Global Industries, Ltd. Q1 2009 Earnings Call Transcript

Global Industries, Ltd. (GLBL)

Q1 2009 Earnings Call Transcript

May 7, 2009 10:00 am ET

Executives

John Clerico – Chairman and CEO

Peter Atkinson – President

Jeffrey Levos – SVP and CFO

Analysts

Jim Rollyson

Graham Mattison [ph]

Joe Gibney

Bill Dezellem

Michael Marino [ph]

Brad Handler

Presentation

Operator

Welcome to the Global Industries' first quarter earnings conference call. At this time, all participants are in listen-only mode. After the presentation, we will conduct a question-and-answer session. (Operator instructions) Today’s conference is being recorded. If you have any objections, you may disconnect at this time. On the call this morning are John Clerico, Chairman and Chief Executive Officer; Peter Atkinson, President; and, Jeffrey Levos, Senior Vice President and Chief Financial Officer. I would now like to turn the meeting over to Mr. John Clerico. Sir, please begin.

John Clerico

You want me to do it?

Jeffrey Levos

I can do it. Thank you, Torrie. This is Jeff Levos, the CFO. As in previous calls, I would like to welcome you to our earnings conference call for the first quarter of 2009, and remind you the call is being recorded and will be available on our Web site. The primary objective of this conference call is to discuss the earnings for the quarter ended March 31st, 2009.

Certain of our comments and responses to questions may include forward-looking-statements. These forward-looking statements are subject to a number of uncertainties, which are discussed in detail in our Form 10-K filing with the SEC. Now I’ll turn the call over to Mr. John Clerico. Mr. Clerico?

John Clerico

Thank you, Jeff. Good morning, everyone. Welcome to our first quarter call. As in the past, I’ll provide a summary overview of the quarter. Then Jeff will provide financial comments. And Peter will provide more detailed operational comments. And at the end, we’ll conclude with Q&A.

As I said in our press release, we continue to make progress on our recovery plan. And we were able to return to profitability in the quarter. Our $0.17 of earnings would have been significantly higher, if we’d completed the certification of our diving saturation system in Brazil, in time to start our diving work on the Camarupim project. We were unsuccessful in doing this, however, and it became necessary for us to charter a third party vessel to complete the work, and thereby incur significant extra cost. More on that in a few minutes from Peter. During the quarter, we continued to execute well on some of our other key projects, those in the Middle East, Asia Pacific, and the Gulf of Mexico.

Financially, as we’ve said before, we continue to carefully manage our cash and costs. We finished the quarter with $351 million in cash, as a result of focusing on our receivable collections and controlling our spending.

Our SG&A costs continued to decline as a result of cost reduction actions. We were down to $19.9 million in SG&A in the quarter, which was $3.2 million lower than last year, and then lower than the fourth quarter of 2008. We expect further reductions in this area.

As I also said in the press release, we are wrapping up in our current project in Nigeria, which contributed meaningfully to earnings during the quarter. Since we have no new projects for West Africa in our current backlog, we’ve decided to substantially reduce our operations there by closing our regional office and deploying the Cheyenne. We intend to continue to evaluate future projects in West Africa. And we'll be prepared to reenter the market if we have the type of project opportunities which would justify doing so. Our backlog declined during the quarter to just under $400 million.

We’re currently seeing good project opportunities in the Gulf of Mexico, especially in the decommissioning area. However, Mexico projects typically have short lead times and contribute little to our backlog levels. Elsewhere, our visibility on future projects, which would start up in late 2009 and into 2010 is reduced as a result of project delays. We intend to remain vigilant and proactively reduce our costs should these project delays persist.

Despite the challenging industry environment, we remain focused on continuing to improve our performance. We intend to do this by effectively marketing our services to customers; continuing to invest in our two new, world class, new build vessels; developing cost effective solutions for our clients; and, executing our projects safely and effectively. That's it for my overview. Now I'll turn the call over to Jeff Levos for financial comments on the quarter. Jeff?

Jeff Levos

Thank you, John. For the first quarter of 2009, consolidated revenues were $269.5 million compared $301.5 million for the same quarter last year. Gross profit was $45.4 million in the first quarter 2009 compared to $54.3 million in the same quarter last year. Net income was $19 million or $0.17 per diluted share towards the first quarter of 2009 compared to $26.1 million or $0.22 per diluted share in the first quarter of 2008.

