I.D. Systems' CEO Discusses Q2 2013 Results - Earnings Call Transcript

Aug. 7.13 | About: I.D. Systems, (IDSY)

I.D. Systems, Inc. (NASDAQ:IDSY)

Q2 2013 Earnings Call

August 7, 2013 4:45 PM ET

Presentation

Executives

Jeffrey Jagid – Chairman, CEO

Ned Mavrommatis – CFO and Treasurer

Ken Ehrman – President

Analysts

Bryan Prohm – Cowen and Company

Morris Ajzenman – Griffin Securities

Ryan MacDonald – Northland Securities

Bryan Prohm – Cowen and Company

Operator

Good day, ladies and gentlemen and welcome to the I.D. Systems’ Inc. Quarter Two 2013 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session (Operator Instructions) I’d now like to turn the call over to your host for today Mr. Jeffery Jagid. Sir, you may begin.

Jeffrey Jagid

Thank you. Welcome to I.D. Systems fiscal 2013 second quarter conference call. Thank you for joining us today. I’m Jeffrey Jagid, the Chairman and CEO of I.D. Systems. Joining me today are our CFO, Ned Mavrommatis; and Ken Ehrman, the President of I.D. Systems. I will provide an overview of our results for the quarter, Ned will detail our financials, and Ken will review recent sales and operational highlights. We will then open the call to your questions.

Before we begin, let me remind everyone regarding forward-looking statements. The following discussion contains forward-looking statements within the meaning of federal securities laws, which are subject to risks and uncertainties, including, but not limited to, the impact of competitive products, product demand and market acceptance risks, fluctuations in operating results, and other risks detailed from time to time in I.D. Systems’ filings with the Securities and Exchange Commission. These risks could cause the company’s actual results for the current fiscal year and beyond to differ materially from those expressed in any forward-looking statements made by or on behalf of the company.

For the three months ended June 30, 2013 ID Systems’ revenue grew to a second quarter record $9.4 million, up 17% sequentially over the first quarter of 2013 and up 8% year over year from the second quarter of 2012. Our sales pipeline for the back half of 2013 is solid and we remain optimistic about our growth opportunities for the balance of the year.

Our recurring revenue also continued to grow in the second quarter of 2013 increasing 2% over the second quarter of 2012 to $4.4 million or 46% of total revenue for the quarter. Our gross margin in Q2 was a strong 52% consistent with the historical levels. We remain focused on the revenue growth strategy that has proven successful over the past three years. We are working to build revenue vertically by expanding our footprint with core enterprise customers and diversify revenue horizontally by establishing new customers utilizing both channel partners and our direct sales organization.

We are also committed to maintaining our technical leadership in the markets we serve by expanding and monetizing the intellectual property behind our wireless asset management solutions. As most of you know, one of the key markets addressed by our patent portfolio is rental car management and we have deployed our systems on approximately 30,000 rental vehicles in North America for Avis Budget Group, our exclusive partner in this market.

On August 1, 2013, we entered into a memorandum of understanding with Avis Budget to cooperate on the development of a new generation of in-vehicle wireless devices to automate all Avis Budget car rental environments, including airport lots, virtual lots, and car sharing applications. Under this MOU, we are negotiating an amendment to our 2011 master agreement with Avis Budget and, to facilitate those negotiations, have agreed with Avis Budget to extend our exclusivity period until September 30, 2013.

We have many reasons to be optimistic about our future with Avis Budget. Their CEO Ron Nelson has noted publicly that our technology pays for itself on increased fuel revenue alone. Avis Budget also owns an approximately 9% equity stake interest in ID Systems and has warrants to acquire a significant number of additional shares of our common stock. I look forward to reporting developments with Avis Budget to you in the future.

As a final though, I would like to emphasize that we continue to develop many growth opportunities with large enterprises in addition to Avis, including American Airlines, BMW, Bridgestone/Firestone, Caterpillar, CNH, Ford, GE, General Mills, Home Depot, John Deere, Kellogg, Nestle, New Rubbermaid, Procter & Gamble, Rio Tinto Alcan, Roche Stores, Cisco, Supervalu, Toyota, Walgreens, Wal-Mart and many other Fortune 500 companies.

