Hudson Global's (HSON) CEO Manuel Marquez on Q2 2014 Results - Earnings Call Transcript

Aug. 2.14 | About: Hudson Global, (HSON)

Hudson Global Inc (NASDAQ:HSON)

Q2 2014 Earnings Conference Call

July 31, 2014 10:00 AM ET

Executives

David Kirby – Director of Investor Relations.

Manuel Marquez – Chairman and Chief Executive Officer

Stephen Nolan – Executive Vice President, Chief Financial Officer

Analysts

Mark Marcon – Robert W. Baird

David Beck – RBC Capital Markets

Andrew Fleming – Heartland Advisors

Operator

Good morning and welcome to the Q2 2014 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks there will be a question-and-answer session. (Operator Instructions) I'd now hand today’s call over to David Kirby. Please go ahead, sir.

David Kirby

Thank you, Tamika, and good morning, everyone. Welcome to the Hudson Global Conference Call for the Second Quarter Of 2014. Our call this morning will be led by Chairman and Chief Executive Officer Manolo Marquez; and Executive Vice President and Chief Financial Officer Stephen Nolan.

Please be advised that except for historical information, the statements made during the presentation constitute forward-looking statements under applicable securities laws. Such forward-looking statements involve certain risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These risks are discussed in our Form-8K filed today and our other filings made with the SEC. The company disclaims any obligation to update any forward-looking statements.

During the course of this conference call, references will be made to non-GAAP terms such as EBITDA. An EBITDA reconciliation is included in our earnings release and quarterly slides, both posted on our website, hudson.com. I encourage you to access our earnings materials at this time. They are posted on our website under future documents and will serve as a helpful reference guide during our speakers' remarks.

With that, I’ll turn the call over to Manolo Marquez.

Manuel Marquez

Thank you, David. Thank you all for joining us on our second quarter 2014 earnings call. I’m pleased to report continuing progress in our financial performance in the second quarter. Second quarter revenue was $167 million, gross margin was $63 million an increase of 2% over the second quarter of 2013 in constant currency and Hudson’s best gross margin performance since the fourth quarter of 2012. Adjusted EBITDA which would have been $500,000 positive before one-time costs related to the proxy contest and the AlixPartners engagement ended up as a loss of $800,000 after the one-time costs, still an improvement of 64% in constant currency from the same quarter last year.

And our performance improvements were widespread in the core business and markets, with gross margin and adjusted EBITDA growth in all our largest markets in Europe and Asia-Pacific and in our three core lines of business recruitment, RPO and talent management. In our investor presentation in May I spoke about the platform we have been building to drive sustained profitability and value creation this was based upon four key strategic foundations a strong leadership team, a lean integrated structure, a focus on our core strength and markets and a differentiated brand and detail presence.

The performance improvements we have delivered in the past four quarters, are likely due to the ongoing development of these platforms. Let me highlight the advancements we made in these foundational components and the performance benefits we experienced this quarter as a result.

First a strong leadership team. I have spoken of the extremely talented senior leadership team, we have attracted from the competition over the past 18 months. These leaders have put their stamp on the business and are driving significant results. Let me give you a few examples. Under the leadership of our new managing director of Asia, our China business grew its gross margin by 30% in cost currency in the quarter. In France our new managing director drove a 6% increase in gross margin and a significant turnaround to adjusted EBITDA profitability. In the UK our new managing director for recruitment which includes both temp and perm, drove 13% gross margin growth this quarter.

Our management team in Belgium have returned our market leading business there through rapid growth, gaining 12% in gross margins and more than doubling last years profitability in the quarter. Equally critical to our future has been the ability of these leaders to attract experience front office talent. We were able to hire and assimilate highly-talented fee earners in the first half of the year, especially for our highest potential markets and practices and ending up with a year-over-year net increase of over 150 people.

These new hires should contribute meaningful incremental growth in the months and years to come further accelerating market share gains and improving profitability. Second, a lean integrated structure, while increasing our fee earners population by 14% as compared to the second quarter of 2013 in order to accelerate our top line growth in the future. We continue to create a linear more agile and more integrated support structure. We reduced our support head count by 81 positions or 16%, this actions help offset both the increased fee earner expense and the cost of the proxy context and the AlixPartners engagement.