The 11% decline in revenues between comparable quarters was primarily due to lower activity in our Middle East and Asia Pacific/India segments, partially offset by increased revenue in our West Africa, Latin America, and North America subsea segments. We did make progress in the first quarter in continuing to reduce our selling general and administrative expenses. The $19.9 million spent for the first quarter 2009, as John said, decreased by $3.2 million over the same quarter last year. This is primarily due to company wide cost control activities. SG&A is also down sequentially from the 2008 fourth quarter total of $21.9 million.

Interest income of $60,000 for the first quarter of 2009 decreased by $6.2 million over the same quarter last year, primarily due to significantly decreased cash balances and lower interest rates.

During the first quarter of 2009, we booked a $143.8 million of new work, resulting in a backlog of $394 million as of March 31st. This booked work is distributed among our portable segments as follows, Asia Pacific/India, $164 million; Latin America, $111 million; Middle East, $43 million; West Africa, $41 million; North America, $35 million.

Turning to cash flows for the quarter, net cash used by operations in the first quarter of 2009 was $10 million, compared to $69.2 million used in that same period last year. This decrease in operating cash used, primarily reflects lower short term working capital needs and reduced dry-docking costs. Investing activities used $7.6 million net cash during the first quarter of 2009 compared to $21 million provided in the first quarter of 2008.

During the 2009 first quarter an $11.4 million decrease in our restricted cash requirements related to outstanding letters of credit under our revolving credit facility’s provided cash, which was more than offset by ongoing expenditures for the construction of the two, new generation derrick/pipelay vessels, the Global 1200 and 1201. Cash provided in the first quarter of 2008 primarily result from the proceeds from the sale of marketable securities.

Net cash used by financing activities was $2 million for the first quarter of 2009, compared to $900,000 used for the first quarter of 2008. Use of cash in both periods primarily results from payments on long term debt. In summary, net cash outflows, $19.6 million for the first quarter of 2009, with an ending unrestricted cash balance of $268 million, and total cash of $351 million. With that, I’ll turn the conference over to Mr. Atkinson. Thank you.

Peter Atkinson

Thank you, Jeff. Good morning, everyone. I’ll be discussing a few operational highlights for the quarter ended March 31st, 2009. Income before taxes in our West Africa segment increased $22 million in the first quarter of 2009 to $17.8 million. Revenues increased $24.5 million to $65.1 million.

During the quarter, the Cheyenne worked on the replacement and repair of the 24-inch pipeline in Nigeria. This project, which we completed successfully this week, generated higher profitability than the prior year’s work in the region. Revenues in our Middle East segment declined $61 million to $24.5 million during the first quarter of 2009. Income before taxes decreased $13.2 million to $6.3 million.

The Berri and Qatif project in Saudi Arabia progressed as planned with our revised estimate, and we recorded a $2.2 million improvement in the anticipated cost to complete this project due to better than the anticipated productivity during the first quarter of 2009. We successfully completed hydro-testing the offshore segment of the 30-inch Berri water injection pipeline late yesterday afternoon, and the DLB 332, which departed for scheduled dry-docking in Bahrain on March 26, has returned to the field this week, and is setting up to commence laying of the 16-inch Qatif oil pipeline.

Revenues in our Latin Americas segment increased $76.3 million during the first quarter of 2009, compared with $70.2 million during the first quarter of 2008. Income before taxes declined $13.9 million to $6 million. During the first quarter of 2009, we successfully progressed work on Pemex' Ixtal project in the Bay of Campeche. But recorded $11.3 million of additional estimated project costs on Petrobras’ Camarupim project in Brazil to reschedule diving work from the REM Commander to a third party diving vessel. We expect both projects in Brazil and Mexico will be completed within the second quarter of 2009. The REM Commander is being demobilized to the US Gulf of Mexico.

Revenues in our Asia Pacific-India segment declined $12.2 million to $69.8 million during the first quarter of 2009. Net income before taxes decreased $6.5 million to $7.4 million. During the quarter, the DLB 264 and Subtec One continued installing pipelines, cables, and a tri-port [ph] for ONGC’s MHSOP project off the west coast of India. The DLB Comanche completed the installation of an SPM for IOCL off the east coast of India, then mobilized for TGI’s pipeline repair project offshore Indonesia.

