Advent Software Q1 2010 Earnings Call Transcript

Apr.28.10 | About: Advent Software, (ADVS)

Advent Software (NASDAQ:ADVS)

Q1 2010 Earnings Call

April 28, 2010 5:00 pm ET

Executives

Heidi Flaherty – VP Finance, Investor Relations

Stephanie DiMarco – Chief Executive Officer

James Cox – Chief Financial Officer

David Peter Hess - President

Analysts

Andrey Glukhov – Brean Murray

Jonathan Maietta – Needham & Company

Tim Fox – Duetsche Bank

Gil Luria – Wedbush Securities

[Rene Defursta – Janney Montgomery]

David Scharff – JMP Securities

Operator

Welcome to the first quarter 2010 Advent Software earnings conference call. (Operator Instructions) I would now like to turn the call over to Miss Heidi Flaharty.

Heidi Flaharty

Good afternoon. I’m Heidi Flaharty Vice President of Finance and Investor Relations. Thank you for joining us today for Advent’s first quarter 2010 earnings call. Hosting our call today are Stephanie DiMarco, Advent’s Chief Executive Officer and Jim Cox, Advent’s Chief Financial Officer. Also with us today is our President, Pete Hess.

Most of you participating in this call are aware of the regulations regarding forward-looking statements. Accordingly, we would like to note that during the course of this conference call, we will make forward-looking statements regarding events or the future performance of the company. We wish to caution you that such statements are predictions that involve risks and uncertainties and that actual events or results could differ materially.

We discuss a number of these risks in detail in the company’s SEC reports including our quarterly report on Form 10-Q and our 2009 annual report on Form 10-K, and any forward-looking statements must be considered in the context of such risks and uncertainties.

The company disclaims any intention or obligation to publicly update or revise any forward-looking statements whether as a result of events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events.

As a reminder, we include non-GAAP financial measures in our disclosures. These non-GAAP financial results are not meant to be considered in isolation or as a substitute for results prepared on a GAAP basis. Please refer to the tables entitled Reconciliation of Selected GAAP measures to non-GAAP measures in our earnings release which was filed with the SEC on a Form 8-K and available on our website for a reconciliation of GAAP to non-GAAP financial measures.

Finally, I would like to take this opportunity to extend an invitation to our Analyst Day event in New York City on May 13, from 9:00 am through noon, followed by lunch. There will be presentations by Stephanie, Pete and Jim as well as product presentations by the heads of our various business units. Please contact me directly to register. We look forward to seeing you there.

I’ll now turn the call over to Stephanie.

Stephanie DiMarco

Thanks Heidi and welcome everyone. Thank you for joining us this afternoon. I’m pleased to report that Advent had a very strong first quarter. Revenues from continuing operations were $67 million, new annual combined term contract bookings or ACV, were $7.3 million, up 65% year over year.

We’re now including our Advent on Demand bookings in ACV, which were $1 million in the quarter. GAAP operating income from continuing operations was $7 million and non-GAAP operating income from continuing operations was $13 million, representing a margin of 19%.

Diluted earnings per share from continuing operations were $0.16 on a GAAP basis and $0.29 on a non-GAAP basis. Operating cash flow from continuing operations was $12.5 million.

The strength of our first quarter performance results from increasing demand for our market leading suite of software and services from customers around the world. It’s a continuation of the improved demand we’ve experienced in the second half of last year.

Our product portfolio is compelling and we are seeing a lot of interest in our solutions around the world. Later in the call, I’ll take more about our accomplishments and highlights, but first let me turn the call over to Jim who will provide further details on the numbers.

James Cox

Thanks Stephanie. There are four areas I’ll cover today; first, bookings and revenue, second, expenses and profitability, third, cash and cash flows and finally, guidance.

Customer demand remains strong with a $7.3 of annual contract value or ACV of term license and Advent on Demand contracts signed during the first quarter. This is a 65% increase over the $4.4 million booked in the first quarter of last year. Both these figures include Advent on Demand bookings, which we now include in our ACV metric.

Advent on Demand delivers the same Advent software via the SAS model. With more customers choosing to deploy our solutions through Advent on Demand, we’ve updated our disclosures to include both types of bookings. For comparability, we provided the 2009 Advent on Demand bookings by quarter within our earnings slides.

