicians familiar with the project, we expect the excitement and differentiation of the new project to bolster additional sales of our implant products. For 2009, because of the transition from Trinity to Trinity Evolution, we expect our combined sales volume of these two products to be roughly the same number CCs as 2008.

The second key to Blackstone's operating profitability in 2009 is gross margin improvement. During the first half of the year, we expect the gross profit margin to be in the mid to high 60s, improving in the second half of the year to 72% to 73% range. The improvement will be driven primarily by two things. One is the full market launches of the new implant products Ascent LE, Firebird and Pillar SA, which will drive a mix shift in Blackstone's total revenue. We expect the higher margin implants to become a larger percentage of the total revenue. Specifically, we expect biologics to go from a little more than 20% of Blackstone's total revenue in the first half of the year to around the mid teens in the second half.

The second primary driver of the expected gross profit margin improvement is the introduction of Trinity Evolution which as we announced earlier this week, we now expect to begin making available to the market by May 1. Because we will not be required to purchase inventory of the new Trinity Evolution allograft, we will be recording the revenue generated from this product at 100% gross margin, or twice that of the currently distributed Trinity allograft. As such, it will have a positive impact on the total blended gross profit margin for Blackstone during the second half of 2009.

The third key of Blackstone's profitability in 2009 is lowering our SG&A ratios as a result of both leveraging the expected revenue growth and to a lesser extent beginning to see the positive impact of the first stages of the reorganization and consolidation plan. During the first three quarters, we expect Blackstone's total SG&A to sales to be around 70% to 75%. However in the fourth quarter, we expect it to drop to around 60%. With regard to the reorganization plan, as we previously announced, the costs associated with this initiative are expected to be incurred primarily during the first three quarters with the impact of Q4 being a net benefit. On top of the reduced spending in connection with the reorganization, in the fourth quarter, we also expect to have our strongest sales quarter of the year. As a result of these three main factors, we expect Blackstone to reach a quarterly operating profit by the fourth quarter of this year.

At this point, I will hand the call over to Bob.

Bob Vaters

Thanks, Brad, and good afternoon, everyone.

I would like to focus on three primary areas during my discussion. First, I will give some additional detail on the items included in the earnings reconciliation in today's press release. Second, I will talk about the balance sheet including our cash and debt balances and our improved leverage. And finally, I will go through our guidance for the consolidated company for 2009.

I'll start with the items we pointed out on our earnings reconciliation that impacted fourth quarter results. First, we highlighted an unrealized non-cash fair value adjustment of 5.2 million related to an interest rate swap we put in place in June of last year. Previously, under the applicable accounting rules, this swap was accounted for as a cash flow hedge and changes in its value were accumulated in other comprehensive income on the balance sheet. Due to the recent declines in interest rate, and a LIBOR floor in our amended credit facility, this swap is no longer deemed highly effective. Therefore, cash flow accounting is no longer applicable and going forward mark to market adjustments are required to be reported each quarter through our income statement under the expiration of the swap in June 2011. We will look at it this quarterly and continue to report any unrealized gains or losses on a mark to market basis. This swap still provides a hedge against interest expense on $150 million of outstanding debt it covers should LIBOR rise above 3.373%.

Since this represents an unrealized non-cash item, it is excluded from EBITDA as calculated in accordance with the company's amended credit facility, and therefore it does not affect the calculations of our covenants. We have included the fair value adjustment on the reconciliation of non GAAP measures, and it will be our intent going forward to do the same with the unrealized gains that will naturally result as the swap winds down. In other words, this liability will ultimately reverse itself over its remaining life running through the income statement.

The next item on our earnings reconciliation is related to expenses associated with strategic initiatives. These costs were incurred in connection with our collaboration with MTF on Trinity Evolution. We indicated in our third quarter earnings call that during Q4 that costs associated with our strategic initiatives, including MTF related expenses, will be approximately 3.5 million. With the commercialization phase running ahead of schedule after a previously announced completion of the final development milestone, we simply recognized the expenses in alignment with the current status of the project’s completion. Based on this accelerated timeline, we booked pretax R&D expenses of 5.6 million in the quarter or about $0.21 per share. Of the 10 million we have committed to paying MTF in accordance with our agreements, we have now spent $6.1 million over the last two quarters. From a cash perspective, we paid 8.5 million last year and expect to paying the remaining 1.5 million on the launch of Trinity Evolution in the second quarter of this year.

During our last earnings call, we also indicated we expected to incur some cost associated with reorganization and consolidation plans. In the fourth quarter, those costs totaled approximately 1.5 million pretax or $0.05 per share, most of which related to previously announced activities at Blackstone. Another item on our reconciliation is the foreign exchange losses of approximately 1.7 million pretax, or about $0.06 per share that we incurred primarily due to unrealized non-cash foreign currency adjustments, resulting from a rapid strengthening of the US dollar against various foreign currencies. A number of Orthofix’s foreign subsidiaries have intercompany and trade accounts payable that are held in currencies other than their home currencies, and movements in the relative values of these currencies resulted in foreign exchange gains and losses. To the extent, the US dollars strengthens in the future, we will continue to report these unrealized non-cash foreign exchange adjustments as other expense. If the dollar weakens, we could report foreign currency adjustments as other income.

