Layne Christensen Management Discusses Q2 2014 Results - Earnings Call Transcript

Sep. 6.13 | About: Layne Christensen (LAYN)

Layne Christensen (NASDAQ:LAYN)

Q2 2014 Earnings Call

September 06, 2013 11:00 am ET

Executives

Devin Sullivan - Senior Vice President

Rene J. Robichaud - Chief Executive Officer, President and Director

James R. Easter - Chief Financial Officer and Senior Vice President

Analysts

John B. Rogers - D.A. Davidson & Co., Research Division

Gerard J. Sweeney - Boenning and Scattergood, Inc., Research Division

Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Layne Christensen Company Fiscal Year 2014 Second Quarter Financial Results. [Operator Instructions] As a reminder, this conference is being recorded. I would like to introduce our first speaker for today, Mr. Devin Sullivan of The Equity Group. Sir, please go ahead.

Devin Sullivan

Thank you, Karen. Good morning, everyone, and thank you for joining us today for Layne Christensen's Fiscal 2014 Second Quarter Conference Call. Our speakers for today will be Rene Robichaud, President and Chief Executive Officer of Layne Christensen; and Jim Easter, Chief Financial Officer of the company.

Before we get started, I'd like to remind everyone that statements made during today's call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934. Such statements may include, but are not limited to, statements of plans and objectives, statements of future economic performance and statements of assumptions underlying such statements and statements of management's intentions, hopes, beliefs, expectations or predictions of the future.

Forward-looking statements can often be identified by the use of terminology such as should, intended, continue, believe, may, hope, anticipate, goal, forecast, plan, estimate and similar words or phrases. Such statements are based on current expectations and are subject to certain risks, uncertainties and assumptions, including, but not limited to, the outcome of the ongoing internal investigation into, among other things, the legality under the FCPA and local laws of certain payments to agents and other third parties interacting with government officials in certain countries in Africa relating to the payment of taxes and the importing of equipment, including any government enforcement action, which could arise out of the matters under review or that the matters under review may have resulted in a higher dollar amount of payments or may have a greater financial or business impact than management currently anticipates; prevailing prices for various commodities; unanticipated slowdowns in the company's major markets; the availability of credit; the risks and uncertainties normally incident to the construction industry; the impact of competition; the effectiveness of operational changes expected to increase efficiency and productivity; worldwide economic and political conditions and foreign currency fluctuations that may affect the worldwide results of operations.

Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially and adversely from those estimated, anticipated or projected. These forward-looking statements are made as of the date of this filing, and the company assumes no obligation to update such forward-looking statements or to update the reasons why actual results could differ materially from those anticipated in such forward-looking statements.

With that said, I'd now like to turn the call over to Rene Robichaud. Rene, please go ahead.

Rene J. Robichaud

Thanks, Devin, and good morning, everyone. Thank you, all, for joining us today. Our results for the second quarter were disappointing, well below our expectations and our abilities as a company. The $79.9 million loss from continuing operations was primarily attributable to $57.3 million of noncash items, operating losses at Geoconstruction, substantially lower profits at Mineral Exploration and lastly, the planned temporary corporate overhead costs primarily associated with the consolidation of our headquarters to The Woodlands, Texas.

The results of this quarter should not overshadow some exciting and welcomed developments at our business segments. We continue to operate in an environment that is notably different from last year.

Bearing this in mind, and as we did last quarter, I will discuss the progress at our divisions on a consecutive quarterly basis. At Water Resources, we reported a pretax profit of $1.6 million in the second quarter of fiscal 2014, which compares to a $26,000 loss in the first quarter.

At Heavy Civil, the most challenging of our businesses, has produced the most rewarding of turnarounds. Heavy Civil reported a pretax loss of $49,000 in the second quarter, improving from a loss of $1.5 million in the first quarter. Heavy Civil is on track to return to profitability later this fiscal year.

We're continuing to diversify our Heavy Civil and Water Resources businesses away from the hard-bid municipal market and towards higher-margin, reduced competition and negotiated project work. Our success in this regard is evident in the progress at both Heavy Civil and Water Resources through the first half of fiscal 2014.

