Furniture Brands International CEO Discusses Q1 2011 - Earnings Call Transcript

May. 5.11 | About: Furniture Brands (FBNIQ)

Furniture Brands International Inc. (FBN) Q1 2011 Earnings Call May 5, 2011 8:30 AM ET

Executives

Ralph Scozzafava – Chairman, Chief Executive Officer

Steve Rolls – Senior Vice President, Chief Financial Officer

Frank Ward – Vice President, Treasurer

Analysts

Todd Schwartzman – Sidoti & Company

Brad Thomas – Keybanc Capital Markets

Barry Vogel – Barry Vogel & Associates

TJ McConville – Raymond James

Operator

Good day ladies and gentlemen and welcome to the First Quarter 2011 Furniture Brands International Earnings conference call. My name is Tawanda and I will be your coordinator for today. At this time, all participants are in listen-only mode. Later we will facilitate a question and answer session. If at any time during the call you require operator assistance, please press star followed by zero and a coordinator will be happy to assist you. As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the presentation over to Mr. Frank Ward, Vice President and Treasurer. Please proceed, sir.

Frank Ward

Thank you, Tawanda. Good morning everyone and thanks for joining us today. After I read the Safe Harbor statement, Steve Rolls, our Senior Vice President and Chief Financial Officer will go over the financial results of our first quarter. Ralph Scozzafava, our Chairman and Chief Executive Officer will then follow with a discussion of what we’re doing to drive our sales, control costs, and make the necessary investments in our brands.

I need to remind you that certain comments made during this call may contain forward-looking statements within the meaning of Section 21(e) of the Securities Exchange Act of 1934. Our actual results and future financial conditions may differ materially from those expressed in any such forward-looking statements as a result of many factors that may be outside of our control. Please refer to our SEC filings, including our annual report filed on Form 10-K for a complete discussion of the major risks and uncertainties that may affect our business. The forward-looking statements made today are as of the date of this call and we do not undertake any obligation to update our forward-looking statements.

If you do not have a copy of yesterday’s press release, you may obtain one along with copies of prior press releases and past SEC filings by linking through to the Investor Relations page of our website, furniturebrands.com.

I would now like to turn the call over to Steve, who will provide the highlights of our first quarter results. Steve?

Steve Rolls

Thank you, Frank. As reported in last evening’s financial results press release, total sales for the first quarter decreased 7.6% over the same period last year. On a sequential basis, sales in the first quarter increased 7.9% versus the fourth quarter of 2010. During the quarter, we saw sequential progress each month with sales comparisons to the prior year improving as the negative impact of the inclement weather was reduced.

Gross margin for the quarter was 26%, roughly flat compared to 26.2% last year. SG&A expenses totaled $79.6 million for the first quarter compared to $79.9 million last year. This is not the quarterly run rate we expect going forward. We expect SG&A will be a little higher than this level in future quarters due to expense timing of some items like advertising and people-related costs.

On the retail side of our business, the 46 Thomasville stores that we have operated for more than 15 months showed a same-store sales increase of 17% this quarter. This is the fifth straight quarter of double digit comp store growth in our own Thomasville stores. Part of this increase and the marketing spend mentioned earlier was directed to the Thomasville brand and is helping fuel the momentum of the business.

Focusing for a moment on what has been the high occupancy cost of some of these stores, we have said that as their leases expire we will evaluate our options for each store on a case-by-case basis. In most cases, we will relocate and resize these stores to achieve a more favorable cost structure. For example, during the quarter we held close-out sales in preparation for three store closings as these stores did not meet our performance criteria. One of these stores will be relocated in the Dallas market as we announced earlier. We will open an additional new Thomasville store in Chicago during the second quarter and continue to look for the right store opening opportunities throughout the remainder of the year.

Inventory at quarter end was $256 million versus 231 in the first quarter of 2010 and 250 million at year-end 2010. We expect to end this year with inventory levels flat to slightly below 2010 year-end levels. Cash at quarter end totaled $41 million and debt totaled 77, for a quarter-ending net debt balance of 36 million.

