American Science and Engineering's (ASEI) CEO Chuck Dougherty on Q3 2016 Results - Earnings Call Transcript

| About: American Science (ASEI)

American Science and Engineering, Inc. (NASDAQ:ASEI)

Q3 2016 Earnings Conference Call

February 8, 2016 04:30 PM ET

Executives

Charles P. Dougherty - President and CEO

Diane J. Basile - SVP, CFO, and Treasurer

Mike Muscatello - VP and General Counsel

Analysts

Edward Marshall - Sidoti & Company

Stephen Levenson - Stifel, Nicolaus & Co., Inc.

Josephine Millward - The Benchmark Company, LLC.

Operator

Good afternoon ladies and gentlemen, and welcome to American Science and Engineering Third Quarter Fiscal Year 2016 Results Conference Call. My name is Ayela and I will be your conference facilitator today. At this time, I’d like to inform you that this conference call is being recorded and all participants are in a listen-only mode. [Operator Instructions]

Diane Basile, AS&E's, Chief Financial Officer and Treasurer will now begin the conference. Please go ahead.

Diane J. Basile

Good afternoon and thank you for joining us for AS&E's third quarter fiscal 2016 results conference call. I’m joined today by Chuck Dougherty, our President and CEO; and Mike Muscatello, our Vice President and General Counsel. I’ll begin with an overview of the financial results, and Chuck will then offer his comments, after which we will open the call to questions.

Before we begin, I'd like to remind everyone that during the course of this presentation, we will be making certain forward-looking statements based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from our current expectations and beliefs. I encourage you to review the Safe Harbor statement and the risk factors we have identified in today’s press release and in our most recent Form 10-K and subsequent SEC filings, which can be found on our Web site at as-e.com.

Now, I’d like to discuss the results of the third quarter. When comparing results to the prior period, unless otherwise stated, I’ll be referring to the corresponding period of the prior year.

Net sales and contract revenues in the December quarter were $22.2 million, down 40% from the prior period revenues of $37 million. This decrease in revenue was primarily attributable to the decrease in mobile cargo from $10.8 million in the prior period to $2.7 million in the current quarter and a decrease in cargo from $8.6 million in the prior period to $2.6 million in the current quarter.

The breakout of revenue by product line for the quarter is as follows: Cargo systems $2.6 million, mobile cargo systems $2.7 million, parcel and personnel systems $3.8 million, other product revenue was $0.7.million, and service revenue was $12.4 million for the period for a total of $22.2 million.

The gross profit in the quarter was $10.9 million. As a percent of revenue, this was 49.1% as compared with 46.3% in the prior year period. The current quarter product gross margin increased 411 basis points as compared to the prior period and service margins remain consistent with the prior period.

Selling, general, and administrative expenses were $7.7 million, or 35% of revenue in the quarter, as compared to $7.6 million, or 21% of revenue in the prior period.

Company funded research and development expenditures in the current quarter were $4.6 million, or 21% of revenue, as compared to $5.7 million, or 15% of revenue in the prior period. This reduction is driven primarily by two factors. First, the prior period included subcontract or expenses not included -- incurred in this quarter and second the current period reflects the results of ongoing cost alignment initiatives and headcount reductions effective earlier in the year.

The Company recorded an income tax benefit of 931K in the current quarter as compared to a $1.3 million provision in the prior year. As a result of the retroactive reinstatement of the R&D tax credit, the effective tax rate was 67% in the current quarter. The loss per share in the December quarter was $0.06 as compared to earnings per share of $0.32 per fully diluted share in the same period last year. Free cash flow for the quarter calculated its cash from operations of $8.4 million less CapEx of $0.2 million was $8.2 million.

A review of our year-to-date results through the third quarter ended December 2015 reflects the following. Revenues were $78.8 million for the first nine months of fiscal 2016, as compared to $95.6 million in the prior year. This decline is primarily due to a decrease in products revenue, while service revenues were relatively flat when compared to the prior period.

On a year-to-date basis, gross profit as a percentage of revenue increased 258 basis points to 47.8% from 45.3% primarily due to improved service margins.

