Mood Media's (FDMCF) CEO Steve Richards on Q2 2014 Results - Earnings Call Transcript

Aug.15.14 | About: Mood Media (FDMCF)

Mood Media Corporation (OTCPK:FDMCF) Q2 2014 Earnings Conference Call August 15, 2014 8:00 AM ET

Executives

Randal Rudniski - IR

Steve Richards - President and CEO

Tom Garrett - CFO

Ken Eissing - President of North America

Analysts

Trent Porter - Guggenheim Securities

Kevin Cohen - Imperial Capital

Michael Kass - BlueMountain Capital Management

Todd Morgan - Jefferies

David McFadgen - Cormark

Mike McAfee - Shenkman Capital Management

Lynn Gallagher - Credit Suisse

Operator

Good morning ladies and gentlemen and thank you for standing by. Welcome to Mood Media Second Quarter 2014 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. I would now like to turn the meeting over to Mr. Randal Rudniski. Please go ahead, sir.

Randal Rudniski

Thanks Chris and good morning ladies and gentlemen. We appreciate your time in Mood Media Management to discuss our financial results.

Presenting on this call is Steve Richards, Mood Media's President and CEO and Tom Garrett, Mood Media’s Chief Financial Officer. Yesterday we released our financial results, news release and MD&A, all are available on our Web site along with an updated corporate scorecard. Steve and Tom will provide opening remarks and then will be available to answer your questions as time permits. We ask that you limit your questions to one with a follow-up and then return to the queue for any further questions so that we can get to as many participants as possible.

Before we start, I'd like to remind you that the forward-looking nature of this presentation answers to questions and statements about future events, strategies and outlook are subject to risks and uncertainties, accordingly actual performance could differ materially from statements made today. The documents we filed the securities commissions in Canada and United Kingdom contain those risks and assumptions that could cause results to differ from today’s discussion. So with that, I will turn it over to Steve Richards for his opening remarks.

Steve Richards

Thanks Randal and welcome everyone. We appreciate you joining our call this morning. Today I will cover our Q2 performance and update on progress that we’ve achieved position Mood Media for long-term gains. I will summarize Mood’s efforts to transform the culture, the products, the operations and the revenue generation capabilities of the organization with our steadfast determination to create long-term sustainable growth.

Finally, I will describe our second quarter successes in capturing market opportunities for local, for visuals, mobile and audio solutions and provide you with updates on our wave integration and synergy initiatives.

We are making tangible progress in reaching milestones that demonstrate our transformation and we are logging significant strides toward achieving our outlined goals. When I have concluded my remarks I will turn the call to Tom Garrett for a discussion Mood’s second quarter 2014 financial performance in greater detail.

So let me begin by summarizing Mood’s second quarter results. Mood achieved EBITDA of $24 million, a moderate sequential improvement and in line with the goal we outlined on our Q4 call deliver EBITDA growth as the year progressed. We remain on track to achieve the financial outlook we established on our Q4 call with the EBITDA in 2014 to be flat to slightly up relatively to 2013.

We expect to achieve acceleration in the back half of the year as our synergy initiatives and consolidations gain their outlined effects. In the second quarter, our North American, international and head office results on a combined basis were above our expectations and on an individual basis, it was on track or ahead of plan. These operations represent over 90% of our total EBITDA and we are pleased with their performance in the quarter which included reduced churn and lower operating expenses.

We successfully reduced operating expenses for these units by approximately 3.5 million relative to the prior year, driven by the positive impact of our integration activities while successfully developing our local sales initiatives and driving new product development. Our BIS and Technomedia units fell short of our internal expectations and we know we have more work to do for additional gains in these units. BIS and Technomedia are large job non-recurring businesses and as such, the revenue streams are not as predictable as our Mood subscriber oriented organizations. As a result, the underperformance of BIS and Technomedia relative to their target plans is primarily due to the delayed timing of project startups and a ramp up in infrastructure related to platform expansion.

That said, in July, when we saw the BIS has not met its Q2 and first half targets, we took immediate and decisive actions and initiated new performance guidelines and a broadcast reduction set of initiatives to improve BIS EBITDA performance for the back half of the year.

In Technomedia, we are encouraged by a marked increase in second quarter for installation in the remainder of 2014 and a significant pipeline of new sales activity that we expect to close for new gains.

Turning now to Mood sales and business development initiatives broadly. Our primary sales and revenue initiatives center on the following strategic elements consistent with our stated strategy. Growing the scale and capabilities of our local sales team in North America and Europe, deploying new and compelling products and solutions to gain market share as we arm Mood sales teams for greater sales effectiveness and efficiency, adding partnerships to enhance Mood technological and sales channel capabilities and then cross-selling Mood solutions via Technomedia and BIS units and vice versa.

These sales and revenue initiatives are multi-year projects fully implementing and successfully accomplishing them will strengthen Mood’s path for sustainable long-term growth. To date I am pleased with our progress, our achievements over my first ten months and the initiatives we are executing relative to the plan.

To be specific, in Mood local sales and business development, in Q2 we made strong progress building out Mood’s local sales team in North America. I am proud to highlight that we increased the number of local sales AEs or account executives to 91 individuals by the end of the quarter driven up from 75 in Q1 and up from 65 that we ended 2013 with.

We are excited about our greater than 40% gain here and are encouraged to have it back in markets where we previously lacked any market coverage to effect development, support and expansion of Mood audio, digital mobile and social interactive client engagements. Mood’s local build out will continue as we execute on the plans to have a 100 AEs in North American by year-end and more than 140 AEs in 2015.

In Europe, we are investing in local sales AEs with associates hired to-date in Germany, France and Benelux plus recruitment underway in the United Kingdom. For new Mood solutions developing compelling new services for Mood Local and premier AEs to sale is another key part of our long-term growth strategy. New services will feature leading technology provide tangible benefits for clients and will be designed with compelling value propositions for market differentiation.

As examples of that strategy, Mood Mix, we are pleased with the first results of our new local streaming product which we called Mood Mix. We launched mix in the second quarter for local because we believe it’s simple to use streaming capabilities and ability for clients to tailor customized audio selections with creative programming for Mood music mixes will be very appealing to the market place. We have begun to sell Mix as a solution in the U.S. and in our European big four countries and expect positive gains from this new service.

