Forbes Energy Services Management Discusses Q1 2013 Results - Earnings Call Transcript

May.15.13 | About: Forbes Energy (FES)

Forbes Energy Services (NASDAQ:FES)

Q1 2013 Earnings Call

May 15, 2013 10:00 am ET

Executives

Casey Stegman

John E. Crisp - Chairman, Chief Executive Officer, President, Chairman of Forbes Holding Company, Chief Executive Officer of Forbes Holding Company and President of Forbes Holding Company

L. Melvin Cooper - Chief Financial Officer, Principal Accounting Officer, Senior Vice President and Assistant Secretary

Analysts

Brian Uhlmer - Global Hunter Securities, LLC, Research Division

Marco Rodriguez - Stonegate Securities Inc., Research Division

Lou Nardi

Colin Wilson-Murphy

Evan S. Templeton - Jefferies & Company, Inc. Fixed Income Research

Trey Cowan - Clarkson Capital Markets, Research Division

Joseph Von Meister

Operator

Good day, ladies and gentlemen, and welcome to the Forbes Energy Services First Quarter 2013 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to hand the conference over to Mr. Casey Stegman of Investor Relations. Sir, please go ahead.

Casey Stegman

Thank you, and good morning. Welcome to Forbes Energy Services Earnings Call for the First Quarter of 2013. We appreciate you joining us today. With me on the call is today is John Crisp, Chief Executive Officer; and Mel Cooper, Chief Financial Officer. The purpose of today's call is to review the company's financial results for the quarter as well as provide you with some additional color on the business. Following opening remarks, the operator will provide instructions regarding Q&A.

During today's call, management will discuss adjusted EBITDA from U.S. Operations, which is a non-GAAP financial measure. Please refer to this morning's press release and the company website for disclosures about this measure and for a reconciliation of the most directly comparable GAAP financial measure.

On this conference call, Forbes Energy management may make comments that reflect their intentions, beliefs and expectations for the future. Such forward-looking statements are qualified by the inherent risks and uncertainties surrounding future expectations generally and may materially differ from actual future results involving any one or more such statements.

Forbes Energy undertakes no obligation to publicly update forward-looking statements as a result of events or developments subsequent to this conference call. For a more detailed discussion of such risks and uncertainties, please see the company's filings with the SEC.

With that, I'd like to turn the call over to John Crisp, Chief Executive Officer of Forbes Energy. John?

John E. Crisp

Thank you, Casey. Good morning, everyone. Thank you for joining us on this call this morning. After my opening remarks, I'll turn it over to Mel to discuss selected financial data.

Generally speaking, the first quarter ended on a solid footing, considering the sluggish start we experienced at -- in the beginning of the year. By late February, early March, the industry had reinstated much of its drilling activity and began -- and we began to see a gradual uptick in equipment utilization related to the market's movement.

Because of the industry delay in ramping up, our consolidated revenue was down slightly for the quarter. We also had some seasonal weather that affected the utilization in turn of revenue. However, we felt the increase in gross margin this quarter compared to Q4 partly due to strategies our operational management has executed over the past couple of months.

Pricing was modestly flat relative to last quarter, although rates for our fluid management services are depressed due to an imbalance in the supply chain. Now that spring is in full force and summer is approaching us, we should be able to benefit from some of the longer daylight hours, which usually helps us generate additional revenue.

Starting out, our customers have traded lightly this year, but based on the utilization curve from March through April, we're anticipating an increase in more demand as the industry moves into full circle -- swing.

To summarize our segments' highlights, let me first start with Fluid Logistics. Fluid Logistics continues to contribute slightly more revenue than our Well Servicing. Although our revenue was lower than the previous quarter, our gross margins were up as we were able to capture revenue that once went to third parties for supplemental equipment. Our water restocking unit has been demonstrated by -- to several customers. As customers are getting a better understanding of the economics and the potentials -- the potential benefits we believe this service will be fully adopted. We continue to pursue our permits for additional disposals, and this will be an ongoing process.

In our Well Servicing segment, our coiled tubing is beginning to receive -- being well received by our customers thanks to solid performance from operations and prudent management.