Finally going the other way in our adjusted earnings, we excluded 3.4 million in tax benefits, including 1.2 million or $0.07 per share which resulted from a reversal of previously recorded FIN48 tax liability and 2.2 million or $.13 per share resulting from a favorable geographic mix of pretax gains and losses in certain tax jurisdictions. Excluding these favorable items, the company's fourth quarter tax rate was 35%.

Now let us move on to the balance sheet. Our total cash balance at December 31, 2008, was $25.6 million, which was $1.4 million lower than the balance at the end of the prior quarter, and $15.9 million below the balance at the end of 2007. The $1.4 million reduction in cash during the fourth quarter included the impact of a $10 million prepayment of debt we made in December.

During 2008, we made $17 million in debt payments reducing our term debt to approximately $281 million at the end of the year. As of today, we have made a total of $56 million in payments since the inception of the credit facility in September 2006, of which $49 million was ahead of schedule maturities. This is consistent with our desire to deleverage the balance sheet giving us more room under the leverage ratio. A part of it is in our amended credit facility.

In fact, our fourth-quarter EBITDA as defined in our amended credit facility improved significantly over the third quarter to $23.1 million, resulting in a leverage ratio of 3.4 versus the maximum allowable ratio of 4.0. As we announced two days ago, due to improved cash flows stepping in large part from steps we have taken to normalize expenditures at Blackstone, we have made an additional $7 million debt repayment ahead of its scheduled maturity date, further reducing our outstanding term debt to approximately $274 million.

I would like to finish up with a brief review of our guidance for 2009. We have included a good number of guidance metrics in today's press release, and I won't go through each one of them, but here are the highlights.

Starting with the top line, we expect to generate between $535 and $545 million in total revenue for the full year. This represents year-over-year revenue growth of between 3% and 5%, but it is an increase of about 8% on a constant currency basis. Our full year 2009 reported earnings are expected to be $1.38 to $1.48 per share including pre-tax cost of approximately $5.8 million or $0.21 per share related to our strategic agreements, including MTF, and $3.3 million or $0.12 per share associated with the reorganization plan we previously announced at Blackstone.

This full-year earnings guidance also includes costs of about $0.03 per share in connection with a special general meeting of shareholders that is scheduled for April, just a couple of months prior to our normal, annual general meeting. We expect a gross profit margin of 74% to 75%, which is an increase of 100 basis points to 200 basis points over 2008, after adjusting for the $11.5 million inventory reserve we booked in the third quarter.

Finally, we expect EBITDA calculated in accordance with our amended credit facility to be between $93 million and $98 million, which will represent an increase of between 10% and 15% from 2008 full year EBITDA of $84.9 million.

Based on our ‘09 EBITDA guidance, we met just the low end of our expected range and did not make any additional repayments during 2009 other than the required quarterly payments of 825,000. With all else remaining the same, our leverage ratio at the end of the fourth quarter as defined in our credit facility would be approximately 3.0. This would be compared to a maximum allowable ratio at that point of 3.25.

Now at this point, I will hand the call back over to Alan.

Alan Milinazzo

Thanks for the update, Brad and Bob. Before we move to open the lines for questions, I would like to just take a few minutes to talk a little bit about the vision we have for Orthofix over the next few years.

We believe the decision to acquire a spinal implant company was and remains a strategically sound choice as Orthofix was searching for a complimentary, high-growth and high-value orthopedic sub-market in which to expand. Our successful spine stimulation franchise and the growing number of surgeons who prescribe our stimulators gave us the perfect customer platform to offer additional complimentary spine products.

Further, the high sales growth potential, very attractive margins, and strong valuations made the spine implant and biologic market an obvious choice for Orthofix. Although the Blackstone business did not perform to our expectations in 2008, the fundamentals of the strategy remain sound as we look at 2009 and beyond.

The recent and sustainable improvements in the business performance are noteworthy, and we expect they will result in continued improvements in operating performance throughout this year as evidenced by the Q4 forecast for profitability in this business.

The business challenges associated with this acquisition, particularly during 2008 have been significant and in some cases, unexpected. Having said that, the key issues which we dealt with in late 2000 and through most of 2008 have been analyzed and solutions have been put in place so that we can realize the potential of a strong and broad spine strategy.

As a reminder, the US market of spinal fusion implants and bone graft substitutes alone is over $5 billion with highly attractive growth rates. Add in the nonfusion technologies we have in our pipeline, including our cervical disc, interspinous spacer, and dynamic stabilization device. And we believe the conditions for the foreseeable future remain just as attractive as when we acquired Blackstone.