Inliner's profit of nearly $4 million in the second quarter rose by nearly 70% from the first quarter. Inliner is on track to post its eighth consecutive year of record results.

In a still challenging global commodities market, Mineral Exploration's pretax profit of $1 million was slightly below the first quarter of this year. MinEx's second quarter profit is notable when considering that our Latin American affiliates lost $1.3 million in the quarter, nearly triple the loss posted in the first quarter.

Geoconstruction continued to incur significant operating losses, along with a $14.6 million noncash goodwill impairment charge. However, things are beginning to look up at this division, and I will comment on that shortly.

Certainly, challenges remain. We expect to record an additional $5.8 million in costs associated with our corporate headquarters’ consolidation during the second half of fiscal 2014. This will weigh on our results. Improvement at Geoconstruction will be heavily dependent on our ability to secure new contracts. Although we have a number of exciting bids outstanding and a few contracts awaiting final signatures, delays and even cancellations are a part of this business and could affect the timing of this division's turnaround. It also appears as if low demand for Mineral Exploration services will persist through fiscal 2014.

With respect to our One Layne business development initiatives, we are currently pursuing over $1.3 billion of potential projects that leverage and combine the unique skill sets of our division professionals. Our Heavy Civil and Water Resources divisions are pursuing more One Layne opportunities than any other of our businesses. Importantly though, our Energy Services and Mineral Exploration businesses are leading One Layne opportunities worth over $400 million.

Before turning things over to Jim, I'd like to provide you with an update on the operations at our business segments. We continue to invest in our Energy Services division. After the very successful May 2013 launch of our Water Transfer business in the Permian Basin, we're now gaining traction with more clients. Further, we will be commercially testing our new mobile treatment units in the next 2 weeks. If this test goes as expected, we will have the crews and the equipment in place for water sourcing, water transfer and water treatment capable of generating $20 million of revenue annually. Today, we're running at roughly half this amount.

We now have 7 master service agreements in place with large E&P companies, and we're negotiating several others. Our ability to keep utilization rates high depends on negotiating agreements with 15 to 20 clients and proving our complete solution with each of them.

We are targeting a $20 million annual revenue run rate at Energy Services by the second quarter of fiscal 2015, on our way to a $200 million business by 2017, which is slightly longer than we originally anticipated.

With respect to Water Resources, our injection well business is now looking up, and we have over $125 million of bidding opportunities. We have won $8 million of injector well work over the -- which will be completed over the next 6 months. We continue to pursue work from domestic industrial clients, which carries a much more favorable margin than other types of projects.

In the first 6 months, industrial work amounted to $27 million, and we expect to surpass our goal of $50 million this year. This goal was adjusted from last year following the transfer of specialty drilling to Mineral Exploration.

Our repair and installation business is healthy, with revenues totaling $45 million for the first 6 months of the year, representing a slight decrease of 2.5% over the prior period. Nonetheless, we are confident that Water Resources will meet its revenue goal of $85 million this year.

Importantly, Water Resources is leading 18 One Layne opportunities valued at over $640 million. One example is a $20 million water supply system to a major industrial client in Louisiana. Our outlook for this business is that we expect the Water Resources second half operating earnings will be double those of the first half.

Turning to Inliner. Higher revenues and profits are related to excellent execution in all our markets. Third-party sales of lining projects were $31.5 million in the second quarter, up $7.1 million from the first quarter. We expect that these sales will remain strong. Our fiberglass wet-out line will be completed this month, and we have a trained install crew ready to go. This fiberglass technology should provide solid growth opportunities for Layne. Our outlook for this business: We believe that Inliner is on a path to generate its eighth consecutive year of record results.

At Geoconstruction. As expected, performance at Geoconstruction, excluding noncash charges, mirrored that of the first quarter of fiscal 2014. We believe that the second quarter was the bottom with respect to Geo's performance this year.

The bidding environment has improved considerably, and we are starting to win important new work valued at almost $100 million in the U.S. and South America. We expect that our backlog will increase smartly [ph] during the third and fourth quarters as new contracts are signed and that results will improve beginning this quarter, with a return to profitability expected in the fourth quarter.

