Susser Holdings' (SUSS) CEO Rocky Dewbre on Q2 2014 Results - Earnings Call Transcript

Aug. 8.14 | About: Susser Holdings (SUSS)

Susser Holdings (NYSE:SUSS)

Q2 2014 Earnings Call

August 08, 2014 11:00 am ET

Executives

E. V. Bonner - Executive Vice President, General Counsel and Secretary

Sam L. Susser - Founder, Chairman, Chief Executive Officer and President

Rocky B. Dewbre - Executive Vice President, President of Wholesale and Chief Executive Officer of Wholesale

Mary E. Sullivan - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Treasurer

Kevin J. Mahany - Former Vice President of Merchandising

Analysts

Sharon Lui - Wells Fargo Securities, LLC, Research Division

Irene Nattel - RBC Capital Markets, LLC, Research Division

Benjamin Brownlow - Raymond James & Associates, Inc., Research Division

Ben Bienvenu - Stephens Inc., Research Division

Ronald Bookbinder - The Benchmark Company, LLC, Research Division

Ethan H. Bellamy - Robert W. Baird & Co. Incorporated, Research Division

Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Susser Holdings/Susser Petroleum Partners Second Quarter Earnings Conference Call. [Operator Instructions] This conference is being recorded today, August 8, 2014. I would now like to turn the conference over to Mr. Chip Bonner, Executive Vice President. Please go ahead, sir.

E. V. Bonner

Thank you, operator. Good morning, everyone, and thanks for joining us. This morning, we released our second quarter 2014 earnings for both Susser Holdings Corporation and Susser Petroleum Partners.

A reminder that today's call will contain forward-looking statements. These statements are based on management's beliefs, expectations and assumptions and may include comments regarding the company's objectives, targets, plans, strategies, costs and anticipated capital expenditures. They are subject to risk and uncertainties that could cause the actual results to differ materially, as described more fully in the company's filings with the SEC. During today's call, we will also discuss certain non-GAAP financial measures that we believe are helpful for a full understanding of our financial performance. Please refer to our news release for a reconciliation of each financial measure.

With me on the call today are Sam L. Susser, Susser Holdings' Chairman and CEO; Rocky Dewbre, CEO of Susser Petroleum Partners; Mary Sullivan, Executive Vice President and CFO; and other members of our leadership team.

Last week, we announced that we have scheduled August 28 as the date for the special meeting of Susser Holdings stockholders to consider and vote on the merger agreement with Energy Transfer Partners. We also filed a prospectus with the SEC, which is in the process of being mailed to all shareholders of record as of July 22, along with the related election materials. Assuming an affirmative vote by our shareholders, we would expect to be in a position to close the transaction on August 29, following the shareholder vote.

As was the case last quarter, we won't be able to comment on certain specific details of the timing of the integration, the size of the ETP dropdowns to SUSP beyond our brief prepared remarks. A reminder that the information reported on this call speaks only to the company's view as of today, so time-sensitive information may no longer be accurate at the time of any replay.

Now I'll turn the call over to our Chairman, Sam L. Susser.

Sam L. Susser

Thanks, Chip. Good morning, everyone, and thank you for joining us on the call. Despite the distractions of the pending merger, our team, once again, delivered solid strong performance for the second quarter. Starting with the merchandise side of the business. Same-store sales for the quarter increased 4% over last year, mainly driven by fresh fruit -- fresh food, beer and packaged drinks, and reflects both an increase in customer traffic, as well as transaction size.

Merchandise margin was in line with our trend at 33.8%. The decline, versus 34.3% a year earlier, was mainly related to a timing difference in rebate recognition during 2013. Year-to-date, our margin continues to remain strong at 33.9%, which is 20 basis points better than the first half of last year and reflects, in large part, the continued strong growth of Laredo Taco Company, mitigated by pricing pressure in certain other categories.