Our wireless asset management solutions are the most flexible and robust in the markets we serve and as these markets continue to mature, we believe they will continue to fuel continuing growth for ID Systems. Thank you for your time today. I look forward to your questions later on the call.

Now let me turn the discussion over to Ned Mavrommatis, our CFO to detail our financial results for the period.

Ned Mavrommatis

Thank you, Jeff and hello to everyone on the call today. As Jeff noted, revenue for the three months ended June 30, 2013 increased 8% to $9.4 million, up from $8.7 million in the second quarter of 2012 and up 17% compared to the previous quarter. The growth was driven by increased sales of both legal management and transportation management systems.

Recurring revenue for Q2 increased to $4.4 million or 46% of total revenue compared to $4.3 million in the second quarter a year ago. Our vehicle management business contributed $4.9 million in revenue in Q2 2013, up 12% over the second quarter of 2012 and up 29% compared to the previous quarter. Our transportation asset management business contributed $4.4 million, an increase of 4% over Q2 a year ago and Q1 2013.

Deferred revenue which primarily relates to the sale of new units of our transportation asset management business increased to $11.7 million at June 30, 2013. Gross margin for Q2 was 52% as Jeff mentioned, a strong result consistent with historical levels, reflecting a healthy mix of both derived and channel partner sales.

SG&A expenses and R&D expenditures were $5.6 million and $1.1 million respectively in Q2 2013, 1% lower than $5.7 million and $1.1 million respectively in the second quarter of 2012. Excluding stock-based compensation and depreciation and amortization, our Q2 non-GAAP net loss improved to $851,000 or $0.07 per basic and diluted share compared to a non-GAAP net loss of $1.2 million or $0.10 per basic and diluted share in the same period a year ago. Net loss for Q2 improved to $1.7 million or $0.14 per basic and diluted share compared to a net loss of $2.1 million or $0.18 per basic and diluted share in the second quarter of 2012.

Our balance sheet remained strong. As of June 30, ID Systems had $14.7 million in cash, cash equivalents and marketable securities and no debt. Thank you for dialing in today. I look forward to your questions and reporting further on our financial progress in the future. With that let me turn the call over to Ken Ehrman, President of I.D. Systems to review highlights of our sales and operations.

Ken Ehrman

Thank you, Ned and thanks for joining us this afternoon. I would like to cover just a few highlights from the second-quarter of 2013. On the industrial vehicle side of our business, we received follow-on sales from many large enterprises, including Bridgestone/Firestone, Campbell Soup, Caterpillar, Ford, General Mills, Home Depot, Kuehne + Nagel, John Deere, Kellogg, Nestlé, New Rubbermaid, Procter & Gamble, Rio Tinto Alcan, Toyota, Walgreens, and Wal-Mart, among others. These world class companies continue to gain substantial benefits from our technology which support their ongoing investment in our systems.

In the second quarter of 2013, we also received initial purchase orders from several new enterprise customers, representing additional opportunities for future horizontal growth, including two tier 1 automotive suppliers, a global manufacturer of water heating and treatment systems, a leading US specialty retailer and a major US forest products company. It is worth emphasizing the important role that our channel partners continue to play in the growth of our vehicle management business.

The truck dealers and OEMs, particularly Raymond Corporation, a division of Toyota made substantial revenue contributions in Q2. Major end-users who ordered our systems through our channel partners, including a Fortune 100 retailer, a Fortune 500 retailer and one of the world’s largest food service companies.

From our vantage point, wireless control tracking and management of industrial equipment has become a best practice for any organization with substantial material handling operations. And our wireless vehicle management solutions are at the forefront of innovation and effectiveness placing ID Systems in a strong position to capitalize on the continued growth of this market.

On the transportation asset management side of our business, we also continued to win repeat business from key customers in Q2, including BASF, C.H. Robinson, Estenson Logistics, Bed Express, the Coke companies, Meyer Stores and Specialized Transportation Inc. New transportation customer wins in Q2 included a California-based trucker specializing in transporting fresh produce to US moving companies and a leading North American transportation and logistics service provider. In this market segment, our asset intelligent subsidiary continues to be top three player regularly winning business through referrals from satisfied customers and in direct competition against competitors like [Dyetracts].