As Stephanie mentioned, first quarter 2010 Advent on Demand bookings were $1 million and first quarter ’09, Advent on Demand bookings were $1.1 million.

Stephanie will provide more detail about our great ACV performance, but in summary, the ACV numbers reflect strong booking across all of our geographies and within all of our product lines.

Revenue for the first quarter was $66.7 million, up 1% over the first quarter of 2009 driven by growth within our other recurring revenue line. Other recurring revenues increases year over year as a result of the Axys Data services and Fidelity on-demand contracts going live last September.

Term license revenues decreased primarily as a result of the net deferral of our revenues from our term service deferral. As a reminder, we defer all revenue on our new bookings until our implementation services are complete. In the first quarter, we had a net deferral of term license and professional services revenue of $500,000.

However, in the first quarter of 2009 the release of deferred revenue increased revenue by $2.7 million, a $3.2 million difference between the two quarters. In addition, in the quarter, reductions in perpetual license and professional services revenues, resulted in a portion of revenue that is recurring to 88% of total revenue, compared to 85% in the same quarter last year. Finally, in the first quarter all international revenue was 14% of total revenue.

Turning to renewal rates, our renewal rate which is based on cash collections, and therefore reported a quarter in arrears was 89% in the fourth quarter, consistent with the renewal rate in the third quarter. Additional collections from the third quarter were only a few hundred thousand dollars, and therefore did not change the rounding on the 89% renewal rate in the third quarter. However, when all the cash is collected from the fourth quarter renewals, we expect the 89% renewal rate to move into the low 90%’s.

\

We are now 18 months past the beginning of the market crisis and 12 months past the S&P 500 index low. We expect our overall renewal rates for 2010 to improve compared to our 2009 rate.

Turning to expense, cost of revenue for the first quarter was $20.6%, down 2% over the same period last year. Gross margin was 69%, up one point over the same period last year. This margin increase was primarily due to the reduction of both professional services and expenses as a percentage of our total revenue.

The total first quarter operating expense was $38.8 million up 5% from the same period last year. There are a few aspects within operating expense that are worth mentioning here. Sales and marketing was up $1.1 million or 7%. Approximately half of that increase was due to additional people related expense focused generally on expanding internationally, and one quarter of the increase was due to increased travel expenses from the additional sales activity.

Product development cost reduced PD expense in the quarter by $1 million more than in the same period last year. PD was therefore up on a gross basis of approximately $1 million primarily due to additional hiring and expenses as well to a lesser extent, expenses for our new office in Beijing.

Finally, general and administrative expense was up $900,000 or 11%. This was principally due to the additional rent expense in both our New York and Boston location as we build out our new facilities in those cities. We expect rent expense to come down in the third quarter and again in the fourth quarter as we vacate our existing offices and move into the new offices in those cities.

The resulting first quarter operating income was $7.3 million, down 13% over the same period last year, representing a reduction in operating margin from 12.6% to 10.9% of revenue. The decreases in operating income are primarily attributed to the aforementioned double rent and the additional term service revenue deferral.

Net income was $4.2 million, down 21% from the same quarter last year. GAAP diluted EPS from continuing operations was $0.16 compared to 40.21 in the same quarter last year.

With respect to non-GAAP earnings, I remind you of Heidi’s opening comments. Non-GAAP operating income in the first quarter was $12.7 million or 19.1% of revenue, down from $13.5 million or 20.4% of revenue in the prior year. Non-GAAP diluted EPS were $0.29 per share down from $0.33 in the same period last year.

Turning to cash and cash flow, as of March 31, we had approximately $112 million in cash, cash equivalents and marketable securities compared with $118 million on December 31. Operating cash flow for the quarter was $12.5 million, up 16% over the same period last year due to our strong ACV and cash collections.

As a reminder, our first quarter operating cash flow has typically been the lowest of any of the four quarters because of the timing of collections and the annual payment of year end variable compensation.

In the quarter, we also repurchased approximately $10.5 million worth of stock at an average price of $42.41 per share. We also paid $4.7 million for the Goya acquisition and approximately $4.3 million in property and equipment principally for the build out of our New York facility which resulted in a decrease in our cash balance since December 31.

