CYREN's (CYRN) CEO Lior Samuelson on Q2 2014 Results - Earnings Call Transcript

| About: CYREN Ltd. (CYRN)

CYREN Ltd. (NASDAQ:CYRN)

Q2 2014 Results Earnings Conference Call

August 19, 2014, 10:00 AM ET

Executives

Monica Gould - IR

Lior Samuelson - Chairman and CEO

Mike Myshrall - CFO

Analysts

Marcel Herbst - Herbst Capital Management

George Melas - MKH Management

Dick Mills - Ramcor Management

Operator

Greetings, and welcome to the CYREN 2014 Second Quarter Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Monica Gould, Investor Relations. Thank you. You may begin.

Monica Gould

Thank you and welcome to our conference call to discuss CYREN's second quarter 2014 financial results. This call has been broadcast live and can be accessed on the Investor Relations section of CYREN website.

Before we begin, please let me remind you that during the course of this conference call, CYREN's management may make forward-looking statements. These forward-looking statements are based on current expectations, that are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. These risks are outlined in the Risk Factor section of our SEC filings, including our prospectus described on July 3, 2014 and our prospectus supplement filed on July 25, 2014. Any forward looking statements should be considered in light of these factors.

Please also note as a Safe Harbor any outlook we present is as of today and management does not undertake an obligation to revise any forward looking statements in the future. Also during the course of this conference call we may discuss non-GAAP measures when talking about the company's performance. Reconciliations to the most directly comparable GAAP financial measures, are provided in the tables in the earnings press release issued today and available on the Investor Relations section of our website.

With me on the call today are Mr. Lior Samuelson, CYREN's Chairman and Chief Executive Officer and Mr. Mike Myshrall, Chief Financial Officer.

With that, I would now like to hand the call over to Lior.

Lior Samuelson

Thank you, Monica. Greetings everyone, and thank you for joining us today as we share our second quarter results.

I'm pleased to report that CYREN delivered a good second quarter performance or organic revenue growth of 3% year-over-year to $8.3 million. Additionally, our cloud-based CYREN WebSecurity offering began to generate initial revenue and is generating very strong interest.

These results were driven by a number of factors including healthy renewal activity within our core embedded solutions business. Most notably our multi-million dollar, multi-year agreement with a software and services company in the top 50 of the Forbes' Global 2000.

Our results reflect new business and up-sell deals where customers and partners seeking to leverage CYREN’s proprietary detection technology and our global threat intelligence developed from real time analysis of more than 12 billion transaction from over 550 million endpoints each and every day.

Geographically we saw demand across the globe with a particularly strong booking quarter from the Asia Pacific region including customers and partners in Singapore, Australia, Japan, Korea, Hong Kong and China.

In addition to new business, our existing customers and partners deepened their CYREN relationship with the purchase of additional services to increase the level of threat protection for the organization and their end users.

The product mix of CYREN's services added include our inbound and outbound anti-spam, anti-virus, URL filtering, email security as well as our cloud-base WebSecurity service launch earlier this year.

Turning to the CYREN WebSecurity offering, we extended our global reach offering by signing six new partners across Europe, Asia and the United States, bringing our total number of distribution and reseller partners to 18.

These partners share our view of the cloud-based SaaS market, as an opportunity to serve businesses, expose to potentially crippling security facts. We've found these partners appreciate the WebSecurity designs to quickly capture the fast growing market opportunity to offering a total solution for roaming users, smartphones and tablets.

Two of our partners signed their first end customer for our WebSecurity service in the second quarter providing further market validation for our offering. These business customers based in Europe and Asia have been provisioned and have already begun to generating initial revenue.

Importantly, one of these customers was added just one month after we announced our partnership with U.K. distributor VCW Security. We attribute this early success to our partner on-boarding process, which was detailed on our last earnings call.

The on-boarding process is one key component of the CYREN Partner Vision Program, which includes administrative and sales training to support our partners and accelerate their time to market.

Additionally, the program provides for joint marketing and planning of regional events as well as the sponsorship and major conferences with partners such as Phoenix, a topmost American distributor with a network over 20,000 valued-added resellers.

On the product development front, we remain on track to expand our portfolio with the cloud-based Advanced Direct solution in 2015 to compliment our WebSecurity service.