Throughout the first quarter, the first 3 units were in full operation, while the fourth unit contributed in the last half of the quarter. With the fifth unit now on board, we believe this piece of our business will start to gain momentum as we focus on sustainable utilization strategies.

Status of our conventional Well Servicing rigs follows the industry's seasonal transition back to work, with utilization progressively increasing company-wide. Regarding our capital expenses, we spent a portion of our CapEx as planned for the first quarter. We finished up our fifth coiled tubing unit, which was a carryover from our CapEx plan in 2004. And speaking, we're basically in line with our CapEx spending. We realized the benefit of newly manufactured equipment we added to our fleet through lower repair and maintenance costs and the removal of third-party contractors. With these investors -- with these investments, we are well positioned to take additional business on as the demand warrants.

Now I'll turn the call over to Mel. Thank you, Mel.

L. Melvin Cooper

Thank you, John, and good morning, everyone. I'm going to take you through the financial results for the first -- for the 3 months ended March 31, '13, as compared to the prior quarter, which ended December 31, 2012.

Consolidated revenues totaled $102 million in the first quarter of 2013. That's a decrease of 5% compared to consolidated revenues of $107 million in the fourth quarter of '12. Our gross margins increased to $24 million or 24% of revenues in Q1 2013 from approximately $22 million or approximately 20% of revenues in the fourth quarter of 2012.

As John mentioned earlier, this decrease in revenue was primarily due to a slower ramp-up of activity across all of our markets and is in line with the general industry trends. Our consolidated gross margin percentage increased for the quarter primarily due to fewer equipment sub-rentals, as John mentioned, reduced maintenance and repair costs and lower insurance expense.

Our Well Servicing segment revenues increased 3% to $50 million in the first quarter as compared to $49 million in Q4 of 2012. This increase resulted from a 3% increase in rig hours between the quarters plus a positive impact from our coiled tubing business.

In terms of dollars, Well Servicing expenses were relatively flat between the current and prior quarter in the amount of $40 million for each quarter. As a percentage of revenues, Well Servicing expenses amounted to approximately 80% in the first quarter of 2013 as compared to 83% in the fourth quarter of 2012.

Gross margin in the Well Servicing segment increased to $9.8 million or almost 20% of revenues during the first quarter as compared to $8.2 million or almost 17% of revenues in the fourth quarter of 2012. The increase in gross margin can primarily be attributed to lower wages relative to revenues and a decrease in insurance expense for the quarter.

As in the previous downward trend in -- as the previous downward trend in utilization began to stabilize during the first quarter, we've benefited from ongoing labor and contract services adjustments that resulted in a more efficient use of personnel and services for the quarter. These items represent the majority of the margin increase.

We also benefited from changes in estimates related to our insurance costs, which are partially self-funded. These costs tend to fluctuate from quarter-to-quarter due to the estimating process and claims history.

During the first quarter, revenues in our Fluid Logistics segment decreased to approximately $52 million as compared to approximately $59 million in the fourth quarter of 2012. That's a decrease of approximately 12%. This was consistent with a reduction in trucking hours from approximately 375,000 in the fourth quarter to approximately 324,000 in the first quarter of 2013.

Operating expenses for Fluid Logistics were approximately $37 million or 73% of revenues in this quarter as compared to $45 million or 77% of revenues in the fourth quarter of '12. This resulted in an operating margin of $14 million or 27% of revenues for the current quarter as compared to $13.5 million or 23% of revenues in the prior quarter. The increase in operating margin resulted in part from reduced third-party expenses, lower repair and maintenance costs and a decrease in insurance expense for the quarter.

Our third-party expense for items such as truck rentals, frac tank rentals, et cetera, continues to moderate with the addition of our new equipment and management initiatives.

Repairs and maintenance were also impacted with the addition of this new equipment as well as our managers' cost controls. As in our Well Servicing segment, the first quarter of 2013 also benefited from changes in estimates related to our insurance costs.