Importantly, during 2008, we refreshed the Blackstone portfolio both organically with products like Firebird, ProView, and Pillar SA and inorganically with wise investments like MTF and InSWing. We believe these products in combination with our market leading spine stimulation products create a highly differentiated portfolio in the marketplace.

We continue to improve execution at Blackstone and have begun to realize the potential that exists with the successful and comprehensive spine strategy, which for us includes our stimulation, biologic, and implant businesses. This is a direct result of the North American alignment we put in place in August last year and improved cross-selling, penetration rates that we believe will continue unlocking some selling opportunities we originally envisioned when we began with the strategy back in 2006.

Further, our expectations, which appear to be in line with a number of investors based on recent discussions I have had are that the value of a $250 million to $270 million highly profitable spine business will unlock segment shareholder value over the coming quarters and years.

Our recent and ongoing success are a credit to the entire Orthofix organization, and I want to thank everyone of our employees and partners for their part in helping us deliver high-quality products to our physician customers and their patients.

With that operator, let us open the call for questions.

Question-and-Answer Session

Operator

Thank you. (Operator instructions) Your first question is from the line of Gerald [ph] with Thomas Weisel Partners.

Gerald – Thomas Weisel Partners

Thanks a lot for taking my call. You report earnings about 10 different ways here, and I'm just curious, you know, how we should look at ‘09 versus ‘08. Are you talking about the $1.30 to $1.48 off of the negative $13.37 number or off of the positive $1.54 number that you did for 2008.

Alan Milinazzo

I think you want to look at it – really it is intended to be on a GAAP to GAAP basis. So, we are not reporting things like the swap, for example, to be recurring again in ‘09.

Gerald – Thomas Weisel Partners

Okay. So the $.40 you put up in the fourth quarter, that is the type of number we should be comping against when we look at your ‘09 guidance, is that correct?

Alan Milinazzo

Yes, just make sure when you do it you have things like the remaining strategic investments in both columns.

Gerald – Thomas Weisel Partners

Okay, sure.

Alan Milinazzo

As I pointed out those numbers today.

Gerald – Thomas Weisel Partners

Okay, on the gross margin side, it looks like next year is going to be an excellent year but in 2010 once this Trinity agreement, whereby you get 100% gross margins goes away, could we potentially see the gross margin line contracting in 2010?

Bob Vaters

Hi, Gary no. That – the agreement with Trinity Evolution from MTF begins – actually we start commercializing products May 1 of 2009. It is a ten-year agreement. So that will stay with us for 10 years. Those economics are for 10 years.

Gerald – Thomas Weisel Partners

Can you just go through how that works one more time, I'm just a little bit confused on that one.

Bob Vaters

Sure. So today we will – inventory we build, we collect products from Osiris, now NuVasive. We sell that in the market at somewhere between $350 to $400 per cc. As of May 1, when we start shipping products from MTF, Trinity Evolution the next generation product, we will realize 70% of the average selling price per cc whatever that happens to be on an account by account basis. And so we will record that as both revenue and 100% gross margin since we don't have any other inventory costs associated with the product.

So that begins May 1st. There will be a little bit off an overlap for a month or two, May and June, and then come July 1, we will be exclusively shipping the MTF product via the MTF organization. That is when the gross margin begins to flip obviously from the current call it 50% range to 100%. So, we get the lower revenue about 70% of the ASP, but again our cost is virtually the same as our ASP.

Gerald – Thomas Weisel Partners

Okay, that is very helpful. When you talk about the hardware side of the business, you are expecting a pretty significant ramp in gross margin improvement in the second half of the year, can you talk about what is attributing or what we can attribute that to, is it new products, is it better distribution or is it manufacturing?

Alan Milinazzo

One of the issues we had this year was that we saw a pretty significant dip for about 4 or 5 months in our metal business within the Blackstone part of our organization. And so that is a high margin business for us, and so as Brad has begun to roll out some of the new products, the Firebird product et cetera, we began to see the gross margin improve already. We noted an improvement in Q4. So that is primarily the driver on the metal side relative to Blackstone business. Brad you have anything you want to add.

Brad Mason

The other thing too Gerald in the second half of the year is the Trinity Evolution margins are what is impacting that number significantly as well. So absolutely the – when the Firebird systems and the new systems we have for the implant business, we expect that percentage of business to grow relative to the biologics.

Gerald – Thomas Weisel Partners

Okay, great. And then lastly Brad, you know, you are very close to the spine business here, and you know there's been a lot of talk obviously about procedure volume slowdowns in a number of surgical areas, but what have you seen in spine lately. Has it been stable? Is there any sign that it could be weak, can I just get your thoughts on that. Thanks a lot.

Brad Mason

Yes, absolutely Gerald. Last week I had my scientific advisory board meeting with nine top surgeons in there, and I asked that specific question. And they are not seeing a slowdown in their business at this point. We have not seen it in the Blackstone business, and could there be an effect from this macro-economy? Yes, there could be. But so far it is holding up very well.

