Sprott's (SPOXF) CEO Peter Grosskopf on Q2 2014 Results - Earnings Call Transcript

Aug. 8.14 | About: Sprott Inc. (SPOXF)

Sprott Inc (OTCPK:SPOXF) Q2 2014 Earnings Conference Call August 8, 2014 10:00 AM ET

Executives

Peter Grosskopf – Chief Executive Officer

Steven Rostowsky – Chief Financial Officer & Corporate Secretary

Analysts

Geoff Kwan – RBC Capital Markets

Graham Ryding – TD Securities

Gary Hill – Desjardins Capital Markets

Paul Holden – CIBC World Markets, Inc.

Scott Chan – Cannacord Genuity

Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Sprott Inc's 2014 Second Quarter Results Conference Call. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. (Operator Instructions) As a reminder, this conference is being recorded today, August 7, 2014.

On behalf of the speakers that follow, listeners are cautioned that today's presentation and the responses to questions may contain forward-looking statements within the meaning of the Safe Harbor provision of the Canadian Provincial Securities Law.

Forward-looking statements involve risks and uncertainties and undue reliance should not be placed on such statements. Certain material factors or assumptions are implied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements.

For additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward looking statement, please consult the MD&A for this quarter and Sprott’s other filings with the Canadian securities regulators.

I will now turn the conference over to Mr. Peter Grosskopf. Please go ahead Mr. Grosskopf.

Peter Grosskopf

Thank you, operator. Good morning everyone and thanks for joining us today. Our CFO Steve Rostowsky is with me on the call. Our Q2 results were released this morning and are available on our website where you’ll also find the financial statements and MD&A.

I’ll start on Slide 4, with a review of our Q2 performance. During the quarter our AUM increased by $147 million to $7.8 billion as of June 30. Most importantly for our business nearly all of our funds have delivered positive year-to-date performance with many posting strong double digit returns. We continue to build sales momentum recording our fourth consecutive quarter of positive net sales during Q2.

Our enhanced strategy is managed by John Wilson continue to be our top selling fund group and have now passed $800 million in total AUM. It’s worth mentioning that these strategies in keeping with our macroeconomic views place a focus on downside protection which should enable them to outperform during the market correction.

Our capital book continues to perform well generating a $6.5 million return during the quarter. Our total available capital now stands at $330 million or $360 million if we include undrawn lines of credit.

On Slide 5, we have some of our recent highlights. We can continue to expand our diversified Canadian platform with the busy launch calendar. We also recently launched our first ETF on the NYSE. The Sprott Gold Miners ETF or SGDM leverages our extensive experience as gold investors, and is based on proprietary, factors based methodology. Well, it will take sometime to measure the success of this ETF, we believe it could be a key growth area for our business, along with our three physical trusts. It gives us four NYSE-listed investment funds that are easily accessible to U.S and international investors.

Earlier this year we acquired three real assets funds focused on infrastructure, agriculture and timber. We recently launched the Sprott Real Assets Class, a new fund that combines all three funds and we believe, will be more popular.

We have also expanded our specialty credit platform with the addition of the Sprott Bridging Income Fund which is a new factoring fund that’s sub-advised by Bridging Finance.

Our managed companies continue to perform well with Sprott Resource Corp. advancing its private equity strategy with a number of new investments. Including their recently announced transaction to finance the repurchase of PBS Coals through an investment in Corsa Coal Corp.

Sprott directly participated in this transaction providing a US$25 million senior debt facility to Corsa and earning warrants in the process. Sprott Toscana is delivering on strong results and recently made the strategic decision to exit the lending business and focused on investing in mid to long life oil and gas properties working interest and royalties.

This is a positive development for our company and we believe that business will be more readily advanceable and growable overtime. In July we completed a Bought-Deal Offering for $23 million shares from Eric Sprott the offering was well received and fully subscribed including over allotment. We also announced plans for a private placement of an additional $5 million shares to the Sprott employee trust.

This offering had the effect of expanding our public flow and bringing in a number of significant new shareholders who share a similar outlook to us. Eric now owns approximately 24% of Sprott and is committed as a long-term shareholder with no further plans for stock sales.

He has already have reinvested a significant portion of these proceeds in our funds increasing both our AUM and management fees.