Regarding Heavy Civil. This division is benefiting from a combination of higher-margin new business and completion of lower-margin legacy projects. This has resulted in breakeven performance for the second quarter as we promised last year. Approximately 2/3 of our work booked in the last 12 months has been reduced competition work that is getting away from the hard-bid municipal market that defined this division for the last several years.

Heavy Civil is leading the discussion on 10 One Layne opportunities valued at $575 million. One of these opportunities is a $50 million opportunity in West Texas to source, treat and transfer water to a proposed new power plant. Our outlook for this business: we are on track to return profitability later in fiscal 2014.

Last is Mineral Exploration. Although gold and copper prices have stabilized at reasonably healthy levels, demand from our customers for Mineral Exploration services remains weak. We believe that the global outlook for our MinEx services remains challenged for at least the rest of fiscal 2014. We attribute this to a number of factors, including global economic uncertainty, especially lower growth rates in China; mining company cost fatigue after a period of very high demand; the ongoing integration of large acquisitions by some major mining companies; and the effect of political unrest in certain areas.

Demand for our services in Southern Mali is returning, and we expect to operate profitably there after the wet season ends, which is usually in October. We have maintained profitability at this division for the second consecutive quarter despite these challenges. Lower demand has forced us to aggressively reduce this division's cost structure.

Overall, rig utilization in the second quarter was approximately 50%. We will continue to take whatever steps are necessary to maintain profitability while the industry recovers.

MinEx is continuing to work with our other Layne divisions to pursue a secure new project work under One Layne. For example, we recently submitted a major water supply proposal to a large mining client in Mexico. Given the positive outlook for delivering solutions to our mining clients, we plan on changing this division's name to Layne Mineral Services.

In summary, despite our disappointment with our financial performance in the first half of fiscal 2014, we are increasingly confident that the performance of our divisions will improve during the second half of this year. Some of that progress will become evident beginning in the third quarter, with more pronounced progress developing by the end of the fiscal year.

I'll now turn the call over to Jim Easter, who will review our second quarter results. Jim?

James R. Easter

Thanks, Rene, and thanks to each of you for participating in today's call. We expect to file our 10-Q with the SEC on Monday, September 9.

As Rene mentioned, we reported a loss from continuing operations for the second quarter of $79.9 million or $4.09 per share compared to net loss from continuing ops of $3 million or $0.16 per share in last year's second quarter. The loss this quarter was primarily attributable to $42.6 million of noncash domestic tax valuation allowances, a $20.5 million loss at Geoconstruction, consisting of a $14.6 million goodwill impairment charge and $5.9 million of operating losses, both attributable to weak demand in the U.S. and South America.

The $14.6 million represents the total carrying value of Geo's goodwill. We do not believe that we have suffered an impairment of long-lived assets, and the only goodwill remaining on our books now is the $8.9 million booked in Inliner.

We have also seen substantially lower profits at Mineral Exploration as low customer demand for our services persist. And finally, approximately $13.2 million of corporate overhead costs, which includes the costs associated with the consolidation of our headquarters to The Woodlands. Essentially the noncash charges and items, net loss in the second quarter would have been $22.9 million or $1.17 per share.

Our revenues declined 19.4% to $232 million in the second quarter of fiscal 2014 from $288 million in the second quarter of fiscal 2013 due to lower revenues at all segments, except for Inliner and Energy Services. For the quarter, revenues at Inliner increased $37.9 million from 35 -- to $37.9 million from $35.2 million in the second quarter of fiscal 2013.

Cost of revenues for the current quarter decreased $37.9 million or 16.5% to $192.1 million or 82.8% of revenues from $230.1 million or 79.9% of revenues for the second quarter of fiscal 2013. This increase in cost on a percentage basis is due primarily to the effect of late-stage work on certain projects at Geo, which generated lower margins, as well as project delays and cancellations at this division.