General and administrative expenses were comparable at $7.3 million for the first quarter as compared to $7.4 million in the prior quarter. Adjusted EBITDA from U.S. Operations was $17.4 million in the first quarter of '13. That's a 21% increase as compared to the $14.4 million for the prior quarter.

We generated net loss from U.S. Operations attributable to common shares of $2.8 million or $0.13 per share in the current quarter. As of March 31, 2013, our unrestricted cash totaled approximately $31 million. We had no cash borrowings on our revolver, and we had approximately $3 million in letters of credit outstanding against the revolver. This resulted in a total liquidity for the company of approximately $103 million.

As of March 31, 2013, we had $280 million of our 9% senior notes due 2019 and approximately $22.5 million of other notes payable that are comprised of equipment notes of $17 million and $5 million of insurance notes. We maintain our $75 million revolving credit facility with Regions Bank. While this facility remains available for general corporate purposes including financing capital expenditures if necessary, we currently intend to use the facility primarily for financial stability in a cyclical industry.

And now I'll turn the call back over to John before we get to your questions.

John E. Crisp

Thanks, Mel. In summary, our business has lots of room to grow, and the market seems to be moving in the right direction that will allow this expansion. We anticipate an increase in activity and sequentially greater demand in all operating markets in the second quarter.

We anticipate utilization levels to be -- to steadily increase, but we do not anticipate any changes in pricing in the second quarter. There's lots of potential still to pursue throughout Texas, especially the Eagle Ford, the Eaglebine and the multi-shale plays in West Texas. Although there's always a level of uncertainty in the industry, our customers are gradually executing their capital programs. We are hoping the upward trend continues through the year.

With that, operator, we'll turn it over to questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of Brian Uhlmer from Global Hunter.

Brian Uhlmer - Global Hunter Securities, LLC, Research Division

I just wanted to touch base on -- you were talking about more permits for saltwater wells. I was just curious how many more do you think you could get out between now and year end, what's your target, and what are the locations that you're looking at?

John E. Crisp

Well, Brian, the number's uncertain. We are actively pursuing permits in all 3 of our operating areas in the state, from the Eaglebine to Eagle Ford and especially out in the Permian Basin with the multi-play that's going on out there. We are probably within a month away of procuring a drilling rig to drill a new well in the Eaglebine area. That'd be the first one that we've been successful on receiving this year. Yes, with the regulations and everything going through Railroad Commission, sometimes, the time is hard to predict, so our plan is to continue to move in that direction.

Brian Uhlmer - Global Hunter Securities, LLC, Research Division

Okay, good deal. And moving on to coiled tubing, are the -- is the fifth asset-- are all 5 assets going to be in close proximity to each other so you can recognize better the pull-through of your overheads on those assets, or where do you envision the 5 assets being over time?

John E. Crisp

The 5 assets -- our plan is to keep them here in the Eagle Ford, operating them out of one central location. We feel like we've got great management there, and it's just easier to keep overhead down by keeping them altogether.

Brian Uhlmer - Global Hunter Securities, LLC, Research Division

Right. And you think there's enough demand down at Eagle Ford to fill them up?

John E. Crisp

Yes, sir. We're seeing a nice increase in our coil business. We've got a very new fleet of large-diameter or 2-inch-diameter long rigs coil. Our fifth one, we put a smaller coil on it to do more of the maintenance work. So we feel like we gave the customers a choice there. We're seeing demand pick up each month. We're still not where we want be, but we feel like as the year continues, we'll have them fully utilized.

Brian Uhlmer - Global Hunter Securities, LLC, Research Division

Okay. And will that vary in day rates depending on what you're doing out there, but overall, what are the pricing trends for those assets?

John E. Crisp

Brian, our pricing is pretty well flat versus Q4. From its peak where we modeled it back last year this time or first quarter of '12. I'd estimate pricing is probably off of its peak 20%, maybe 25%.

Brian Uhlmer - Global Hunter Securities, LLC, Research Division

One final one for me. You mentioned lower labor costs, Mel, and I was trying to figure out, are you saying overall lower labor, less total hours so less total costs? Or are you saying that per hour, unit labor costs are going down and as the markets weaken a bit you don't have to pay people as much on an hourly wage, perspective? Which one is it?