In the new few months, we will accelerate marketing campaigns, promoting mix, taking advantage of the expertise of our internal Technomedia, GoCo creative marketing agency and testing opportunities to broaden its distribution. For Mood Social Wifi, the next innovation in our product portfolio, it’s the introduction of a new WiFi based solution called Mood Social Wifi. We began beta testing this solution in the United States just two weeks ago and already have clients signed in addition to recent activities in Europe where we signed a premier fashion retail brand on Mood Social Wifi.

Social Wifi is a monthly recurring service targeted at retailers. It provides clients with the solution to extend their in-store WiFi service to their end user customers capitalizing on social media marketing and customer analytics sharing. Social Wifi offers a compelling and engaging customer experience and provides clients with an effective means to connect with their customers. As we roll-out Social Wifi, we are testing the delivery of a Mood Mix and Social Wifi bundle in addition to selling either product to standalone solutions.

As an example, its services sold individually at 34, 95 monthly with the Mood Mix Social Wifi bundle, Mood offers a package at just $60 monthly and if the client signs a two-year commitment, we include all related equipment free of charge. The Mood Mix, Social Wifi bundle is an attractive solution designed to enhance client retail experiences, add Mood revenue gains, stimulate AE productivity and increase retention for clients and relationships stickiness. In Mood Mobile, we are achieving solid progress in advancing our Mood Mobile suite of solutions and remain highly optimistic about the mobile opportunity for both our premier and our local client segments.

I am delighted to announce that in July, we launched a large back-to-school mobile promotion with Office Depot and OfficeMax having partnered Mood’s technological and audio platform capabilities with Shazam. The Office Depot and OfficeMax promotion uses Mood Mobile digital audio marketing technology to trigger Shazam’s customer interactions which are promoted by via in-store marketing posters and promotional tools at an Office Depot and OfficeMax locations. This is a great initial engagement covering all 2,000 Office Depot and OfficeMax sites across the United States and delivers promotional content along with an opportunity for consumers to easily download the Office Depot app and interact with Office Depot back-to-school promotions simply by Shazaming a Mood song at any of their Office Depot stores.

This is Mood’s first large scale mobile retail campaign using what we know as a unique location specific audio triggered marketing promotion. We plan to jointly approach premier clients about similar deployment opportunities as we promote exciting, engaging and unique in-store mobile marketing experiences that leverage Mood’s platform, network and technology across broad client footprints all with the flick of the Mood Mobile network switch.

In Mood international, client interest in our mobile solutions is growing. Earlier this week, we received a green light from a major Spanish supermarket chain named Eroski to pilot our mobile solution with their launch beginning later in 2014. Additionally, we have two active tests in development one with the 300 plus store, French fashion brand and other is a 2,000 plus site European convenience store chain. We are excited to make Mood Mobile a reality after months of testing, partnering and join world class partner development and see these mobile engagements as a very exciting part of our retail future.

For Mood visual solutions, as a follow-up to our announcements last quarter in connection with Mood wins, those include FirstMerit and a significant U.S. Wendy’s franchisee which were our largest North American visual contract to date. We’re pleased to be in testing for deployment of new TV be another large QSR customer. More recently we signed 100% plus new sites from new visual solutions with UPS stores bringing our total in that brand to over 400 locations. We’re also piloting new visuals in a new 1,000 store premier retail chain. And in Mood International, we entered a major new audio and visual relationship with the top 10 global auto manufacturers after full launch Mood should gain more than 1,000 dealer locations across 22 countries resulting in a new multimillion dollar opportunity. That European relationships open the door for Mood to engage with the clients’ U.S. counterparts and with their upmarket premium branded car division with potential for 325 incremental international sites in that premier brand. This adds to our visual deployments in auto to date for VW, Fiat and Renault and we’re excited about this recent development.

Separately, in the second quarter, we sold new visual systems deals in Mood International to Primeworks, [indiscernible] and Nike and have entered into a new engagement with Mercedes Benz in our first ever Moscow location for a visual systems installation.

In Mood’s partnerships next for growth via Mood’s partnership strategy we’re developing and pursuing partners and affiliate opportunities to expand Mood solutions and broaden sales distribution channels that increase revenue generation avenues. Shazam as I’ve highlighted is one example of a partnership that enables Mood to deliver unique client solutions. We are currently in discussions with a leading edge Tier 1 wireless speaker manufacturer and a world class media and advertising firm. We look forward to updating on progress in this area on future calls.

Turning now to premier sales activity in the quarter, we saw strong second quarter reengagements as follows; in North America, we resigned relationships with approximately 10,000 sites including Loews, Abercrombie and Fitch, Home Depot, Luxottica, Delhaize and Darden among others. In New York we resigned major relationships covering almost 6,000 sites including [indiscernible], CHR Group, Kaiser's Tengelmann, Abadá, Ulla Popken and Intertoys. Our North American upselling results included solutions to provide enhanced experiences for Aéropostale, Outback Steakhouse, Heinz, Tommy Hilfiger, Lauren Taylor and among others for the new audio and visual deployments that I’ve discussed.

For international, we’ve up sold new services to clients including Nike, PVH Group and Tops among others. We’re also achieving new premier client wins that include MIM and Cheebo, in international Godiva and the large auto brands that I previously mentioned in visuals and two non-traditional audio customers Equity Residential and Asset Campus which operate multiple dwelling units in apartment complexes in the United States. At Technomedia and BIS, Technomedia gains notable wins in the quarter including a spectacular project at St. Louis Union Station, Petroleum Basin Museum with a Texas sized AV project, Ferrari World in Dubai, DreamWorks, Minerva, Unilever, Bloomberg R&D and several projects for Atlantis and Nassau Paradise Island. Technomedia and Mood also signed or implemented new cross sell deals with Bahama Breeze, Abercrombie, Hollister and Planet Fitness in the quarter.