In April, we successfully refinanced our asset-based loan agreement. The renewed facility is now $250 million in size, which is adequate for both our current and expected future funding needs. It has a five-year maturity and increases our borrowing availability by $33 million versus the former facility to a total availability currently estimated at about $51.5 million. The new facility has several variable interest rate options. The option we typically choose is a LIBOR-based borrowing option which is now LIBOR plus 2.75% versus the old spread of LIBOR plus 1.5%. In addition, the pension funding covenant has been changed from a specific dollar requirement to a more flexible requirement that matches the plan’s regulatory minimum contribution amounts.

As a reminder, the regulatory minimum is an IRS-determined minimum, which for us in 2011 would be zero. We, however, expect to fund the plan at the ERISA minimum which for 2011 is estimated to be $3 million. You can find more information on our new asset-based loan in our previously filed 8-K.

While I’m on the topic of pensions, this quarter we extended the amortization period for deferred losses based on the accounting guides applicable to our frozen plan. The vast majority of our pension plan participants are no longer with the Company. The amortization period is now based on the average expected remaining life of participants versus the average expected service period. This reduces pension expense by approximately $6 million in 2011 versus 2010.

As you saw in our press release, we are no longer including a selected items table with our quarterly results. The relatively small dollar amount of selected items as well as immaterial differences in these items on a year-over-year basis drove the decision to remove the table. Going forward, in the event we have any material selected items that affect a given quarter’s results or comparability to the prior year, we will be explicitly calling these out.

Lastly, to help you with your models, capital spending for the year is expected to be about 25 to $29 million, depreciation approximately $24 million, and we expect to have an income tax expense of approximately $3 million. 2011 capital spending levels are elevated from prior years given the capital investments being made in Indonesia, Mexico, and our SAP project, all of which serve to improve our cost structure and increase efficiency over time. Our capital spending will be more heavily weighted in the first half of this year as the Indonesian project is completed.

I will now turn the call over to Ralph to discuss the results in more detail.

Ralph Scozzafava

Thanks, Steve. While we’re pleased with the progress we’ve made on a number of fronts during the quarter, we have significant work yet to do on the revenue side and continued opportunities on the cost and efficiencies side. As we ramp up our new product introductions and brand-building programs to drive store traffic and ultimately revenues, we’re not losing focus on our cost discipline. Brand-building investments are being made in a prudent and disciplined manner while expenses that don’t drive revenues are continuing to be managed tightly.

Looking at our Q1 sales performance, we experienced a headwind of weather during January and early February; however, later in February and in March, we did see a corresponding improvement in the business. Additionally, we’re particularly pleased with the traffic improvements that we saw at High Point Market.

In our Thomasville retail business, we saw continued momentum with same-store sales up 17%. Because we control distribution in these stores, it’s fairly straightforward to determine if our brand-building efforts and marketing spend in this area are working. Our same-store sales results are the report card and the results speak for themselves. In addition, healthy traffic and order trends at High Point make us cautiously optimistic about the growth outlook for Thomasville going forward. As Steve mentioned, we announced two store openings in the quarter, one in the Dallas Galleria and one in Chicago in Lincoln Park. There could be more this year, predominantly in geographies where we have existing stores which creates leverage and scale benefits for us. We’ll continue to be analytical and disciplined in new store openings, and these stores must meet several expected return requirements that create a positive net present value.

There is also significant opportunity to improve the productivity of the current base of Thomasville owned stores. As you know, these were locations that we didn’t choose. We took them back as underperforming stores. These 47 stores are in predominantly weak locations. Many are too large and carry occupancy costs reflective of the more robust and more expensive real estate market at the time that the leases were negotiated. As these leases become due, we evaluate each and every store on a case-by-case basis to determine if it’s a candidate for relocation and resizing.

There are essentially three outcomes here. The first is we relocate to an A location which may carry somewhat higher occupancy costs on a per-square foot basis but more importantly carries the potential for higher sales volumes and possibly lower total occupancy costs as we optimize the size of our footprint. The second outcome is simple – it’s an exit from the location entirely; while the third outcome is a renegotiation of the lease terms leading to a rent reduction, and given current market conditions, we see a number of these. All these outcomes will serve to improve the profitability of our own Thomasville stores in the future.