Operator

Your next question is from the line of Michael Matson with Wachovia Capital.

Michael Matson – Wachovia Capital

Hi, thanks for taking my question. Just I wanted to ask you about the adjustments to – from GAAP to your adjusted EPS number, I'm coming up with the total of $0.42. Looking back at your Q3 results, it looks likes you were guiding to $0.07 impact from sort of these non-operating expenses. Just wondering that is a pretty big differential, what caused that and how do we know that looking out for ‘09 there is sort of so called non-operating expenses won’t end up being greater than what you are guiding to now.

Bob Vaters

Well, this is Bob Michael. I mean in terms of the guidance and what was different in terms of the call-out expenses, in tables it is pretty well spelled out. Obviously, the unrealized non-cash fair market adjustment was not guided. The foreign exchange non-cash unrealized loss was not guided, and the strategic investments we accelerated because we are ahead of schedule. So those of the principal differences. The second part of your question.

Michael Matson – Wachovia Capital

Second part was just the looking out at ‘09, I mean, should we be concerned that those numbers – the adjustments could end up being bigger than what you are guiding to given what happened with the fourth quarter?

Bob Vaters

Yes, well – you are talking about the unrealized non-cash numbers, let us look at them. Take the swap, it is way more likely that we will start to actually have gains because the remaining balance sheet item for the swap actually has to amortize to zero between now and June 2011. So we have taken this one-time mark-to-market essentially because we didn't pass the cash flow hedge accounting. So that is unlikely. It could go up a little bit if interest rates continue to go down but over the coming quarters you are going to see probably gains until it gets to the time the swap expires in June 2011. Foreign exchange, my guess is as good as yours, but keep in mind these are, you know, the vast, vast majority are unrealized non-transactional intercompany accounts, who exchange rate was supplied to it to a balance. No transactions happened. And as to the strategic initiatives I gave you specifics as to what would be for next year.

Michael Matson – Wachovia Capital

Okay. And can you tell us what your cash flow from operations and free cash flow was in the quarter?

Alan Milinazzo

We haven't put that out but I can tell you this, if you look at the cash difference between the end of the third quarter and the end of the fourth quarter netting out the debt repayment, you know, our cash was only down about $1.5 million. So, we had probably a move in cash upwards, sort of a proxy for free cash flow of about $8 million to $9 million in the fourth quarter.

Michael Matson – Wachovia Capital

Okay, and then question on Trinity Evolution, once that product is launched, I guess how should we think about how quickly the sales of that product could ramp. Are there going to be any production constraints or availability of the product, training itself, people training on surgeons anything around that it is going to kind of restrict how fast that the uptake is?

Alan Milinazzo

Hi, Michael, it is Alan. Now our expectation is that we have got – we got a little bit of a running start here in that we will begin limited market releases in May, which will give our customers and our sales force an opportunity to see the product before we stop shipping the old Trinity product. We have already had a number of meetings, launch meetings, both with the MTF folks, and I think that we are noted in the past that there are about 38 folks who work for MTF who will be facilitating the introduction of the product for us. So, our expectation is that as inventory builds, and our ability to supply the demand that we have created to this point, we can satisfy that comfortably by the time that we have no overlap of inventory. And everything from our standpoint and looking by Brad’s comment here is that the support from the distribution system has been very high and the customers that have been exposed to new allograft product and the data that we have so far has all been very positive. Brad, I don’t know if you want to add anything.

Brad Mason

The only thing I would add Michael is that we're now currently building inventory. So we expect to be in an appropriate position, MTF is currently building inventory is what I should say, and so we expect to be in a good position in terms of inventory and were ready to go.

Michael Matson – Wachovia Capital

Okay, did I hear you say that the May 1st date and that is sort of a preliminary launch, and that is there some date after that where it'll be a full launch or –

Alan Milinazzo

Exactly Michael, we began a couple of years introducing sort of three stages of launches, a physician preference phase, the limited market release phase, and then a full market release phase. And so May 1st will be the limited market release, physician assessment and then we will go right to the full market release as of July 1.

Michael Matson – Wachovia Capital

Okay, all right and then on Blackstone, forgive me if you said this or if it was in the press release, I didn't see it or hear it but the – what percentage of Blackstone was – came from biologics this quarter?

Bob Vaters

We didn’t say, Michael. What we did say you probably picked on was the increases in biologic sales that sequentially Brad mentioned and the increase in metal sales, thoracolumbar sales from Q3 to Q4 we had 20% plus in biologics. Sequential increase and the 9.5% in thoracolumbar. So we didn't provide the actual detail in that. We have – we have in the past mentioned though that Trinity sales for 2008 were roughly $22 million.

Michael Matson – Wachovia Capital

Okay, and then just one more question on stimulation. Is there any risk that we could see a repeat of the reimbursement cut that we saw last year in spine stem or long bone [ph] stem?