AlixPartners completed their engagement to identify opportunities for a more focused business after the divestiture of eDiscovery, support future growth in core areas, and improve operating efficiencies and effectiveness. The Hudson management team worked closely with AlixPartners to develop a recommendation for changes to further our progress in these areas, which was approved by the Board on Tuesday. Our program involves the optimization of real estate and the integration of support services and systems at both the regional and corporate levels. The cost of this program will be covered in a restructuring charge of up to $7 million, which we expect to take over the next 12 months depending upon the timing of the strategic actions including the sale of eDiscovery business. After the actions are completed we expect to generate an ongoing annualized return of 1.5 to 2 times the charge.

Our third initiative is focusing on our core strength and markets. Most of our major markets experienced significant year-over-year constant currency growth in recruitment in the second quarter with double digit gains in Belgium, China, Spain and the U.K.

In Asia-Pacific we had our second consecutive quarter of year-on-year growth with all our lines of business contributing to that growth as it was in the first quarter. Particularly worthy of mention is this quarter’s success in Australia, where gross margin grew 6% in a challenging economic environment, outperforming our major competitors.

We believe this performance is a clear indicator of continuing market share gains and a testament to our strong leadership, reinforced operational discipline, and focus on winning in our highest opportunity practices and sectors.

We have made a commitment to growing our RPO and talent management businesses globally and have been rewarded with continuing success in those business lines. RPO achieved its highest quarterly gross margin ever growing by 6% as compared to the second quarter of 2013, which was our previous strongest quarter.

Of particular importance was another strong quarter for RPO in the Americas, achieving gross margin growth of over 50% there and further solidifying its position as our largest business line in that region, as measured by gross margin.

Talent management gross margin grew by 9% this quarter on a constant currency basis with increases in all regions. We continue to develop new tools and pilot them with existing clients to ensure that we remain a leader and innovator in this category. While experiencing strong positive results from the core markets and practices presenting the great opportunity for success, we are advancing the initiative announced on our last earnings call to explode the sale of our eDiscovery business.

We have received a significant amount of interest in the business from a number of organizations. Through a formal outreach and assessment process working in partnership with Duff & Phelps, we have begun discussions with interested parties. While we can’t provide any specifics on those conversations, we are optimistic about the progress being made.

And fourth, a differentiated brand and the ease of are presence. We continued to introduce key brand-building and digital initiatives to support the short and long-term goals of the business and are experiencing the benefits of those launched in previous quarters. Among the second-quarter efforts were the competition of a research program to market our proprietary services in the area of employer branding and a marketing partnership with Y20 organization to help address the employment prospects of Generation Y in the 20 leading economies of the world leveraging our proprietary talent assessment tools on techniques.

And our detailed efforts continue to drive rapid growth in applicants for the positions we fill on behalf of our clients, with applications increases of 30% this quarter in our major market as compared to the second quarter of 2013.

With all of this in minds I m confident about our future. Our efforts to build a strong and lasting foundation for our business delivered substantial performance improvements in our key markets and practices and have established a clear positive trend line. Our Q2 improvements in Australia demonstrates that as we have strengthened our foundation we can now win market share and grow even in the face of the challenging economic conditions in some of our core markets.

We have committed to and we believe we are now on the path to delivering sustained profitability and significant shareholder value creation. Specifically, we expect to meet our goal to deliver positive quarterly-adjusted EBITDA by year end.

Stephen will now share more details on our financial performance and our outlook for the third quarter.

Stephen Nolan

Thanks, Manolo, and good morning everyone. I'll begin with the overall results for the second quarter. Our revenue came in at $167.4 million, down 4% year-over-year in constant currency. Growth in RPO, talent management, and perm recruitment was offset by weakness in temp contracting.

Gross margin was $62.8 million, up 2% year-over-year in constant currency. We had growth in recruitments, RPO and talent management. SG&A costs were $63.6 million, which was 24% higher than last year, despite a 14% increase in fee earner headcount and the $1.3 million of costs related to the proxy contest and AlixPartners engagement. Adjusted EBITDA with an $800,000 loss, 64% better than a year ago.