Another profit improvement that we can look forward to over time is the roll-off of our dark store leases. The expense related to these leases is about $6 million annually until about 2014, when it drops off rapidly as these terms mature. In addition, we don’t expect to hold most of them to full maturity as in many cases, it will behoove the landlord and us to find a replacement tenant sooner than later.

Moving on to our Lane brand, much like Thomasville, we saw increased order rates at our Lane showroom at the High Point Market and we’re also seeing increased placements at retail. Most importantly, we’re very pleased with the double digit increase in website traffic to our Lane site and an even stronger increase in store locator hits on the site. Both of these are indicative of the initial success of our brand-building and marketing programs that were directed toward Lane over the past few months. We’ll continue to measure and monitor these effects with the ultimate measures being increased sales and profits.

Let’s move on to our manufacturing operations. We continue to focus on our lean manufacturing initiatives and supply chain efficiencies and expect to see the results of this work in our gross margin performance as we go forward. Our gross margins are back to where they were prior to Q4, and while gross margins will fluctuate quarterly, we fully expect an upward trend line over time driven by these continued improvements and efficiencies.

In the first quarter, we completed the closing of our Appomattox plant which we’d previously announced on an earlier call. Once we complete the sale of this facility, we’ll realize annual savings of about 4 to $5 million. Until then, quarterly savings is approximately $700,000.

Our Indonesian plant expansion is proceeding right on plan and should be completed early in the third quarter. We expect to begin to realize annual cost savings shortly thereafter as we fill the plant.

Our Mexico cut-and-sew plant has also begun preliminary operations and shipped its first container in the last week of March. Production and productivity will continue to ramp up over the next few years and we expect our annual run rate pretax savings in 2014 for both these projects to be in the range of 10 to 12 million combined.

In summary, we’re encouraged by our year-to-date order trends and the implications for revenue generation as we progress through the year. We remain disciplined on the cost and capital spending front as we continue to offset a large portion of our brand-building and marketing programs with savings in other areas. In short, we’re doing exactly what we said we’d do. Our efforts over the last three years to reduce costs and increase efficiency are yielding the intended results.

We’re excited at the opportunity to drive revenue through increased distribution, better product and brand investments. This will be accompanied by continued improvements in our manufacturing, sourcing, distribution, and retail operations. We’re committed to our mantra of controlling our controllables and improving our results.

That will conclude our prepared statements, and now we’ll open up the lines for your questions.

Question and Answer Session

Operator

Thank you. Ladies and gentlemen, if you wish to ask a question, please press star followed by one on your touchtone telephone. If your question has been answered or you wish to withdraw your question, simply press star, two. You may press star, one to begin.

Your first question comes from the line of Todd Schwartzman with Sidoti & Company. Please proceed.

Todd Schwartzman – Sidoti & Company

Hi, good morning gentlemen. First on the roll-off of the dark leases, Ralph, how should we think about that 6 million annual benefit from quarter to quarter? Just kind of straight-line it, or is there any kind of bumps in the road there?

Steve Rolls

It’s actually, Todd, it’s probably going to hold pretty steady at about 6 million rounded off for three years, and then it starts to drop off more rapidly in the fourth and fifth year, so. That’s again if we ran to the ultimate end of the lease, which I doubt is going to happen.

Ralph Scozzafava

Just to add to that – I know you need the math so you can put it in your model. We are, as we might have mentioned on some other calls, this is a daily/weekly activity for us to work our way out of a number of these leases. We’ve got just this past week one that we worked our way out of, and over time we’d like to think that we can beat that schedule that Steve mentioned. But it is fairly flat for those three years right now with no changes.

Todd Schwartzman – Sidoti & Company

Great. The Thomasville comp is impressive. That was up against a prior year positive comp, correct?

Steve Rolls

Right.

Ralph Scozzafava

We were plus 16 a year ago in the quarter, and now plus 17. I think that a lot of the work that we’re doing on product and on our brand-building activity, the advertising, the in-store experience, the design help that we give at retail, we continue to hone that model and we’re pleased.

