Sappi Limited Management Discusses Q2 2013 Results - Earnings Call Transcript

May. 9.13 | About: Sappi Ltd. (SPPJY)

Sappi Limited (NYSEMKT:SPP)

Q2 2013 Earnings Call

May 09, 2013 7:00 am ET

Executives

Roeloff Jacobus Boëttgerr - Chief Executive Officer, Executive Director, Member of Group Executive Committee and Member of Social, Ethics, Transformation & Sustainability Committee

Mark Gardner - Chief Executive Officer, President and Director

Alexander van Coller Thiel - Member of Group Executive Committee and Chief Executive Officer of Sappi Southern Africa

Barry John Wiersum - Chief Executive Officer of Sappi Fine Paper Europe

Analysts

Caroline Learmonth

Lars F. Kjellberg - Crédit Suisse AG, Research Division

Nishal Ramloutan - UBS Investment Bank, Research Division

Brian Morgan - BNP Paribas, Research Division

Nilesh Desai - Ares Management LLC

Operator

Good day, ladies and gentlemen, and welcome to the Sappi Second Quarter 2013 Results. [Operator Instructions] Please also note that this conference is being recorded. I would now like to hand the conference over to Roeloff Boëttgerr. Please go ahead, sir.

Roeloff Jacobus Boëttgerr

Thank you. Good afternoon, and good morning to you, ladies and gentlemen, and thank you very much for dialing into our second quarter 2013 results presentation. So may I draw your attention to the forward-looking statements and Regulation G disclosure requirements on the second slide.

Starting then with a summary on -- and highlights for the second quarter 2013, the European business was impacted by lower prices and higher pulp costs. And negatively so, the specialized cellulose projects are on track. And as of date, both major shuts at Cloquet and Ngodwana have successfully been completed. The profit for the period at $7 million down substantially from the $58 million a year ago, and we expect these profits to be lower as a result of the impact of these 2 major projects, but they are even lower than what we expected, mainly as a result of weak trading conditions in Europe.

Earnings per share $0.01. And then the operating profit excluding special items at $40 million, also down substantially from the equivalent quarter a year ago. Net finance cost down to $40 million from $51 million a year ago, but that was slightly negatively impacted by currency exchange rates, the strong euro, and on a like-for-like basis would have been even lower. Net debt at $2.152 billion, that is in line with our own expectations and impacted by the 2 major capital projects. On Slide #5, the EBITDA and operating profit excluding special items graph. And I think the trend going is negative here, as expected, but the quantum of the profits or the reduction in profits are higher than what we expected on the back of that European performance.

Moving onto the divisional overviews, the margins on Slide 7. All the margins is going in downward direction here. South Africa and North America, in line with what we expected it to be, once again impacted mainly by the disruptions to the business as a result of these 2 projects, and they should start recovering from the first quarter, in particular, as these projects start up. In Europe, however, margin is much weaker than what we expected. And I'll talk about that just now on Slide 8.

We experienced very weak market conditions in Europe. Price is lower year-on-year and lower than the last quarter, 2% to 3%. And despite the actions that we've taken to reduce our costs base significantly in Europe, that was not sufficient to post reasonable results. Variable costs also increased during the quarter, particularly for pulp, but also for energy and delivery costs. And that combination led to an operating loss in the European business.

The specialties business in Europe had another good quarter. Volumes and prices were up in both comparative periods.

In North American business on Slide 9. We had a very good performance given the impact of the low conversion. The coated paper volumes were up 6% year-on-year and 2% from the last quarter. And this is significantly better than the industry in that we are continuing to take market share there and our costs are very well under control. This happened in a quarter where prices actually declined.

The specialty paper business performance improved throughout the quarter as the margin increased particularly from China. And I might add that the new patents and products that we've released into the markets were very well-received in all main markets. Market pulps sales from Cloquet were down, as expected during the quarter as we prepare for the -- as we have prepared for the effect of the shut. Variable costs were down in both comparative periods, driven principally by improved operating efficiencies, but also lower input costs.

In South Africa, 2 sides to that story. First of all, continued strong performance by the specialized cellulose business, EBITDA margins of 34% for the cycle, and the mold continue to operate very well at full capacity.