SG&A expenses decreased 10.2% to $36.9 million from $41.1 million in the second quarter of fiscal 2013, primarily due to a decline in compensation and selling expenses. These declines were partially offset by $3.2 million in cost associated with the relocation of the company's headquarters to The Woodlands, and as a percentage of revenues, SG&A expenses increased in the second quarter of fiscal 2014 due to the aforementioned factors, as well as lower total revenues compared to the second quarter of fiscal 2013.

Moving forward, we expect SG&A expenses to moderate as we complete to move to The Woodlands by the end of this year. Depreciation, depletion and amortization declined 15.2 -- to $15.2 million for the second quarter of fiscal 2014 from $15.9 million for the second quarter of fiscal 2013, reflecting the sale of nonessential assets.

We reported a loss in equity in earnings of affiliates of approximately $1.3 million as compared to earnings of $6.4 million in last year's quarter, primarily due to the global decline in mineral exploration, as well as severance costs recorded by the affiliates as they downsized their operations to respond to the changed industry conditions.

Interest expense increased to $1.6 million for the second quarter from $800,000 in the second quarter of fiscal 2013, reflecting increased borrowings on our revolving credit facility. Our long-term debt at the end of the quarter was $101 million.

Our pretax loss for the quarter was $29.7 million compared to a pretax gain of about $324,000 in last year's second quarter. Income tax expense was $50.2 million in the second quarter compared to $3.5 million in the second quarter of fiscal '13. Due to the lower-than-expected actual operating results and the continued drop in forecast, particularly at Geoconstruction and Mineral Exploration, we recorded a $42.6 million in additional noncash income tax valuation allowances in the second quarter of fiscal '14. The company had previously recorded an $8 million valuation allowance on foreign tax credits during the first quarter of fiscal '14.

We reported a net loss of $74.8 million in the second quarter of fiscal '14, which includes $5.4 million of income from discontinued ops, which included the net gain on the sale of SolmeteX. There is one slightly unusual item on our balance sheet, which is a $10.6 million receivable, which is essentially the SolmeteX sale. The receivable was on the books for only 1 day as the deal closed on July 31, but cash didn't arrive until the next day, which was then paid down on the bank line. Our cash position at July 31 was $23.3 million. We had working capital of $123.5 million, long-term debt, less current maturities was $101 million, and equity was $317 million or $15.86 per share.

I'll turn the call back to Rene.

Rene J. Robichaud

Thanks, Jim. Some of the factors affecting our business: global commodity markets, government budget constraints, civil unrest, are outside of our direct control. In those cases, we are responding aggressively by adjusting our cost to help ensure that we maximize our return on assets while pursuing future opportunities. And I think we are doing that successfully.

Over the past 2 years, we have redefined our corporate culture and defined synergies, solutions and client service as the tenets upon which we will grow. We have implemented performance management strategies and aligned compensation to reflect our new direction, focused on our core competencies and unified our company into a single location in The Woodlands.

We're not done yet, not by a long shot. We must create a model under which each of our divisions can operate and collaborate profitably in a sustainable manner. We must continue to strengthen our financial metrics, continue to reduce our exposure to hard-bid contracts, drive growth at our Energy Services division to a level that reflects the significant potential we see in that business and elevate our profile among our global customer base as the company that offers, creates and implements One Layne solutions throughout the water management cycle. We remain confident in our direction, and I thank you for your continued interest in Layne.

With that, I'll turn the call over to Karen, the operator, for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of John Rogers from D.A. Davidson.

John B. Rogers - D.A. Davidson & Co., Research Division

A couple of things. First, on the -- more on the housekeeping side. The corporate expense that you noted in the release and the cost related to your moving, there was also a mention in report of higher legal and professional fees. Are those ongoing? And are they separate from the moving expenses?

James R. Easter

Yes. Those are not going to be -- I guess, they know those are not going to be ongoing expenses. Some of those that you see right now are really some of the costs incurred as a result of our FCPA issues and compliance costs, they come in there. And we certainly expect to close the book on our cost for the move to The Woodlands by the end of this year.

John B. Rogers - D.A. Davidson & Co., Research Division

Okay. So the $1.7 million that you referred to, that should disappear or I guess just get scaled back somewhat, because I guess some of it's compensation too.