In the current year, SG&A expenses are $22.7 million, or 29% of revenues, as compared to $24.9 million, or 26.1% of revenues in the prior year. The decrease was primarily driven by a reduction in compensation and benefits attributable to previously effected headcount reductions offset somewhat by an increase in legal expense.

Research and development expenses decreased to $16.2 million, or 20.6% of revenues, from $18.1 million, or 18.9% of revenues in the prior year, primarily due to cost initiatives and prior period headcount reduction. Year-to-date the reported loss per share is $0.07 as compared to earnings per share of $0.01 in the prior year.

A review of our current balance sheet reflects that the balance in cash, restricted cash and short-term investments, at December 31, was $97.3 million, or $2.4 million less than the March 31st balance. This decrease is primarily attributable to cash provided by operations of $11.5 million offset by dividend payments of $10.8 million and repurchase shares of $2.3 million. For the nine months ended December 2015, CapEx was 798K. Cash from operations less CapEx, or free cash, in the current year was $10.7 million, as compared to a negative $15.6 million in the year-ago period.

DSO at December 31st was 68 days as compared to 75 days at September 30th. For the nine months ended December 2015, depreciation and amortization expense was $2.9 million. As to the stock repurchase program, there were no purchases made during the third quarter. Therefore, the total purchase and retired through the third quarter remains at 3,261,907 shares for $170 million at an average purchase price of $54.88 per share.

Net bookings in the quarter came in at $29.5 million, generating a book-to-bill ratio of 1.3. This brings bookings to $97 million through the third quarter with a resulting book-to-bill ratio of 1.23. Our backlog at December 31st was $156.6 million or 13% above the December 2014 balance of $138.2 million.

At a recent meeting, the Board voted to approve a cash dividend of $0.50 per share. The dividend is payable on March 2nd to the holders of record at the close of business on February 18th.

Finally, this quarter we’ve identified cost containment actions which we anticipate will yield a $6 million reduction in run rate expenses. We expect that as a result of these efforts together with our ongoing cost initiatives that we will exit the year at $42 million annualized operating expense run rate.

I’ll now turn the call over to Chuck for his comments.

Charles P. Dougherty

Thank you, Diane, and good afternoon everyone. To begin with, I’d like to welcome Diane to AS&E and to the quarterly results call. I’m looking forward to working with Diane and the rest of the team of our executive team as we continue to work to improve our operational performance and drive our strategic growth initiatives.

As noted, third quarter results were impacted by external factors as continuing regional volatility and rapidly declining oil prices in key end markets caused delays in shipment of backlog orders for ZBV and Z Portal Systems as well as booking of new orders.

As mentioned in earlier calls, we continue to believe that a number of governments in the Middle East have grown more stable with new U.S friendly administrations in places like in Iraq and Egypt as examples. However, the rapid decline in oil prices has impacted our business as some Middle East government’s responded by donating funding for large infrastructure related projects.

In response to the external factors adversely impacting our business and the industry as a whole, we’re taking steps to continue cost containment actions and manage operating costs as Diane just outlined.

In the third quarter, we continued our focus on working capital improvements to optimize cash flow generation, resulting in over $8 million of free cash generated for the second consecutive quarter. Cash and investments increased from $92.8 million at the end of the second quarter to $97.3 million at the end of the third quarter, which will continue to give us flexibility as we move forward.

Year-to-date we’ve booked $97 million in orders, which exceeds the $88.9 million we booked for all of the FY15. We booked $29.5 million in new orders for the quarter, including a significant cargo order. Our opportunity pipeline remains strong and at a comparable level the last year with large cargo projects not dropping, but continuing to push to the right.

As I’ve stated, regional volatility adversely impacted the quarter, but it has also created opportunities for us in the Middle East, Africa, and elsewhere as governments must still take action to project critical infrastructure against terrorist threats even if they cannot currently fund large scale projects.

We are actively quoting our systems to customers looking to implement proven detection systems that can quickly ship and deploy in order to respond to an immediate threat or to fill security gaps.

Our proven ability to respond to customer demand for quick turn, stopgap security solutions, continues to be a significant differentiator for AS&E. This is particularly true of the ZBV, the ZBV in combination with the Tx-View and now the next generation Z Portal and the new Car View portal, which both offer construction less design to eliminate construction delays and accelerate installation schedules.