Lowered revenue and project profitability during the first quarter of 2009 were attributable to low pricing and increased competition through the region. The Comanche has now completed the installation of the TGI pipeline, and we expect this project to be completed in the second quarter. However, the DLB 264 experienced some initial difficulties with the installation of the MHSOP track port which may delay the completion of this project into the fall. The DLB 264 will be demobilized to Singapore in June for schedule dry-docking, and the DLB Comanche will mobilize to Thailand to commence work on Chevron’s 2009 offshore program.

Revenues in our North America subsea segment increased $7.6 million to $31.6 million during the first quarter of 2009. Income before taxes were $12 million, compared to a loss before taxes at $700,000 in the first quarter of 2008. Revenue increased primarily due to increased activity for two MSVs, the Olympic Challenger and Global Orion, which ended service in the second half of 2008. This increase was partially offset by a loss of revenues from the Sea Lion, which was grounded in an incident in November 2008, and was damaged beyond (inaudible) repair.

Results for the 2009 first quarter included a $4.9 million gain on the sale of the Sea Lion in settlement with our insurance company. Revenues in our North American offshore construction division segment put $5.3 million during the first quarter of 2009, compared to $6.9 million in the first quarter of 2008. Loss before taxes was $12.2 million the first quarter of 2009 compared with a loss of $7.3 million in the first quarter of 2008.

Revenues from both periods were negatively affected by seasonal adverse weather conditions. Activity in the first quarter of 2009 consisted primarily of support work performed by the Cherokee. The Chickasaw was in dry-dock during the first quarter of 2009, and the Cherokee in dry dock during the first quarter of 2008. The increase in this segment’s loss was primarily due to higher non-recovered vessel costs as the Hercules and Sea Constructor arrived in the Gulf of Mexico in January 2009, and experienced minimum activity in the quarter.

Thank you. That concludes our prepared comments, and we will now take your questions.

Question-and-Answer Session

Operator

Thank you. (Operator instructions) Our first question from Jim Rollyson.

Jim Rollyson

Good morning, guys.

John Clerico

Good morning, Jim.

Peter Atkinson

Good morning.

Jim Rollyson

Excellent rebound. John, you talked about West Africa and the fact that you’re wrapping up some work there and going to close things down for now because there’s not a lot of work. Obviously that region contributed quite a bit to the first quarter profitability. Thoughts going through the rest of the year on whether or not you’ve got opportunities elsewhere to replace that? Just kind of how you’re thinking.

John Clerico

In the near term, I don’t think it’s going to be a problem replacing the lost revenue from West Africa. But longer term, it’s obviously an issue. I commented on that a little bit in my backlog comments, and we had some problems in West Africa. But as you could see from the quarter’s results, we had solid profitability as we finished up the work, and man, I wish we had more.

Jim Rollyson

Obviously in the Gulf, Peter you mentioned the OCD segment was a negative number, and I think you mentioned part of that was idle vessel time, the Hercules, Sea Constructor, et cetera. As you go into what’s normally the high season, it looks like you’ve got the Hercules scheduled to work for Shell. Kind of status update on how work is progressing otherwise, and if you expect to get back to profitability there.

Peter Atkinson

As we mentioned, we’re starting to see quite an interest, a lot of inquiries for salvage work in the Gulf. We’re also starting to see some inquiries for pipeline work in the Gulf. We do expect to see the activity pick up as we go into the second and third quarters, which are traditionally the best quarters in the Gulf of Mexico.

Jim Rollyson

Do you think you’ll get back to the black in there in that segment, with what you see?

Peter Atkinson

That’s what we’re trying to.

Jim Rollyson

Perfect, and then the last one for me, maybe guys a status kind of update on where the new builds stand?

Peter Atkinson

The new build’s on schedule. The direction of the hull blocks is slightly ahead of schedule. We’ve had several meetings with the Keppel and with all the owner-furnished equipment vendors, and that is on schedule for delivery in April of 2010.

Jim Rollyson

And when do you start training personnel to crew that and when do you anticipate that you guys actually start to market that first vessel?