James R. Easter

Yes. Well, it was never going to fully disappear, but it will certainly scale back.

John B. Rogers - D.A. Davidson & Co., Research Division

Okay. And then the second question was just on the Energy Services business, and I know it's a small division but hopefully with great potential. The delay in getting to your $20 million run rate, is that a function of your organization? Or is that a comment -- I mean, how much of that is just market activity being slower?

Rene J. Robichaud

None of it is market activity being slower. All of it -- we've got the operations. We've got the trained crews. We've got the equipment in place in the Permian Basin. We're on the verge of commercially testing our mobile treatment units. Once that commercial test is done, we will have solved for a full solution for our clients, and we will have the crews and equipment in place for a $20 million run rate business. But that --

[Technical Difficulty]

John B. Rogers - D.A. Davidson & Co., Research Division

I'm not sure where you just got cut off. We were just talking about the opportunities in the Permian Basin, and the market was still...

James R. Easter

Sure, yes. We don't know what happened. We just lost all of our phones. So...

Rene J. Robichaud

One of the problems with consolidating corporate headquarters is that you go through these hiccups as you try and stabilize things, and we apologize for that.

John B. Rogers - D.A. Davidson & Co., Research Division

No problem.

James R. Easter

Okay, I'm not sure where I dropped off, but the point I was making was we have 7 master service agreements signed up right now. And where we create real efficiencies is being able to keep the crews deployed in direct continuation so that you don't spend 3 or 4 days in the field, bringing equipment back to the yard, 3 or 4 days later, you go back to the field. And as we bring and sign up more MSAs with more oil companies, we'll be able to utilize the equipment at a much higher level. And that is what will really start driving this business forward.

John B. Rogers - D.A. Davidson & Co., Research Division

Okay. And in terms of the -- I don't know whether you measure it by backlog or the service agreements there, you expect to be at a full run rate once you get through the tests, is that right? Or...

Rene J. Robichaud

Well, the full run rate for the current crews and equipment, probably by the second quarter of next year.

James R. Easter

That's important to note that the equipment we have right now is capable of generating that run rate. It's just we don't have the number of MSAs in place where you can do direct continuation.

John B. Rogers - D.A. Davidson & Co., Research Division

Okay, okay. And then the last question, if I could. The -- in terms of what you have in backlog now across all your Water Infrastructure businesses, are the margins there -- are you comfortable that they're appreciably higher with what's in backlog and not just what you're bidding on?

Rene J. Robichaud

Yes. The days of us reducing our price, increasing our risk to chase volume are over. So everybody know, one of the reasons we've slowed down in selected areas is because we're not going to book poor prices, and we're not going to book higher risks at regular prices. It's going to be, now, appropriately priced project-by-project.

John B. Rogers - D.A. Davidson & Co., Research Division

And how much do you have left of the low-margin work to run through? I mean, should you be done with it by the end of the fiscal year?

James R. Easter

Yes, pretty much. Well, certainly, what we refer to is the legacy projects. Those are virtually complete. We're really in the phase of contract closeout and final audits and things like that. Now we do have a few that need to be pushed on through, and we'll be doing that, and we'll be reloading the backlog with our margin work going forward.

John B. Rogers - D.A. Davidson & Co., Research Division

Okay. But -- so I guess I'm trying to get a turning point, but fiscal '15, we should see that? [indiscernible] for the rest of this year?

Rene J. Robichaud

There should be no more legacy projects of the vintage 2010, 2011 that's hurt us so bad last year, left by the end of this fiscal year. We're down to, as a total percentage of our portfolio, probably in the area of 5% to 10% of those legacy projects.

Operator

[Operator Instructions] Our next question comes from the line of Gerry Sweeney from Boenning.