Additionally, we will release further enhancements to our mobile security and email security offerings. These new services and capabilities once again demonstrated scalability of our cloud-based global infrastructure, while leveraging the intelligence garnered from the daily analysis of more than 12 billion transactions.

As with our WebSecurity offering, these initiatives and the development will be largely funded by the strong cash flows of our core embedded solutions business.

Our leading position in cloud-based security was further strengthened with a recent award of several important data privacy certifications. These include the TRUSTe Cloud Data Privacy Certification for WebSecurity and email security platform, as well as the EU and Swiss Safe Harbor Certification.

These certifications underscore our robust data privacy practices and enhance our competitive position in regions with strong data privacy laws.

Lastly, we strengthened our balance sheet with the successful completion of our registered direct offering last month, the transaction which was [although] (ph) subscribed, generate $11.5 million in gross proceeds, increase our visibility with the investment community and expand our investor base.

In summary, I am very pleased with the performance and solid fundamental. In our core embedded business, we support our product development efforts that underlie our growth initiatives. Our continued progress in ramping the WebSecurity offering as well as positive early customer and partner feedback is very encouraging.

We remain confident that we are on the right track and our strategy will accelerate topline growth enjoying long-term shareholder value.

Before I hand over the call over to Mike, I am pleased to announce that Mike Myshrall has been appointed to the role of permanent CFO of CYREN. As many of you know Mike has been a highly valued member of our senior executive team for nearly four years and we believe that his financial leadership will be critical as we continue to execute our growth strategy.

With that, I’ll hand over the call to Mike to further elaborate on the quarterly results. Mike?

Mike Myshrall

Thank you, Lior and good morning, everyone. I am excited to formalize my CFO role with the company and I look forward to updating all of you on our progress as we continue to execute on our growth objective.

I will now provide you with the summary of our second quarter 2014 results. For the more detailed results, please refer to the press release we issued earlier today, which is posted on our website. In addition, please note that we compile our financials under U.S. GAAP, which includes non-operating expenses.

In order to better analyze our business performance, I will also discuss certain financial metrics on a non-GAAP basis, excluding those non-operating items. You can refer to today’s press release for a full reconciliation of our GAAP and non-GAAP results.

GAAP revenue for the second quarter of 2014 was $8.3 million, up 3% from $8.1 million from the sequential first quarter of 2014 and up 3% from $8.1 million a year ago. Non-GAAP revenues for the second quarter totaled $8.3 million compared to $8.1 million for the sequential first quarter of 2014 and $8.2 million in the second quarter of 2013.

Our GAAP gross margin for the quarter was unchanged at 75% compared to the first quarter, while our non-GAAP gross margin for the quarter was also unchanged from the prior quarter at 78%.

GAAP operating expenses for the second quarter were $8.1 million, down from $8.2 million in the first quarter of 2014 and compared to $7 million in the second quarter of 2013.

Non-GAAP operating expenses for the quarter were $7.5 million, up slightly from $7.4 million in Q1 2014 and compared to $6.4 million for the second quarter of the prior year.

Second quarter GAAP net loss was $2 million or a loss of $0.08 per basic and diluted share and compared to a net loss of $2.1 million or a loss of $0.08 per basic and diluted share during the first quarter of 2014.

Our second quarter non-GAAP net loss was $1.1 million or a loss of $0.04 per basic and diluted share compared to a non-GAAP net loss of $1.4 million or $0.05 per basic and diluted share during the first quarter of 2014.The differences between GAAP and non-GAAP net income are included in our press release.

Now turning to the balance sheet, our cash balance at the end of the quarter stood at $3.1 million compared with $2.3 million at the end of March, 2014. Operating cash flow in the second quarter was $0.3 million compared to cash used in operating activities of $2.4 million during the sequential first quarter of 2014.

In addition we drew down an additional $1 million on our $7.5 million credit facility and the balance as of June was $5.3 million.

As Lior discussed, we strengthened our balance sheet subsequent to quarter end with the successful completion of our registered direct offering in July, resulting in net proceeds of approximately $10.2 million excluding any proceeds to be received upon exercise of warrant.