The paper business experienced tough market conditions in South Africa, particularly for packaging paper, which was offset only to a certain extent by exports. Variable costs was slightly up from the previous year, and this was mainly driven by a weaker rand and paying dollar-based costs for input costs. In the special items, you will have noticed that there are quite a number of items, and the main elements of those are the positive credit of $96 million, and that relates to a revaluation of our forestry assets, particularly for softwood. Following the conversion at Ngodwana to dissolving wood pulp, we will use substantially less softwood, and that wood would now be available for lumber sellers resulting of this revaluation. We also had an impairment charge of $52 million related to Tugela and Stanger molds, and that is part of our ongoing process to further improve the cost base and efficiencies of our South African paper assets.

Moving then on to the strategic focus on Slide #12. Our strategy remains as previously communicated and has 3 main themes, which if we execute successfully on that, it will result in a much better returns and a stronger balance sheet. The themes are to focus on the low-cost paper business -- on a low-cost paper with better margins on a sustainable basis and stronger cash flows. Growth in the higher-margin businesses is particularly cellulose, but also other specialty businesses and then a healthy balance sheet.

On Slide 13, the focus on the low-cost paper business was reasonable returns. As far as North America is concerned, that's on track, and we are continuously further tweaking that business to ensure a continued good performance. But certainly, Europe and, to quite a large extent, South Africa, we are still not where we should be. In fact, far from it, and more needs to be done, more will be done to ensure that we get those businesses to perform on a reasonable basis at least.

As far as the specialized cellulose and other higher margin businesses are concerned, very much on track. The demand for dissolving wood pulp remains strong. And it is a competitive market, but we have very strong demand and contracted a large proportion of our capacity already. Saiccor is performing well and most projects are due to start up in the third quarter. In other words, before the end of June, with the production of dissolving wood pulp. The Alfeld pulp conversion is very much on track.

The balance sheet. Our net debt level is evolving exactly as we expected. We expect debt to peak in quarter 3 at about $2.4 billion on a net basis and then reduce to about $2.2 billion at year end. And we've also done a post-quarter refinancing in South Africa, which would reduce our finance costs further. This remains a balance between growth and the costs of improving our business and debt reduction.

On Slide 14, just some pictures of the progress at our Cloquet conversion in Ngodwana. Standing next to me, Mark, would you like to comment on those quickly?

Mark Gardner

Thank you, Roeloff. What you see here in these pictures are a lot of the work that went on over the last few months, and we did have our annual outage in April. The left-hand side is just a real good view of the things that we've been doing to continually keep our paper machines. They are very low cost and have the flexibility to use all kinds of different fibers, depending upon quality and need. The other pictures, I won't go into other than just to point out that there is a lot of tank work that was done, a lot of process changes made to the pulp mill. And the lower left-hand -- right-hand corner is some work done in the wood yard. I wouldn't say that we planned on starting up on -- in early May last week, this weekend, actually, this past weekend, and we're up and starting right now. So the mills are coming up on crack pulp as planned.

Roeloff Jacobus Boëttgerr

Thanks, Mark. And then on Slide 15, some pictures on the Ngodwana conversion. And Alex, would you like to make a comment or 2 on that?

Alexander van Coller Thiel

Thanks, Roeloff. The topics are really a view from the chip bin, showing the lush places. And most of the key equipment are already in place and substantially -- a substantial part of that already commissioned. At the bottom, you see the replacement of the old pulp dryer with a much more modern machine. This, in fact, has been the largest move in the paper industry of this kind of equipment. This a 750-ton dryer that's been removed in one piece and the new dryer put in place. Project well on track and we will produce pulp before the end of June.

Roeloff Jacobus Boëttgerr

Thank you, Alex. Moving on then to Slide 16, net debt development. As I've mentioned before, our net debt, very much in line with what we projected and expected, peaking quarter 3 and then coming down to around $2.2 billion at year end. Maturity profile on Slide 17. A very healthy position, and following the year end, our target is then to start reducing debt at a faster pace. At quarter end, we have $398 million of cash on hand and another $509 million committed undrawn credit facility is available to us.