Peter Atkinson

We’re marketing it currently. We’ve been marketing it heavily at the OTC this week. And as far as the crewing goes, we’re putting the team together. We’ve appointed some key personnel for that project who will be part of the construction team, and then transitioning to the operational team on the – manning that vessel. But that’s an ongoing process right now.

Jim Rollyson

Great. Thank you very much.

Operator

Our next question is from Graham Mattison [ph].

Graham Mattison

Good morning, guys.

John Clerico

Good morning.

Graham Mattison

Just a question on the $2.2 million upside gain you got in the Middle East. Could you give a little more color in terms of what that was there? Is that better project execution, better weather than had expected, or just a combination of both?

John Clerico

I think it was primarily better execution on the project. If you’ll recall, that is against an estimate we made late last year to finish the work. And both our execution times, Peter talked about productivity, I think that was the primary driver that enabled us to reduce our estimated cost to complete and take that to earnings this quarter.

Graham Mattison

Nice. I’ve got to agree. Thanks. And then with the Sea Lion, are there plans to replace that vessel? Since the damage beyond repair, were you looking to add another vessel there or stay with the existing fleet and wait until the new builds and other ones come on?

John Clerico

I think it’s going to be much more of the latter. We are working on a vessel rationalization strategy which I’ve talked about before to match our project and revenue opportunities with our fleet. And marketing the Global 1200 and the 1201, we think are going to position us well to win future businesses. So I think what you’ll see from us, both with regard to the Sea Lion and some other older vessels, is we’ll take those out of service. Sell them if we can. Stack them if we can’t.

Graham Mattison

Got it. Okay. Great. I’ll jump back in queue. Thank you very much.

Operator

Our next question is from Joe Gibney.

Joe Gibney

Thanks. Good morning, everybody. I just want to touch on the West Africa transition in particular. What target markets might you be looking at for the Cheyenne? Any initial thoughts there? And will we see any incremental costs associated with the shuttering of this operation in the near term in 2Q?

John Clerico

As far as incremental costs are concerned, we will keep a business development presence there and try and reduce the rest of our costs. So you’ll see some continuing costs, but it’ll be very substantially lower than it has been currently. We are looking for opportunities for the Cheyenne, and really all of our vessels, anywhere in the world we think there are projects that are both attractive and we that have the capability to handle. Did I miss anything, Joe, or didn’t?

Joe Gibney

No. That’s it. And the Cheyenne, correct me if I’m wrong, you indicated wraps up work this week. Is that correct?

John Clerico

Yes, sir.

Joe Gibney

Okay. Jeff, question for you. Good job on the cost control side. You mentioned wringing out some more efficiencies on SG&A. How much lower can we really go? You guys are doing a good job on cost control. Where can we turn it a little bit lower in the back half the year?

Jeffrey Levos

I think so, Joe. As we discussed before when we were in expansion mode, SG&A was an investment like anything else. Since we’re clearly in a position where we’re managing against a revenue footprint that is where it is, we’re looking to continually wring out cost and we’ve got some more opportunities that we’re going after. And you should see the effects of those in the second quarter results.

Joe Gibney

Okay. And Berri-Qatif, if I look at your Middle East backlog, $43 million. Is all of that accounted for by Berri-Qatif? Is that correct?

Peter Atkinson

That’s correct.

Joe Gibney

And this is expected to still target wrap up here in 2Q?

Peter Atkinson

That’s correct.

Joe Gibney

Okay. And last one for me. Just curious, John, your thoughts on the SURF market. I know previously you’ve mentioned, maybe taking a look at some opportunities here as you look down the road into 2010 right now obviously on the cost control side? But what are you seeing there? Some opportunities for Global, maybe to look a little bit more in expanding their SURF capability, and certainly a little bit of a over capacitized situation on the lower end DP side? But just curious on your thoughts about that market going forward?

John Clerico

Well, it’s certainly looking a long term, a growing market opportunity. We have done some related project work in times past. We think at least some of the SURF work suits us pretty well with regard to our capabilities. For us to be a real factor there, I’d think we would have to do some things like bring in some people who are experienced, think about getting a SURF vessel. We’re not going to move aggressively on that in the near term, but over time you’ll see us taking steps in that direction, to make some progress. We’ll talk about that.