Turning to the regional and country performance, we delivered year-over-year gross margin growth in most of our business lines and geographies. Gross margin in our European businesses was up 9% year-on-year in constant currency, driven primarily by strong perm results led by the UK up 18%, 30% growth in Belgium, Spain up 37%.

Talent Management grew 7% in Continental Europe, led by Belgium and France. In UK, temp contracting gross margin grew on lower revenue as temp gross margin percentage improved. Asia-Pacific had a strong second quarter with year-over-year growth in revenue and gross margin of 7% and 4% respectively in constant currency. Gross margin improvement was driven by growth in talent management and perm recruitment primarily Australia and China.

Australia gross margin grew 6% with strong perm and talent management results somewhat offset by weaker temp contracting as challenging market conditions persist. China gross margin grew 30% with strong performances across all markets and all business lines. In the Americas, revenue and gross margin were 30% and 24% respectively, below second quarter last year.

eDiscovery gross margin fell by 45% year-over-year due to lower activity with existing clients especially in the financial services sectors, and recent new business wins that were not as larger as projects that ended in 2013. The RPO team delivered another strong performance with a 50% year-over-year increase in gross margin, driven by both US and global clients further solidifying RPO as a primary gross margin contributor to the Americas business.

The Americas second quarter adjusted EBITDA performance was also negatively impacted by significantly higher medical costs caused by an unusually large number of high dollar claims. Looking at our global business lines, RPO gross margin increased 6% year-over-year on the strength of significant growth from existing clients and new business wins in Australia, China, Hong Kong and U.S., while RPO gross margin in Europe declined as a number of contracts in the UK ended in 2013.

We expect that year-over-year RPO growth will increase in the second half with a ramping our recent deployments and easier comparators in Australia. Talent management improved its gross margin 9% year-on-year in constant currency with strong performances in Australia, China and Belgium and France. Here are some additional data points in the second quarter we incurred $1.1 million in restructuring charges in the quarter $700,000 was related to reducing office space in Australia and $400,000 of restructuring of a back office in Asia.

Our second quarter results included $333,000 of stock comp compared with $857,000 a year ago. Our second quarter tax provision was a $415,000 charge as compared to $138,000 charge year ago. We ended the quarter with $18 million in cash and $34 million in available borrowings, totaling $52 million in liquidity. Days sales outstanding at June 30 was 49 days compared to 50 days last June.

Capital expenditure was $1.2 million in the quarter of which $900,000 related to landlord-funded leasehold improvement in Melbourne and Perth. We expect 2014 capital expenditures of between $3 million and $4 million, and we will continue to be prudent with our capital investments.

We had $2.2 million of borrowings at quarter end through June 30 our average borrowings year-to-date were $1.5 million. Our credit facility with Royal Bank of Scotland expires in August and will be replaced with two facilities, one in the U.S. and one in the UK. We expect to have them in place before the expiration of the RBS facility.

As we announced this morning, the planned sale of our eDiscovery business is moving forward and we’re pushing for a close by the end of 2014, although it may take longer. We finished the first half of 2014 with an adjusted EBITDA loss of $3 million which compared to a $7 million loss in the same period last year on a constant currency basis. This improvement was achieved by growing both gross margin and also reducing our costs while investing in fee earners and absorbing the Alix and proxy costs.

We still have a lot of work to do and as we consider our prospects for the balance of 2014 conditions remain challenging in some markets. We will continue to invest selectively in our fee earner base and drive productivity. We expected the investments that we have made today should generate a meaningful positive return in the short-term.

As Manolo mentioned, the Board approved a program of action based upon our work with AlixPartners, that will help us further optimize our business following the sale of eDiscovery. It will also position us to successfully capitalize on our core business growth potential and build further efficiencies in our organization. We expect the majority of the program components and related restructuring charges of $7 million to occur in the next three quarters, the annualized targeted savings on the retained business are estimated to be at least $12 million.

As we know the third quarter is always challenging because of seasonality in Europe. We are also anticipating weaker year-over-year performance in the Americas as we transform the business. With all that in mind, our outlook for the third quarter is for revenue of between $165 million and $175 million at prevailing exchange rates. This translates to year-over-year revenue growth of between 1% and 7% we expect adjusted EBITDA between breakeven and a $2 million loss. Regionally I would expect the Americas to lag the guidance range, while Europe should be inline and Asia-Pac should be ahead of the range.