L. Melvin Cooper

The wages are not going down. So that's a --

Brian Uhlmer - Global Hunter Securities, LLC, Research Division

I don't think so as I'm...

L. Melvin Cooper

It's just that -- we've been looking at labor costs very hard, and we've gotten more efficient at it. The -- plus, you have the natural trends in a market that's moderating as it was throughout 2012. You're constantly adjusting labor, and you're always kind of a little bit behind. When the market is starting to go back up, then you realize some benefits from that.

John E. Crisp

Brian, also we -- here last quarter, we tasked our managers on looking at their operations and being more efficient. And they've done a great job, and we're seeing the benefits, utilizing their labor very efficiently, looking at the supply chain in levering and understanding everything. I think that's the biggest key that we saw our gross margin going up this last quarter.

Operator

And our next question comes from the line of Marco Rodriguez from Stonegate Securities.

Marco Rodriguez - Stonegate Securities Inc., Research Division

Real quick, I just wanted to talk a little bit about the Fluid Logistics business. In your prepared remarks -- rather, the press release, you kind of imply some increased or pretty-- a higher level of competition. On the last call, it sort of sounded like-- the previous call for Q4, sounded like that has sort of stabilized. But now it sounds like maybe that competition has started to increase again. Am I understanding that correctly? And if so, can you talk a little bit about the dynamics there?

John E. Crisp

I wouldn't say it's increasing, but we still have a fully supplied market. Where the -- when I say fully supplied, it's probably oversupplied somewhat, and it's going to remain to be a challenge for awhile. I don't see a whole lot of new competition coming in, but we still got plenty of supply out there in the market.

Marco Rodriguez - Stonegate Securities Inc., Research Division

Okay. And then your pricing scenario, I'm not sure if I caught that, did you say that the pricing sequentially was fairly flat?

John E. Crisp

Yes.

Marco Rodriguez - Stonegate Securities Inc., Research Division

Okay. And if I were to look at -- also on the Well Servicing side year-over-year pricing, what sort of increase or decrease have you seen there if you could estimate?

John E. Crisp

Our Well Servicing pricing has been pretty flat since mid-last year. We still need to get normalized and inflation-adjusted. I think the industry still needs another 15% or 20% to get back to peak.

Marco Rodriguez - Stonegate Securities Inc., Research Division

Got it. And then switching gears here once again to Fluid Logistics, do you have any sort of a truck count that you're kind of looking at to exit the year with?

John E. Crisp

Well, we -- we're not planning on adding any large numbers of -- to our fleet this year, so it probably will be pretty well flat.

Marco Rodriguez - Stonegate Securities Inc., Research Division

Got it. And then lastly, on the balance sheet, just kind of thinking about as the year progresses on the working capital accounts, do you see any major changes forthcoming? Or do you think that they will just follow your historical patterns?

L. Melvin Cooper

Yes, Mark. This is Mel. It should follow the historical. The only thing that happens is, as business picks up a little bit, certainly it uses working capital for accounts receivable and so forth, so -- but that's just in the normal course of business.

Operator

And our next question comes from the line of Lou Nardi from Global Hunter.

Lou Nardi

I just wanted to follow up on that working capital question. Given that cash was up a lot and debt was down a bit, it looks like it was a pretty big swing maybe as much as $15 million in working capital. Is that correct?

L. Melvin Cooper

I'd have to look at the net number, Lou, but I know receivables were down a little bit in the first quarter, but [indiscernible] helps out. And we're going to have -- we're running about 71, 72 days in days sales outstanding at the end of March. That's a little lower than we normally run. That's just a function of working on collections, and that could very easily pull back up to 75 or 78 days, which has kind of been our history. And if it does, that uses up cash.

Lou Nardi

Right, okay. I'll run the numbers of that -- those DSOs. And then lastly, CapEx was, I don't know, maybe a little larger than I was looking for in the first quarter. Is the target for the year still around $23 million?