Joe Gibney

Okay. Thanks, guys. I appreciate it. Good job turning the corner.

Operator

(Operator instructions) Our next question from Bill Dezellem.

Bill Dezellem

Thank you. We have a couple of questions. First of all, what went wrong with the certification of the dive vessel in Brazil?

John Clerico

The facts leading up to that, the causes of it are a long story that probably I can take the rest of the conference call talking about. But it was an issue of not properly coordinating it on our side. We left it a little bit late and there were some problems with various equipment items with the SAT system, and we just were not able to complete the certification project. It was a large disappointment.

It was a large financial hit, as you saw in our disclosures in the quarter. We found the strategy to move on with the project. We've taken some significant lessons learned. But this was something that transpired over at least a year involving a number of steps that we didn't handle as well as we should have. As I said, that's a very short version of a very long story.

Bill Dezellem

Thank you, I appreciate that. And then shifting to Mexico. Would you please update us just in terms of the level of work that you're seeing there and Pemex' propensity to (inaudible)? And then in the same vein, it seems like Mexico has the distinction of lower commodity prices but also pretty significant decline rates. What insights do you have as to the way Pemex is thinking about that?

John Clerico

Peter and I are kind of break split. Let me just say that Doldoray [ph] and I went to Mexico maybe three months ago. We have a strong position with Pemex. I think when they have key projects, we're at the top of their list for consideration. We have a number of potential projects under discussion with them. And we would like to bring those to successful fruition so we can get our backlog back up in Mexico. But we do enjoy a strong position vis-à-vis our customer there. Peter, if you want to add anything?

Peter Atkinson

Good morning, Bill. Mexico is one of the probably brightest spots for the remainder of 2009, and there's no question that they're experiencing significant depletion rates. I think that's a matter of public record that those fields are depleting markedly. And that they're getting squeezed by both a declining production and by diminished and lowered commodity price. But they still do have several projects that have been sanctioned and they're looking at going ahead later this year with those tenders.

We do have two projects there. One, the Ixtal project, which we're in the process of completing. In the second quarter we have to pin the loop at a project that we'll be starting at the end of the second quarter. And that is one of – I just said, there's opportunity there for us in the remainder of this year.

Bill Dezellem

Thank you. And if I may ask two other quick questions. Number one, bids outstanding, what is that total number as of today? And what cost savings are you anticipating from the exit of West Africa compared to had you not made this decision?

John Clerico

Well, let me take the latter, your second issue first. Without work in West Africa we would have the vessel cost, the crew cost, of having idle equipment. We would also have a full scale project management office in Lagos, and all those costs – and we are going to – unless something happens pretty quick to change our mind, we're going to close that down. And as I said earlier, just maintain a business development presence. As to bids, in-house it's down somewhat but it's still just under $3.5 billion.

Bill Dezellem

And would you be able to quantify the dollar amount for the West Africa differential that you were discussing?

John Clerico

I don't have that right off the top of my head and I don't think we've disclosed specifically our regional office and regional cost breakdowns.

Bill Dezellem

That's fine. Thank you, both.

Operator

(Operator instructions) Our next question is from Michael Marino [ph].

Michael Marino

Good morning, gentlemen.

Peter Atkinson

Good morning, Mike.

John Clerico

Michael.

Michael Marino

I guess my first question is for Jeff. Can you update us on the CapEx for this year and next year too as it relates to the new builds specifically? And then, additional maintenance CapEx that you all have planned?

Jeffrey Levos

Sure. Michael, I will give you the PPNE [ph] additions number update for each of the builds as I have in the past on the call. We are relatively consistent to what we discussed in the last quarter for the 1200. For the full year of 2009, still looking at just a little under $87 million for the first two quarters of 2010. When the 1200 comes out we're looking at a little over $35 million. On the 1201 the full year would be – for 2009, would be a little under $72 million. The 2010 additions would be about $94 million. And then the 2011 completion cost would be about $29 million.

Michael Marino

Okay. And those 2009 numbers, are those net of what you spent on the first quarter?

Jeffrey Levos

Those are full year numbers.

Michael Marino

Okay.

Jeffrey Levos

And those are additions to the project.

Michael Marino

Okay.

Jeffrey Levos

Okay?

Michael Marino

What was total CapEx in the first quarter?