Bob Vaters

Yes, believe it or not Michael I know, you have been covering this a while. It was 2 years ago that we had that happen to us. Now, at this point I think our sense is that reimbursements for the foreseeable future through ‘09 certainly look to be stable. Something we monitor very, very closely. As you know, we employ a lot of people in Texas to keep an eye on this for us but for this year, we don't think there is a risk there. We do, obviously, we had a very good year in 2008. So we brought our projected growth rates down to more in line and slightly ahead of market growth rates, but reimbursement risk for ‘09 does not appear to be high.

Michael Matson – Wachovia Capital

Okay, thanks a lot.

Bob Vaters

Thanks Michael.

Operator

Your next question is from the line of Peter Bye with Jefferies & Co.

Josh Jennings – Jefferies & Co.

Hi, this is actually Josh Jennings in for Peter. Good evening.

Alan Milinazzo

Hi, Josh.

Josh Jennings – Jefferies & Co.

I guess just first on the Blackstone business, you know, it sounds like distributors stabilized and then the business stabilized in the quarter. You now, one of the issues I believe you had in the past couple of quarters, the distributors opening new customer accounts. Can you provide any commentary there in terms of any changes on that front, whether the facility or ease of opening new accounts now that the Trinity product is in the past and the Evolution is out there?

Alan Milinazzo

Josh, I will start and then maybe Brad will want to jump in here. I think for us, we certainly appreciate you noting that. We do think that the distribution system at Blackstone has stabilized greatly, really since August-September when Brad came in and took on the direct responsibility there. And our distributor numbers are roughly the same-I think we have talked in the past about between 40 and 42. Brad alluded to we have made a couple of small changes in Q4, but we have also added a couple of new guys. So we are roughly the same. Opening accounts, you know, we use sort of a combination of things. Stimulation introductions are growing for us which are nice. So that cross selling that has been enabled through this North American structure has helped to open up some new accounts. Firebird, I think has really done some nice things for us. And we have in fact opened up some Trinity accounts even though those are with the current Osteocell product, but those customers we expect would turn over for us in July. So, really we sort of use a number of things to open up new accounts. Brad I don't know if you want to add anything.

Brad Mason

Josh, you know, I personally met with a number of surgeons who are looking at switching their business or portions of their business to Blackstone. And we our distribution force, with the sales force we have out there today we have a lot of opportunities to open new accounts and that is their job. They are out there doing that everyday. So I'm very pleased with that distribution system.

Alan Milinazzo

And one point I would add, I think on top of that I mentioned it may be a minute ago when Michael's question came up was, we really look forward to this relationship with MTF, 38 folks they have in the field, who have their own set of unique relationships that we think will be very positive for us in terms of leveraging new introductions and new customers. So, you know when that time comes for us in May to begin launching the product, we look forward to using those folks to get us into some physicians we haven't historically been talking to.

Josh Jennings – Jefferies & Co.

All right, and in terms of the Trinity Evolution, I noted in a press release that you described how that product promises to be superior to current forms in the market. Can you just provide any sort of elaboration on those comments in terms of what advantages the Evolution product will have over the Osiris product that is out there now?

Alan Milinazzo

Josh, probably a little bit early for us to start getting into some of the marketing details. As you can imagine, you know, from a competitive standpoint, we don't want to tip our hand here, but our sense is that based upon the data that we have that we will come to market with other elements of the product we think we will be able to distinguish between this product and the Osteocell version. So, stay tuned and as we get close to the launch, we will share some of that with you.

Josh Jennings – Jefferies & Co.

Okay, and just in terms of accelerated timelines, you know, can you comment on what piece of the developmental process was regulatory issues or just the development process in general that allowed you to move the timeline up? Any specifics there?

Alan Milinazzo

You know it is sort of across-the-board. I mean, I think MTF is just all the timelines that have been set up they have exceeded our expectations. You know, it is just a terrific team. We talked about being the pre-eminent partner in this space, and so really across the board all the different elements that would go into the product moving from development phase to commercialization phase, you know, we have exceeded those. And so from our standpoint what is really allowed us to confidence is that we move to building inventory on the product and that allows us to have an accelerated launch. Now, recall that this is not a 510(k) based product. This is the tissue product. It is treated at an advanced plant. So it really comes down to all the testing and validation processes that are still under way but also gives the confidence to move up the date from July 1 to May 1.

Josh Jennings – Jefferies & Co.

Great and then just with the 23% growth sequentially in biologics, was that a higher than anticipated run rate and does that sort of change your idea in terms of the inventory buildup with the old Trinity product and having any excess inventory or not enough inventory when your distribution rights expire in June.