Total deferred revenue was down by $3.9 million to $142 million on March 31, primarily due to the seasonal decline of annual billings during the first quarter.

Now I’ll turn t guidance and I’ll be making forward-looking statements so again, I’ll remind you of the Safe Harbor statement in Heidi’s opening remarks. In the second quarter, we expect revenue to be between $67 million and $69 million, reflecting growth of 6% to 9% over the second quarter of 2009. We’re leaving all full year guidance that we provided last quarter unchanged.

In summary, we’re off to a great start in 2010, delivering on our growth in bookings and operating cash flow while continuing to make the investments that position us well to achieve our goals for the full year 2010 and beyond.

With that, let me turn the call back to Stephanie.

Stephanie DiMarco

Thank you Jim. As you’ve just heard, we achieved very positive results across our business and robust growth in bookings. We’re gratified that the improving demand we noticed last year has accelerated.

Annual combined term contract bookings in the first quarter increased 65% over the same period last year to $7.3 million. Our strong bookings came from continued momentum across our entire product portfolio and from customers around the world.

Augmenting our sales efforts is the growing excitement over the new releases of all our major products this year. The Geneva team delivered a very strong first quarter adding new clients in North America, EMIA and Asia.

During the quarter, we also quarter, we also made final preparations to Geneva 8.0, our upcoming release. The new release of Geneva adds powerful middle office and portfolio management capabilities to complement Geneva’s world class accounting functionality.

Some of the new features include exposure reporting, trade capture, enhancements to bank debt processing and more accounting functionality to facilitate work flow for credit shops. We’ve heard clearly from our U.S. and international clients about the importance of these capabilities and believe Geneva 8.0 will differentiate us even more from our competition. We’re thrilled to be taking this huge step forward with Geneva to further extend our market leading position.

It was also a very strong quarter for Tamale highlighted by the signing of a significant deal with Tamasic Holdings, a sovereign wealth fund in Singapore. With over 400 users, Tamasic is Tamale’s largest client to date and is further indication and institutional money managers recognize the value of efficient investment research and due diligence processes.

Along with both hedge funds and asset managers, we continue to see a lot of interest from the multi-manager community which includes fund to fund, endowments and foundations. In fact, Tamale’s multi-manager client base has doubled since our acquisition since just five quarters ago.

Tamale is a powerful tool for any type of investment institution looking to improve front office productivity and bolster operational processes to support due diligence while saving time and money.

Based on a recent ROI study that we conducted, we believe that a 25 person investment team earning industry average compensation stands to save $1 million a year by using a research management system to centralize, organize, share, search and find all the research data they receive and generate.

We’re very excited about our next release of Tamale due out next month. Version 5.0 introduces new configurable templates, dynamic reports and views combined with a new framework for seamless data integration that helps firms streamline their investment process. We continue to be very enthusiastic about the research management space and Tamale’s expanding presence in a diverse range of market segments and geographies.

APX 3.0, the most expensive of the products since its launch in 2005 was launched this quarter. With this release, we continue to set a new standard in comprehensive portfolio management for asset managers and wealth managers around the globe.

Our customers have been eagerly anticipating this release for its flexible reporting framework, expanded data access and enhanced CRM features and we’re really pleased by the initial reception.

We’ve also released Access 3.8 this past quarter an important update to our turnkey portfolio accounting and reporting solution. The update to support the OSI, the 2010 option symbology initiative as well as platform compatibility and reporting enhancements marks our continued commitment to keeping the platform current as technology and regulatory changes impact our 3,000 plus Access customers who rely on this solution to run their businesses.

As you can see, our continuing investment in research and development, 18% of revenues last year and the same percent in the first quarter, is bringing a wealth of new functionality to the market. We believe this investment will further differentiate our offerings in the future and spur demand.

Moving to our outsource offering, the first quarter we signed one of our largest Advent On Demand deals with a multi-billion dollar asset management firm who will be leveraging our full suite of products including APX, Moxy, rules manager, revenue center and REX through the SAS deployment option.

Advent on Demand has enabled us to serve a much wider market, demonstrating a commitment to delivering our market leading product to customers in whatever manner that meets their needs. The service continues to very well received.