Average fuel gallons sold per retail store increased by 2%, excluding the acquired Sac-N-Pac stores, versus an increase of 5.5% a year ago. The modest slowdown in volume growth reflects several things. The first is that we've experienced tremendous growth in gallons the last few years that was well above our historical growth rate, so we're comping up against really strong numbers. We also continue to see our markets attract additional new competitors, as well as intense pricing and promotional activity by big-box retailers. And third, we experienced some short-term supply issues in West Texas due to unplanned refinery and terminal outages. This, in turn, caused transportation capacity shortages, as truck waiting times at the available racks significantly increased and loads were sourced from alternate longer-haul areas. This part of Texas is already short on trucking capacity due to the demands of the oilfield. Fortunately, the refinery and terminal issues have been largely resolved, and we're experiencing dramatically fewer runouts and, therefore, stronger fuel volumes, so far, in Q3.

Retail fuel margin was $0.187 per gallon for the quarter versus $0.182 a year ago before deducting credit card fees. That compares to a comparable average Q2 margin of $0.22 per gallon over the previous 5 years. We're about 5 weeks into the third quarter, and we have finally seen some declines in the fuel cost which, as you know, generally helps our fuel margins.

Our overall personnel expenses were 19.9% of merchandise sales versus 18.4% a year ago and 21% in Q1. The increase over last year is due to a couple of factors: one is a shift in product mix towards more food service, which requires about 3x the amount of labor as a percent of sales versus traditional convenience store merchandise. Additionally, our health care costs have increased about $3 million to $4 million annually as a result of the Affordable Health Care Act. We are constantly working to effectively leverage our scheduling software, particularly in the restaurant area. Our ratio of direct labor cost to merchandise and restaurant sales improved 120 basis points from the first quarter, and we expect to see further benefits from those adjustments in the third quarter. Our goal is to properly match staffing levels in our stores to the customer count as it surges up and down throughout the day on a store-by-store basis.

Two areas in which we saw year-over-year positive trends are in shortage expense control and in our mix of part-time versus full-time employees. Both have been improving since the beginning of the year. We have increased our part-time staffing by 9 percentage points since January 1, which gives us much greater flexibility to staff at the optimum level, depending on the time of day and customer traffic patterns. We have also been very pleased with the progress and the performance of the new stores we opened in 2013, most of which became cash flow-positive within the first 6 months of operations.

On the new store development front this year. We opened 5 new Stripes stores in the second quarter and acquired 2 existing stores, 1 of which already had been rebranded as a Stripes. In addition, we have opened 4 more stores since the beginning of the third quarter. As of today, we have 17 new stores under construction. All of these should open before year end.

Our real estate team, led by Jerry Susser and David Marks, continues to build a significant pipeline of new sites that will provide meaningful growth in cash flow for SUSP unitholders in 2015 and 2016, and we expect to have more units under construction during the second half, giving us a bigger pipeline of stores to open in the first half of 2015 than we did already in 2014. We'll have greater visibility into next year's plans once we close the transaction with Energy Transfer. But we anticipate further acceleration next year on our new-build program that will include areas that are strategic to ETP, following 2 years of substantially faster organic growth here in Texas.

We're continuing to drive improvement in the 47 Sac-N-Pac stores we acquired in Central Texas earlier this year, both in the merchandise and the fuel areas. We completed merchandise resets during the second quarter, and we are seeing modest sequential improvement in merchandise sales each month. Fuel volumes have also improved and now average 68% of the average Stripes store. That's up from 60% 1 quarter ago, reflecting a big jump in Sac-N-Pac same-store fuel volume. We also just expanded the operations of 42 of the 47 stores from 18 hours to 24 hours a day. We're continuing to evaluate each store and expect to make some decisions later this year as to whether to offer certain sites to our best dealers or rebrand them to Stripes, which could also include major remodels or even a raise and rebuild, and to integrate Laredo Taco into as many locations as is practical.

Susser Petroleum Partners is performing very well. As Rocky will expand on, we hit the first split of the IDRs this quarter. SUSP is well-positioned from a management and a system standpoint to benefit from the growth that ETP has in mind for the partnership over the next several years by combining the Sunoco wholesale and retail network with the Susser Petroleum and Stripes network.

Now I'm going to turn it over to Rocky for a more detailed look at our wholesale business. Rock?