I will give you more information about the new Car View Portal in a few minutes. War zone opportunities continue to be an active component of our pipeline. The ZBV continues to provide exceptional performance in war zones for detecting explosives weapons and currency.

During the quarter, ZBV’s operating in a war zone were instrumental in multiple seizers including the seizure of $1 million, our largest currency seizure to date and a large cash of chemicals use to make vehicle borne improvised explosive devices or VBID.

We continue to see indications that U.S Federal Government, spending for security detection systems, including technology refreshed as well as new systems while return the moderate levels in the next fiscal year. We believe we’re well positioned to take advantage of increased U.S spending in our sector due to our technologies proven history of performance effectiveness, and reliability for U.S government agency such as U.S Customs, Department of Space and Department of Defense.

Now I’d like to share some of the highlights from the quarter. We received $13 million order for next generation Z Portal systems and service from an African Government agency to screen cars and trucks for weapons and VB IEDs. The Z Portal high throughout, multi technology and multi view capabilities will provide the customer with the ability to detect more explosive threats than other systems.

The customers selected the Z Portal for those machine for a number of reasons. First, they previously had purchased ZBV’s and have first time experience with Z Backscatter’s proven detection results. In Q2 of this fiscal year, they added to their fleet of ZBV’s with a follow on order which allowed us to successfully demonstrate our ability to execute on the quick turn book ship order on the same quarter help them address immediate threat requirements.

The next generation Z Portal’s construction was designed enables an expedited shipment installation date for an end user who seeks to rapidly deploy our detection technology. As part of our portfolio of expansion efforts, we are announcing the introduction of our Car View portal high throughput inspection system.

The Car View system is the only relocatable portal on the market to offer two views of scanned cars using a combination of dual energy transmission and Z Backscatter technology. The cost effective system meets the footprint requirements of a standard tollbooth lane and is ideal for securing special events and parking garages as well as high track facilities, government buildings and vital checkpoints.

Car View is the latest of our multi technology family of solutions and leverages complimentary technologies to provide more insight into cars and small vehicles. With its lower cost and small footprint, it has the potential to expand the served market for portal systems in their commercial applications.

As noted, Car View is another AS&E quick book ship product, because of its construction less design. We’ve included a photo of the new Car View system in today’s presentation.

In addition to introducing new systems, we continue to develop and introduce innovative underlying technologies that can extend the capabilities of new and existing platforms. The most recent example of this is our wave shifting fiber detector technology. The dual energy material discrimination capabilities of our new Car View portal, the next generation Z Portal and Tx-View for ZBV is made possible by this technology, which has also allowed us to develop new x-ray systems that are more powerful, efficient, compact and rugged, because of its unique characteristics.

Turning to portable systems, we continue to execute on our roadmap with the release of MINI Z enhancements that are the direct result of customer feedback from initial deployments and our growing field experience. We are improving operational effectiveness with software enhancements including an image stitching capability to assist with image interpretation.

The software allows the user to create an image that is made up of up to four separate scans as shown in our presentation. Additionally, we made tactical improvements to assist public safety officials to execute their mission more efficiently. For example, the [indiscernible] mount allows for easier single user operation and a tactical backpack for field personnel provides both an easy transport method and a protective stores areas for the MINI Z.

During the quarter, we received a sizable order for over 40 MINI Z systems from a new customer in the APAC region, another quick turn book ship order for an immediate security requirement. We continue to see traction from U.S Federal Government agencies to place new MINI Z orders in the quarter to test it for multiple applications.

We currently have systems deployed with 15 U.S government agencies including key customers such as the U.S Air Force, Navy, Army, Department of State and U.S Fish and Wildlife. We are also seeing results from our efforts to accelerate our services growth initiatives.

During the quarter, we received a managed services contract from NATO Support and Procurement Agency, or NSPA, which is a follow-on to a previously announced March 2015 award. The new award is a five-year contract valued at up to $33 million and resulted from a competitive bid. The first year of the contract is funded for $6.4 million for the operation maintenance and service of both AS&E and third-party explosive detection systems deployed at a site in the Middle East.