As far as the outlook is concerned, on Slide 19, we expect market conditions in Europe and South Africa to continue to be weaker than what we previously envisaged. Demand and prices therefore for those businesses will probably remain under pressure, and input costs are likely to remain high as well. The recent performances in the South African, but more particularly the European business, necessitates further action, and we are very much committed to decisively address the performance of these businesses. And again, in particular, in Europe, in order to restore margins to acceptable levels, even under economic conditions, market conditions as weak as they are at the moment.

And then notwithstanding this expected continued, fairly weak market conditions in Europe and as well as the commissioning of start-up of our 2 dissolving wood pulp projects, we expect that the group will, at worst, breakeven at a net profit excluding special items level for the year, and for the European business, to breakeven at operating level for the year in totality. I did talk about our expectation in terms of debt. Just repeating again that both our major projects are on time and progressing very well, and we're looking forward to ramp up to matching production during the first quarter.

Although this is a tough year, as expected, for us and a very much transitional year and one that ended up being, from a European perspective, even tougher than what we expected, we are confident that all the actions that we are busy taking in terms of the growth of the business into higher-margin areas, as well as the actions that we've planned for our European business will put us in a very good position to -- as we've planned for so long, start improving our performance significantly from 2014 onwards.

That brings me to the end of the presentation. I'm joined by the all executive team in various countries at the moment. Together with me, we are quite happy to take any questions that you might have. Thank you.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Caroline Learmonth of ABSA Capital.

Caroline Learmonth

Three questions, please. First of all, in Europe, can you talk a little bit more about how you see current market conditions? So what do your order books look like, and do you think you have stable market share versus your competition? And then secondly, in terms of fixing the European market, what action do you envisage taking, and when do you aim to do that? And then finally, on the projects and the commissioning in South Africa and North America, what impact on normal operating profit do you expect from a commissioning and ramp-up for the rest of this year?

Roeloff Jacobus Boëttgerr

Thank you, Caroline. And I'm also going to ask some of our colleagues here to answer. In Europe itself, the market conditions themselves are -- we expect to remain very challenging. In terms of market share, we certainly are not losing against our competitors. Our opinion is that the market, in general, is tough. From time to time, I think we'll have to admit that our market share does go down every time we try to push prices up. And to wind margins, you do see an effect on market share. And that's one of the problems in the industry. As far as the actions are concerned -- and Barry, I just want you to just overall comment on the European performance as well. But as far as the actions are concerned, we, at this point in time, are not sharing exactly what we're doing and where we're doing it. This involves people, it could involve customers and there are range of actions, some we know what to do and on the process of doing and others we are evaluating various options that should be available to us to improve this performance. But one thing I can tell you is that we are not excluding any type of action whatsoever from getting our European business to perform better even under tough market conditions. We'll get back to the projects just now, but, Barry, would you like to add any...

Barry John Wiersum

Just a bit more on price on the market shares, Caroline. It's -- our market shares for the business is outside coated wood-free sheets have been stable or slightly up. With regard to sheets, it's really the only place where we put some pricing pressure on in terms of putting up. We were probably some weeks ahead of the rest of the competition. That has cost us the market share. I noticed that the price trough was around about February. Since then, there's prices that have moving up. And we see that others have joined, so we expect these market shares to come back to normal.

Roeloff Jacobus Boëttgerr

Thank you, Barry. And I think unfortunately, in terms of pricing, as we indicated, we see movement in price. That's important, but have not seen sufficient movement in price at this point in time to give us confidence that we'll perform better than a breakeven position at year end. Now obviously, the sooner we implement all the actions that we are planning to implement, the sooner the business will perform better, but there's only so much you can do in a period of time. The effect of the ramp-up on our business is a positive effect. The main negative effect on operating profits are the shuts that we've had during quarter 2 and in the North America in 3. So towards the end of quarter 3, the performance should start improving. And then as we go into quarter 4 and we ramp up, that should accelerate in terms of the effect on our profitability. The guidance that we've given you here is taking all that into account and including what we expect to happen in Europe is the breakeven situation for the group at worst at year end. Should market conditions improve or we can ramp up faster than what we thought, well, then it could be better.