John E. Crisp

Yes, that's still our target. And if you normalize our CapEx spending, Mel and I are pretty pleased to be in line. We had that fifth coil unit that used up some cash. You normalize that, it pretty well about the direction it should go.

Operator

[Operator Instructions] Our next question comes from the line of Colin Wilson-Murphy from Bowery Management.

Colin Wilson-Murphy

John, can you just give us a little more color around the water restocking unit? You said that it's been demonstrated by several customers. Do you expect those customers to begin paying for those units over the immediate term?

John E. Crisp

Yes. We've had a number of inquiries and demonstrations, basically about one a week, it seems like, Colin, and we're just educating them and showing them the economics on it. We definitely feel like that we're making headway there. We've had a couple of pretty serious inquiries after the demonstration, but it's just that they've got to go to their management and figure out something. But we're hoping to get this thing start generating some revenue here. I'd like to see it this quarter, but I can't say definitely it'll happen this quarter. But we're working in that direction.

Colin Wilson-Murphy

Okay. And how many of those units do you have?

John E. Crisp

We're on our first unit. This is -- we do believe once we get this one out on the customers' payroll, and use that as a case study, that this business is very scalable. But we're just trying to tweak the processing and everything on this first unit.

Colin Wilson-Murphy

Okay. That's helpful. And, Mel, the -- you mentioned that you benefited from changes in estimates related to insurance costs. What was the benefit? What was the dollar amount benefit?

L. Melvin Cooper

It was probably $0.5 million or so. Yes.

Operator

And our next question comes from the line of Evan Templeton from Jefferies.

Evan S. Templeton - Jefferies & Company, Inc. Fixed Income Research

Just during the first quarter, we had a nice run-up in natural gas prices, which unfortunately have come down a bit. But what are you hearing from your customers in terms of what price that might restart natural gas activity? And did any of that occur in 1Q? Just wondering what you're generally hearing in the marketplace.

John E. Crisp

Evan, that's a hard question to answer. But it seems like consensus is around $5. But if our customers could have the confidence that the $4 would be sticky, I believe we'd see some investment coming in there. But definitely, as it approaches the $5 mark, we're -- our customers have promised us that they're going to spend some money there. But this first quarter, even with natural gas prices at a high for some time, we didn't see much activity in the gas market this quarter.

Operator

And our next question comes from the line of Trey Cowan from Clarkson Capital.

Trey Cowan - Clarkson Capital Markets, Research Division

Just I seem to remember you guys having a pretty good win on the Well Servicing side where you jumped up quite a few notches on the call list. Can you talk about that for me, please, just to give me a little bit of color there?

John E. Crisp

Well, I guess you're talking about the activity, Trey?

Trey Cowan - Clarkson Capital Markets, Research Division

I was thinking you all were on the call-out list where you all were like #7 and you jumped up to, I think, #2, but I'm...

John E. Crisp

Oh yes, you're talking about our coiled tubing. Okay.

Trey Cowan - Clarkson Capital Markets, Research Division

Sorry about that.

John E. Crisp

Yes. We're seeing some of these coiled tubing units that were under contract. They're rolling off or being taken out. And as these are being taken out, that gives us more opportunity to market our coiled tubing. But also, what we've noticed, some of our larger customers, they'll actually have a call-out list. And of course, it's the one that's contractor gets called first, and then it goes on down the line. And what we have experienced in the past is typically called out by pricing. Well, we have been noticing that we're steadily moving up the list and not just in pricing. And I think it's being recognized for our new equipment and our highly experienced people. In fact, we have one customer that we do work for when they actually have the big problems. And, I guess, I credit my experienced managers and people on the locations for getting that work. But I think as we move forward, Trey, and the reputation of our highly experienced folks get around to some of these customers. We'll eventually be preferred vendors.

Trey Cowan - Clarkson Capital Markets, Research Division

Great. And then just speaking more to coiled tubing, your margins, I assume, have been kind of ticking up along with the increased utilization. And so whenever you get to a more full utilization by year end, do you think that's where the margins will stick? Or do you think you've still got some room left next year for margins to go higher?