Our VeriWise product family is the industry's broadest ranging from basic, easily install tracking systems to advanced refrigerated trailer and intermodal container management solutions. As Jeff pointed out, we hold a market leadership position in each of our business segment, particularly with respect to our technology and IT. On that note, let me turn the call back over to Jeff for the Q&A segment of the call.

Jeffrey Jagid

Thank you, Ken. That concludes our prepared remarks. We are now pleased to open the call to your questions. Thanks again for participating on the call today.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question today comes from the line of Bryan Prohm of Cowen and Company.

Bryan Prohm – Cowen and Company

(Inaudible)

Operator

Mr. Prohm, we are having difficulty hearing you. We are able to hear you now. Please continue with your questions.

Jeffrey Jagid

I think we lost him. Now we will move to the next question, operator.

Operator

Our next question will come from the line of Morris Ajzenman of Griffin Securities.

Morris Ajzenman – Griffin Securities

Clearly Avis Budget is the price, you guys have focused on – two months ago and now little less than two months, investment community is really focused on that. I won’t put that in the slide for right now because I mean obviously that’s the gem we’re all looking at here. But let’s question on the core business, this quarter year over year up 8% and in the press release you talked about substantial revenue contributions et ctera, et ctera. It’s still my presumption given you had a decent increase year over year and a good increase sequentially, the customers you are dealing with, you’re probably getting ones, twos Gs type orders and nothing material, that’s my presumption, otherwise we would see a much higher revenue run rate, particularly on the product side. In response to that, can we expect to see a much greater ramp up in revenues based on your outlook, the existing customer base with someone rolling out to really move the needle because at this rate, again you’re growing but you’re still generating a loss on a GAAP basis and even on a pro forma basis. What is it that will get us really ramp up or will it just be work in process taking in on the quarters? And again let’s put Avis Budget to the side, clearly that’s a whole different game.

Jeffrey Jagid

This is Jeff, Morris, I appreciate the question and I think it raises a very interesting issue that we had for a little bit of time. And let me say this, the pipeline is very strong, you are absolutely right with your observation that that deployments have been kind of land and expand when we get into opportunity, we demonstrate the products capability and its economic benefit and then we use that to further expand into that customer. I think in order to see a significant jump in revenue coming from DMS, we’re going to have to sell to the enterprise and have more kind of a corporate driven initiatives similar to what we've seen in the past for the company like Wal-Mart and I think in order to do that really the tool that we are working on positions us I think very nicely to take advantage of opportunities or the analytics.

And when you start to look at these tools and you start to see the power associated with the data that’s being collected it’s pretty compelling and I would expect that those investments we’ve made in the development and now the deployment of some of those analytics tools will begin to bear fruit. But you are absolutely right in terms of the quarter what you are seeing is a really a systematic increase in adoption from certain customers as well as the addition of some new customers with initial implementations.

Morris Ajzenman – Griffin Securities

Can this come to fruition analytics anything spurring really jumpstarting a much greater growth rate, last year third quarter it’s going to be down because you have Avis Budget in there, I think rolling out for another 15000, 20,000 vehicles whatever number was. But typically will it be any time this year that we can see a big spike or is it more realistic to see something like that potentially in 2014 on a sequential basis?

Jeffrey Jagid

That’s always a tough question Morris for us which is the question of when especially on the deployment of something that’s kind of new and innovative like this. It wouldn’t be unheard of to see something this year and we are absolutely targeting some opportunities currently that could transition into paid program of this year but I am hesitant to say with definitely yes and it would be in the third quarter and your observation is also accurate that Q3 last year we had revenue contribution of fairly sizable revenue contribution from Avis and we are currently working kind of to backfill that this year in light of our continued negotiations with them.

Morris Ajzenman – Griffin Securities

Let me just one more dig in on the same path, sequentially assuming there is no one large – order coming in, again put Avis Budget to the side, should we expect to see top line growing 8, 10% sequentially in this sort of environment?