Operator

Our next question comes from Lars Kjellberg of Credit Suisse.

Lars F. Kjellberg - Crédit Suisse AG, Research Division

Just a couple of follow-up questions there. You have fairly talked about the sort of costs related to the startups around -- bank conversions around $40 million. If I did the math right, you took -- you had about $18 million costs in Ngodwana in Q2. Is that what we're going to see in Ngodwana? We’re done there, and the balance is now going to come into North America in Q3? Is that what you're suggesting?

Roeloff Jacobus Boëttgerr

Lars, yes, thank you for the question. The total impact of the conversions of operating profit in 2013 was estimated to be about around $40 million. Our latest estimate is about $44 million, given the pulp price movements. Of this, $11 million has occurred in quarter 1 and 2, and the balance of about $33 million is heavily weighted to quarter 3, and most of that relates to our North American business.

Lars F. Kjellberg - Crédit Suisse AG, Research Division

Okay. And I know it's slightly unclear as to how many, but you didn't really respond to the question what actions you're planning in Europe. Can you indicate at all what sort of potential effect you may have and when or whatever action you're planning?

Roeloff Jacobus Boëttgerr

Lars, no. We don't feel comfortable at this point in time to disclose more. What I can tell you is that we are aggressively looking internally at what we can do to further reduce our cost base, to -- in the other -- in certain instances, even the running our business differently, and we certainly will look at capacity as well. So it's a wide range, which we are aggressively, internally are going to do whatever is necessary. And then, we are not only in with the focus, we are looking externally as well at what can we do to bring down our cost base and to address capacity issues. And more than that, I cannot say at all.

Lars F. Kjellberg - Crédit Suisse AG, Research Division

For my final question, of course, when it comes to other areas of improvement, we have talked about South Africa domestic in this side. If you calculate backwards from what you've given in Saiccor and stripped out the sort of -- and Ngodwana shutdown costs, you're basically looking at around an EBIT negative around 2% for the balance of the business. This was supposed to be profitable, but when should we expect that to happen, and what is not going right in effect?

Roeloff Jacobus Boëttgerr

It's a very free comment, and I'll ask Alex to talk as well here. But essentially, the paper business in South Africa has not been performing as well as we wanted it to be. We are seeing major improvements in the cost base in the South African business, but the market has been weak in South Africa, particularly for packaging papers. On the other graphic side, office paper side, it was better. There, it was not bad. But the bigger part of our business, paper-wise, is most certainly on the packaging side. One should not underestimate the effect on the paper business of the Ngodwana shut and this conversion. That has had an effect. The input costs were also higher than what we expected as a result of the weaker rand because many of our input costs are dollar-based. And then, as I've said, we are exporting as well, but not large volumes. We expect the business to start improving as Ngodwana gets back to normal operations. And indeed, we are seeing a good improvement in efficiencies in Ngodwana now that the mill is starting to ramp-up. So quarter 3 will still be one where -- it's not -- you're not, in my opinion, going to see investment improvement. But from then onwards, we should see the benefits of all the actions that we've taken. Subject of this, always to market conditions. Alex, would you like to add?

Alexander van Coller Thiel

Yes, thanks, Roeloff. I think in terms of pricing, we have the good traction, we're seeing the results. I think you need to keep in mind that in Tugela, we only in completed the mass volume of PM4 in this quarter. And obviously, that takes a while to settle down. Input costs with the weaker rand has had an effect. We're actually making good progress with it in terms of add substitute raw materials or actually just driving cost in terms of recipes and price negotiations. And I think then the last point is, with the kind of production performance that we are now seeing over in Ngodwana and Stanger actually in the last weeks, we have the opportunity to move more volume and really weaker rand, that will probably be into the African export market where there are substantial opportunities for us.

Operator

Our next question comes from Nishal Ramloutan of UBS.

Nishal Ramloutan - UBS Investment Bank, Research Division

Just -- maybe just give us what your thoughts in terms of the marginal, small players in Europe on coated wood-free? I mean, how are they staying positive and staying in business? And do you expect closures to happen on that front and any step, something that you're actually waiting to see if that happens? And then just also in Europe, this price increases for April, I mean, with the -- January price increase, nothing successful. What's driving the April pricing increases and how confident are you that those will go through?