This was acted in the quarter with projects underway including Telemat which is a large Telco in Belgium where we deployed video walls and integrated AV solutions; a high end AV and audio teleconferencing solution for the municipality of work in the Netherlands, two massive outdoor LED applications for power tower also in the Netherlands and new AV solutions for Quintex, Stibbe Lawyers among others. And as discussed last quarter Mood International is focused on expanding globally into underpenetrated markets with favorable competitive environments. As such we see a significant opportunity in Eastern Europe, Russia and China and we’ll continue to develop opportunistic markets to achieve long-term and new market growth objectives.

Turning to synergies, integration Wave 2 and 3 updates, moving on now for the update integration efforts our comprehensive executive plan is firmly in place and we are delivering important results with intense activity across North American International as we transform those operations. Our Wave 2 and 3 initiatives are progressing nicely. We have probably captured savings in the $8 million to $10 million range with a pipeline of incremental initiatives that could raise those savings further. We began implementing European labor initiatives and expect savings from those activities to be delivered in late 2014 with full year impact in 2015.

As a new focus we’ve identified opportunities for integration activities in 2015 been incremental set of Wave 4 initiatives. Wave 4 will likely encompass improvements across numerous aspects of the organization including further real estate efficiencies in international, consolidation of inventories SKUs by 10% to 20% globally with related supply chain efficiencies. Phase 2 of customer count receivable management function consolidations for specific customer segments, consolidation of our music and ingestion and satellite platforms, the implementation of a new European ERP system that reduces our present platforms from five to one and a consolidation of legacy devices with delivery technology migrations were appropriate to more efficient solutions. As it relates to 2014 achievements, let me outline our progress specifically with Wave 2 and 3 efforts. I will highlight key operational benefits into 3 broad buckets process procurement and real estate and give you examples of where we’ve executed that showcase our track record for continued execution in the quarters to come.

Process updates. During the last quarter we announced our deployment of the new ERP system across North America effectively placing whole North America on one common platform. I am happy to share that this effort was implemented on time and materially on budget. Our new Oracle solution enables us to deliver tremendous benefits and virtually every aspect of our U.S. business. We’ve closed three months of financial and operational results on Oracle and that we’re still refining billing and reporting processes, we now have a fully integrated set of the analytical and reporting tools. These enhancements will provide a better of view of customer data, drives productivity of our workforce and optimize Mood efforts across all business dimensions.

In procurement, we made solid progress in connection with Key initiatives including establishing a formal global sourcing team to manage our supplier relationships, negotiate contracts and implement formal procurement processes company-wide. We’re rationalizing Mood supply base for equipment and service categories across our top 50 suppliers, carrying down the supply base to three or less vendors and that to achieve efficiencies and purchase leverage; and we are generating annualized savings from sourcing and procurement processes that I have mentioned already, but achieved $2.5 million in benefits.

In real estate, the real estate gains and synergies we consolidate the facilities to improve the efficiency of our infrastructure further slating (Ph) our assets as we previously committed. As examples, we reduced our North American footprint to 12 sites by the end of March and we will complete the plan to reduce to 5 by the end of August. This is a full month ahead of the timeline outlined on our last call and four months ahead of the schedule we originally committed in Q4 of last year.

We completed the sale of our Dallas warehouse generating proceeds of approximately 800,000 while achieving above market results for that property. We prepared 25% of our Charlotte facility for sub-leasing or consolidating our data center to Charlotte, our satellite uplinks there and distribution centers and we will build out call center redundancy in that location to achieve maximum utilization of this long-term asset.

In international we have similar efficiencies underway in Germany and France with further activity to occur in the UK as part of Wave 4.

In total, our real estate achievements will generate savings of $2.5 million to $3 million as they annualize by the end of 2014. And finally before I turn the call over to Tom I want to highlight our continuing efforts to simplify and improve our asset portfolio and our capital structure.

In the quarter, we sold our Canadian DMX and Trusonic accounts to our long-term and valued affiliate partner Stingray. We received $9.5 million on the closing of the transaction and subject to achievement of certain performance indicators we expect to receive additional amounts over the next year.

We are pursuing two small asset divestitures that we are hoping to finalize by the end of 2014. If completed, these business line sales will further simply and align our organization while enhancing capital structure of the firm. We’ve successfully refinanced our first lean term loan in April and we’re actively determining course of action for the 2015 maturity of our convertible debentures that Tom will cover in a few minutes.

In summary, we’re making significant progress executing our initiatives as we drive and strive to create the new Mood as a more effective client oriented enterprise with new highly differentiated experience by designed products and solutions. We will remain consistent and relentless in our pursuit of our vision and strategy. And with that I will turn it over to Tom for his remarks on the quarter and for our outlook for 2014. So with that, Tom.

Tom Garrett

Thanks, Steve. Welcome everyone and thank you for joining us today. As Steve has shared, in the second quarter we made significant progress further implementing our strategic plan across multiple fronts including sales, operations, product development, finance, integration, Wave efforts and key transactions.

During my comments today, I will review how each of these are reflecting in the Q2 results. Thanks to our hard work, we’re steadily moving towards the inflection point of our transformation, and based upon this, we know we have the right strategic plan in place. And while the significant transformation will happen over a period of time, the management team remains committed to providing you with a quarterly update on the steady progress we are making against our plan. Above all we’ve established the right priorities and our accountable leadership team is relentlessly focused on execution.

Q2 2014 EBITDA was $24 million, down $3.6 million from the $27.6 million in Q2 of 2013. Our consolidated plan had contemplated softer EBITDA performance relative to prior year. To summarize a high level view of the consolidated EBITDA year-over-year comparison for the quarter, the $3.6 million reduction can be attributed to lower revenues of $6.4 million and lower related growth margins of $5.3 million offset by $1.6 million in reductions of operating expenses associated with our integration in Waves initiative. As a reminder, two important considerations must be taken into account as we evaluate the $24 million 2014 Q2 EBITDA versus the $27.6 million of Q2, 2013. One is the impact of the franchisee agreement reached last year that has a $750,000 quarterly negative EBITDA impact and two, the $550,000 negative impact from the sale of our Latin American residential business in January. That combined headwind of $1.3 million of quarterly EBITDA will persist for a like amount in each quarter of 2014 and total an estimated $5 million for the year as we compare results to the prior year.