With that I will pass it over to Steve, for a review of our financial results for the quarter.

Steven Rostowsky

Thanks Peter. Good morning everyone. I’ll start on Slide 6, with a look at our AUM. Our AUM was $7.8 billion as of June 30 this year an increase of $147 million from the end of Q1 and up $875 million from December last year. The increase in AUM during the second quarter was due to an increase in market values of $176 million and net sales of $73 million which was partially offset by the removal of a $102 million from Sprott Toscana which Peter mentioned as we exited the lending business and some related funds during the quarter. On a year-to-date basis the increase in AUM was due to an increase in market values of $728 million and net sales of $196 million again partially offset by the removal of the Toscana AUM during the second quarter.

Turning to the next slide, monthly AUM as you can see the majority of the increase in the AUM this year occurred in January and February at precious metals Porphyry Valley before softening into Q1 and then rebounding a gain in June.

Turning now to AUM changes by product types our asset mix is relatively unchanged from the end of Q1. Our Physical Bullion business which remains the largest contributor to our total AUM increased by $22 million during the quarter, our mutual funds recorded $41 million in net sales during the quarter with $120 million in market appreciation while our alternative investment funds as group reported $6 million in redemption during the quarter while our AUM of our managed companies increased by $22 million.

The market value of our fixture term LPs declined by $27 million in Canadian dollar terms during the quarter most of that from currency translation. As those are all US denominated funds. Slide 9, moves on to revenue which gives you breakdown of revenue for the quarter. Total revenues were $30.4 million for the quarter reflecting an increase of $13.8 million from Q2 2013.

The improvement was attributable to stronger commission and interest income as well as improved proprietary investment performance. Management fees at $20.1 million for the second quarter reflects a decrease of $1.3 million from the prior period. This reflects a modestly lower average AUM as compared with the comparative period last year but management fee as a percentage of AUM remain consistent.

Commission revenues were $2.5 million for the second quarter reflecting an increase of $900,000 from the prior period, the increase was due to increased private placement activities at both global and SPW. Interest income was $3.8 million during the quarter largely to the performance of the loan book and cash from last year’s Sprott Resource Lending acquisition which acquired in Q3 last year. During the three months ended June 30 2014 we recorded $2.7 million in gains from capital invested in proprietary investments compared with the loss of $9.5 million in the second quarter of 2013.

I should also note that other income includes a $1.5 million great fee received from the termination of the Toscana financial income trust management contract half of which was paid out in the compensation. So looking now at the some refinancial information, total expenses for the quarter were $22.7 million a decrease of 15% from the second quarter of 2013. However, if we exclude the impairment of intangible charge in the prior period total expenses actually increased from $21.3 million to $22.7 million an increase of $1.4 million. The key contributor to the increase was higher G&A expenses largely as a result of an increase in fund development costs relating to proposed new products, higher marketing costs and a property texpo relating to a full close property.

Also there were some additional rent related to the Toscana business and to Sprott Resource Lending Corp., which came on in the third quarter of last year. So there were several what we would regard is non-recurring G&A cost in the quarter a normalized G&A should be in above $6 million per quarter range.

Adjusted base EBITDA for the quarter was $6.8 million or $0.03 per share down from $8 million or $0.04 per share in the second quarter last year while net income for the period was $5 million or $0.02 a share compared with the net loss of $6.7 million or a loss of $0.04 per share for the three months ended June 30, 2013. The next slide shows the EBITDA reconciliation in more detail. I think its pretty self explanatory, but we thought it would just be useful to show you the components of the adjustments included in the base EBITDA metrics.

Slide 12, provides a snapshot of our current capital position. We currently have an extremely strong balance sheet with close $330 million in investable capital as well as an undrawn line of credit. Over $200 million of that is in cash and loans through Sprott Resource Lending Corp.

We have a disciplined capital allocation framework in place and we will be judicious in the deployment of balance sheet capital, which will include seeding new funds and financing acquisitions as applicable.

And with that, I’ll pass it back to Peter for some closing remarks.

Peter Grosskopf

Thanks, Steve. Our number one priority this year was to turnaround our investment performance and get back delivering the phase of results we built our business on. We’ve taken a number of steps to improve this important – to improved performance and these have begun to pay off.