Todd Schwartzman – Sidoti & Company

Other than the advertising, what else is driving it? I mean, is traffic up commensurate, for example, with that comp?

Ralph Scozzafava

Yeah, the advertising helps drive the traffic. I think the new product offerings are a big part of it, and I think that the way that our design help in-store is working directly with the consumer, making home calls, really helping from a design standpoint that we’ve created a compelling proposition and it’s reflected in the numbers.

Todd Schwartzman – Sidoti & Company

And within the products, are there any items, are there any collections that are getting inordinate attention?

Ralph Scozzafava

I think that some of the newer collections are. We’ve got a new collection, Studio 455, that is a very strong player for us. We’ve also got some new collections that you might have seen at High Point that aren’t in stores yet that we’re particularly excited about, so we’re anxious to continue to get that product to retail.

Todd Schwartzman – Sidoti & Company

On the ad spend, it sounds as though – I don’t want to put words in your mouth – but it sounds as though the increase was not perhaps as much as you expected, and that picks up a bit in second quarter?

Ralph Scozzafava

No, it was at a strong level. We offset with some cost reductions so that the SG&A came in where it came, but that’s not our normal run rate. It was—we put a strong effort out in the quarter on advertising. We were up more than double digits, so.

Todd Schwartzman – Sidoti & Company

So do some of those offsetting cost reductions not recur in Q2 and beyond?

Steve Rolls

There are a lot of things that kind of go in and out of SG&A, but you would expect it in Q2 and beyond to be higher than the Q1 rate, kind of along the lines—I mean, we’ve talked in the past about a 78-plus-5 for incentive comp gets you to a 83 level. Obviously, there are a lot of things that push that up or down. You’ve got wage or salary improvements, you’ve got healthcare costs, you have cost take-outs that we continually do in our SG&A line that reduce that level. Advertising obviously swings up and down. So there are just a lot of things that move up and down, but it should be higher going forward than the current level.

Todd Schwartzman – Sidoti & Company

Okay. And on raw materials, what was the first quarter impact and, more importantly, what’s your outlook there?

Ralph Scozzafava

We didn’t have a big impact in the first quarter. That said, we are seeing increases that are at pretty strong levels, things like leather up over 30%, things like foam up over 20%, steel over 30. So these are the kind of increases that ultimately we have to offset, some with productivity initiatives and some with selected pricing actions. So we’ll continue to manage that. It will be challenging through the balance of the year. We’ve got plans in place. We feel comfortable with them. Some we’re beginning to execute already.

Todd Schwartzman – Sidoti & Company

And just as a reminder, what pricing actions, if any, have you already announced and what do you think might be added to that, if anything?

Ralph Scozzafava

Yeah, I think the go-forward ones we probably won’t talk much about. We’re monitoring the competitive landscape. We’re also balancing that against our productivity initiatives, but we have taken some surcharges, particularly on leather product. Of course, freight is always a sliding scale with us because we surcharge that normally, so that will be a non-impact. But we have seen, of course, petrol go up and we’ve had to respond with freight surcharges increasing. So it’s flowing in, I won’t want to say naturally. We don’t like these kind of pricing actions against us, but we’re reacting.

Todd Schwartzman – Sidoti & Company

Great, thanks guys.

Ralph Scozzafava

Sure.

Operator

Your next question comes from the line of Brad Thomas with Keybanc Capital Markets. Please proceed.

Brad Thomas – Keybanc Capital Markets

Thank you, good morning. Wanted to follow up a little bit more on the top line. You know, another very strong quarter from a comp perspective within Thomasville. As we think about your performance in those retail stores relative to the overall sales level, could you just help us think about why, at a Company level, we’re not seeing something closer to that growth rate that you get in some of your retail stores?