Total deferred revenues as of June 30, 2014, were $5.7 million, compared to $6.3 million at the end of the first quarter and $7 million at the end of the second quarter of 2013. The decrease in deferred revenues was primarily driven by revenue recognition from a large customer fee payment that was received in 2013.

Moving now to our financial outlook for the remainder of 2014. We remain on track to achieve the guidance that we provided at the beginning of the year. Specifically we anticipate that the core business will be maintained with flat to low single digit revenue growth in 2014.

As Lior mentioned, we are pleased that our cloud-based CYREN WebSecurity offering has begun to generate initial revenue and is generating strong interest from our partners. As we detailed at our last call, given the SaaS nature of the offering, it will take some time for revenues to build and as such we do not anticipate material revenue contribution from this service until 2015.

Our core embedded business remains very profitable and we plan to continue to invest a cash flow from this business into our growth initiatives.

At this point, I would like to turn the call back to Lior for closing remarks.

Lior Samuelson

Thank you, Mike. And with that, we'd be happy to take your questions. Operator, please proceed.

Question-and-Answer Session

Operator

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions) Thank you. Our first question comes from the line of Marcel Herbst with Herbst Capital Management. Please proceed with your question.

Marcel Herbst - Herbst Capital Management

Good morning, and thanks for taking my question. What's the total number of CYREN WebSecurity resellers you now have in your network?

Mike Myshrall

18, at the current time.

Marcel Herbst - Herbst Capital Management

I understand these are distributors that have resellers working with them and I think wasn't the number closer to 20,000?

Mike Myshrall

So we signed contracts directly with our distribution and reseller partners. Some of them are distributors, some of them are resellers. Our largest distribution partner has over 20,000 reseller partners as part of their network, but we have 18 direct contracts with our distribution and reseller partners.

Marcel Herbst - Herbst Capital Management

And how predictable is participation rate of those resellers? And do you have any visibility on end-user license sales there?

Lior Samuelson

So, we currently don't have a lot of predictability. I think that -- so the way I view it, it's like a train leaving the station, we've left the station. We are getting alot of speed. We’re building a large funnel, I can’t tell you exactly what the adoption rate is going to be and the speed of the adoption.

Because -- so there is an adoption rate, so people have statistics on adoption rate other products, but I think this product is different enough that we don’t -- that'll be very difficult for us to basically to predict. Obviously, we're very optimistic, but I can't give you all - I can’t give you a number.

Marcel Herbst - Herbst Capital Management

In regards to how the software is sold, I understand that some resellers are including this in their existing solutions and others sell it more as a freestanding product. What's the mix there? How many are including it and what is their difference in license fee you would get in between those options?

Mike Myshrall

So most of the partners that we have bundle the service offering with other security offerings. They come and rebrand it under their own brand. Others sell it under the CYREN brand. We have the full white label capability and rebranding capabilities of the service as a feature.

The pricing difference is really very depending on the size of the partner and the number of seats that they commit to. So, it’s less about bundling of service and more about size of the partner and total volume of business that they’re bringing to CYREN.

Marcel Herbst - Herbst Capital Management

Okay. And how many resellers have completed training as sales people and rolled out the product to their customers at this point?

Mike Myshrall

We have about approximately half of the resellers and distribution partners have gone through some level of training and during the past certifying their sales teams as they roll out the service.

Marcel Herbst - Herbst Capital Management

Okay. Thank you. I’ll go back in the queue for now.

Operator

(Operator Instructions) Thank you. Our next question comes from the line of [George Marema] (ph) a Private Investor. Please proceed with your question.

Unidentified Analyst

Good morning, Lior. I was wondering what your plans were on data center capital spending for the remainder of 2014?

Mike Myshrall

Sure. So CapEx during the second quarter was down slightly from the first quarter and I think we finished the quarter with around $200,000 in CapEx. That was largely to supplement our data centers, our whole data centers and build out several satellite data centers to support the CYREN WebSecurity offering.

For the year-to-date I think we are roughly in $600,000 CapEx range year-to-date and we would expect that for the rest of the year we will continue around the same level I’d say as Q2, as we continue to build-out additional satellite data centers in different geographies around the world.

Unidentified Analyst

Was this basically at your expectations at the beginning of the year to do about this pace or this ahead a bit of below it?

Mike Myshrall

It’s in line with the budget. It's about on par with our expectations.