Under the leadership of John Wilson and Scott Colbourne, we’ve seen significant improvements in performance of our mutual and hedge funds. Our natural resource strategies have been the year’s top performance highlighted by the Sprott Energy Fund managed by Eric Nuttall, which is up more than 40% to-date.

Our precious metals strategies are performing well and the Sprott Zijin Mining fund is proving to be a model for future institutional mandates. The fund was built to endure the volatile nature of the gold market and to fully participate in its upside. It’s results have been good to-date. We’re pleased with the performance of Sprott Consulting managed companies.

As I mentioned at the start of the call, Sprott Resource Corp has been very active turning around a number of difficult investments that the new team inherited and deploying capital into high potential new holdings.

Sprott Toscana continues to generate strong performance. And with the new funding in place at Toscana Energy Corp is now expected to be an active acquirer. Our capital book delivered strong performance in the first half of 2014 and we continue to focus on generating both yield and upside without sacrificing downside protection.

So in closing, I’d like to reiterate our vision, which is to become the leading precious metal – global precious metal investment manager with related resource capabilities, while continuing to revitalize and grow our diversified asset management franchise in Canada.

On the precious metals side, the SGDM will give us more exposure to U.S. and international investors and open up a much larger target market. I’d note that the GDX which is its principle competitor increased it’s units outstanding by almost 50% last year, which was one of the worst cold years on record.

We’re committed to building our institutional business and opening new markets for our products. Several of our businesses are now at the stage where they’re well positioned to attract institutional investors.

In Canada, we continue to launch new products and focus on improving performance. And we’ve developed a company-wide framework to ensure that our capital is judiciously employed to different investment classes with clearly defined hurdle rates and specific allocation targets. We’re pleased with this approach and we’ll continue to focus on delivering returns through various market conditions and of course we will continue to reduce expenses when possible in line with our AUM. We’ve made solid progress so far this year, however, positioning our products to generate meaningful performance fees is going to take time and sustained effort and we’re very focused on that task as well.

We will collectively remain focused on as we progressed through the second half of 2014.

That concludes our remarks for today’s call. We’d now be pleased to answer any questions you may have and with that I will turn the call back to the operator.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from the line of Geoff Kwan with RBC Capital Markets. Your line is open.

Geoff Kwan – RBC Capital Markets

Hi, good morning. First question I had was with the Eric’s secondary sale and reinvesting it back into the Sprott’s funds. Are you able or would you be able to provide some color around about how much and maybe what strategies that they went into – when you reported Q3 results in November?

Peter Grosskopf

I mean, we’re not able to Eric’s declines and we are not able to give specific information on the purchases and we do expect that they are going to continue as he sees opportunities. I would say that we all know that Eric still believes that the precious metals and their related equities are dramatically undervalued. So, what he believe is about to occur, so you’d naturally expect him to go into those areas. And in terms of the total amounts I would say from that share sale he will have some tax to pay, but we expect that the majority would be in – invested in our funds or products overtime.

Geoff Kwan – RBC Capital Markets

Yeah. Okay. I mean, I was just looking for maybe some sort of ballpark number just in the sense to give us better see what money becoming in from third party investors.

Peter Grosskopf

Well. It’s – in the grand scheme of things with $8 billion in AUM, it’s not that material and we can’t give the specific number, so that’s a sure sale itself is obviously the largest amount that he could put in. So…

Geoff Kwan – RBC Capital Markets

Okay. And in terms of some of the new funds that you are looking at, I know, you’ve been working out some institutional stuff are there other things that that you can talk about that might be coming down the pipeline over the next call or two to three quarters.

Peter Grosskopf

Well, we’ve got a lot on the go as it is. And with the announcement on the bridging product and with the continued focus on growing the real assets funds and all the existing funds that we have, I think we’ve got a lot of different funds on our plate now. So, on the institutional side we’re running all of the strategies involved already. So it’s just the question of creating a fund which is seeded by a group of institutions it’s more like a creation exercise not like starting a whole new strategy, so that’s just dependent on specific closing with an institution.

On the lending side we thought we would have that this quarter. We’ve been delayed by the plans of that – one of the key seed investors, but we’re hopeful that we’ll get something done in the near future.