Alan Milinazzo

I will make a quick comment and then invite Brad to mention it. But one of the things that we are excited about we noted is that with the new relationship with MTF, we're going to have the ability to go into the orthopedic space, and we have got a terrific orthopedic organization that delivered great results as we made some strategy changes last year in particular in the US. So, we do believe that demand is going to be higher for the product as we roll it out. We also believe there will be some differentiation as we will talk about in subsequent calls. But the nice thing for us is that that increase really does sort of underscore the fact that the distribution system has not only become stabilized, but it is really become reengaged and more effective. And so to me that is sort of a really nice takeaway from that. Brad I don't know if you want.

Brad Mason

Yes, Josh the other thing I would say is we had to calculate ahead how much inventory we anticipate that we would need until June 30, which I think is the core of your question. As we sit here today 4, 5 months after we made that decision I'm very happy with our inventory levels of the Trinity product, and I don’t – I do not expect to run out of the Trinity product nor do I expect to have a lot of Trinity left at the end of that time. Certainly it is going to be a little bit of a juggling act as we make the transition but I think we are prepared for that and very, very satisfied with our position today.

Josh Jennings – Jefferies & Co.

Great, and just one last one. I mean just you may have mentioned this, I may have missed it, but with Blackstone expected to grow 8% to 12% in ‘09, you are still expecting orthopedics and sports medicine to grow year-over-year in the double-digit range?

Alan Milinazzo

We – in our guidance we gave top line guidance for the company growth, which is obviously impacted by currency, and we – what we have said in the release Josh is that we had an extraordinary year in all of our businesses, and outside of Blackstone obviously and the results in the past few months keep us encouraged – and we are encouraged about Blackstone for 2009. But we have pretty well cautioned investors that the sort of growth rates we saw across those other businesses, we don't expect to duplicate this year. We did, however, say that the market growth rates for their respective businesses is sort of the floor for us. So, we would expect that we could grow beyond market growth rates whether it is sports medicine, the orthopedics segment that we compete in, the stimulation business and obviously Blackstone we specifically called that 8% to 12% top line.

Josh Jennings – Jefferies & Co.

Okay, great. I appreciate it, thanks.

Operator

Your next question is from the line of James Sidoti with Sidoti & Company.

James Sidoti – Sidoti & Company

Good afternoon Alan. Can you hear me?

Alan Milinazzo

Hi Jim. We got you.

James Sidoti – Sidoti & Company

Okay, first question, you mentioned (inaudible) shareholders meeting. Is there a hard date for that?

Alan Milinazzo

There is. We filed an 8-K I think a couple of days ago. But it is roughly in the April, kind of early April timeframe.

James Sidoti – Sidoti & Company

Okay, but you are not sure exactly when?

Alan Milinazzo

It is to be within the first week or two of April.

James Sidoti – Sidoti & Company

Okay, and now is the cost for the meeting built into your guidance?

Alan Milinazzo

It is, if you listen to Bob, if you listen to my script, my speech that we put $0.03 in there.

James Sidoti – Sidoti & Company

$0.03 for the cost of the meeting.

Alan Milinazzo

Yes, which is our percent estimate.

James Sidoti – Sidoti & Company

Okay, and you mentioned that that was the charge for the interest-rate swap. Now, in your guidance is there anything to reverse that in 2009. Does 2009 assume that that line is zero?

Bob Vaters

It is zero. But as I pointed out it is likely that if freights stay the same we will go above, there will be a reversal pretty quickly in there.

James Sidoti – Sidoti & Company

So there would mean your number would come in higher than that $1.40 to $1.50?

Bob Vaters

If you are looking at a pure GAAP and you are including that unrealized non-cash adjustment as an income or an expense, yes.

James Sidoti – Sidoti & Company

Okay, so right now that $1.40 to $1.50 that is pure GAAP number?

Bob Vaters

It is, but you really need to look at the schedule that we gave, and look at the specific adjustments we made and look at the call-outs that I gave you specifically in my part today.

James Sidoti – Sidoti & Company

Okay, I'm sorry, but I'm having a hard time with this. So does that $1.40 to $1.50 include the $0.03 for the meeting and the charge for MTF?

Bob Vaters

Yes.

James Sidoti – Sidoti & Company

It does.

Bob Vaters

Yes.

James Sidoti – Sidoti & Company

Okay, all right. And you said that the leverage ratio ticks down to 5 at the end of the year?

Alan Milinazzo

No, we are at 3.4 now, and we said that we are comfortable at the $0.03 level at the end of the year.

Bob Vaters

Take that 3.25.

Alan Milinazzo

Are you asking, excuse me. Are you asking the – what the actual covenant is or –

James Sidoti – Sidoti & Company

The covenant is right?

Alan Milinazzo

Yes, it goes down to 3.5 at the end of September and to 3.25 at the end of the year.

James Sidoti – Sidoti & Company

At the end of December. Okay, great. Thank you.

Alan Milinazzo

Thanks Jim.

Operator

(Operator instructions) Your next question is from the line of Stan Manny [ph] with Manny Family Investments [ph].