Unidentified Analyst

Okay. And you recently raised $11.5 million in capital. Are your expectations now that that will carry you to profitability?

Mike Myshrall

That's our current expectation, yes.

Unidentified Analyst

Okay. So, you guys have stated that the revenue from the new WebSecurity will be non-material in 2014. I guess you expected to be material in 2015. Do you have any further color on what material definition is in 2015?

Lior Samuelson

No, we don’t. If I did -- if I know anything any degree of certainty, I will let you know. I just don’t and I would rather not -- I have a lot of personal feelings and personal opinions but…

Unidentified Analyst

Yeah.

Lior Samuelson

But nothing, that's based on hard data.

Unidentified Analyst

Okay. As you look out for 2015 today, by this winter by say January of 2015, are you expecting to provide revenue guidance for next year at this point? You think you will be?

Lior Samuelson

We hope so. We are not so sure yet. The only reason that we're not providing is because we don’t have enough information and we would rather not. I know it introduces little bit of uncertainty to the investor community. I think that, but we would like to be able to have a greater visibility before we tell you what’s happening.

I think that over the next few months, obviously our experience will grow with the adoption rate and then once we have a better handle on the adoption rate then we’ll be able to make basic forward statements.

Unidentified Analyst

No, I agree with that, very responsible. So I'm just trying to -- trying to get any gray shade of colors, are we expecting 5% growth or 50% growth just some sort of idea there, but I have to kind of focus lot of it. Okay, well that's all my questions for now. Thank you.

Lior Samuelson

Thank you.

Operator

Our next question comes from George Melas with MKH Management. Please proceed with your questions.

George Melas - MKH Management

Good morning, Lior.

Lior Samuelson

Hey, George.

George Melas - MKH Management

Quick question on the operating expenses. The sales and marketing in R&D were up little bit but G&A was down quite a bit, both sequentially and year-over-year. Was there any particular item there that was non-recurring or I mean any good guys or is that run rate going forward for G&A?

Mike Myshrall

So I think there are few things that are happening there George. Number one is we did make a change to our corporate allocation method for accounting at the beginning of 2014. So that shifted some of the common expenses, the allocated expenses from G&A into R&D and sales and marketing. So that’s one aspect that’s happening.

But also shifting from Q1 to Q2 as you’re aware we had some significant executive termination. So our former CEO and our former CFO are no longer included in the payroll and we haven't backfilled for those positions. So I think that the Q2 run rate is reflective of what you should expect for the second half of the year.

George Melas - MKH Management

Okay. And then assuming -- just assuming that revenue stays where it is, does operating expenses remain relatively flat from Q2 levels or are you planning to increase OpEx further?

Mike Myshrall

So, we are planning on further investing in R&D part of the goal of capital raise was to strengthen the balance sheet that we could invest in our product and service for the future. So we are making some investments in WebSecurity as well as new product development.

So I would expect R&D to grow up during the second half of the year. With the other expenses to remain flat and may be some opportunity for cost savings in certain areas, but overall I think the R&D will have the most significant investment.

George Melas - MKH Management

Okay. And maybe too far looking into the future, but do you see -- do you see now having sort of a bubble in R&D spend and that sort of tapers off with declines in 2015 or are we going to have keep investing 35% of revenue for the near future.

Lior Samuelson

So I think that, so as Mike said, I think investment R&D will increase. I think that on – so I’d say that, we will stabilize some more and probably early 2015. And then I think it should stay on as - on the dollar spend it would stay constant flat but as percentage of revenue should begin to decline.

George Melas - MKH Management

Okay, great. And then maybe one more question. The initial sales to end users from your two resellers, can you tell us a little bit more about them and I don’t know if their pricing is available or is public? How are – maybe they are bundled or maybe they're standalone I don’t know, but how are the customers, the end customers paying for it and how much are they paying for it?

Mike Myshrall

So the customers that we have were signed by our two resellers one in the U.K. and one in India. And the pricing methodology that we offer to our partners is that we offer them a standard price list and they get a discount off the price list. And then how they position the service to their end users is up to them.

We have our manufacturer to collect the price basically as a per user, per month price and it ranges depending on the -- the type of service it ranges from $10 or $12 per user up to over $30 per user per month, actually it would be per year.