Geoff Kwan – RBC Capital Markets

Okay. And the last question I had was just on the M&A side, if you can maybe talk about some are you looking at smaller bolt-on acquisitions are potentially something a little bit more significant and maybe high level, it’s something maybe potentially imminent over the next few quarters.

Peter Grosskopf

Yeah. We don’t have anything imminent to talk about and I would say on the resource side there are lots of what I call tuck-in targets globally, the key thing is how good is the strategy and fit how good a fit or the partners and very importantly, to the clients of those firms want to become clients of ours.

On the diversified side the scope is quite a bit broader there is more material things that we could look at there, but we don’t have anything ongoing currently quite frankly we are more focused on getting our own results in the best possible shape before we take anything else on.

Geoff Kwan – RBC Capital Markets

Okay. Great. Thank you.

Operator

Our next question comes from the line of Graham Ryding with TD Securities. Your line is open.

Graham Ryding – TD Securities

Hi, good morning. With the Gold Miners ETF that you launched in reference to ETF expanding last year in a difficult gold market. Should we interrupt that as you think you can grow the ETF in regardless of sort of the – you don’t – it doesn’t need gold to rally over the next couple of years.

Peter Grosskopf

I’d rather answer that by saying very specifically our view is – we believe the SGDM is a better product and we have reasons for believing that and I think that there is – as all of us know there’s just a rapidly increasing investor audience for ETF style product, so in the gold business it almost tends to benefit from tough markets because people kind of throw in the towel on active management and just say, I’m going to buy an index. We just passionately believe this is a better product.

Graham Ryding – TD Securities

Okay, and then would you – be willing to throughout any targets that you’ve got in mind.

Peter Grosskopf

No not really, I think the GDX and its sister company are a $11 billion, so it’s a big audience and not only that. But I think if gold returns to favor we’re all under sizing what the potential interest could be. So it’s a question of execution and investor interest and markets and I can’t even hold the target out.

Graham Ryding – TD Securities

Yes, fair enough. Just quickly you provided some good color around the shared seller on Eric’s stake. Those are any particular reason provided as to, why he wanted to sell down a stake at this time?

Peter Grosskopf

Yes. Well I wouldn’t mint any bones about it, we ask him to sell – and we ask them to sell because we knew as a client that he had a very passionate belief that they were huge gains and some of these beaten up gold and equity. Gold’s and silver equities and we also knew that we had some investor interest. We’ve been seeing institutions over the last six months for the first time in our existence and comment always came back with flow is to small employees own too much. And so we jumped up at the opportunity to buy the shares at those price – at that price and Eric responded.

Graham Ryding – TD Securities

Okay and then just lastly on the Toscana fund or portion of assets that are unbound. Can you just provide some color on what the thought process there, that you are seeing moving away from lending and more into the direct investments?

Peter Grosskopf

Yeah, I can and as I mention it’s a positive move, that the lending business we will carry on but as we did with the mining’s we are carrying at on off our own balance sheet. The simple math is that the lending business in energy was difficult in terms of sourcing new opportunities there is a ton of capital chasing that sector right now. It’s chasing that sector at increasingly aggressive leverage ratios with the WTI price that’s been tagged at $100 or so far a long time.

So, we worth playing the game of chasing those loans. So our capital book on the lending side was very small, on the other hand on the working interest side that business is delivered very consistent and attractive returns and we seem to be much more differentiated in terms of having bigger targets. So most of the investors in the lending business agreed to roll over to the working interest side because they just see it as cash flow and a very good return, so that working interest business is now poised to expand quite a bit, and as well on the energy side we are seeing there – our Toscana team is world class in terms of the ability to develop royalties through drilling funds and we have done one deal at the substantial size and are about to commit to another one. So we have another very interesting business that’s staring to get size there in Calgary.

Graham Ryding – TD Securities

Okay, and then is there any, is it a timing issue or is there any reason why there was a $100 million I guess divestiture and that didn’t get rolled over into these other opportunities, your working interest opportunities and royalties?

Peter Grosskopf

Yes, there is bit of timing issue because the working interest business is charge management fees on the basis of barrels of oil owned and barrels of oil produced. So until the cash is deployed I don’t know exactly what their capacity is but I think they could make $50 million or $70 million worth of acquisitions pretty easily now. So until that capacity is deployed in barrels we don’t get paid.