Stan Manny – Manny Family Investments

Gentlemen, a really improved report. I have a quite detailed question on the Trinity Evolution, can you kind of give us a little more color or detail on the market potential. Does this compete with InFuse, does is it only compete with the NuVasive/Osteocell, how do you see the market, the market size, and you are really not putting a lot of potential sales into 2009. So looking out further, is it a $100 million market potential, 300 million, what are we looking at for market potential that you're going to be able to attack?

Alan Milinazzo

Yes, Stan, that's a great question. Primarily the market today, obviously the stem cell market, we created the stem cell market, our Blackstone, with the distribution agreement with Osiris, and today that market is whatever we represent plus the sales that NuVasive has begun reporting. The potential for the market though when you consider that on the spine side, half the cases are still done. There is a second procedure that is done, there is an autograft procedure that is done that we're hoping that we can impact. But then if you think about products like InFuse that are $1 billion plus opportunities that are out there for us, so the potential market numbers are just huge. So from our standpoint, we’ve got to make that shift from getting 100% of the revenue recognition to 70% revenue recognition, which constraints a little bit of the revenue expansion in 2009, but helps the profit sizes. So our expectation is that with the new generation of the product that we have out in the marketplace, some of the data that will be coming out, some of the studies that we're going to be initiating, we would expect that both the spine and orthopedic segments will be several hundred million, if not, bigger markets over the next 6, 7, 10 years. Brad, I don't know if you want to add anything else.

Brad Mason

Yes, the other thing I would say, Stan, is the market we play in with that product is really a $1.5 billion market as we speak. But yes, it is – it does complete with InFuse and other biologic products. So we have tremendous potential in that product. I think the conversion to the new product and getting things ramped up and as Alan said that 70% revenue recognition versus the 100% is why we are showing it flat for this year.

Stan Manny – Manny Family Investments

Okay. But the potential is there, and are you finding in your discussions with the surgeons that this could replace some of the discontent and problems with InFuse, I mean is that an immediate potential?

Brad Mason

It definitely is, Stan. I have had specific conversations with the surgeons who have indicated that exact thing to me.

Stan Manny – Manny Family Investments

Okay. So this thing could really be a big addition to our business.

Brad Mason

Absolutely.

Stan Manny – Manny Family Investments

Okay. Second question, nobody has framed the potential reorganization restructuring savings over the next 2, 3 years. Could somebody put some numbers around it? I mean is it a 5 million a year potential savings what you're doing, is it 10 million? I mean we have a small share based, so those numbers become significant bottom line and margin improvement?

Brad Mason

Yes. And Brad again, for 2009, we have a net expense of 3.3 million that we previously announced. And in 2010 – which reverses by the way in Q4, and we start to see the benefit of the consolidation and organization. In 2010, it is a benefit of about $2 million and then thereafter about $5 million per year.

Stan Manny – Manny Family Investments

For the restructuring program?

Brad Mason

That is correct.

Stan Manny – Manny Family Investments

Okay. Last question, can somebody tell us what were high, low case of debt end of 2009, best – and the worst case you did talk about would be the 30 EBITDA ratio. What is the best case if all the numbers come in and you are the top range of your expectations for 2009, what would our debt be if we apply the cash to debt pay down?

Bob Vaters

Well, Stan, this is Bob. We are at 274 of senior debt now. And like I said earlier, we had $8 million to $9 million available cash for debt, or at least a 3 million [ph] movement in cash balance at the fourth quarter. Whether we do it and at what pace is something we haven't really talked about nor have we forecasted here in the balance sheet, but we definitely could be a lower number. I don't really want to comment at this point to…

Stan Manny – Manny Family Investments

Okay. Because you have – you are forecasting a EBITDA of – fairly high EBITDA, 90, in the 90s, 90 million, and certainly you have got a – we know the interest payments and I don't know your CapEx, but it would seem to me that you could put a real hit into the significant pay down in debt this year if everything moves along as expected?

Bob Vaters

I would agree. I just don't want to be too specific, but it is certainly a goal to deleverage. And as you have seen, at the end of last year, we did 10. Two days ago, we did seven, all ahead of scheduled securities.

Stan Manny – Manny Family Investments

Okay. And you did a table, which was excellent for the fourth quarter cash earnings, but you didn't to it for the year 2008. Any reason you didn’t roll that thing out?

Bob Vaters

We do have one for full-year ‘08 that has 43.5 and 254. It is just below the EBITDA table.

Stan Manny – Manny Family Investments

Oh, is it? Okay, when it came, we didn't have that much time to look at it. Okay, 254 is…

Bob Vaters

I’d be glad to send it to you again.

Stan Manny – Manny Family Investments

Okay. Thank you. Good job, gentlemen. You are really moving ahead.

Alan Milinazzo

Thanks Stan.

Operator

Your next question is from the line of Bill Plovanic with Canaccord Adams.