Tamika, please open the line for Q&A.

Question-and-Answer Session

Operator

(Operator Instructions) We do have a question from the line of Mark Marcon.

Manuel Marquez

Hi, Mark good morning.

Mark Marcon – Robert W. Baird

Good morning, nice to see the progress both in Europe and in Asia-Pac. Wondering, in terms of the guidance that you are giving, is the assumption that Europe will basically track in line just on the top line or would we see stronger growth in terms of gross profit as we witnessed this last quarter?

Manuel Marquez

Yes, Mark I think we’ll see obviously we have the split between continental Europe I guess is quite soft in the third quarter relative to certainly Q2. And the UK, less of an impact. So, yes, we are anticipating I think those trends from a revenue perspective and that the mix will still be quite helpful in terms of gross margin.

Mark Marcon – Robert W. Baird

Okay. So we should see a gross profit improvement?

Stephen Nolan

Yes.

Mark Marcon – Robert W. Baird

Okay. On a year-over-year basis.

Stephen Nolan

On the year-over-year basis.

Mark Marcon – Robert W. Baird

Okay. And then does the guidance in terms of the – between negative $2 million to breakeven, does that include the impact of the restructuring or is that cost excluded?

Stephen Nolan

That cost is excluded.

Mark Marcon – Robert W. Baird

And how much would you – how much of the restructuring would you anticipate getting done within the next three to six months?

Stephen Nolan

Again my comments over the next three quarters, we have done a lot of work with AlixPartners, but we now have some detailed planning to do at the region level. So I think, we would look to have as much as possible done before the end of this year, so we could get basically a full year of savings next year.

Mark Marcon – Robert W. Baird

What would you anticipate in terms of cash flow for the coming quarter?

Stephen Nolan

We continue to invest in the fee earners, we continue to look for revenue growth. It is a seasonally soft time, so I think we are watching on a week-to-week basis our DSO, our investments, our collections. So I mean I think we would say that, it should be probably flat to somewhat up compared to where we finished Q2.

Mark Marcon – Robert W. Baird

I’m sorry; flat to?

Stephen Nolan

Somewhat up, that the cash would be somewhat higher at the end of Q3.

Mark Marcon – Robert W. Baird

Okay, so positive free cash flow for Q3?

Stephen Nolan

That’s our goal.

Mark Marcon – Robert W. Baird

Okay, and in terms of the savings that you are anticipating from the restructuring, would there be any offsets? In the past we have talked about savings and restructurings, but then there were other areas that we ended up investing in. How should we think about the projected savings?

Stephen Nolan

I think you have hit it, I mean, we will be looking for gross margin growth that falls down we continue to invest in fee earners in the core markets. And we will be pushing as much savings as we can in newer areas, both real estate and other support. So I think – will there be some offset? Yes, is the net impact to be positive yes?

Mark Marcon – Robert W. Baird

And then with regards to the Americas and the eDiscovery business, I missed – how much was that down specifically?

Stephen Nolan

It was down 40%, 45%.

Mark Marcon – Robert W. Baird

It was down 45%? In terms of the potential sale of that business, you've indicated you've gotten a lot of interest. What would you anticipate? Can you give us any sense for how you are thinking about that in terms of what the proceeds might be?

Stephen Nolan

Can’t really comment right now, Mark I mean, we are on schedule with our – with the process we have identified with Duff & Phelps. The Board has now approved us moving forward. We have you will see assets held for sale in the Q2 10-Q. So we are moving ahead.

Mark Marcon – Robert W. Baird

Okay, great. Thank you.

Stephen Nolan

Thank you, Mark.

Operator

Your next question is from the line of Andrew Fleming.

Stephen Nolan

Hi, Andrew, good morning.

Andrew Fleming – Heartland Advisors

Hey, good morning. I just wanted to follow-up on the previous question. With the restructuring charges that you anticipate taking, where do you expect the cash balance to be at the end of the year?