Rocky B. Dewbre

Thanks, Sam. Good morning, everyone. Our wholesale fuel business delivered solid performance in the second quarter. As a result, we are pleased to announce the fifth consecutive increase in our quarterly distribution at Susser Petroleum Partners, an increase of 3.5% versus the prior quarter, to almost $0.52 per unit, or $2.08 on an annualized basis. This distribution represents a 14.8% increase over the second quarter of 2013, and is in line with the double-digit growth we expected to achieve when we launched our IPO almost 2 years ago.

With this increase, we have achieved a second target distribution level outlined in our partnership agreement, and our Board of Directors has approved the first incentive distribution payment of approximately $64,000 to Susser Holdings, the owner of our IDRs. SUSS will also receive its ordinary share of the distribution on common and subordinated units. Based upon distributable cash flow of $13.7 million, this reflects a coverage ratio of 1.19x for the second quarter and a coverage of 1.22x for the trailing 4 quarters.

Susser Petroleum Partners delivered a 19% year-over-year growth in fuel gallons sold, a 31% increase in total gross profit and a 21% increase in adjusted EBITDA in the second quarter. Our existing and acquired sites continue to generate robust growth in fuel volumes and rental income, resulting in an increased distributable cash flow and distributions. The 2 acquisitions that we completed over the past 10 months have made a meaningful contribution to our year-over-year growth. Also, as Sam mentioned earlier, we are well positioned in the fast-growing Texas economy, which continues to support our business by upping drive fuel volume.

We added 11 new contract dealers last quarter and discontinued 3. This brings our independent dealer count to 624 at the end of June. We expect to add a total of 50 to 65 new and acquired dealer locations for the full year. The partnership's gallons sold to affiliates increased 11% year-over-year to 293 million gallons. This reflects strong initial volumes at newly built Stripes stores, as well as healthy growth trends in existing Stripes stores and at Susser Holdings dealer-operated consignment locations.

Volumes sold to third parties, including independent dealers and commercial customers, increased 35% to 169 million gallons. Gross profit on these third-party sales increased 37% to $8.3 million, reflecting additional gallons sold by new sites and contribution from the Gainesville Fuels acquisition. Margin per gallon was approximately the same as last year at $0.049 per gallon. Average fuel margin for all gallons sold by the partnership on a weighted average basis increased to $0.037 per gallon compared to $0.036 last year.

Rental income continues to increase as SUSP completes additional sale-leasebacks with SUSS. In the second quarter, rental income contributed $4.3 million to gross profit, accounting for 19.6% of the partnership's total gross profit. We completed dropdown transactions for 6 Stripes stores during the second quarter for $31 million and 3 more so far in the third quarter for $12 million. Since the IPO, we have acquired a total of 49 retail stores for $204 million that will produce annual rental income of just over $16 million for the partnership, plus the $0.03 per gallon margin on fuel volumes. We remain optimistic about the long-term growth potential in our markets and look forward to the additional opportunities the merger with Energy Transfer Partners will provide for our unitholders.

Now I'll turn the call over to Mary Sullivan for a few comments on the consolidated financials. Mary?

Mary E. Sullivan

Thanks, Rocky. Good morning, everyone. To summarize the consolidated financial results of Susser Holdings. This morning, we reported adjusted second quarter net income of $14.3 million or $0.66 per diluted share, versus adjusted income a year earlier of $12.5 million or $0.59 a diluted share. These adjusted numbers exclude the impact of $3.1 million of pretax merger-related expenses in the latest quarter, and a $26.2 million dollar debt refinancing charge a year ago. Adjusted EBITDA, excluding the $3.1 million of merger-related charges that fall under the G&A expense line, was $53.1 million, compared to $50.5 million a year ago.

Gross profit for the quarter increased almost 15% over last year. Top line growth in sales in gallons that Sam and Rocky covered are primarily responsible for this increase, as well as slightly higher retail and wholesale fuel margins. For the retail division, fuel represented 29% of gross profit for the second quarter. On a consolidated basis, fuel represented 36% of gross profit, with merchandise and other inside sales accounting for 64% of gross profit.