Steven Rostowsky

Also included in that number there were some funds called Maple Leaf funds that they were managing or begin co-managed by an another company out rest and it was very marginal business it is related to the Toscana Financial Income Trust. And we just existed both parts of that business at the same time. But it was very marginally from a net income perspective for sure, which is why on the details telling you about products types, where you’d see two pieces alternative investments strategies and managed companies that add up to the $102 million. But both are related to the Toscana Financial Income Trust and the side of the business that we’ve exited.

Peter Grosskopf

And that side the drilling front side is what we would we have money’s deployed there currently and we would like to grow that business into a different product that’s not sub-advised

Graham Ryding – TD Securities

Not sub-advised by Toscana?

Peter Grosskopf

No not sub-advised by a third party that have been…

Graham Ryding – TD Securities

Okay

Peter Grosskopf

Involved with that. That’s 100% advised by Toscana.

Graham Ryding – TD Securities

Got it, okay. And then just lastly quick question on the expense side. Can you give some color on the G&A employee compensation tick up slightly over the quarters, is this a run rate. Is there anything one time and…

Steven Rostowsky

Yes, there’s one big one time in there and that’s – there was a break fee on the Toscana financial income trust of $1.5 million of which have went into a – which have went into a compensation. There’s also some earn out metrics Sprott Toscana, so the total Toscana let’s call it a compensation and bill was about $850,000 more than in the previous quarter. There were also some higher commissions, and again that relates to revenue and sales and there was a small severance charge.

Graham Ryding – TD Securities

Okay, thank you.

Operator

Our next question comes from the line of Gary Hill with Desjardins Capital Markets. Your line is open.

Gary Hill – Desjardins Capital Markets

Thanks. Just quick question decent net sales $73 million this quarter, just wondering if you can give us an outlook for the second half of the year, particularly around mutual funds and bullion funds, seems like the net redemptions improved quite a bit on the bullion side.

Steven Rostowsky

Yes. The bullion fund side is lumpy. I mean, there are some either sales or redemptions on the bullion funds. But on the physical trust there was quite a lot of redemptions in the first quarter. That’s where physical bullion primarily there was nothing in the second quarter but that sort of comes and goes that’s a little bit of lumpy. But on our other funds sales we are seeing continuation of the trends that you’ve seen generally positive on our mutual – on the mutual fund side laid by the enhanced strategies, but we are seeing sales in some of our other products like the energy fund as performances improved and the alternative investment strategy is pretty flat as you could see really modest redemptions in – net redemptions in the second quarter and we started seeing that, pretty much flat.

Gary Hill – Desjardins Capital Markets

And then sorry going back to the bullion and physical side – for the second half was the more (indiscernible) that you guys…

Steven Rostowsky

Well, certainly compared to the first quarter, I mean, we don’t expect to see such large redemption in the second half of the year. But it’s very unpredictable.

Gary Hill – Desjardins Capital Markets

Yeah.

Peter Grosskopf

The trust are all sitting with reasonable priced to now – statistics now. So we don’t see any pressure there, in fact we are looking at the office that side. We are looking at okay, you’ve got a couple of ways right now to press the button and grow them. And that is something that we have to very seriously consider in the next quarter, because it involves a more innovative way of growing those trust.

Gary Hill – Desjardins Capital Markets

Okay. I have a question to Steve, there were the one time item G&A that you’ve mentioned. How quickly can you revert back to the normalized run rate of $6 million?

Steven Rostowsky

Oh, this quarter?

Gary Hill – Desjardins Capital Markets

The next, okay.

Steven Rostowsky

That should we’ve taking for this quarter absent any other onetime expenses that come up but we’re not anticipating anything we’re already into August. So I am guessing that would be run pretty close to our run rate for Q3.

Gary Hill – Desjardins Capital Markets

Okay, perfect. That’s it for me thanks.

Operator

Our next question comes from the line of Paul Holden with CIBC. Your line is open.

Paul Holden – CIBC World Markets, Inc.

Thank you, good morning. First question with respect to the Toscana lending book, out of the – excuse me out of the $1.02 million, how much of that is going to Sprott balance sheet?

Peter Grosskopf

I think the number is approximately 20 but it runs out pretty quick. So it will be converted to cash over reasonable quick period of time.

Paul Holden – CIBC World Markets, Inc.