Stephen Nolan

Andrew, it’s – we obviously have a number of sort of variables there, I would say, but on the trading side we continue to invest in our fee earners and expectations there that revenue will rise as they become productive towards the end of the year. If we sell the eDiscovery business by the end of the year, that obviously has an impact as well. So I think, normally we would look at our fourth quarter, if you look at last year we finished very strongly in terms of collections and our DSO was – I think was at record levels, so sort low levels. At the moment, we are investing, we expect to sort of have some trading and potentially other events that we don’t have concerns about cash at the end of the year.

Andrew Fleming – Heartland Advisors

Okay, so just to be clear, we are right around $18 million today?

Stephen Nolan

Yes.

Andrew Fleming – Heartland Advisors

Now, ex the proceeds from eDiscovery, do we expect that number to be higher or lower than it is today as we end the year?

Stephen Nolan

At the end of the year, my expectation is that number will be higher.

Andrew Fleming – Heartland Advisors

Okay. And then how much revenue did eDiscovery do last year?

Stephen Nolan

For the year?

Andrew Fleming – Heartland Advisors

Yes. Yes. Just ballpark would be sufficient.

Manuel Marquez

Somewhat between $80 million and $90 million, Andrew.

Stephen Nolan

And again Andrew that’s US, UK, don’t forget we have a nice business in UK as well that rolls in there.

Andrew Fleming – Heartland Advisors

And the entire business is on the block currently, not just the US?

Stephen Nolan

Yes.

Operator

At this time there are no further no audio questions.

David Kirby

We will just pause a minute and make sure that the case. Operator, do you have any other questions?

Operator

We do have one that just came in the queue from David Beck.

Stephen Nolan

Hi, David good morning.

David Beck – RBC Capital Markets

How are you doing? Couple of questions. If you could just give us a rough sizing of the RPO business in the pipeline geographically in terms of opportunities for growth, new wins?

Stephen Nolan

If you’re looking at second quarter, David, it was about 17% of our gross margin. Obviously, the bulk of that is in Asia Pac. There was the growth in North America with 50% basically over the last six months. We are growing quite nicely and then we discussed some wins in the UK, or at least one win that I'm aware of that would be coming in the second half. It’s a growing part of our business. If you remember last year in the second quarter we had a contract that ended so we had a tough comparator this year. We expect to see some very good growth both from retained and new clients in the second half.

Manuel Marquez

The Asia-Pacific, as you know, is our stronger business there. We are ranked as the number two in the market in Asia-Pacific. And we have invested in expanding the Australia process into Asia and most of the new pipelines have been generated in China, which is a testament to the fact that the expansion from Australia to Asia is working. But we have also major wins in Australia, too.

In North America we have started investing in recruiting a new team for RPO approximately midyear last year. The team is now in place and have a strong pipeline, which is demonstrated by the second consecutive of over 50% growth. We have reinforced that safety team in the UK at the beginning of this year and we've got a nice pipeline building up over there. As you know, the RPO contracts are long-term contracts, so it’s great when you have them, but the time to lock in one of those contracts is on average six months, so it does take time to convert the pipeline. But we have converted already some clients that are coming on the second half and we believe that the traction that we have demonstrated in RPO will continue in the next quarters.

David Beck – RBC Capital Markets

Can you – any color on visibility of the pipeline, new requests for proposal opportunities for growth in RPO?

Manuel Marquez

In terms of number of deals in the pipeline, value of the pipeline?

David Beck – RBC Capital Markets

Yes, something along those lines. In terms of number of proposals you are bidding on versus maybe this time last year, just to get some sense of whether there have been more engagements for your services?

Manuel Marquez

Yes, I think the attraction on the pipeline is much stronger than last year, but last year we had one sales person in RPO for all Europe. Now we have got three. The person that we had last year in Europe was also taking care of operations. Now we have top talent running the operations so that the leader of RPO business in Europe is more concentrated on sales. So that gives you an idea of how much we are incrementing the friction that we've got in the market and anything happened in the US. In the US, we’ve got three highly-talented people in the market and we have a very strong team that is concentrating in operations.

David Beck – RBC Capital Markets

And if you could maybe provide a little color on the eDiscovery business. It's been put up for sale; how has that affected whether it be the morale or the position of that business in the market to winning new contracts?