Jeffrey Jagid

We certainly have the opportunity to do that to drive that kind of growth but I am hesitant to give you that level of guidance but the pipeline can definitely drive and support that level of growth. You are talking about roughly $2 million increase if I am doing the math – quick math right over the 9.4 million – I wouldn’t characterize that as a grand slam or something that really is difficult.

Morris Ajzenman – Griffin Securities

One more quick question on the service revenue, why was it down sequentially from 4 to just over under 1?

Jeffrey Jagid

Morris, the service line includes implementation and other professional services and that number was slightly down in Q2 compared to Q1 and that was the reason.

Morris Ajzenman – Griffin Securities

What else can you tell us about Avis Budget? I know you have something to release there and is the negotiation that you are on, specific to what’s in the paragraph, there is more to it beyond that, and you release – what else can you tell us about that?

Jeffrey Jagid

Well in light of – I think you certainly have to read between the lines to a certain extent in the 8-K but we did mention that they started to – way past starting, they facilitated a dialogue between our respective engineering organization, both Zipcar and ID systems and they really are working with us to – have worked with us to design kind of this next generation in vehicle device for use in a multiple number of applications, and now to put it very bluntly what we’re talking about essentially is price and quantity up to their full fleet as the next step. So we are pretty optimistic about it. I think the car rental industry is moving in the direction of deploying wireless technology to automate a number of processes and I think we've the best product for it, at the best price. So I think we are in a very good position with Avis and I am pretty positive on our outlook there as far as the getting something done by the end of September.

Operator

Our next question comes from the line of Ryan MacDonald of Northland Securities.

Ryan MacDonald – Northland Securities

First I guess with this Avis opportunity, remind us what kind of opportunity would be there in terms of number of vehicles, if a deal is signed for the Zipcar kind of car sharing service and if and when the deal is closed, how quickly do you think you can ramp substantially to see the additional material impact from that?

Jeffrey Jagid

We had negotiated a master purchase agreement with Avis at the end of – I think it was announced at the end of the summer of 2011, that covered the entire US fleet which is about – depending on the time of the year it peaks at about 300,000 vehicles. We had rolled out and deployed 30,000 of those vehicles as the first phase, the second phase that was contemplated under that agreement was their full fleet and in the interim they acquired Zipcar, so what that acquisition basically did is it slowed things down a bit but also created an additional opportunity for us because of the Zipcar fleet. In addition what Avis has said is a plan on while -- they can plan on continuing to maintain the Zipcar bran, they plan on using the strength of their fleet to increase based on demand and times of week increase of the Zipcar fleet on kind of a dynamic basis and could increase to as much as 30,000 additional units.

So I think the opportunity continues to be the full US fleet for now as there’s also some international opportunity in addition to Zipcar and what they have tasked us to do is work with their internal engineering team to develop the technical stuff application for this next generation in-car wireless platform which we've done and now we’re working with ABG on the terms of the next phase.

As far as the second part of your question, our ability to ramp is really a function of when they would place the order, you are talking about surface and electronic assembly we would be able to ramp, probably deliver the first unit four to six weeks after receipt of the order.

Ryan MacDonald – Northland Securities

If a deal is closes opportunity to maybe begin ramping or shipping before the end of the year here?

Jeffrey Jagid

Right and then it would also obviously be driven by their needs and we usually match up with their in-fleeting process. So it’s also a function of the demand.

Ryan MacDonald – Northland Securities

I guess going back to maybe -- from the previous quarter with the filing of the shelf you had, I know there were some discussion of looking at maybe some M&A opportunity. Is that still something that you're looking towards before the end of this year and if so, what kind of technology would you be looking into?

Jeffrey Jagid

They are definitely a very long list of criterion that a potential target would have to meet and we do actively look at opportunities but we also understand the magnitude of the opportunity in front of us from an organic standpoint. But there is a lot happening in the M2M space, we believe that we're in the middle of it. So we do see a lot of deal flow but again the potential target has to meet some very stringent criterion and the timing is really driven by the opportunity. We don’t currently have any offers outstanding, we are not currently looking at or have signed any agreement with any particular target at this point but we do look and we do believe that there may be some opportunity to accelerate the growth of the business through some in-organic means.