The sale of the Latin American residential operations was in line with our strategy to monetize non-core assets in an attractive model point provide balance sheet enhancements but the sale also reduced our revenue and EBITDA base on a year-over-year comparative basis. The further detail of the year-over-year EBITDA variance let me provide you with some perspectives on each high unit. North American EBITDA was down by just over $500,000 versus prior year but excluding the impact of the IA agreement and the Latin American sale of the $1.3 million combined together North American EBITDA was actually ahead of the prior year quarter.

Even if we only added back the effect of the Latin American sale, we would be ahead of prior year without having to ad back the impact of the IA agreement. International EBITDA excluding this was down versus prior year, approximately $0.5 million ahead of our internal plan. As Steve covered earlier, North America and international represent over 90% of our earnings, so their progress resolves one of the big key to moved overall transformation. Technomedia EBITDA declined $1.5 million versus prior year and was below plan to the lower year-over-year revenue. This was down $1 million versus prior year and below expectations but this unit had several large project wins delayed or which have failed to materialize.

Given these slowdowns relative to plan, we have taken swift and focused action to right size the cost structure to rectify their full year performance so that this will deliver an EBITDA within 3% to 6% for the prior year. Corporate showed a positive variance to prior year to make up the remaining balance of the total $3.6 million negative variance in EBITDA to prior year. Despite any challenges we have encountered, given our overall progress, we continue to expect to deliver full year EBITDA that compares favorably to 2013 and in line with the range we have indicated previously.

Keep in mind that our current guidance reflects the transformational efforts underway and the negative impact related to removal of $2.2 million of EBITDA related to the sale of the Latin American business in January. The $3 million impact of the IA settlement we have shared previously. The impact of $800,000 in the second half EBITDA related now to the sale of the DMX accounts and the underperformance of Disc and Technomedia.

Now let’s take a closer look at the revenues, gross margin and operating expense performance of the business. Overall revenues of a $119.9 million were $6.4 million or 5.1% lower compared to Q2, 2013 revenues of a $126.3 million.

North American revenues were down $5.8 million across both rendering of services and sales of goods category. Rendering and services revenues were down $3.3 million with the reduction of $2 million in monthly recurring revenues which was largely related to the effect of the Latin American residential sale of approximately $1.1 million and the erosion in the North American subscriber base for the balance . Installation and service was down 1.8 million, largely related to $2.5 million reduction in equipment sales given our de-emphasis of large resource intensive lower margin jobs and the impact of the IA agreement.

Technomedia revenues of $8.5 million were down $1.7 million versus the prior year related to the weak sales pipeline at the beginning of the year and relative to the pipeline at the start of 2013. However, we have seen significant growth in the Technomedia pipeline since the start of the year and growth in new wins, which we believe supports the projections for the second half of 2014 for Technomedia. The Technomedia revenue variance of $1.7 million was reflected in the $2.2 million decrease in the rendering of services categories, offset with a modest increase of 0.5 million in the sale of goods category.

International revenues were up $900,000 primarily due to the positive impact of foreign exchange related to the strengthening of the euro versus the U.S. dollar compared to the prior period. On a ForEx neutral basis, revenues would have been down slightly by $600,000 related to a lower recurring revenues given the reduced site numbers and a minimal ARPU decline. These revenues of $14.7 million were up $200,000 versus prior year but on a foreign exchange neutral basis $500,000 million. Let’s take a look at gross margin which was down 5 million on a consolidated basis on $6.4 million lower revenues.

The gross margin rate fell from 56.9% to 55.5% or 140 basis points on a consolidated basis. The North American gross margin rate was relatively stable reflecting a reduction of 27 basis points compared to prior year although gross margin dollars were up $3.5 million on $5.8 million lower revenues. Lower installation revenue did not absorbed as much of the fixed cost of the tech labor force and recurring margins were lower due to lower ARPU on a lower location count. International gross margin was down 241 on just over $900,000 higher sales related to a one-off royalty credit in Q2 of 2013 and $800,000 which impacted the comparative recurring margins.

This gross margin was lower 270 on 230 higher revenues and was impacted by competitive pricing pressure affecting margins on larger project businesses.

Technomedia gross margin was down $1 million on $1.7 million lower revenues driven primarily by lower revenues in its GOCO advertising business. We successfully reduced our operating expenses $1.6 million versus the prior year quarter to $42.5 million as we begin to see the benefits of our Wave programs taking positive effect. First North American operating expenses were down $3 million due to the realization of the initial Wave savings effort and heightened control of discretionary spending. International operating expenses were up just under $300,000 over prior year due to higher sales and operational salary expense which was partly offset by a reduction in marketing expenses. These salaries will be positively impacted in the back of 2014 given the labor reorganizations and international consolidation efforts that we already have underway.

It’s very important to note on a foreign exchange neutral basis international operating expenses were actually lower by $465,000. BIS operating expenses were up $739,000 largely driven by an increase in salaries related to the expansion of the work force in anticipation of meeting the demands of significantly higher budgeted revenues. Approximately $275,000 of the $739,000 increase was ForEx related.

As I discussed in the revenue section we’ve taken swift, decisive and focused action to right size the BIS cost structure that have been expanded in anticipation of increased revenues to be in line with current revenue expectations.

Technomedia operating expenses were up $0.5 million related to higher salaries and wages on incremental headcount related to the ramp up for business development and implement creation of pipeline projects weighted for the second half.

Now moving down to P&L you also see we recorded $10 million in other expenses in Q2 compared with other expenses of $7.9 million in the prior year’s quarter. As described more fully in our footnote six included in the current period other expenses is a $3.1 million gain on sale of assets of which our DMX Canada account -- sale accounts for $2.9 million. On a year-to-date basis other expenses reflected total of $6.6 million related to gains on sale as it also captures the disposition of the Latin American residential business in January.

For Q2, our transaction and restructuring expenses totaled $8.8 million while settlements and resolutions totaled $4.2 million. The restructuring cost pertain to our integration and restructuring program that Steve described earlier which would include severance, IT integration and real estate consolidation. In the second quarter approximately $5 million of the restructuring expense was non-cash in nature. Transaction cost relate primarily to continuing amounts payable for past acquisitions made by the previous team. Settlements and resolutions reflect negotiated and finalized settlements of other liabilities related to DMX and Muzak largely held over from the 2013 items that we now have put in the past.