Jeffrey Levos

Total CapEx in the first quarter was $20.2 million.

Michael Marino

Okay.

Jeffrey Levos

And remember, when you're looking at that statement of cash flows, externally that's cash payment.

Michael Marino

Okay. All right. And then, my other question as it relates to Brazil, what's the timing of the job completion? And was the change in the quarter just – was it a timing change or was it just bringing in the chartered – the third party vessel?

Peter Atkinson

It was a combination of both, Mike. There was additional slippage in the schedule, but it was predominantly the mobilization of the additional DSP in there. And we expect to be completed in the second quarter.

Michael Marino

Okay, Q2. All right. Great. And then, one last one if I could. The Hercules, now that that's back to work, and you have mentioned I guess the Gulf of Mexico decommissioning and pipeline market getting a little bit better, do you all envision that work – that vessel working a little bit – I mean, what kind of utilization do you all see for that vessel going forward beyond the 45 day contract? And as it relates to that, what was that vessel costing you all on a quarterly basis when it wasn't working?

Peter Atkinson

We're seeing a lot of interest in the Hercules, a surprising amount of interest on those salvage projects, and we're quite confident that we're going to get good utilization out of it in both the second and third quarters of 2009. As to the cost – the cost profile that we had in West Africa was significantly higher than the cost profile we have in the Gulf of Mexico. And I think it was running us in the region of $2 million a month when it was in West Africa.

Michael Marino

Okay. Thank you. That's all I had.

Operator

Right now the question is from Brad Handler.

Brad Handler

Thanks. Good morning. Apologies if I may have missed something along the way here, but I'm just curious, are you going to continue to report a West Africa segment? There's not much – there's no business going in the second half of the year.

Jeffrey Levos

Brad, this is Jeff. As we discussed, although we're curtailing our physical operations, we will continue to maintain business development activities. And we'll continue to review and bid on projects that are appropriate to do so. Therefore, at this point there wouldn't be a commercial or financial accounting reason to eliminate the segment.

Brad Handler

Understood. Okay. Unrelated follow up. I think I did miss this specifically, I think you had a gain on a sale in North America in Q1? Did I catch part of that?

Peter Atkinson

Brad, that was the disposal of the Sea Lion, which was a casualty that we had in November of 2008. Those were the insurance proceeds.

Brad Handler

Insurance proceeds, right. The $4.9 million, right? Was that after tax?

Jeffrey Levos

That's pre-tax.

Peter Atkinson

That's pre-tax.

Brad Handler

And I guess, where does the Cheyenne go while it's looking for work? In other words, what reporting segment will it remain in?

Peter Atkinson

Brad, it will remain in the West Africa business unit. We've demobilized it from the field. It's de-rigging in Lagos right now, and then we intend to take it into our base in (inaudible).

Brad Handler

And the REM Commander, have you lined up some work for it in the Gulf of Mexico in the middle of the year?

Peter Atkinson

Not at the moment. We are currently in the process of demobilizing it from Brazil back to the Gulf of Mexico, but we don't have any specific project for it at the moment.

Brad Handler

And I guess – I think you can probably orient me on that general question relative to how you think about future opportunities in Brazil and the importance of keeping a vessel there, versus bringing it back to try to secure some near term work, I guess. Just help me think through that a little bit. Is there a trade off from an opportunity stand point at all? Or no, this is just a question of securing the work while you have it and you can get back in-country easily enough?

Peter Atkinson

Combination of a variety of issues. Yes, the short term opportunities exist in the second and third quarter in the Gulf of Mexico, which is traditionally the high season. But the other factor is that you can't keep the vessel in Brazil if you don't have a project for it. You have to clear the men for a specific project. Once the project is complete you have to take –demobilize them.

John Clerico

Yes. I'll just say I wish it was still there. I wish it had an operative, certified SAT system when it was doing work there instead of having a third party vessel.

Brad Handler

Right. Sure, sure. Okay. All right, guys. Thanks for the answers.

John Clerico

Right.

Operator

At this time I'm showing no questions.

Peter Atkinson

All right. If there are no further questions, then that concludes our call today and we appreciate your interest in the company. And we thank you for joining us today. Thank you all.

Operator

Thank you for participating on today's conference. You may disconnect at this time.

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!