G&A expense was up $7.1 million year-over-year. As I mentioned earlier, $3.1 million of this was merger-related expense. $2.1 million is higher noncash stock-based compensation expense, and $1.7 million of the increase is additional bonus and 401(k) matching accrual versus last year, primarily due to improved performance against internal targets this year. Other operating expenses for the quarter increased by $8 million but are largely due to supporting 69 more retail stores and a larger wholesale platform than we had at the end of June 2013. We did see a slight increase in credit card fees from 1.6% to 1.7% of retail fuel revenue. Also, utilities increased with the higher natural gas prices driving up electricity costs. Excluding credit cards and utilities, other operating expense, as a percent of merchandise sales decreased by approximately 20 basis points compared to Q2 2013.

Consolidated CapEx during the second quarter was approximately $68 million, and this includes about $50 million related to new store construction and land purchases. This number does include partnership capital spending of approximately $37 million. SUSP CapEx included $200,000 in maintenance capital, and the balance was for purchase of Stripes stores and other growth investments. Our consolidated revolver borrowings increased by about $27 million since the end of last quarter to fund new stores and expand our land bank. We have $27 million of cash on the balance sheet and $357 million combined capacity on our 2 revolvers. As of the end of the quarter, our net debt to trailing 12-month EBITDA was about 3x on a consolidated basis and 3.6x at Susser Petroleum Partners.

Operator, we're now ready for any questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question will come from Ms. Sharon Lui with Wells Fargo.

Sharon Lui - Wells Fargo Securities, LLC, Research Division

Just a question in terms of the pace of construction. So I guess, with 4 stores opened in the third quarter and 17 in construction, can we expect a balance of 21 for the balance of the year? Or are there potential for additional stores to be opened?

E. V. Bonner

Sharon, this is Chip. We expect to have -- the 17 stores that are under construction today, we expect those to be completed this year and open this year. We expect to start another 6 stores for the balance of the third quarter, with up to 6 more in the fourth quarter, which those will open in 2015.

Sam L. Susser

So the total number of kind of new retail units is going to be about 30.

E. V. Bonner

30 for this year.

Sam L. Susser

That'll open this year.

E. V. Bonner

That's correct.

Sharon Lui - Wells Fargo Securities, LLC, Research Division

Okay, great. And then just 1 quick question on the partnership OpEx. Do you think, I guess, the Q2 run rate is a good run rate going forward?

Rocky B. Dewbre

Sharon, this is Rocky. As you look at the operating expenses and the G&A expenses, both for this quarter, when we're comping against last year, we did not have the Gainesville in that number because that didn't happen until Q3. So I believe the Q2 number this year would be a reasonable number for a run rate going forward. We had some unusual expenses that may help us going forward. But obviously, there's always unexpected things that happen as well. So I think it's a reasonable run rate.

Operator

Ms. Irene Nattel with RBC Capital Markets.

Irene Nattel - RBC Capital Markets, LLC, Research Division

Sam, in your prepared remarks, you noted that beer and packaged beverages were important contributors to the same-store sales growth. But you also noted that you're seeing stepped-up competition in certain categories. Wondering if you could provide a little bit more color on which categories are seeing greater competition, and how it is that you're continuing to drive the same-store sales growth in beer and packaged beverages.

Kevin J. Mahany

Irene, this is Kevin. Yes, we're still seeing more competition build on both beer and packaged beverages, especially from the big-box retailers, also from the value discount channel. The way we're really going about it is we're looking at individual markets and we're continuing to go head-to-head with them, where we can, to continue to build our sales.

Sam L. Susser

Kind of the pressure categories for the quarter in terms of margin pressure were: first, cigarettes; dairy; and candy and snacks were kind of the headwind categories for the quarter. And we had help, obviously, from Laredo Taco as the both kind of the same-store growth there and the contribution from all of the new stores are helping drive food to a bigger mix. Food service, which is both Laredo Taco and coffee and fountain drinks and so forth, now account for about 1/3 of our gross profit, 32.6% for the quarter versus 31.7% for the comparable quarter, the year before. And that's helping us fend off the by-store competition from the Dollar stores and the Walmarts and so forth.