John E. Crisp

Well, we're not anticipating any significant rate changes in the near future. We're going to continue to work on efficiencies in-house, and on our supply chain. And by focusing on that, that's going to help margins. And of course, natural windfall, the more utilization you have, that works in our favor. So I definitely think that we have the opportunity to continue to increase margin. We're not where we want to be by far, but we're going to continue to work that direction. But to answer your question, next year, sometime in this cycle, we in the industry, we've got to have some rate increases. It's just not us. The whole industry needs to. We're still probably 15%, maybe 20% off of peak pricing. So if we ever get that, I think that, that will definitely be margin expansion.

Operator

And we also have a question from Joe Von Meister from Bennett.

Joseph Von Meister

The improvement in margins in the quarter, it sounds like insurance played a pretty small role. How much did you save on third-party expense?

L. Melvin Cooper

Joe, I don't have that at my fingertips, but the third-party and wages, I know, were the bulk of the improvement. So that was -- that's the math between those 2 items.

Joseph Von Meister

How does that work? How do you save? I mean, because we're looking at lower revenues and several hundred basis point margin improvement in services and even better in Fluid Logistics. So how do you get that magnitude of improvement if you could detail that out for us? Because it's a good thing, but seems like a pretty big increment.

L. Melvin Cooper

It's a big increment. And I'll make 2 comments, and I'll try to give you a little more background on it. It's like any company. It's even hard to look at 1 quarter for any company. I think you have to look at several quarters. Now having said that, on the subcontractor services or third-party services, we had been using a lot of specialty tanks, trucks in the past, frac tanks. And that's finally come home, and we've really been focusing on getting those. Some of that equipment gets stuck in the field when you rent it. Even though you're ready to replace it, you can't just go out to your customer and unhook frac tanks when they're still using them. They have a long-term commitment and a long-term location. So it takes a while to bring some of that in, and we're -- it's -- we've pretty much got it all in now. And then you've got repairs and maintenance. You didn't mention those, but that was a big number. And again, we've been focusing on repairs and maintenance, labor costs, unutilized labor that's not rebillable.

John E. Crisp

Also, Joe, we're really working our supply chain on our vendors. We've been -- line item on repairs and maintenance is a pretty high number just in parts and equipment that we have to buy, and we're levering every way we possibly can there. There's no one magic bullet that helps this. We tasked our managers, our operational managers, and they performed. It's a daily challenge, and I think there's still room there. We were amazed to get such a windfall this quarter. This takes time to implement, and we're actually a little bit ahead of what our managers -- what we tasked our managers to do.

L. Melvin Cooper

And one of the things we've done, Joe, is we have a purchasing manager that's done a really good job. He's been here for some time now, and he's working with all of our managers. And that's -- and again, I mentioned it when I started the response to your question, but this is 1 quarter, and...

Joseph Von Meister

So were there any reversals of reserves or any sort of odd items that would have extraordinarily reduced the expense on the quarter that we would see normalized next quarter? Or are we talking about straight-off lower rental expense associated with equipment in the field and lower wage costs?

L. Melvin Cooper

You've got the wage cost that we talked about. You've got the insurance change in estimate. That was the $500,000, $600,000. And in any quarter, you always have changes in estimates for a variety of things. You probably have another couple of hundred thousand or so in there for changes in other estimates that are just not material in the overall scheme of things. But I think what you're looking for, Joe, was, what are the onetime charges that we'd expect to go away going forward? And I think I got through all the ones I know about just then.

Operator

And I have no further questions at this time. I would like to turn the conference back to John for any concluding remarks.

John E. Crisp

Well, we appreciate everybody participating on the call. We -- overall, we were amazed that the quarter strengthened out. As the industry, we really expected everybody to go back to work January 5. We didn't see that until late February, early March. Now with the CapEx being implemented from our customers, we believe that the workflow will continue, which will increase our utilization. We do believe that each quarter is going to get better this year. I appreciate your time. Thank you.

Operator

Thank you, sir. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may now disconnect. Everyone have a good day.

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

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

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!