Ralph Scozzafava

Yeah, I think that’s a great question and it’s something that we talk about here quite a bit. I think as it relates to Thomasville, the (inaudible) is fairly similar. Those are typically longer purchase cycles so you’re going to get a consumer to come in your store, usually come back a couple of times, work with your design help and work on a project; and really, it flows very smoothly. We had a significant, I think, interruption in our business predominantly in January, a little bit in early February, that was weather-related. So when you get into the more transactional, somewhat promotional businesses that happen in multi-brand retail stores, and in our case it’s the Lane brand, it’s the Broyhill brand, weather on a weekend when you lose a shopping weekend, that retailer just loses volume. With Thomasville, we’re able to make that up because it is a design project. It does go on over time. The decisions get made over a period, so it’s not as volatile.

That said, I think that it’s a credit to what’s happening at Thomasville. I think the in-store experience continues to improve. I think the product line continues to improve and that just finds it’s way into your sales numbers.

Brad Thomas – Keybanc Capital Markets

Great. And so to follow up on the weather comment, what did sales look like through the quarter? How much—you know, if we looked at total Company revenue, what was the difference in that January/February period versus where the quarter ended, or perhaps even how April has played out?

Ralph Scozzafava

Sure. Steve mentioned that we got better sequentially through the quarter. I can tell you that the vast majority of the volume loss year-on-year happened in the month of January and early February. We track year-on-year comps on a monthly basis. We made progress versus the prior year every single month. That continued into March and continues into April. So this is—you know, clearly the numbers indicate, and we see it, that January and the first week or so of February was our problem; and it seems like forever ago but there was a lot of snow in a lot of markets, and it really hurt retail.

Brad Thomas – Keybanc Capital Markets

Okay. And Ralph, within the motion furniture industry I know a competitor of yours, Berkline, has liquidated, declared bankruptcy. What are you seeing in terms of opportunities to take some floor space? Can that be a meaningful driver in the next few quarters?

Ralph Scozzafava

I think it can. Whenever a competitor goes out of business, there’s always going to be distribution and floor space that needs to transition. Dealers need to get good selling product on their floor. Lane is a great option for former Berkline dealers. It’s a great motion brand. The price points are right; the values are right. It’s a TV and marketed brand, and we’re seeing some progress by the Lane team. They’re being very aggressive to help dealers really fill out that spot on their floor and to solve their issues.

Brad Thomas – Keybanc Capital Markets

And have you had success picking up some floor space at this point in time?

Ralph Scozzafava

Yeah, we have. We have. And it’s very competitive, as you may know. There are a number of folks that will vie for that space, but we think that we’re in good position. We’re picking up at this point what we feel is our fair share. It’s never enough, right? So we’re continuing to be aggressive and to pursue that floor space.

Brad Thomas – Keybanc Capital Markets

Great. And then just lastly, just a quick update on SAP would be helpful. I mean, I think you all are still in the blueprint phase, if I’m not mistaken. Where are we with SAP?

Steve Rolls

We’re just finishing the blueprint phase of SAP and then we will start our first phase of implementation, or realization as it’s typically called. And that realization would involve two of our brands plus our corporate financials, and it would be completed in the second half of next year, so a little more than a year from now.

Brad Thomas – Keybanc Capital Markets

Great, thanks Steve. Thanks Ralph.

Ralph Scozzafava

You bet, appreciate it.

Operator

Your next question comes from the line of Barry Vogel with Barry Vogel & Associates. Please proceed.

Barry Vogel – Barry Vogel & Associates

Good morning gentlemen. Historically your first quarter is the biggest quarter of the year as far as percentage of sales.

Ralph Scozzafava

That’s right.

Barry Vogel – Barry Vogel & Associates

And I was disappointed, notwithstanding the comments about the weather, because over the last 10 years you’ve always had weather issues theoretically, sometimes worse and sometimes not so bad, in the early part of the year. Even last year, you did $322 million in revenues in the first quarter and the economy was not doing as well in last year’s first quarter as it theoretically is doing now. So is there any reason why the sales, in my opinion, were disappointing other than the weather?

Ralph Scozzafava

I think weather was the biggest piece of it, Barry. We saw our numbers in January virtually—it was over 80% of our decline year-on-year happened in the first four, five weeks of the year. And so we know we don’t have a distribution problem; we know we don’t have a problem of product issues. So that’s what it points to. We’ve seen escalating comps since then. We don’t like to point to things like this, but this is where it is.