We’ve seen more than 50% growth in our outsourcing client base over the past two years. With nearly 500 clients, we have the industry’s largest client base using outsource services.

As I’ve said on previous calls, we also believe the international markets represent key growth areas for Advent and it’s been born out in our results. Our offices in Hong Kong and Beijing give us local presence and as I noted earlier, we signed several important new clients in the Asia Pacific region in the first quarter.

We also took the opportunity to expand our EMIA product offering with the acquisition of Goya AS in the first quarter. Fund managers are increasing their focus on distribution and Goya’s product, TradeX provides many of the largest fund managers and fund distributors with a web based fund distribution platform.

Several of our largest clients in the Middle East and the Nordics already use TradeX. Acquiring Goya strongly supports our international growth initiatives by extending our competitive product portfolio for the international fund management and distribution market.

International revenues represented 14% of total revenues in the first quarter and now include revenues from Asia as well as EMIA.

We’re encouraged by growing evidence the investment management market is returning to health. Our strong Q1 bookings clearly support this. In addition, we see new firm formation around the world continuing focus by firms by operational efficiency and compliance and increasing demand for outsource services.

We believe we’re well positioned with our broad product portfolio and expanded international presence to capture the business that market trends suggest.

In summary, I’m extremely proud of our first quarter financial results. Our key financial metrics were strong and show that we continue to reap the rewards of our investment in product development, product acquisition and geographic expansion. These rewards will be further enhanced as customer demand rebounds around the world this year.

Finally, I’d also like to extend my personal invitation for you to join us at our analyst day on May 13 in New York. If you’re already a Tamale user, you may already have the event and all the details in your Outlook calendar. We hope to see you there. Thank you for joining us, and now I’d like to open up the call for questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Andrey Glukhov – Brean Murray.

Andrey Glukhov – Brean Murray

Can you comment as to when do you think the renewal rates are going to gravitate closer to the historical norms which is sort of in the high 90’s?

James Cox

We don’t guide on that metric. I think what we said here is that we think that 2010 is looking better than 2009. I think last quarter, someone else asked us a question do we expect it to return to our historical levels within the next few years, and I think we said yes. How that timing plays out, time will tell.

Andrey Glukhov – Brean Murray

A technical question on your buy back. In this quarter, you bought the shares back at probably the highest level that you’ve been buying them ever. Have you applied the same methodology to decide whether to buy back the shares or not as you did historically with the hurdle rate and the necessary rate of return?

James Cox

Yes, we remain consistent in our methodology.

Andrey Glukhov – Brean Murray

Since you are doing a slightly different ATV reporting, would you be willing to disclose cumulative ATV at this point?

James Cox

I’m sorry, cumulative ATV?

Andrey Glukhov – Brean Murray

Yes.

James Cox

I’m not sure what that metric is.

Andrey Glukhov – Brean Murray

ATV contracts signed to date.

James Cox

We historically have them just without the Advent on Demand essentially. And now we are including Advent on Demand as well.

Andrey Glukhov – Brean Murray

Right, but I don’t have them back into every single year. Maybe we can take it offline.

James Cox

Yes, we can take if offline, but basically what we try to do is give you, as we’ve evolved, we have the methodologies in place to report on Advent On Demand as well as all of our other bookings, and so in order to provide you with some comparability, we provided you all of 2009.

We aren’t going to go back past 2009, because we think that gives you a fair comparison for our 2010 bookings numbers.

Stephanie DiMarco

The reason we’re disclosing it now is it’s starting to be more meaningful, but I think in the prior periods, they weren’t big numbers anyway, so we’re not going to go back and restate.

Operator

You're next question comes from Jonathan Maietta – Needham & Company.

Jonathan Maietta – Needham & Company

Pete, I think it was you last quarter talked about being very happy with the bookings level in the quarter and the fact that you didn’t drain the pipeline to get that number. I just wonder if you could provide some commentary as to how the pipeline stands today.

David Peter Hess

We didn’t drain the pipeline in Q1 either, so things are looking good on the pipeline front.

Jonathan Maietta – Needham & Company

With regard to the Geneva, what are some of the signposts that you’re looking for? What should we be focused on in terms of how that’s gaining traction in the market?