Okay, so its mostly just being wound down

Peter Grosskopf

Well, it could step up very quickly if opportunities present themselves and also all of the cash really goes over to the energies, Toscana Energy side they just need to spend it.

Paul Holden – CIBC World Markets, Inc.

Got it, yeah I understand. So last year, when you first announced the transaction with Sprott Resource Lending the main side with respect to transferring a book was – to book most of the loans into private LP structure, and I understand your comments regarding why that LP structures being delayed. As your philosophy changed it all, are you more content to keep with a portion of the lending business on balance sheet today.

Peter Grosskopf

Philosophy has not changed at all, it’s delivering exactly what we thought it could, it’s very nice returning but lower risk asset class, it’s been well executed we haven’t had any credit issues, we haven’t seen the upside because the business does generate a lot of warrants and shares and we haven’t had great resources markets and we haven’t had any big wins, but its very solid and in terms of running with a new LP we’re still totally focused on doing that.

Paul Holden – CIBC World Markets, Inc.

Okay. And so the majority of the loan assets should be transferred to the new LP whenever it launches.

Peter Grosskopf

No, they won’t be transferred, they’ll be running down but effectively our commitment will be transferred over time because one side will be coming down, while the other is going up.

Paul Holden – CIBC World Markets, Inc.

Right. Got it. Got it. Okay. And then with respect to your cash balance you still have a over a $100 million. Now I understand you always going to operate with some kind of cash balance. So, what I want ask is, what’s that minimum level you would be happy operating and what would you do with the, how do you deploy the access the cash.

Peter Grosskopf

Well, we’re happy staying very conservative and the opportunities are more driven by, what we see out there and whether we can create a managed product around that. And I would say we’ve been more active recently. But you’re right we want to keep our cash balance of $40 million or $50 million at anytime to not so much to run the business because we do have an operating line. But more to in the event of a market crush. And so that we can jump on something that’s really attractive.

Paul Holden – CIBC World Markets, Inc.

And then last question with respect to Sprott Resources is there any update on are realized and or unrealized embedded performance fees, its actually considering the sale earlier this year.

Peter Grosskopf

Do you mean Sprott Resource Corp?

Paul Holden – CIBC World Markets, Inc.

Correct. Yes.

Peter Grosskopf

I believe that there is still a little bit below their benchmarks so given the sale of long-run shares they do start to claw back against benchmarks, but I don’t believe that we’re expecting performance fees as of the current configuration.

Paul Holden – CIBC World Markets, Inc.

Okay.

Peter Grosskopf

They set, I think they set up a very nice participation with Corsa and PBS that’s showing itself to be in the money to date, but that’s a five year investment now. So nothing we’re counting on.

Paul Holden – CIBC World Markets, Inc.

Thanks for your time.

Operator

Our next question comes from the line of Scott Chan with Cannacord Genuity. Your line is open.

Scott Chan – Cannacord Genuity

Good morning. Pete, when you talked about building institutional business and you mentioned in your last remarks that several funds with near term potential, can you just remind us and highlight those funds that are in near term potential to market to institutional clientele?

Peter Grosskopf

Okay, I’ll give you a brief rundown of those that I think have potential. I mean, technically, any fund does, so for instance our Absolute Bond Fund or our Diversified Yields Fund or Enhanced Equity Fund, they could all be interesting to institutions in the manners to counter in a fund format.

But the ones that I typically talk about are those in the resource area, because that’s what we’re known for and in the resource area, we have private lending, we have private equity, we have energy yields, we have gold and precious metal hedge capability and we have resources long-only capability.

So, all of those are being positioned in one way or another for institutional participation. I think the lending is probably the closest. But it’s a – even the Precious Metals Trusts are appealing to institutions. And we haven’t really opened them us to institutions, because the offerings have all been done via retail networks. But any of those could be attractive and it’s just a question of who signs up first?

Scott Chan – Cannacord Genuity

Okay. That’s the only question. Thanks, guys.

Peter Grosskopf

Thanks.

Operator

We have no further questions in the queue. I’d like to turn the call back over to Mr. Grosskopf for any closing comments.

Peter Grosskopf

Okay. Well, thanks everybody today for your time and thank you operator. Have a good day.

Operator

Ladies and gentlemen, thank you for your participation in today’s teleconference. 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!