Ryan MacDonald – Northland Securities

Finally in terms of the effects on the call – working towards monetizing your patent portfolio, is this strategy here to be pursuing licensing agreements or is this going to be done mostly through litigation and if so is it something that would be material to second half of this year?

Jeffrey Jagid

I don’t think it would have a material impact on the second half of this year, we don’t really want to spend a significant amount of money in litigation and I think that the comments related to our IP portfolio were primarily around the car-rental industry and right now we’ve done a lot of analysis. We do think that there is some – we have a good belief that there is some infringement out there, we will probably start with the pursuit of license revenue but we definitely take the protection of our IP very seriously. But we also have to wait to see what happens with Avis. So there are lot of moving parts as it pertains to our IP portfolio and the last thing we want to do is get involved and spending a significant amount of money on litigation when we can maybe pursue some license revenue.

Operator

Our next question is from the line of Bryan Prohm of Cowen and Company.

Bryan Prohm – Cowen and Company

So I will do a housekeeping one for you Ned, really fast, before I forget, could you go over the revenue split by type and how they break out between hard and services on power fleet and Veriwise?

Ned Mavrommatis

On the transportation asset management business $1.6 million in revenue was from product, and $2.8 million in revenue was from service for a total 4.4 million, on the legal matter business $3.7 million was for product, 962,000 revenue was from service for a total of 4.6 million and then we had approximately $280,000 in service revenue from the rental car space.

Bryan Prohm – Cowen and Company

So revenue in the quarter was little bit light of the desired run rate or desired double-digit run rate 8% year-over-year, does that mean – just in looking at the overall run rate for the first half it looks like the pipeline may not be currently as it stands capable of delivering double digit growth year over year, is that a fair characterization – you commented that it was solid and you are optimistic but first quarter is a tough comp, any commentary on there would be helpful.

Jeffrey Jagid

Bryan that’s a great observation. I think that absent significant contribution from the car rental opportunity in 2013 is going to be difficult to not impossible but difficult to drive that growth through the balance of the year in light of the slow start we had in Q1. Right now if you ask me hey, we are going to get real revenue growth – real revenue contribution from Avis this year in light of the timing, I think it’s going to be driven by really their requirement. So I think they will be capability of delivering units this year, the question will be whether they have the appetite for it relative to their planned fleet – really in-fleeting needs. So that’s a really tricky question, if that doesn’t come in – the revenue doesn’t come in 2013 I would say the pipeline is supported but we’re starting from unfortunately from our situation in Q1, so it’s difficult to not impossible.

I really don’t think we would be the reason factor in revenue recognition there. I think it would really be -- the critical path would be Avis saying okay now we place the order and we are taking delivery of 60,000 vehicles in the Northeast so we want you guys to install units during the in-fleeting. I think that’s going to be the issue. How does that negotiation go with Avis, what’s the quantity and pricing and a number of items.

Bryan Prohm – Cowen and Company

I think last quarter you had noted that the only real change in the conversation with Avis Budget about deeper integration of your technology into its fleet and specifically – was it related to Zipcar on the prospective expansion of Zipcar, is that still the case – I mean timing and price obviously significant components of that but if there is that sort of a – 30,000 of the 300,000 that are not – it could be potential weak on Zipcar, is that the gating factor or the ex-factor in the extension of the timing?

Jeffrey Jagid

It’s not really the quantity of Zipcar vehicles, it’s really the threshold issue was Avis acquired Zipcar they had to make a decision as to what direction they were going to head in as far as wireless technology next generation wireless technology in the Zipcar fleet and I think that they wanted to make that decision before they decided what they wanted to do with balance of their fleet. So I think that we are in a good position, I think we have answered that issue for them and I think we are well equipped to take advantage of some of our expertise on that area. And they are going to benefit from that.

Ken Ehrman

I think what they were looking for is the Zipcar technology performed certain functions, the ID Systems technology provides a different functions and they basically wanted to combine the two and provide the best of both worlds kind of solution that could be adapted to all these different rental car environments and that’s what has – technological advancement.

Operator

Our next question comes from the line of [Warren Hurtzmen] of AIG Investments.