David Peter Hess

Geneva 8.0 as Stephanie mentioned, what is does effectively, it turns Geneva from an accounting system into a portfolio management system. So the reason that’s important for us growth wise, is it helps Geneva be more competitive in the institutional asset management marketplace, so really going outside the traditional hedge fund space, and we’ve started to pick off some accounts in that area, and we expect that to continue largely enabled by Geneva 8.0.

And then also within the hedge fund space, internationally Geneva has not been the market leading hedge fund product. It’s really been Beecham and Tradar are the two systems, and so what 8.0 does is, it gives us actually the footprint that we needed in order to effectively displace those systems.

So the motive behind Geneva 8.0 was expand hedge funds internationally, the growth of the product internationally in the hedge fund space, and also give Geneva the legs it needs to go into the institutional asset management space.

Operator

You're next question comes from Tim Fox – Duetsche Bank.

Tim Fox – Duetsche Bank

A question around the composition of the bookings a little bit if you could give us some color there. Were there any 10% bookings customers within that results in the quarter?

James Cox

Yes.

Tim Fox – Duetsche Bank

Would you care to share which product line, if that was the case?

James Cox

Yes, we had great deals in Tamale. We had great deals in Advent on Demand and we had great deals in Geneva, so it was across the whole portfolio. We had a few big deals and we had a lot of smaller deals as well.

Tim Fox – Duetsche Bank

You didn’t mention APX, I’m assuming it was pretty strong there too. But I’m wondering is there expectation that the APX 3.0 might help accelerate the renewal cycle. In other words, were some customers maybe waiting for this newest release to upgrade or even possibly some opportunities, the old pent up demand question.

David Peter Hess

I don’t think APX per se would help with renewals because if you’re using the system, you’re going to use the system.

Tim Fox – Duetsche Bank

I’m sorry, I meant upgrades.

David Peter Hess

Upgrades, I think so. APX 3.0, I’ve said internally, it’s the release that I’ve always been waiting for. The reporting enhancements are very compelling to our client base, and also we addressed some limitations in work flow in the CRM functionality that were critical gaps to close for our cube clients to be able to move to APX.

So we sunset the cube product and we have approximately 150 cube clients, many of whom are now engaged with us in discussions about moving to APX. So APX 3.0 I think will give an incentive I think. It will be compelling enough to unleash a little bit of that pent up demand as you said.

Tim Fox – Duetsche Bank

I know you don’t give specific guidance around bookings, but is there any reason to think that we shouldn’t see normalized levels from here or maybe some sequential increase across the year, or is it still too lumpy to determine how the bookings might flush out across a year.

David Peter Hess

I can tell you that I feel pretty good about the outlook for bookings. I’m not going to speculate how we’ll compare with prior years. I think we’ll definitely do better than we did last year. Whether we’ll do better than we did in 2008 or 2007, tough to say, but I think this first quarter actually was one of the best first quarter’s we’ve ever had if not the best.

So we’re off to a good start and as I said, the pipeline, the visibility that we have into the next few quarters looks pretty good.

Stephanie DiMarco

And the product roll out schedule is really compelling, so we have a lot to talk to people about all around the world, so we’re pretty optimistic about that as well.

Operator

You're next question comes from Gil Luria – Wedbush Securities.

Gil Luria – Wedbush Securities

On Tamale, if I remember correctly from when you announced the acquisition, the rack rate is about $7,000 a seat a year. Can we apply that to the 400 seats that you sold in that deal to get a sense of the magnitude.

James Cox

I wish you could, but no. We have a scale that essentially you add users as you go through blocks of users, the incremental users are cheaper so the average seat is well below the $7,000 on that deal.

Stephanie DiMarco

But I think what’s exciting, one of the things that’s very exciting about the Tamasic contract, and others that we’ve signed with Tamale is that when we acquired the company, a very strong small company that sold primarily to hedge funds, which are small enterprises. So one of our beliefs was that we could apply our skills in selling enterprise wide systems to global firms through the Tamale product and we’ve now done that several times.

Being able to have contracts that are $100,000, $200,000, $800,000, that’s a very attractive future opportunity for Tamale and we have a couple of good test cases now.