So, it’s really up to the partner to do the final pricing and they get a discount off of our price list.

George Melas - MKH Management

Okay. And do you have -- I'm sure you know, the initial customer roughly what are they signing at? I guess that, [soccer team] (ph) and maybe some of the other end users that you re-sell the stuff.

Mike Myshrall

We can't really comment on end user pricing and those particular deals but, one generic comment I can make is that the largest end user customers will have the lowest per user price and the smaller customers will have a much higher per user price.

Lior Samuelson

George we’re not really seeing any surprises on the pricing side. I think it's what we had anticipated, so there is no.

George Melas - MKH Management

Okay. Good news. Okay, best of luck.

Lior Samuelson

Thank you.

Operator

Our next question is a follow-up question from Marcel Herbst with Herbst Capital Management. Please proceed with your question.

Marcel Herbst - Herbst Capital Management

Thanks so much for taking my follow-up. Can you talk a bit about the margin and competitive position for your upcoming APT product and also update us on when on when you are going to launch that?

Lior Samuelson

So okay let me -- so I think that the first version of our APT product is -- let me take a step back before I answer that. So our APT profit is going be a cloud-based APT product. So, that’s number one.

We are unaware as of now and now there are pure cloud APT products out there, there maybe some that we aren’t aware of. So the first version which will be available on early 2015 is going to sit on top of what we call on of our WebSecurity offering. So it will be like in tandem with our WebSecurity offering.

And then right afterwards, so when you buy our WebSecurity offering, you will be able to also get a -- you would also acquire -- you'll acquire APT, which I think would make the -- we believe will make our offering very powerful.

And then right after that what we are going to do is we’re also going to offer a standalone again cloud-based APT offering.

Again here I think we’re taking advantage without getting into all technical details, we’re taking advantage of the enormous data that we see everyday. I think it's very difficult or virtually impossible to have a good APT solution unless you see a lot of data. And we see as much data as anybody out there.

As you know about 12 billion transactions a day, we see it everyday. So we are able to use that data and other data sources to - we believe to create a very robust APT solution. And so we are on track on development. As you know we are being supported by one of the companies of being supported by these [chief office] (ph). So we get a grant every year to help us and we feel relatively comfortable that what we put up is going to be very good.

Marcel Herbst - Herbst Capital Management

Excellent, great. Thank you very much.

Operator

Our next question comes from the line of Dick Mills with Ramcor Management. Please proceed with your question.

Dick Mills - Ramcor Management

I’d like to follow-up on the pervious question about the operating expenses. Can you give a further breakdown on general and administrative, $2 million a quarter seems to be rather high, but I am interested in what that money is being used for? Is it facilities, management, clerical staff can you comment on executive compensation please?

Mike Myshrall

So, as you know CYREN is a global company. We have offices in McLean, Virginia and Palo Alto, California and Berlin, Germany and Reykjavik Iceland and in Tel Aviv, Israel.

So, part of our G&A is to support the office infrastructure and finance, accounting HR, IT staff in all of those locations. So, to operate a global company and obviously there is a lot of investment required there.

In addition during Q2 we had significant legal and accounting expenses related to both our 20-F filing and our self registration related to the capital raise process. So, we invested significant amount of time, effort and money into those process -- excuse me, into those investments. And we anticipate that a lot of our Q2 expense was one-time only and won’t be repeated in Q3 and Q4.

So, related to executive compensation, we have a Board of Directors look at the executive compensation policy and that was approved and filed last year. So that’s fully available for your review.

Lior Samuelson

So we have to, we basically -- our executive compensation -- and there is a [pool approved] (ph) every year by the shareholders.

Dick Mills - Ramcor Management

You would want to comment on what the executive compensation is for the top three officers for example.

Lior Samuelson

I think private information, but I will tell you that it -- as the Chairman and CEO, I’ll tell you exactly what I earn. So public information, I earn $252,000 a year, that's my basic compensation which is probably at the bottom 5% of CEO’s of publicly traded small technology company.

Dick Mills - Ramcor Management

Okay, thank you very much.

Operator

(Operator Instructions) Our next question is a follow up question from [George Marema] (ph) a Private Investor. Please proceed with your question.