Irene Nattel - RBC Capital Markets, LLC, Research Division

Absolutely. I mean, clearly, that would be a significant differentiator. Sam, if we look ahead, let's say, 2, 3 years, where would you see that food service, as a percentage of gross profit, moving up to?

Sam L. Susser

Gosh, I think we'll be at, at least 35% of our merchandise gross profit and approaching 40%, if you look out 5 or 10 years. We still have the -- and I'm speaking to what I'll call the legacy Stripes stores. With the consolidation of the Sunoco network, those numbers will change over time. And that'll be a process over the coming years.

Operator

Mr. Ben Brownlow of Raymond James.

Benjamin Brownlow - Raymond James & Associates, Inc., Research Division

Just a follow-up on the last question on the competitive openings. You mentioned the big-box and the discount channels. Is it fair to say that you're seeing increased competition across most regions? Or is it more of a pocket?

Kevin J. Mahany

Ben, this is Kevin. We've seen a lot of activity coming, and South Texas is where we're really seeing a lot of the building going on at this point. The remaining markets are still growing but not at the rate as we've been seeing in the Valley markets and Corpus Christi area.

Benjamin Brownlow - Raymond James & Associates, Inc., Research Division

Great. That's helpful. And just on the partnership side. Can you remind us again what your target long-term distribution coverage ratio is, and how you're thinking about the debt versus equity financing when you think about the upcoming dropdowns?

Mary E. Sullivan

Ben, this is Mary. We are still evaluating what that long-term should be under the ETP ownership. As we've talked in the past, Susser Petroleum had very stable cash flow and felt like we could take that target coverage ratio down over time. With the new companies, little bit of volatility with the dropdowns planned, although we believe that's going to be mitigated with the larger geographic dispersity. And so we still have some work to do on that, as well as the specific debt and equity structure on the dropdowns. A lot of work going on, on that. A little too early to add too much color on that today.

Operator

And Mr. Ben Bienvenu with Stephens.

Ben Bienvenu - Stephens Inc., Research Division

Could you give a little bit more detail around new unit performance and give us a sense of how returns on these units are trending?

E. V. Bonner

As we indicated in our prepared remarks, our 2013 stores are continuing to increase. Our stores that we build in markets where we do not have a large market share, large presence, they take a little bit longer to ramp up. But overall, we're pleased with the returns that we're seeing and the ramp-up that we're getting in these new stores. So clearly, opening more stores every quarter provides pressure on -- with respect to those stores, but long term, they'll ramp up. And so far, we're pleased with where we are on our returns.

Sam L. Susser

I'll also say that the company has improved its efficiency on new store openings. There was a time period when we were really accelerating our growth from, like, 12 or 15 stores a year up to this present 30 level, that our rate of efficiency in the first few months was not where we would want it to be. And the Sid and the team have learned from that experience, and we're opening stores up a lot smarter today and getting to profitability a little bit faster in that regard.

Operator

[Operator Instructions] Mr. Ronald Bookbinder with The Benchmark Company.

Ronald Bookbinder - The Benchmark Company, LLC, Research Division

Rocky, I was wondering, on the fuel profit margin to third-parties, it had been steadily increasing from about $0.045 5 quarters ago up to $0.057 last quarter. But we seemed to see a drop-off. Was that because of the acquired third-party fuel distribution over the past year? Or was there some sort of mix shift between contracts?

Rocky B. Dewbre

Our margin for Q2 was the $0.049, you mentioned, and that was consistent with what it was the same period last year. But less than it has been in Q1 and Q4, obviously. Q1, we had an extraordinary quarter. In Q2, we had a rising gasoline market throughout the quarter which, obviously, puts pressure on our margins. That was a big factor. And just overall competitiveness in the wholesale space, we experienced pressure. So we are -- with the gasoline market starting to fall a bit in Q3, we are seeing a little improvement. But I would really just say the biggest delta, quarter-to-quarter, was that we had a great first quarter.

Ronald Bookbinder - The Benchmark Company, LLC, Research Division

Okay. And on the ETP. Could you talk about what sort of multiple SUSP is going to pay for the assets? Or if you can't talk about that, how would you determine the valuation for the assets that SUSP will acquire?