Gil Luria – Wedbush Securities

How many outsource customers are you up to and would you mind breaking that down between your main service and BPO customers.

David Peter Hess

Managed services is new and so we are under 10 managed service clients at this point because we’ve got charter clients who are working to get up and running and implemented. The balance would all be –

Gil Luria – Wedbush Securities

Goya, is that going to be contributing to revenue this year in a meaningful way?

James Cox

I would say less than 5%, not a meaningful addition this year.

Stephanie DiMarco

But I think what Goya will give us is some attractive contracts we’ll sell this year that will contribute to revenue in 2011.

Gil Luria – Wedbush Securities

So 5% to 8% revenue guidance, how much of that is organic?

James Cox

All of that.

Operator

You're next question comes from [Rene Defursta – Janney Montgomery]

[Rene Defursta – Janney Montgomery]

I was just curious if you could break out the unit sales for both APX and Geneva in the quarter.

James Cox

We’re not actually going to disclose that metric anymore. Both those products are maturing over time and so I think those unit metrics aren’t as meaningful anymore because they’re both market leaders, those products. The other issue is that we have a wide variety of price points within both of those, all of our products now, so the units, we’re just going to back away from giving those on a quarterly basis. We’ll continue to break out revenues by product on an annual basis and provide that.

[Rene Defursta – Janney Montgomery]

I believe this was brought up earlier but I’ll ask it in a different way. For the first quarter would you be able to break out the ACV that is not from the on-demand contracts from the AC that shifts from the on-demand contracts.

James Cox

If our total ACV this quarter was $7.3 million, if we went back to what our old metric was, that number would be $6.3 million. So $1 million of that $7.3 million was Advent on Demand.

Operator

You're next question comes from David Scharff – JMP Securities.

David Scharff – JMP Securities

Just curious, are you seeing similar increases in investment spending among any of your competitors? It seems like you’ve enjoyed several years certainly before the financial crisis hit where it seemed like Advent was the only one materially upgrading a lot of its platforms. Are you seeing any renewed competition, renewed efforts to try to perhaps move down market into some of Advent’s core client base by folks like Eagle and others?

Stephanie DiMarco

Many of our competitors are not public in a purely comparable form so I’m not sure we have great visibility on their level of investment. But certainly it’s a competitive market and our competitors are coming out with new products. I would say that we’re far ahead of most of our competitors in all the markets we serve so I think we have a pretty good jump on them, but that isn’t to say that people aren’t issuing press releases and out there upgrading their products.

But it’s not something that we have great visibility on. But I think our win rates are very, very high, continue to be very, very high and that’s probably our best proxy for how we’re doing relative to investment spend.

David Scharff – JMP Securities

If you could comment a little bit on the labor market as it relates to your efforts to hire. You’ve obviously been increasing staffing. Is there more fluidity among sales people and product development among you and your competitors? Is it loosening in the labor market? How are the projected costs sort of flushing out as well as how much it’s firming up over the next year do you think?

Stephanie DiMarco

I think definitely there’s been a recovery in tech in the labor market and so in the areas where we do a lot of hiring in technology, primarily the Bay area, it’s not a buyer’s market anymore and there’s a lot of opportunities out there. So we’ve seen that certainly get stronger.

We don’t have a lot of fluidity amongst competitors for sales people. Our strategy on our sales force is really we have a farm system and we build a bench and promote from within so it’s unusual for us to hire from a competitor.

David Scharff – JMP Securities

Should we be thinking about Q1 levels of product development expense. I know you staffed up there recently. Is most of that felt throughout Q1 or should we be bumping it up a little bit as we think about the quarterly run rate for the rest of the year?

James Cox

One thing that benefited Q1 if you’re going to think about a quarterly run rate is that we capitalized $1.2 million of product development costs. That just has to do with the timing of Geneva 8.0 and APX 3.0 came out.

Stephanie DiMarco

But we’re making investments and we’re building our staff in Asia and so we are looking to grow the top line, grow the margin, but also continue to make investments in the business.

Operator

There are no further questions at this time. I’d like to turn the call over to management for any closing remarks.

Stephanie DiMarco

Thank you very much for joining us and we look forward to speaking with you next quarter.

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!