Unidentified Analyst

Thank you, Lior. I want to follow up from earlier, you mentioned I think you had some successful road shows and stuff in the past and we’re talking about value added resellers and appliance manufacturers. Is that kind of embedded some sort of security solution in appliances. How is that initiative going? Can you update on that?

Lior Samuelson

I can only give you kind of [general] (ph) and tell you that there -- it's an area that we are pursuing very strongly, we have -- we’ve got conversations with some of the biggest in the field. I think it’s sort of a new and emerging area to invade security in all sorts of appliances.

And I think -- I can only tell you what I feel. It feels that it’s moving at the right pace and going in the right direction. There’s not a lot of negative news there. I think that the whole value proposition is very attractive to all parties and if you think about it you are kind of bringing, you’re really brining security very close to the -- and basically it’s sort of like providing the consumer side or maybe [other pie] (ph). So, it’s going pretty well.

Unidentified Analyst

Okay. And, as you look at the pipeline for that, do you expect any deals to be signed in 2014?

Lior Samuelson

I am praying. It's hard to tell. Obviously one of these negotiations [takes a while] (ph), but these are also, when you think about, these are really, really huge deals.

Unidentified Analyst

So it's obviously if a deal was signed tomorrow, it would talk usually what about a year to actually turning into revenue when negated in the product or is this something to be unloaded pretty quickly?

Lior Samuelson

It would not take a year. It will take a lot less than that. My take, so the deal, I think the revenue recognition would ramp up not the day we sign the deal, but these things can -- once you decide to, once it's designed and embedded, it’s pretty quick.

Unidentified Analyst

So, these solutions, they've been -- are they already been tested yet? What phase, the most advanced one, what phase are they in right now? Are they gone through all the testing and all this?

Lior Samuelson

We’re sort of final stages of test and evaluation. We have to remember, we come from the embedded world, right, so we understand that side of the business really well.

Unidentified Analyst

Okay. Sound exciting. Thanks Lior.

Operator

Our next question is a follow-up question from George Melas with MKH Management. Please proceed with your question.

George Melas - MKH Management

Thanks. Quick follow-up guys on the embedded legacy business. It seems to be doing okay, seems to be no decline, maybe even a small increase. Can you talk a little bit about that what kind of sales resources you have to devote to that and whether there is churn or you're just really able to just to keep your current customers?

Lior Samuelson

So George, I think the story really hasn’t changed. We are, as we’ve said before, we’re doing what it takes to basically keep this business going. And hopefully if we can succeed in growing and we will there is still downward pressure on prices. I think that we’ve done a nice job in minimizing churn. Churn is primarily only due to the fact that some of our clients are getting acquired by other companies. Some people moving out of business.

And so I think my view is I think we’ve done a nice job in maintaining that business. Going forward, our intent is to continue to do what it takes to keep that business running, running well, keeping the detection technology up-to-date even in handset because as you know it also has implications for our new lines of business.

So I think - I think it’s doing okay. It is again, it is a competitive market, but I think people need those solutions. So we will continue to provide those embedded products.

George Melas - MKH Management

Okay. Very good. And I just want to ask a question about the previous person asked the question, what was that? Was that sort of a different kind of embedded solution that you could sell? I didn’t quite understand.

Mike Myshrall

The previous question was really related to not the OEM SDK product which are our core embedded business, but really adopting CYREN WebSecurity into an embedded type of a model, where some of our embedded OEM customers right now, will take our SDK solutions are also looking at adopting the CYREN WebSecurity solutions and bundling that in with their appliance offering, that is kind of a hybrid model.

George Melas - MKH Management

Okay, great. Okay, thank you very much.

Operator

(Operator Instructions) Mr. Samuelson it appears we have no further questions at this time. I would now like to turn the floor back to you for closing comments.

Lior Samuelson

Okay. Well, thank you. Thank you for joining us today. Again, we're excited about the future of CYREN as web products and cyber and SaaS continues to increase in frequency and sophistication.

The profitability of [CYREN] (ph) irrevocably changes the business landscape. Our sales time remains robust with strong interest in our WebSecurity embedded service. I continue to believe that CYREN is well positioned to deliver the needed information security solutions and capture associated market growth at cloud-based security solutions.

I look forward to updating you on our next conference call. Thank you and have a great day.

Operator

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

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