Roeloff Jacobus Boëttgerr

I think those 2 issues are very close in link that you mentioned now. When you say that are these small, marginal or prince players in Europe still positive, I -- we're not positive. And I'm convinced we're not one of the highest costs operators. In fact, I think, when it comes to coated wood-free, we must be one of the lower-cost producers. You've seen also the results from other players in the last 2 weeks. And certainly, their performance is not good. So I'm convinced that some of the smaller player and the higher-cost players are certainly not making any profits whatsoever at any level. Cash-wise, I think we are now getting to a stage where many of these players must be reaching a point where they are either cash negative or very close to it. So it's getting tougher, and we -- I cannot predict when companies will no longer be able to continue or not, because there are many factors playing a role. All of them are not publicly held companies and some work on a different basis, and I can't comment on that. If you ask me, are we waiting for them to fall over before it gets better for us? No, not at all. We have to do what we have to do to improve the business for ourselves. These companies have been around -- it's been bad and tough in this coated market for the last 7, 8 years. And so you can't wait. Barry, just on the pricing development and why we think that the standard price will move up?

Barry John Wiersum

All right. In terms of pricing, the January price rise only really started in March. It wasn't the fact that it's toppled because it didn't. Prices reached their trough in February and then started a recovery in March. At the moment, what we have seen in the order books and what has been sold during April does indicate a price increase. We watch the we-see [ph] tracker quite closely to see whether they see a similar increase, they do. So that seems to indicate that, that particular price increase has got some legs to it. That, I think, is entirely cost-based, the fact that cost for the industry relative to prices in the market have just become too high. And so, the industry finds itself obliged to push those prices up against whatever these distances in the market. And I think that will stick. What happens in later quarters remains to be seen?

Operator

Our next question comes from Brian Morgan of BNP Paribas.

Brian Morgan - BNP Paribas, Research Division

Could you just give us some sort of color on what sort of cost inflation is in the cycle at the moment just on a quarter-on-quarter basis and a year-on-year basis? That's my first question. And then my second question, just follow-on from Lars's question, the $44 million loss of profits or cost of this conversion they'll be taking at the moment, you said $11 million was in the first quarter and second quarter and $33 million in the third quarter, but I'm trying to reconcile that with the $18 million that we saw in Ngodwana. So could you just give me a little bit of color on how that works, please?

Roeloff Jacobus Boëttgerr

On the second question first, the Ngodwana cost was a total cost of the impact of shut. Part of that has to do with this conversion and part was just a normal planned maintenance shut, which we have every year. So that's the differential between the 2. In terms of actual cost developments, we don't disclose that. But if you look at the margins and you look at what happened to the rand and pulp price as you -- the net result of that is to clearly show you that input costs have gone up. And it's driven by exchange, to a certain extent, but it's also driven just by input cost increases and energy. So I think if you look at margin and what happened on the selling side, which we disclosed, you will be very easily able to get a reasonable handle on what happened to costs.

Operator

Our next question comes from Nilesh Desai of Ares.

Nilesh Desai - Ares Management LLC

Just looking for a little bit of clarification on your quarter numbers, the quarter to March. Just looking through your accounts, your gross profit for the quarter is actually up slightly and your margins are slightly actually up on the gross profit line, on the gross margins, yet you've taking a big hit to EBITDA. Can you just reconcile that to what you're saying about pulp prices, paper prices and so on?

Roeloff Jacobus Boëttgerr

You've got me now. I need to think a little bit about answering that one.

Nilesh Desai - Ares Management LLC

I mean, I'm on -- hold on. Which -- what page -- I'm on Page 8 of your more detailed report.

Roeloff Jacobus Boëttgerr

On this one, before I get everybody -- waste everybody's time, we'll take it off-line and come back to you on that. But certainly, input costs are up, margins are down. And I just need to -- because you're looking at consolidated numbers there, we'll come back with you...