We currently perceive restructuring and transaction expenses for the full year 2014 in the range of $20 million on a current period expense basis plus$ 4.2 million related to settlements and resolutions. On a cash basis, we currently forecast cash outflows related to the restructuring transaction and settlements to also approximately $20 million. This updated cash outflow reflects an increase from the $15 million high end range we shared earlier as we have had to address several legacy issues that emerge over the last several months because we could proceed previously.

At this point let’s turn our focus to discussion of our KPIs, first site count. Company audio sites at June 30 were 4185000 (Ph), down 5,000 sites reflecting a moderately slower number of site additions compared to Q1. We also have achieved the modest improvement in churn. Visual sites at June 30 totaled 13,800 showing a growth of 800 net sites for the quarter up 6.3% over Q1 of 2014. The visual growth was driven by gross site additions in both North America and international. On a year-over-year basis, visual sites grew by 14% while audio sites decreased by only 2%. Second, ARPU results blend ARPU for Q2 was $46.40 reflecting a $0.10 decrease versus Q1 or a 0.2% reduction. Audio ARPU for Q2 was $45.17 versus Q1 of $45.35 or an $0.18, 0.04% decline. Visual ARPU of 85.08 came in with a $0.49 with 0.06% increase. On a year-over-year basis, Q2 blended ARPU was down 1.8% with visual ARPU up 2% and audio ARPU down 2.3%. Third total site churn for Q2 was 0.09% on a monthly basis down Q1 site churn of 1.1%.

Audio site churn was 1% in Q2 versus 1.1% for Q1. Visual site churn was 0.4% on a change in Q1. The improvement audio site churn was driven primarily by the improvements in international whereas North American churn was stable versus Q1.

Now onto liquidity in capital resources. You’ve heard us say that we’re focused improving our cash and balance sheet positions and on implementing a durable and efficient capital structure. Since the beginning of the year we’ve made tangible progress towards achieving these goals and as Steve highlighted, we have more to do.

Let me share five specific initiatives either completed or underway to improve our liquidity and/or capital structure. First in January, we successfully sold our non-core Latin American residential business raising $10 million on closing, with an additional $6.3 million by mid-2015; 4.9 of which is tied to the achievement of performance targets in conjunction with this business.

Secondly, in late April, we concluded the refinancing of our first lean bank debt with a new five year term loan. This is an important corner piece of our overall capital structure strategy. The refinancing enabled us to extend the duration of our senior debt by one year to 2019 provided $8 million in liquidity for the balance sheet provides increased covenant flexibility and importantly provide this with an improved mechanism to utilize future divestiture proceeds from non-core asset sales to repay convertible debentures. You will not an increase in the P&L on the finance cost line this is largely related to a requirement international financial reporting standards that when there is an extinguishment of debt and then a refinancing, both the prior deferred cost and the cost of the new financing have to be taken as a current period expense.

This departs from my past experience but is one reason why there is a negative comparison in earnings, net earnings period-over-period versus prior year. Third in late June, we completed the sale of the DMX and Trusonic Canadian accounts to our long-term partner Stingray for $9.5 million in cash proceeds with further payments was up to $1.7 million contingent on the achievement of performance indicators for this business.

Fourth, working capital management. Other measures to strengthen balance sheet in the company’s operating profile can be noted when you compare the balance sheet of the working capital accounts at June 30 versus December 31. The balance sheet of the accounts receivable reflect an $8.4 million reduction which was driven by focused collection efforts in both international and North America. This initiative will result in the revamping of credit and collections operations across Europe to a best practices model. The reduction in accounts payable reflected a concerted effort to move the company into a stronger position to negotiate and take advantage of pricing discounts with key Mood equipment and services vendors, we had a heightened focus and investment in our procurement team which Steve shared.

Our fifth initiative with respect to strengthening our balance sheet is to address the October 2015 maturity of the convertible debentures. We’re looking actively at various alternatives that maybe available with the company to address the debentures. Our objective will be to identify an optimal solution while attempting to reduce the cost of capital associated with any pay down or refinancing and potentially partially deleveraging.

Free cash flow improvements are critical element of our deleveraging strategy. We are confident that our integration synergy program will show increasing benefit to both free cash flow and EBITDA as we move through 2014 and into 2015 and as we resolve many legacy issues we’ve had to address. It is our objective to address and then eliminate non-productive one-timer outflows that have been a significant drain on free cash flow in 2012, ’13, ’14.

It is further objective going forward to only devote capital to productive transformative projects with proven attractive ROIs and paybacks. As stated previously, we expect disbursements for restructuring and transaction and settlements cost for 2014 to approximate 20 million with 10 million of this total related to pre-2014 decisions and the balance related to productive decisions.

As we move forward, those previously committed amounts will lessen and we will reduce the overall restructuring transaction settlement expenses significantly. Let me finish by saying that we are incredibly excited about our opportunities for long-term growth and we are steadfastly committed to fully executing on our transformation strategy. We have achieved meaningful progress and in the second half of 2014 and ’15, our energies will be dedicated to our highly prioritized and aligned action plans, focused on driving enhancements, the efficiency and consistency of Mood’s business and creating a foundation for longer-term gains and growth.

We look forward to keeping you informed of the progress in managing this business based on revitalized culture of intense accountability. So with that, we will now open the lines for your questions.

Question-and-Answer Session

Operator

(Operator Instructions). Your first question is from Trent Porter, Guggenheim Securities. Trent, please go ahead.

Trent Porter - Guggenheim Securities

Just on the decline in audio subscriber locations, I think you know about cancelations long before the location actually comes out of your site count. So, I wonder if you have visibility into stabilization in the subscriber locations and an inflexion back to positive growth. And then as my follow-up, I was hoping to ask, I wonder, you touched on this at your Investor Day but I have had a hard time really flushing out. I was wondering if you could give us a little help quantifying the potential revenue and EBITDA impact of what the 140 local AEs relative to today’s count or a year ago count could contribute.