Bill Plovanic – Canaccord Adams

Hi, thank you. Good evening. Can you hear me?

Alan Milinazzo

We got you, Bill.

Bill Plovanic – Canaccord Adams

Fantastic, just three clarification questions if I could. For MTF, you just have 1.5 million left to pay on that, is that correct? And then is the timing on that upon initial product launch?

Alan Milinazzo

Yes. We have 1.5 million to pay and the timing is full commercialization.

Bill Plovanic – Canaccord Adams

So full commercialization?

Alan Milinazzo

It is the last milestone, full commercialization.

Bill Plovanic – Canaccord Adams

Okay. And then I didn't see it anywhere, did you give us what the OUS revenues were in the quarter?

Alan Milinazzo

No. But that will be in the 10-K.

Bill Plovanic – Canaccord Adams

Do you have a ballpark for us, like could you at least share with us what would US or Americas growth year over year or anything of general nature?

Alan Milinazzo

We don't right now. Again one of the things I hope everybody noticed is we have – we're having our call like 2.5 weeks ahead of schedule. So we haven't completely finished our 10-K, and that is one of the things that would be in the 10-K.

Bill Plovanic – Canaccord Adams

Okay. And then lastly, you talked about, you charge about $350 to $400 per CC for Trinity and Trinity Evolution will be priced similarly, how many CCs are used in a cervical case, roughly how we CCs are used in a lumbar case, and what is your mix of that business today?

Brad Mason

Bill, let me take a stab at that. Generally across all of our cases, we average about 10 CCs per case. I do not have the split between the cervical and lumbar, obviously it is a lot more in lumbar than it is in cervical.

Bill Plovanic – Canaccord Adams

Would you say it is an 80-20 makes or in terms of number of cases per performed, lumbar and cervical, or just a guess on the mix of cases, actually number of procedures, when I say cases, that's what I mean?

Brad Mason

Sure Bill. I think I mean as I sit here today without specific information, I figure it is about 50-50.

Bill Plovanic – Canaccord Adams

All right. And then just relatively to InFuse’s challenges over the last six to nine months, I mean up 23% sequentially on biologics, I would assume Trinity drove that, no pricing changes, you know is that indicate of what we could continue to see in the future based on kind of migration away from InFuse?

Brad Mason

I think it is a combination, it is not all. It is not all InFuse. I think the product stands alone by itself and has a lot of advantages and it is a terrific product. Not all of that business is coming from InFuse certainly. So yes, it has tremendous opportunities as we said earlier, very large market opportunity. And the other thing is, we are the experts out there. We have had a product for three years, nobody else has stem cell – has had cell stem cell products that long obviously, and people look to us to lead that market, and that's what we're going to continue to do.

Alan Milinazzo

Yes. Bill, the only thing I guess I would add to Brad is that we really didn't have much of an exposure to this, the stem cell market with orthopedic surgeons. And I know that – Brad and I were both out at a sales meeting recently with our sales force on the orthopedic side, which as you know we sort of redirected last year, fairly successfully into stimulation, biologics, deformity correction. And they are just dying to get their hands on this product. So that is the areas that in addition to the spine space that we are excited about. We will be talking about some of the studies we will be doing probably at your program next week. So we really would look for nice, even growth for that business, the MTF part of the business and biologics next year, and with some improvement in the orthopedic business in particular.

Bill Plovanic – Canaccord Adams

Okay. And then just more clarification, what percentage of your metal, spine metal implant cases right now are utilizing Trinity Evolution? So what is the penetration of Trinity into your current procedural base would you say?

Alan Milinazzo

Yes. Trinity Evolution would be out May 1, and so it is the current Trinity product. Not enough, Bill, actually surprisingly, we haven't given that number out, but it is a surprisingly low number. So I will just give you a couple of quick references because we don't really – we haven’t really said that. But we do business at Blackstone with about 500 or so surgeons, and less than 200 of our customers use the Trinity product. And remember that we have over 1,200 stimulation customers that we are beginning to see utilize some of our Blackstone products. And so if you look at those numbers, 500 discrete customers of Blackstone that is growing, less than 200 that use Trinity today.

Bill Plovanic – Canaccord Adams

All right, great. Thank you very much and we will see you on the 24th in Vegas.

Alan Milinazzo

Thanks a lot, Bill.

Brad Mason

Thanks, Bill.

Operator

This concludes the Q&A portion of today's call. I will now turn the floor back over to Mr. Alan Milinazzo for any closing remarks.

Alan Milinazzo

Thanks, Julie Anne. In summary, as challenging as 2008 was on many levels, we created momentum going into 2009, which we believe is fundamentally important to achieving the strategic and financial objectives, which we outlined for you today. I look forward to communicating with all of you on our progress as the year unfolds. Thanks for joining us on the call today.

Operator

Thank you all for participating in today's conference call. You may now disconnect.

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: transcripts@seekingalpha.com. Thank you!