Unidentified Analyst

Assuming with Avis and with Zipcar, does this mean you will actually potentially be doing a product if everything goes through with them – wide area network cellular capabilities

Jeffrey Jagid

I think in the Zipcar mode, I think it relies on cellular, so to the extent that a vehicle would be used for car sharing it would have cellular capability and one of the benefits of our product is that you don’t need cellular in order to automate the rental and return of the vehicle, it’s a bit over heel because the vehicles turn in airport environment, you could deploy there. (inaudible) could cellular internal opportunities.

Unidentified Analyst

Is your IP though that they have or you have as it relates to the wide area part of the business or only – related to the local aspect?

Jeffrey Jagid

I could tell you that what – about our technology and what’s innovative about our technology, I am not really – I understand their technology but I don’t know what type of – if I understand the question, I am not sure I understand – I know what their patent, strength of their patent portfolio is. We do know as far as what their technology does where we know it very well but we don’t know – you would have to ask them about their IP portfolio.

Unidentified Analyst

You have to kind of make use of that IP and the product that you ship to them – and they would just do that on the – how would that work? Maybe if you are making a product for them that has cellular capabilities in addition to the base technology that you set into them for the first 30,000 vehicles which means you’re kind taking the next step to them for giving them a capability – either Zipcar type rental car that needs solid connection sometime or doesn’t where you can use your technology – it would be the first time you do something like to make use of the cellular ways and the second follow-up question was, even your IP from them that’s around – it’s around that use of the cellular to manage cars – specific IP but if there is does that mean they would give you a license and allow you to use that license and that’s how you would be doing that type of hybrid product?

Jeffrey Jagid

The short answer is that IP – concept culminating the rental and return of the deal by collecting data, automatically transfer during the rental and returns of vehicle as well as access to locking and unlocking vehicle through the ODB port and as far as how we move data around is covered in our patent, we are able to and we are covered in using cellular, we wouldn’t have to engage in any sort of cross licensing if you will. I think our patent as it relates to our ability to deploy technology for Zipcar is very strong. The other thing it covers is using the device in the vehicle to determine whether or not the vehicle is available for rental and then it’s something that is core to deploying the wireless technology in a vehicle in a car rental environment. So I think we are in pretty strong position, I don’t think we would have to license anything. I think – I really think the question is what happens if we don’t move forward, what potential licensing would Zipcar have to do with –

Unidentified Analyst

Also wouldn’t anybody that does anything in this car industry be running a patent or patents?

Jeffrey Jagid

I think you don’t really know the strength of the patent until it’s tested, so really from our standpoint, decide if you want a deploy your resources, right now our position is Avis and Zipcar have been a phenomenal customer and I want to pursue that through the commercial relationship with Avis. I am not even contemplating doing anything other than that at this point.

Yeah and I think that there are infringers and we have to pursue them in a very cost effective manner. I think someone asked earlier on the call whether that would impact the business in the balance of 2013 and my answer to that it wouldn’t – it shouldn’t pass on the cost side, it shouldn’t have an impact on the revenue side.

Unidentified Analyst

Does Avis realize the value of your IP in this space –

Jeffrey Jagid

I think they do but again that would be a question that I would suggest you ask them. My perspective is I think they understand the value of it, the relationship is a very positive relationship. So I am not – we don’t threaten them in any way, we are – we operate as a very good partner for them.

Unidentified Analyst

The recurring revenue stream for you, as there has been talk of lots of wins that are coming on the stream to help boost that recurring revenue, why hasn’t that come on stronger or they are coming on stronger eventually in this second half of the year?

Ned Mavrommatis

I think as we go forward we should see the recurring revenue increase especially as we’ve closed business for our transportation asset management – there is unit backlog right now during Q3 and beyond and once those units get implemented and up and running this is going to have positive effect on recurring revenue.

Operator

And with no further questions I would like to turn the call back over to Mr. Jagid for any closing remarks.

Jeffrey Jagid

Thank you. I just want to close in the same I thank everyone again for participating on today’s call. I hope you can hear our positive enthusiasm and it’s something that we expressed during the call and we look forward to continuing to report on our progress in the future. Thank you very much everyone.

Operator

Ladies and gentlemen thank you for your participation in today’s conference. This does conclude the program and you may all disconnect. Have a great rest of the 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!