Gerard J. Sweeney - Boenning and Scattergood, Inc., Research Division

This may be a little long-winded setup, but here it goes anyhow. But obviously, you've made improvements. You're consolidating in Houston, you had the One Layne, that's a cross-selling, working on the compensation of salespeople, better risk management, and certainly, you've had some challenges. Even the move to Houston, it's probably put a lot on your plate, then you had the MinEx and then Geoconstruction and working through Heavy Civil. And I've always sort of talked about of these sort of from my perspective, that it seems as though things are getting better but not necessarily showing up in results. And what I want to try and get at, maybe get from you is, where we are today versus where we could be in a year or where could margins be in Heavy Civil, Water Resources? I don't think anything in MinEx is permanently impaired, but from an industry standpoint, but -- where should we be looking at? Where can we -- from a margin standpoint, where can we go in the future?

Rene J. Robichaud

I think a year from now, we're going to find virtually all of our businesses in a better place than today. The longer the mineral exploration downturn lasts, the more our clients don't have mineable working plants to go after. And so everybody -- unless you've got a very negative view on global growth, the copper consumption will continue. And that's going to require more mineral exploration to get more economic mining plants. Our construction businesses, both Heavy Civil and Geoconstruction, that -- the pent-up demand for high-quality projects in our minds, we can see the number of people who are trying to organize new and important water management projects. We can't print them and publish them, but the amount of demand we're seeing for new project work is materially better than what we have seen in the last 9 months since the election. But just thinking of next year, we expect to be back in all of our businesses. I'm going to say MinEx, we're going to hold off because that really does depend on the top 20 mining houses of the world finally saying, "Okay, we've turn things off long enough, and we've got to get back."

Gerard J. Sweeney - Boenning and Scattergood, Inc., Research Division

Yes. And maybe even -- I'm going to rephrase a little bit. I'd take a look back at some margins, we don't have a whole lot of data because it was until you really came on board that you started breaking out some of the Water Infrastructure segments. But any reason why you couldn't get back to those margins that you posted in the past?

Rene J. Robichaud

Absolutely not. There's no reason why we cannot get to the historical peaks that we've had in the past. Every division has posted what their peak has been and what it's going to take for them to organize their business, their assets, the client segments we'll focus on, the ones we won't focus on, in order to get back to those historic peaks.

Gerard J. Sweeney - Boenning and Scattergood, Inc., Research Division

Okay. And then, obviously, I mean, you've cut off some of the bad work. I mean, I assume the goal would be to exceed those peaks at some point, obviously, that being a few miles down the road.

Rene J. Robichaud

It's a little bit going to be a function of whether or not the EPA continues to enforce its content decrease on municipalities, a little bit on our success on the One Layne opportunities. We're just at the beginning of getting the One Layne opportunities to make a meaningful impact on Layne. These are brand-new opportunities. What happened just a few weeks ago never would have happened until we consolidated our divisions. We went with a team from Mineral Exploration, Heavy Civil, Water Resources and water treatment to Mexico to meet one of our long-standing major mining clients that has a desperate water management problem. And we're 1 of 3 people invited to the table to solve their problem. We're talking about $125 million project. This never would have happened a year ago. Just getting to the table on these sorts of opportunities is very encouraging to me. But I certainly get it. We now start have to print these projects, execute these projects and prove that One Layne is working.

Gerard J. Sweeney - Boenning and Scattergood, Inc., Research Division

Okay. Now that was my other essential question was when can we see some victories on the One Layne. I think that answers it. A quick question on the Geoconstruction side. You've got [ph] , I think you mentioned $100 million, I'll say, potential work. Is that some of the San Francisco project that was in Q1 and pushed back?

James R. Easter

Yes. We have a whole list of Geo projects that -- yes, I can't say that we have them in the boat yet, but they're definitely on the hook. And we anticipate having several of these signed up very shortly. Some are so close, we were hoping that we have a press release out earlier this week. But we're very confident that we have -- that we see not just light at the end of the tunnel, but actually, we do see the end of the tunnel and have a very good feel, and we're confident that we're going to be able to get these jobs booked. They're going to start work in Q3, but really, honestly, won't start cash flow, and then you see them in the results until Q4.

Operator

And I show no further questions in the queue. At this time, I would like to turn the conference back to our speakers from Layne Christensen for any concluding remarks.

Rene J. Robichaud

Thanks, Karen, and thanks to all of you for your participation and support. We look forward to speaking with you again soon. Bye-bye now.

Operator

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!