Steve Richards

So first let me take the first part of that. This is Steve and then Ken can address the second part one and number two if you will. So, in terms of customers and the renewals customers and cancelation, we actively work the pipeline of customers that are reengaging with us or that we seek to reengage with us and we do that on ongoing basis. We have as Tom said managed churn down in the business and we are back to what I would call historical averages and levels that have been fairly consistent over the last 10 or so years and certainly over the time that I have known the business that said we have opportunities to continuing to improve upon that and Ken will probably speak to that specifically as well.

In terms of visibility to customers that are going to cancel, we don’t get a great deal of insight to that in advance but obviously our growth in local and our growth in premier cross-selling, up-selling and visual opportunities audio, mobile et cetera is all about the same thing and that’s to get broader and deeper customer relationships more of them and basically turn a declining audio count in the positive revenue count and positive subscriber gain situation in total. So, that then folds I think next into the AE question that you had from a local perspective and local, I think you said 140. We are presently at 91; we expect to be back to about a 100 by the end of the year and 140 by the end of 2015.

We managed and watched the productivity the local AEs that bring into the business and basically develop and stream them up into what I would call mainstream fully trained and fully developed locally over the course of kind of four to six month window and had done that historically in the North American business and will do that with this wave of local wave that we brought in. And with that Ken, any other specifics that you want to talk about?

Ken Eissing

Sure and this is Ken. I think in the North America, the only thing I would add to that is, I think the answer to your two questions are somewhat related. The very reason we are investing in the local sales force is to get to a point where we get to local positive or audio positive gain, if you will. I don’t think we are in position to provide specific guidance when that will occur but that is the very strategy behind that or the very rationale for that strategy.

Steve Richards

And if you think about that that’s not just for local AE gains that’s for partnership gains of partnerships that we can sell through, it’s affiliate sales gains by affiliate partners selling in the U.S. and broadly internationally in terms of new markets et cetera, all of those are what I wrapped up in four or five growth strategies that I talked about specifically on revenue growth. So, I hope that’s helpful.

Operator

Thank you. Your next question is from Kevin Cohen, Imperial Capital. Kevin, please go ahead.

Kevin Cohen - Imperial Capital

I guess if you could just sort of elaborate a little bit further with regard to the intention on the 10% convert, just the intention do you think it’s realistic to simply repay them or do you think the company would look to refinance them or I guess you did mention partially deleveraging as part of the options, do you think actually converting those into shares is something that is seriously on the table? I guess if you can just kind of elaborate a bit on that.

Steve Richards

This is Steve, I will take the first part and then Tom can again add as he would like or Randal can. We have two or three options on the table that we have discussed at length with two advisors and beyond that we are not prepared to talk specifically about what those are. We have been working at that for very specifically on those two or three opportunities or two with the hybrid in the third for the last two months very specifically and again it would not be fair or in anyone’s interest while certain in our state share that detail at this point?

Kevin Cohen - Imperial Capital

Steve summarized it well and…

Steve Richards

We’ve had very deep analysis and very deep looks at what our opportunities are and that work will continue. This is not a solution that we want to do over night we want to do this very thoughtfully and it made good progress. So I know whether that answer your question but I hope that insights more.

Kevin Cohen - Imperial Capital

I understand the limitations on what you can and can’t say. And then for the follow-up question in terms of the asset sales targeting and additional two by the end of the year would you say that the order of magnitude of those is similar to the first two that we’ve seen in 2014 or how large might this be?

Steve Richards

The one that we’re talking about at this point are significantly smaller and very focused and sort of get more to the take the opportunity to further align and create simplification of what it is that we do and what it is that we don’t do. And I am all about execution and I think execution is about prioritizing what it is that we’re after and we need to in that be focused what we’re not after as well. We’ve made good progress on one when we’re complete with that we’ll start the other there is just so much that we can do in a short period of time.

Operator

Thank you. Your next question is from Michael Kass, Mood Media. Michael please go ahead.

Michael Kass - BlueMountain Capital Management

First question and I do have a couple, one is just could you elaborate a little bit or just be a little bit more specific on the guidance for other expenses? You’re obviously increasing the guidance I am a little unclear of you basically spent $9 million to $10 million year-to-date you had said I believe $10 million to $15 million now you’re saying 20 plus $4 million of settlements I am not quite sure what that means. And you’re also alluding to the fact that you have gains in that column. And I am wondering if you’re talking gross of those gains or net of those gains? So could you just walk through exactly what you expect at the end of the year given that this is a controllable area for your guys?

Tom Garrett

Sure. First of all when we’re talking about those amounts it’s gross of the gains the gains as you can see even in the P&L line are net of gains other expenses net of gains out. But when we talk about the transaction restructuring and settlements and so forth we talk on a gross amount when we say that the cash will be roughly $20 million on a total basis. We have projected forward and anticipate endure detailed line item fashion each item with respect to the investments we’re making with regard to our Wave initiatives and restructuring we also record the expenses we incur in transactions such as sale of the assets and we also sometimes we can anticipate the settlements and so forth. There were a couple that arose in the second quarter that we had not anticipated.

But as we look forward now with everything we believe we understand the guidance that we have given is what we believe will occur over the next six months.

Michael Kass - BlueMountain Capital Management

So you’re saying $20 million of cash flow year. How much of that was incurred in Q1 and Q2 cash?

Tom Garrett

In Q1 and Q2 cash if you give me a little bit of time or we can take it offline after I just need to access the spreadsheet or Randal maybe able to pull it up but I don’t have that cash amount and the same at this point.

Steve Richards

So you have to look at that come back to you.

Michael Kass - BlueMountain Capital Management

But it appears that roughly $16 million, which is the $9 million to $10 million plus the $6 million of gains on sale?

Tom Garrett

Well, if you take a look at footnote six in the P&L you will add to 16 million when you look at the year-to-date in terms of the charges and flow through the P&L and then what we also do is separately from the accruals or the charges that are flying through the P&L we have also scheduled out from the accruals that existed at the end of last year plus the current accruals and expected accruals what is cash flows associated with those anticipated transaction cost, restructuring and settlements. And our best estimate at this point for the year will be $20 million in cash disbursements related to both the accrual that existed at year end last year and the accruals we anticipate this year. Does that answer your question?

Michael Kass - BlueMountain Capital Management

I am asking for that you’ve said $4 million in the second half is that correct or not?