The new platforms consisting of the next generation Z Portal, Car View portal, MINI Z, as well as the Medium Energy Mobile Scanner and our Expanded Service Offerings exemplified by the NATO managed service award, all result from our long-term strategy of growing our product and service portfolio to expand the reach of our technology and ultimately grow opportunity pipeline in both new and existing markets.

In closing, last quarter we outlined four key areas of focus for the business. This continued to be critical for us as we navigate through the regional volatility and macroeconomic challenges, I referred to earlier.

Over the last year, we’ve taken action to stabilize the core by reducing operating expenses when necessary to align resources with the size and composition of our business. We continue to emphasize working capital improvements to optimize free cash flow and anticipate the free cash flow will be positive for the year with a -- with significant year-over-year improvement.

As stated in prior quarters, resolving the GSA matter remains a high priority for us. We continue to cooperate with GSA and as of November 2015 have provided all requested documents and information. At this time the schedule for completing the investigation is entirely within the government’s control and there has been no new update since last quarter.

We set a near-term goal last quarter of closing one to two large cargo orders. We are pleased to receive the large Z Portal order from an African customer in the quarter that I referred to earlier. We continue to be focused on closing the other large cargo projects in our pipeline.

We continue our focus on accelerating service growth initiatives and are making progress towards securing a large multiyear managed service contract and multi vendor service awards. The NATO award is helping us to build a solid framework for largest scale managed service opportunities, which are not impacted by the price of oil.

We remain committed to enhancing shareholder value and improving our results by managing operating costs, monitoring the global business environment, and making necessary adjustments as we continue to drive execution of our strategic initiatives.

In closing, I’d like to take this opportunity to recognize and thank Ken Galaznik for his many years of service and many contributions to AS&E. Ken is retiring at the end of March and we wish him all the best.

I’ll now turn the call back to the operator for questions.

Question-and-Answer Session

Thank you. The question-and-answer session will begin at this time. [Operator Instructions] Our first question comes from Edward Marshall from Sidoti & Company. Your line is now open.

Q - Edward Marshall

Hey guys, how are you this evening?

Charles P. Dougherty

Hello, Ed.

Edward Marshall

So you mentioned that there were some delays in shipments. I’m curious, did I hear that right? Is there -- were there certain pushouts and as you know they were scheduled for out of backlog that never -- that didn’t hit this particular quarter and were pushed out into future quarters or …?

Charles P. Dougherty

That is correct.

Edward Marshall

Did you quantify the number of orders?

Charles P. Dougherty

Well, there was one that was in excess of $5 million for ZBV’s and Portal -- and Portals during the period and there were a couple other smaller installation related delays incurred, tied to the situation we’re seeing in the Middle East primarily due to the pricing of oil that hit us during the quarter.

Ed Marshall

Okay.

Charles P. Dougherty

And these were in -- these are in backlog and are planning to ship in the -- or being solved in the future.

Ed Marshall

Okay. Not necessarily this particular quarter, the March quarter?

Charles P. Dougherty

Over the next several quarters.

Ed Marshall

I got it. And I thought there was -- there was discussion about kind of a leasing program that would -- with customers that somewhat would kind of offset the strap for cash kind of necessity that would kind of alleviate these kind of downward pressures in your business model. Is it too early to kind of see the results from that, if customers were not receptive to those?

Charles P. Dougherty

I think -- Ed, I think it’s just a little early from my perspective for those results. We’ve really just rolled that out in earnest. We are in targeted opportunities now in some of these more fiscally constrained environments that we’re dealing with mainly attributed to the price of oil. We are looking at financing alternative and these types of alternative solutions as they reassess some of these larger infrastructure programs in the affected markets. So, I think it’s just a little early to see the results.

Ed Marshall

Got it. And I just wanted to ask one question on the balance sheet with respect to the dividend and the cash balance. As I look at the cash -- and I appreciate your comments in your prepared remarks. When I look at cash that’s generated so far, year-to-date, the majority is coming from accounts receivable and deferred revenue. And with the accounts receivable being half of what is next year, I mean are you worried about the dividend law or I mean is there something kind of that you see in the pipeline that’s coming down that kind of relieves maybe some of the cash balance and so forth for the year?

Charles P. Dougherty

I mean its something Ed, we assess quarterly with the board, and obviously something we continue to look at, so, which is one of the major drivers for us having a strong emphasis on working capital that we have through our operational performance.