E. V. Bonner

Ron, this is Chip. One, we can't talk about what we would end up paying, but I will tell you that the board and the independent conflicts committee will have a very big say in negotiating what those dropdowns and what that multiple looks like to SUSP.

Sam L. Susser

I would just build on that, Chip, by saying there's a tremendous alignment of interest between SUSP unitholders and the Energy Transfer family to drive value for unitholders on both sides over the years here. And so very much, the conflicts committee will have to review and approve and do market checks on the pricing of dropdowns, but our interests couldn't be more aligned. And I feel very, very good about the long-term prospects for SUSP with the combination of our building organic growth story, combined with the dropdowns that ETP is positioned to supply SUSP with for -- in the coming years.

Operator

Mr. Ethan Bellamy with Baird.

Ethan H. Bellamy - Robert W. Baird & Co. Incorporated, Research Division

With respect to the dropdowns, what are the gating factors in terms of the speed and the magnitude of those drops? And is Energy Transfer considering taking equity as part of the consideration?

Sam L. Susser

I think those are deal-specific questions that are not appropriate for us to comment on at this time. But these transactions are certainly complex and involved, and there are lot of tax issues and, of course, capital markets issues that have to be resolved, as well as working through the Board of Directors process in doing the right thing the right way. And we've got -- a lot of that work has been started, both here and at Energy Transfer, and we'll have more developments to talk about in the coming months.

Ethan H. Bellamy - Robert W. Baird & Co. Incorporated, Research Division

Okay. Fair enough. With respect to the ETP transaction and your relationship to fuel suppliers. Has that changed at all? And has there been any positive development that we might see in margins going forward from the increased scale?

Rocky B. Dewbre

This is Rocky. So ETP, through the Sunoco group, they have, obviously, a large footprint and multiple suppliers that they work with. At Susser Partners, clearly, we have a number as well. We have a larger number of branded suppliers than the Sunoco team has historically worked with. But the specifics of what the future looks like are still being determined. But I can tell you, with our dealer network, we expect to continue to enjoy good relationships with all of our fuel suppliers we're currently working with.

Sam L. Susser

The scale of this combined company is only going to enhance our ability to buy fuel. It's one of the several very exciting themes behind industrial logic of this combination. And we're not -- we don't know the specifics of how it's going to play out, but size is your friend in this business. And the combination here definitely adds to our size and scale.

Operator

Mr. Sam Susser, there are no further questions at this time. Please continue.

Sam L. Susser

Great. Thank you, everybody. And Mary, Chip, Rocky, thank you for your detailed comments. Kevin, thank you. We are very appreciative of your transparent leadership and your unwavering commitment to our team members and to our investors.

I want to thank our investors, our analysts for being with us this morning and for being such an important part of our growth story over these past 10-or-so years. We're very pleased and gratified by the reaction from the investment community to this transaction. I believe the merger will create a faster-growing, stronger, larger, more diversified company. Otherwise, we wouldn't have entertained their offer. Combined with Sunoco's well-known brand and strong fuel supply and logistics network, proprietary credit card and its broad geographic reach, this company has the potential to be a major player in years ahead.

I want to close today's call by recognizing our extraordinary team of talented leaders and thank those who have been running like racehorses for the last several months to make this transaction happen, and to be ready to contribute to Energy Transfer's growth story from day 1. And I want to thank our 11,000 team members who are responsible for making Stripes the convenience store customers turn to most in our markets. Without your hard work and long hours, none of this is possible. We look forward to seeing many of you this fall, either our offices or when we're out on the road, or better than that, next time you're in our neighborhood, please come taste our tacos and see for yourself the secret sauce behind our companies' success. Operator, this concludes our call. Make it a great day, everybody. Thank you.

Operator

Ladies and gentlemen, this concludes the Susser Holdings/Susser Petroleum Partners Second Quarter Earnings Conference Call. The replay information for today's call is included in this morning's earnings news release. The conference center would like to thank you for your participation. You may now disconnect.

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!