Tom Garrett

No, because I believe what I stated is that we would expect $20 million in charges plus $4 million for transaction and restructuring and addition $4.2 million in settlements we aren’t anticipating any further settlements in resolutions at this point so…

Michael Kass - BlueMountain Capital Management

What settlement, what does that mean?

Tom Garrett

Settlements are negotiations of prior matters or matters that have come to our attention that needed to be resolved.

Michael Kass - BlueMountain Capital Management

When you guys refer to the additional, I don’t know whether to call it in million or what have you of things that you couldn’t anticipate at the time that you gave the initial guidance what are those?

Tom Garrett

Yes, I think every business faces matters that come up that maybe going to arbitration or other kind of litigation and we deal with those as we can in a manner that is most favorable to the company and in its best business interest. I don’t think it’d be in anyone’s interest for me to elaborate on this and in some cases we may not in a public form. We would be happy to take offline with you discussion to go over the details of how we arrive with the $24.2 million for the year in terms of both the $20 million in restructuring and transaction and then the settlement cost of $4.2 million for the [indiscernible].

Michael Kass - BlueMountain Capital Management

Moving to the operating metrics, I was just curious if you could maybe give a sense of tying out the we’re seeing, when you look at the guidance regarding kind of what’s driven the declines, there is a lot of reference to Technomedia and BIS and declines in equipment sales which historically have been described as lower margin, but when you look at the incremental margin EBITDA flow through on loss on sales, it’s still very high. Could you maybe help me understand that a little bit?

Tom Garrett

Sorry, I think I need you to repeat the question because I am not sure I quite understand it.

Michael Kass - BlueMountain Capital Management

Sure. If I look at the decremental margin on loss on revenue, in other words, changing gross margin to change in revenue, it’s obviously well in excess of 50%. In your description, verbal description of what has led to a lot of revenue decline, it’s really misses in Technomedia and BIS, which had previously been describes as relatively lower margin businesses and maybe I am incorrect in that. Could you maybe elaborate a little bit on what the margin has been in businesses that you are seeing attrition in and why you’re seeing such a high decremental margin now we’ve seen that the losses are predominantly losses in equipment sales and alike?

Tom Garrett

Yes, I think that as I went through the gross margin analysis, clearly some of it in terms of that margin as an offset to the impact of foreign exchange and the international businesses. So while there is a significant loss in margin, there was also a significant impact in revenue for foreign exchange. Secondly, there is an impact of the IA agreements which push more relative equipment sales and installation revenues into the IAs who are servicing various territories. The third thing is, is that well the while and BIS and Technomedia are relatively lower margin businesses, their revenue declines were significant in the overall, the revenue variants from the prior year quarter. So hopefully that gives you some guidance. Again we can follow-up more offline if you’d like to go further.

Michael Kass - BlueMountain Capital Management

Sure. On BIS and Technomedia, you were very helpful in disclosing kind of the contribution of EBITDA [indiscernible].

Randal Rudniski

Michael, it’s Randal. Could you back into the queue, we can deal some of this offline, we just…

Michael Kass - BlueMountain Capital Management

Very happy to.

Randal Rudniski

Thank you.

Operator

Thank you. Your next question is from Todd Morgan, Jefferies. Todd, please go ahead.

Todd Morgan - Jefferies

Thank you, good morning. Just I guess a question and a follow up. To sort of go back a little bit to the audio locations trends, is there anything else you can add to the description, for example the type of customers that are leaving premium versus local, these are lesser valued customers or not. I mean the sequential decline I guess it was a little bit higher than it had been in past quarters I guess? And then secondly along with that, is there anything you can talk about the pipeline, the lead pipeline you have there? And as a follow-up the Mood Canada divestiture looked like a pretty successful and logical transaction on your part. Are there other territories where you have the same kind of situation where Muzak is the historical franchisee and there is some overlap with DMX subscribers? Thanks.

Steve Richards

So let me sort of deal with those in reverse order. This is Steve; I will take the last one. So there are other opportunities like the Canada (Ph) DMX Trusonic accounts base et cetera, we are and have looked at those and where they make sense, we will pursue those but only in either situations that are financially sound and also that geographically make sense to us and make sense in this case for the partner to service and sell that base of customers more or so that we could do given that they have employees and associates in that territory and we do not. So there are other opportunities for that. We are looking at those; those are not included in the one or two that Tom and I mentioned previously in terms of divestiture candidates. And to the first part of your question if I can turn that to Ken, go ahead Ken.

Ken Eissing

Sure, I think you have some questions about the broad audio trend, in the quarter our churn, so that the net customers leading from an audio standpoint actually reverted to more in line with historical measures or historical trends I should say. So, from an outflow standpoint it’s kind of where we expect to be and hope to build from on a go forward basis. I think part of the decline are the net reduction you are seeing. We did have a little bit of a reduction in the gross ads and I think there wasn’t any one thing that drove that, I do think the deepened erosion in North America impacted that somewhat and some delaying some installations for period of time but we largely passed any of that.

And in terms of a pipeline, I mean I think we are feeling very good at the current pipeline as Steve elaborated during his comments in both North America as well as in International in terms of new opportunities coming on-board. And I think one other specific question about the mix of customer changing, are they premier or local in terms of what was leaving. I think for the quarter it was pretty much in line with a normal split between premier and local, so there wasn’t anything in particular that was an aberration from a churn standpoint in this quarter.

Steve Richards

And obviously Steve, more desired inflow of both customers, as we ramp from 65 to 91, 91 to 100, 100 to 140.

Todd Morgan - Jefferies

Okay, so in other words a little bit of seasonality going forward should probably help that trend and I guess as the new AEs become, I think their productivity goes up that would hopefully help as well and I think the thing that you are saying is much a question of the new ads as much as the natural attrition in churn that occurs.

Steve Richards

So, we suffered yes on all three of those things.

Operator

Thank you. Your next question is from David McFadgen, Cormark. David, please go ahead.

David McFadgen - Cormark

A couple of questions, so you previously said that you thought 2014 in terms of reported EBITDA be similar to 2013, 2013 it was $111 million. When I look at your EBITDA today that’s 47, to get the 111, you have to have quite a pick-up in the back half. So, can you provide some update on that?