Nilesh Desai - Ares Management LLC

Yes, absolutely. There will be exchange rates and so on in there, so yes.

Roeloff Jacobus Boëttgerr

We'll just give you a proper answer other than me doing a thumb suck here.

Operator

Our next question comes from Jeff Kandelum [ph] of Lucor [ph].

Unknown Analyst

I just a have couple of questions, please. Firstly, I just wanted to understand your mix of softwood and hardwood in your business, if you could?

Roeloff Jacobus Boëttgerr

You're now talking about consolidated business across America, Europe and South Africa?

Unknown Analyst

Not really. I just wanted to -- yes, I mean, I wanted to understand where exactly North America and Europe stood in terms of the share of hardwood and the softwood, please?

Roeloff Jacobus Boëttgerr

That we are using, not what we're growing. Is that what you're saying in South Africa?

Unknown Analyst

Yes.

Roeloff Jacobus Boëttgerr

I'm not clear on your question. This is a very complex question if you look at it consolidated. And I don't think we'll give you any answer. But we can tell you what is what we used in production in North America, Mark, and then, Alex, in South Africa. That differs from what we're growing and planting.

Mark Gardner

Okay. In North America, of course, we're making lots of different products and they come out of 2 different mills with different levels of integration. But as a general rule, making coated wood-free products. We use more hardwood than we do softwood. You could think in terms of somewhere, depending on the grade, it will range from 60% to 70% or 75% of the furnish would be hardwood, the rest would be softwood and broke.

Roeloff Jacobus Boëttgerr

And South Africa, Alex? Moving on more to hardwood now, but you want to answer that one.

Alexander van Coller Thiel

Thanks, Roeloff. Obviously, in terms of making dissolving pulp produce, fully hardwood. And at the moment, as you know, we produce in the region of 800,000 tons of dissolving pulp. That requires a ratio of between 3 and 4 tons of timber for the pulp to actually produce a ton of pulp. We are obviously increasing that to about 1 million tons. And then obviously, in the container board side of the business, we do -- we use a large amount of softwood to actually get the strength properties. In terms of our self-sufficiency, we are in the region of 80% self-sufficient on the hardwood side, and softwood, we have an excess of softwood available.

Unknown Analyst

Okay. And Europe, please?

Roeloff Jacobus Boëttgerr

Barry?

Barry John Wiersum

In Europe, we purchase about 60% hardwood and 40% softwood.

Unknown Analyst

Okay. Great. Very helpful. Just another quick question. I just want to understand your -- I think in your prepared remarks, you talked about the demand of contracted dissolving pulp from the various conversion projects. So I was understand -- I wanted to understand if there's an update on what percentage has been contracted? Was this non-contracted, please?

Roeloff Jacobus Boëttgerr

On the overall basis, and we don't split that between our various molds because that becomes sensitive information for us. But on an overall basis, if you take the 1.3 million-ton capacity that we will be having, I can tell you that a very high percentage of that, close to 1 million tons, if not higher, has been contracted. Yes, more than 1 million tons.

Unknown Analyst

Okay. Perfect. And the last question, if I may, the positive impact from the various conversions, you're expecting in the fiscal year 2013 and '14? Am I right in understanding that?

Roeloff Jacobus Boëttgerr

The impact on the conversions will only be -- well, the negative impact. The cost impact will be largely now, quarter 3, and then a ramp-up impact in quarter 4, and then a positive impact 2014 and onwards, hopefully.

Operator

Our final question comes from Caroline Learmonth of ABSA Capital.

Caroline Learmonth

It's just a follow-up question on this -- impact of the shuts. So if I understand you correctly, there was $11 million impact on the South African shut and no impact this year to -- in North America, and you're saying $33 million impact in the third quarter in North America. Just looking at what North America made in the second quarter, that was $21 million at an operating profit level. So are you expecting North America to make a profit in the third quarter?

Roeloff Jacobus Boëttgerr

Yes. There was a little bit of cost already in quarter 2 in North America as well. And yes, we expect to remain profitable in North America despite this. Thank you, all.

Operator

Thank you, very much, sir. Ladies and gentlemen, on behalf of Sappi, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.

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!