Manuel Marquez

Well, I have to be very transparent very transparent here, it has affected it. Mainly some of the clients that would've partnered for long-term engagements in eDiscovery, they are just kind of thinking that they would wait until they see who would be their new partner when they acquire the business. So that has happened. We are working very closely with our team and I think that, for our employees, it is clear that being part of an organization that has much more of a focus in eDiscovery will be better. But there is always the risk of hiccups when you announce.

David Beck – RBC Capital Markets

Thank you. Again, congratulations on the profitable second quarter a little bit ahead of schedule. Hopefully more to come.

Stephen Nolan

Thanks David.

Manuel Marquez

Thanks so much, David.

Operator

(Operator Instructions) We do have a question from the line of Andrew Fleming.

Andrew Fleming – Heartland Advisors

Hi, guys, Steve, I had a follow-up question on the restructuring. I missed the actual number. Did you expect that to be – was it $12 million or $7 million?

Stephen Nolan

$7 million of cost, Andrew, and $12 million of benefit.

Manuel Marquez

At least $12 million, so $1.5 million to hide the charge and we are being more specific quoting the fact that will be higher than $12 million in that bracket.

Andrew Fleming – Heartland Advisors

Can you explain how that happens?

Stephen Nolan

Well, again, it’s a mix of employee real estate process changes, efficiencies. It’s a multitude of actions. This is the work that we did with AlixPartners that has – in a sense experts and they helped its kind of frame out this effort and we are now working on it with the region heads.

Manuel Marquez

I think that, we cannot be specific about those actions until we work them in more detail and we announce everyone specifically. But you can imagine, as you have asked before, that eDiscovery was $80 million to $90 million in revenues. So, as we divest this part of the business we have to ensure that the new platform of Hudson operates efficiently under the new scale and improves profitability. So, there is an effort on reviewing the way we do think on changing the organizations to manage a business that would be 10% lower in the scale roughly.

Andrew Fleming – Heartland Advisors

Is it simply reducing back office and showing real estate, or is there more to it than that?

Manuel Marquez

Back-office support, yes. Corporate and regional support and real estate.

Stephen Nolan

But it is also the way that we operate. If you looked at the way – for example, in Europe there is a certain set up there. We may look to find ways of doing things in a more efficient way that would, in a sense, generates lower SG&A. So, we have new leadership they are. There are just conversations that we have had about ideas and I think now it will just be probably you’ll see that that will complete the dealing with some of the opportunities that we have identified.

Andrew Fleming – Heartland Advisors

And how much of the cost savings is simply from dropping eDiscovery?

Manuel Marquez

We cannot do that. It’s not fair this moment, Andrew. Sorry about it. But the whole project of AlixPartners is initiating the sinking of Hudson without eDiscovery and how to run a company that doesn’t have a large platform in North America.

Stephen Nolan

But it’s also tagging on to that the focus that we are bringing to that platform as well. So, I think it's both. It’s not just a getting those standard cost, but also how – with this team that we have now brought in obviously there’s the mix of new and old and we are sort of coming out I think in a slightly different mindset.

Andrew Fleming – Heartland Advisors

Okay. My final question is just I’m trying to trend the number of fee earners, the number of non-fee earners over the last four quarters, so if you could provide a breakdown of that I would appreciate it.

Stephen Nolan

We have about 1,300 fee earners at the end of June, and 500 non-fee earners.

Andrew Fleming – Heartland Advisors

Okay. And how did that compare to the prior quarter?

Stephen Nolan

Well, we were up – let me just give me one second. So, as of Q1 it was about 1,150 fee earners and 530, I think in non-fee earners.

Andrew Fleming – Heartland Advisors

Okay. And then do you have the fourth quarter handy?

Stephen Nolan

I don't have it now. We will get to you separately.

Andrew Fleming – Heartland Advisors

Okay, thank you.

Stephen Nolan

You’re welcome.

Operator

At this time there are no further audio questions.

David Kirby

Thank you, operator and thank you all for joining us on the Hudson Global second quarter conference call. Our call today has been recorded and will be available on the Investors section of our website, hudson.com. Thank you, and have a great day.

Operator

This concludes today’s earning call. You may now disconnect your line.

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!