Now as far as going forward, if you look at our quarterly contribution as it relates to net sales, typically Q1 is our biggest and historically if you look at the last 10 years or so, it’s followed by Q2. So right now our energy is focused on delivering a strong Q2, Q3 and Q4.

Steve Rolls

Just to add on the economic side, Barry, it was for our industry weaker this quarter than last year. Housing was weaker; GDP was much weaker than last year. So maybe—I don’t know about the full economy, but it was definitely different for our industry.

Barry Vogel – Barry Vogel & Associates

Now, could you tell me which were the weakest brands and which were the strongest brands in the quarter, despite the fact it was a tough quarter sales-wise?

Ralph Scozzafava

Well, I think instead of really talking about it by brand, maybe the best way is to think about price point and the consumer. It’s been pretty consistent that we will go ahead and see increases on our higher-end brands, our designer brands. Those continue to perform well. I think the Thomasville numbers you’ve seen, what our stores are able to do. I think as you get into the lower-end price points – and we’ve said it before – when gas starts to increase the way that it has, people who start at the lower price point, it starts to affect them a little bit more, and that’s what we’re seeing.

Barry Vogel – Barry Vogel & Associates

And as far as currently, as a percentage of your revenues, what percentage do you think would be in the low-end brands and what percentage in the higher-end brands?

Ralph Scozzafava

You know, we haven’t given that information in the past, and I can tell you that at this point we’re focused on growing all of our brands. We can’t worry about what price point they’re at.

Barry Vogel – Barry Vogel & Associates

Okay, so based on what you’re saying is the second quarter should be a higher level of revenues than the first quarter. Is that correct?

Ralph Scozzafava

We haven’t given any guidance on that at all, Barry, and while we can tell you our efforts are to do that, we haven’t stated anything publicly about that.

Barry Vogel – Barry Vogel & Associates

All right. Thank you very much.

Ralph Scozzafava

Thank you.

Operator

Your next question comes from the line of Budd Bugatch of Raymond James. Please proceed.

TJ McConville – Raymond James

Good morning, gentlemen. This is actually TJ McConville in for Budd. I have a couple of quick ones here. Most of my questions have been answered. Steve, on that extension of the amortization for the pension expense, did you say that that was going to be 6 million for 2011, or for the remainder of 2011?

Steve Rolls

No, that would be for the total, so about 1.5 million a quarter.

TJ McConville – Raymond James

Okay. That’s perfect. And guys, we’ve been talking a lot about sales and the progression of sales. Do you care to comment about whether or not that momentum that you saw through March continued into April in any way?

Ralph Scozzafava

Typically, we don’t talk about a quarter during the quarter. We can tell you that our trends—we’re comfortable with our trends. We had a very good High Point Market. A number of folks on the call I know were at the Market. We had numerous new showrooms. We brought Thomasville and Drexel Heritage into the main building, brand new showrooms for Pierson and Hickory Chair and Lane Venture just a market ago, remodels at Lane and Broyhill; and the traffic numbers were up quite a bit. That’s important to us. Now, the Market was a little bit earlier this year than last year, so we’re going to wait another couple weeks before we declare victory on the trend line, but we’re very comfortable with the traffic and the order activity.

TJ McConville – Raymond James

Okay. And then one last one, maybe what you’re hearing from some of your dealer base. Any comments on consumer credit availability or tightness thereof, whether or not it’s getting easier, how that’s impacting your focus on sales?

Ralph Scozzafava

I think it’s become a non-impact for us in particular, but as I talk to dealers it’s less and less of an issue versus where it was probably a year to a year and a half ago. So we’re not seeing that as being a big impediment to driving sales.

TJ McConville – Raymond James

Okay, that does it for me, guys. Thanks for taking the questions.

Ralph Scozzafava

Thanks for being on the call. I think that’s our last question. I guess at this point, I just want to thank everyone for being with us again today. We’re going to continue to get back to work, get after our second, third and fourth quarter. So we’ll talk to everyone again on the next conference call. Have a great day.

Operator

Thank you for joining today’s conference. That concludes the presentation. You may now disconnect and have a wonderful day.

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!