Ed Marshall

Is there any need to -- I mean, there is no need necessarily for cash right now. You seem to be paying a decent amount of expense to the R&D and so forth. So I mean there is no reason for you to shift decisions altogether and remove the dividend and go towards spending on new programs. But is that correct, first? Like, there is no need for that excess cash to be kind of sent back into the business.

Right. Is there any need to -- I mean, there’s no need necessarily for cash right now. I mean you seem to be paying a decent amount of expense to the R&D and so forth. So, I mean, there’s no reason for you to kind of shift decisions altogether and remove the dividend and go towards spending on new programs. But is that correct first? Like there’s no need for that excess cash to be kind of sent back into the business? I mean -- I guess, what I am asking is that, is the dividend safe?

Charles P. Dougherty

Yes, I mean, we -- and Ed, we review it quarterly. We continue to look at our capital allocation priorities. We are still very interested in targeted acquisition opportunities for the business and continue to assess those as well as part of our capital allocations and that is something we review quarterly with the board.

Ed Marshall

Got it. Okay, thanks.

Charles P. Dougherty

Okay.

Operator

Our second question comes from Steve Levenson from Stifel. Your line is now open.

Stephen Levenson

Thanks. Good afternoon, everybody.

Charles P. Dougherty

Hi, Steve.

Diane J. Basile

Hi, Steve.

Stephen Levenson

And thanks a lot Ken, and good luck, Diane. Just a question, you talked about the U.S. government adding some dollars you believe for the budget this year. But what sort of products are those and does the GSA investigation line, could that keep you from participating in bids or, in fact not blocking you from bidding?

Charles P. Dougherty

That does not block us from participating in bids or block us from bidding. As we stated on, I think in the last couple of quarter’s call since the GSA investigation was announced, we continue to actively bid and sell to all the U.S. government agencies.

Stephen Levenson

For the period again, right?

Charles P. Dougherty

No. It’s fine. I like to hear myself say it too, Steve. So, no, we don’t see that impacting us. In terms of the product set, we think obviously the activity was previously announced for the new medium energy mobile platform, is some evidence of that. We continue to gauge actively on our mobile platforms as well as portals. So, we think it’s going to impact all areas of our product offering and service offering as well.

Stephen Levenson

Okay, thanks. And you mentioned the new product Car View, I guess. Is that something where the people remain in the vehicle when you drive through, and is that permitted in all countries?

Charles P. Dougherty

Well, yes, I’ll give you one of these, it depends answer, Steve. It is similar to our currency portal platform. Some countries allow scanning of people in the vehicles. Some countries do not. So it would fall along the same lines. It is a low power solution like our currency portal platform is, and it meets the same safety requirements. So we expect that to follow the same trends we see for our existing Z portal family, its country-by-country determination based on their regulations.

Stephen Levenson

Got it, thanks. And in light of the fact that it’s a construction less product, is it priced above or below the Z portal?

Charles P. Dougherty

Yes. It is priced below the Z portal, and it’s meant to be lower cost, rapidly deployable and re-locatable type of platform. So it can go from venue-to-venue which we’re seeing a greater need for given the kind of the nature of the threats and something can go off very quickly at a border crossing on a temporary basis, but that’s what's required or potentially for special events utilization. So significantly lower cost in terms of the product cost but also in terms of the installation cost, there is a huge savings with a construction less implementation.

Stephen Levenson

Got it. Thank you. And last one, I’m sure you won't like hearing this one. But in the absence of opportunities for you to acquire any companies, you do have a valuable technology. It’s been pretty lumpy along the way. Do you see any possibility that you would combine yourselves with a larger company at some point?

Charles P. Dougherty

I can't really spec -- I can't really speculate. I mean, I think we -- I think what you said is true. We have great technology, very healthy company. And our focus is on executing on our organic initiatives, looking at these targeted acquisitions and beyond that, I really couldn’t comment on anything of that nature.

Stephen Levenson

Okay. Thanks very much.

Charles P. Dougherty

Okay, Steve.

Operator

Our third question comes from Josephine Millward from The Benchmark Company. Your line is now open.

Josephine Millward

Good afternoon, Chuck, and welcome, Diane.