Steve Richards

So, 2013 was one 103.5, so that’s a difference in the number that you are looking at.

David McFadgen - Cormark

And then do you have any idea what core do you expect to achieve positive free cash flow?

Steve Richards

We certainly think that based the pace at which we have addressed legacy matters as well as the amount that we will be disbursing related to the cleanup of these items this year. But 2015, we believe especially of we hit the targeted pace that we anticipate and the pick up from the Waves saving that we should be positive free cash flow next year.

Tom Garrett

Obviously, David that’s the confluence of the initiatives that cost out the improvement terms of all of the things that we are doing in regard to the wave activities and obviously the benefits of the revenue and investments that we are making in the growth that we take there. Little bit hard to anticipate that exactly but all of those moves certainly step you in the right direction and as Tom said shutting off the flow of outs if you will on, on one-timer settlements, claims et cetera is a significant component of that.

David McFadgen - Cormark

Okay, so would you expect that for the entire year of 2015 to be free cash flow positive or you just hit that inflexion point sometime in that year?

Steve Richards

At this point looks like expecting to hit the inflexion point in 2015 more follow on that as we progress. And Randal just said we haven’t finalized late 40 as well but certainly have some nice opportunities in Wave 4 as well as I outlined.

David McFadgen - Cormark

Yes, and one of things I noticed is that, correct me if I am wrong but it seems like the benefit from those programs kind of being eaten up by the underlying declines in the business.

Steve Richards

Yes, the couple of things that are going on obviously but businesses that we have sold and the EBITDA effect of that, you got the flows from a settlement and claims perspective. You got the positive effects of the accretive aspects of the wave initiatives and they you’ve got as we have highlighted here some declining, minimally declining or making progress on minimally declining ARPU and subscriber counts. I think we can confidently say that we are making progress on most if not all of those agreements and you can see in our number and our trends.

Randal Rudniski

Thanks for your questions Dave operator we have time for two more participants.

Operator

Your next question is from Mike McAfee, Shenkman Capital Management. Mike please go ahead.

Mike McAfee - Shenkman Capital Management

Thanks for taking my question I just want clarity on what you described as far as the mobile relapse you had this quarter with Shazam is that the partner you had referenced the last couple of quarters you had made reference to mobile trials with a large mobile partner that you’re going to be providing more detail on. Is that the partner that you were referencing or is there [indiscernible].

Steve Richards

That is the partner we’ve now gone live with as I said a significant launch in Office Depot and Office Max we have not only tested it in trials and pilots but now have gone full scale launch if you will and very pleased with the early parts of that pilot we’ve been very pleased with our joint development with Shazam and also with our joint business developments approaches with Shazam. So look for more of that type of thing to come not only in terms of Shazam but how we can broaden relationships with partners. And I think I’ve been getting over the first one of those in terms of getting it sold and get it introduced is a big step as I mentioned we got a second Spain effort approved to green lighted just two days ago. We’ve got two in development for Europe; Ken’s got a couple more in development for the U.S. So, getting the first one is often the toughest and we’re happy to say that that’s gone well.

Mike McAfee - Shenkman Capital Management

And just so I understand when you guys have described this product in the past it was the fact that this is all predicated on the fact that the mobile shopper already has Shazam on their phone or…

Steve Richards

In this example either the shopper in this example as Shazam on the phone has Office Depot or Office Max on their phone as an app or as promoted in the store to put one of those on their phone and then we interact with the subscriber in the store. But one of the benefits for Shazam is it is so downloaded today that that’s an opportunity for us and we obviously would look for other opportunities that are similar.

Tom Garrett

I mean just to elaborate a little more I mean Shazam has 500 million downloads around the world they have I think 80 to 100 million active users that regularly download and it’s like a top I believe it’s a top five apps and it’s an app that customers or consumers are used to engaging with and doing something that’s dramatically different than most retailers apps or any other apps that exist. So that’s why we actually feel and it’s obviously music related as well it’s for all of that we feel that there is a perfect partner and we think there is a lot of things we can do in the retail space as well as on with them now that we’ve got the recognition of our signal integrated into their most recent release of their apps on both the iOS and Android platforms.

Operator

Thank you. Your next question is from David Farber, Credit Suisse. David please go ahead.

Lynn Gallagher - Credit Suisse

This is Lynn Gallagher for David Farber. I am not sure if you have this number available but what was that cash restructuring charges in 2013?

Tom Garrett

The cash restructuring charges for 2013 I cannot recall that exact number right now but we can take that offline and get that to you.

Lynn Gallagher - Credit Suisse

So when you gave the EBITDA guidance of roughly flat versus 13 not include restructuring charges, production cost and other that is [indiscernible]…

Tom Garrett

When we give guidance as to essentially flat we’re taking into account all the let’s say the negative factors that would influence the revenue and EBITDA such as the sale of the asset et cetera as well as the positive ones coming from the Wave initiatives and so forth. So it is a pure dollar-to-dollar comparison so when we say we’ll be flat it factors in those things that would tend to draw EBITDA down as well as those things that would boost it back up.

Steve Richards

So with that I’ll conclude as follows. We’re very pleased to show that the actions that we outlined last year and in the first quarter call are beginning to have their desire in fact we’ve accomplished a great deal in the 10 months that since we’ve kicked those off, these enhancements will go well beyond Wave 1 and 3 and extend into 2015 with similar things inclusive of the Wave 4 initiatives that I highlighted here and the expected benefits of that. We believe those efforts will make Mood a more efficient, effective and profitable company and that to create enhanced value for Mood clients and stakeholders alike.

Our entire organization is very clearly aligned and committed to the task in hand as we position the business for the long term growth potential that’s it’s capable of and we fully shared a common vision for the transformation, the revenue growth and enhanced profitability be it our focus principles of transparency, accountability and measured delivery for heightened results. We’re energized by the opportunity as we look through 2015 and beyond and we appreciate your time on this call today and your continued interest in Mood. You can see our scorecard posted up on the website and of course we will follow-up with calls and dialog ongoing after this call. So thanks very much, Chris and folks out there, we will talk to you soon.

Operator

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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!