Charles P. Dougherty

Hi, Josephine.

Diane J. Basile

Hi, Josephine.

Josephine Millward

Congratulations on the NATO contract. I wanted to clarify if that’s already in your backlog. The $33 million?

Charles P. Dougherty

No, that is not in your backlog. The funded piece that was $6 million, that I mentioned that’s what we booked during the quarter, that is in our backlog.

Josephine Millward

Okay. So the Z portal order from the $13 million Z portal order is also in your backlog, right? That was booked during the quarter?

Charles P. Dougherty

That is correct.

Josephine Millward

So, Chuck can you give us, given the ongoing delays, can you give us a sense of how much of your backlog do you expect to ship in the next 12 months? In the past you typically shipped, I would say 70%, 85% of your backlog within a year. You’re actually building quite a nice backlog. So can you help us think about how this is going to play out in the coming quarters?

Charles P. Dougherty

Well, there are a number of, I mean, it’s hard to activate a specific car, but there are number of in that that’s made up of multi-year service book or backlog. It’s made up of multi-year cargo projects mainly in the Middle East. But that’s something that we haven’t reported specifically, I mean, we obviously we break it out. We have seen in terms of I think the percent available to ship within the fiscal year and increase year-on-year as we go into FY ’17.

Josephine Millward

Okay.

Charles P. Dougherty

We don’t break it out, as you know more specific than that.

Josephine Millward

Okay. So did I hear you correctly that the delay -- the shipment delay you experienced during the quarter was roughly $5 million on a ZBV order?

Charles P. Dougherty

Well that was just one -- that was one order and we had a couple of installations -- site installations voice in the Middle East as well.

Josephine Millward

And can you give us a sense whether that’s moving forward in the March quarter or are we going to -- should we expect to see the same kind of delays in March?

Charles P. Dougherty

I think you’ll see it pieced out over the next probably two quarters or so, roughly. And there was a ZBV order and there were two installation related delays in the period, all in the Middle East.

Josephine Millward

So given the volatility in the region, do you expect bookings to improve in the coming quarters?

Charles P. Dougherty

We were seeing a shift in the type of bookings. So we’re seeing the large infrastructure related projects still be active but timing still uncertain. And then we see an impact, but that was being delayed. We do -- what we’re seeing now is a trend, and we started to see that this quarter. A trend where there is immediate threat needs from the ISIS or the Boko Haram threat in Africa where there is a quick churn requirement for lower cost quickly deployed solutions like the ZBV in most cases. So we expect to see more of that type of activity short-term in a few quarters, and less of the very large cargo project type activity. So, and that tends to come up very quickly, and that is, is definitely one of our advantages both in terms of the platforms we offer like the ZBV, and now these construction list portals that can be very rapidly deployed without a lot of make ready type of site work associated with the traditional portal offering. But they tend to come up very quickly and they are much more booked, shipped in nature either in quarter or in, over the period of a couple of quarters which is very different than the traditional large cargo business. So, we are seeing these types of activities emerge throughout the Middle East and Africa right now.

Josephine Millward

Do you think the large cargo projects have been cancelled or they have just been pushed to the right?

Charles P. Dougherty

No, we think they have been pushed to the right.

Josephine Millward

Can you give us the number of ZBVs shipped and booked during the quarter?

Charles P. Dougherty

I don’t know if I have that, Josephine off the top of my head, but I can -- we can try to get that.

Josephine Millward

Okay. Sure. I can get that after the call. Last question, can you give us any breakeven with the new cost reduction initiative in terms of annual run rate?

Charles P. Dougherty

No. But what Diane, did report was that the OpEx, the annualized run rate going out for the quarter or growing out of fiscal year, you will be at $42 million, OpEx run rate -- total OpEx.

Josephine Millward

Okay, great. Thank you.

Charles P. Dougherty

Thanks, Josephine.

Operator

There are no further questions. Ladies and gentlemen, if you wish to access the replay for this call, you may do so by dialing 1-855-859-2056 for U.S. callers, and +1-404-537-3406 for international callers with the conference identification number is 35811274. A replay and presentation will also be available through the investor relation section of company’s website at ir.as-e.com. This concludes our conference for today. Thank you all for participating and have a nice day. All parties may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!