Nova Measuring Instruments' (NVMI) CEO Eitan Oppenhaim on Q4 2015 Results - Earnings Call Transcript

| About: Nova Measuring (NVMI)

Nova Measuring Instruments Ltd (NASDAQ:NVMI)

Q4 2015 Earnings Conference Call

February 17, 2016, 16:30 ET

Executives

Miri Segal - IR

Eitan Oppenhaim - President & CEO

Dror David - CFO

Analysts

Edwin Mok - Needham & Company

Patrick Ho - Stifel Nicolaus

Keith Maher - Singular Research

Operator

Welcome to the Nova Measuring Instruments Limited Fourth Quarter and Full Year 2015 Results Conference Call. [Operator Instructions].Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Miri Segal, Investor Relations. Please go ahead, ma’am.

Miri Segal

Thank you, operator and good day to everybody. I would like to welcome all of you to Nova Measuring Instruments 2015 Fourth Quarter Financial Results Conference Call and Presentation. With us on the line today are Mr. Eitan Oppenhaim, President and CEO and Mr. Dror David, CFO.

I would like to draw your attention to the presentation that accompanies today’s call. The presentation can be accessed and downloaded from the link on Nova’s website at www.novameasuring.com in the Investor Relations section. Before we begin, may I remind our listeners that certain information provided on this call may contain forward-looking statements and the Safe Harbor statement outlined in today’s earnings release also pertains to this call. If you have not received the copy of the release, please view it in the Investor Relations or News section of the company’s website.

In addition the company has prepared a presentation for today's call. It is available in the investor relations section of Nova's website and now would be a good time to download this presentation.

Eitan will begin the call with a business update, followed by Dror with an overview of the financials. We will then open the call for the question and answer session.

I will now hand over the call to Mr. Eitan Oppenhaim, Nova’s President and CEO. Eitan, please go ahead.

Eitan Oppenhaim

Let me add my welcome to everyone. And thank you for joining our two 2015 fourth quarter and full year 2015 financial results conference call. Today I'm excited to discuss the record year Nova posted in 2015 which demonstrates once again our ability to execute well against our strategic initiatives. I would start the call today by speaking briefly to our December quarter results and then spend some time with our 2015 highlights and their relevance to our continuous growth in the next years to come. I will conclude my part with the guidance for the first quarter of 2016.

Following my commentary, Dror will review the quarterly financial results in details. For those who are following the presentation please proceed to slide number four. This was another strong quarter for Nova and a successful conclusion to our third consecutive record year. Despite the current market volatility we continue to deliver solid financial results with revenues and income both the high end of our guidance. For the December quarter we reported revenue of 40 million the high end of our guidance of 37 million to 41 million. We generated non-GAAP net income of 5.3 million or $0.19 per diluted share which is the at the high end of our profitability guidance of $0.11 to $0.20 per diluted share.

With these results we have delivered by now 26 consecutive quarters of profitability. Our market positioning is resonating with customers with our comprehensive suite of solutions is helping us winning meaningful business in a highly competitive market and set up a part with a unique and differentiated portfolio. As recently announced our growing market position is evident by the selection of the world's leading foundry to deliver optical and X-Ray Metrology solutions for multiple process steps for the customers most advanced technology notes. This selection covers metrology solutions for process control in production at 10 nanometer and 7 nanometer technology nodes and metrology solutions for R&D process development in 5 nanometer. This award is expected to contribute significant revenue over the next two years while the customer progress with its initial phases of ramp up. Delivery of these tools schools started already during the fourth quarter of the year. This major win solidify once again our position in the foundry segment and amplifies our capabilities to extend our technology even further to the most advanced sub-10 nanometer nodes.

Our position in the foundry space was extended even further in this quarter with diversified revenues from a wider base of foundry customers, to a variety of deliveries to mature nodes as well. During the quarter we also continued with our goal to diversify our customer base which became a major achievement in 2015. During the fourth quarter four customers contributed more than 10% each to our revenue mix and for the full year we had five customers contributing 10% or more each compared to only two in 2014. This customer diversification ties neatly to our broader technology offerings as we have a larger suite of innovative solutions to offer helping us capture more opportunities in the market and win more competitive evaluations. Finally, this quarter demonstrates once again the operational leverage that we have built into our long term financial model. Our consistent profitability and gross margin stability despite the current market conditions demonstrates that we can execute on our fundamental plans to grow while maintaining a solid profitable financial model that matches the industry cycle.

Turning now to 2015 achievements we are proud that we concluded our third consecutive record breaking year for the full year we delivered revenues of 148.5 million and non-GAAP net income of 21 million or $0.76 per share. These results represent 23% growth in revenues from 2014 and 11% compound annual growth over the last five years outperforming the [indiscernible] equipment spending growth at the same period. The yearly financial results are an outcome of our ability to maintain a controlled financial model that is embedded operational efficiency as well as growing flexibility that assist us in dealing with increased fluctuation in the market. Although we were experiencing peak output from the factory as a result of growing revenues we still kept investing aggressively in shortening lead times and improving operational flexibility even further.

Our efforts yielded a solid model with improved gross margins of 55% which represent improvement of 145 basis points compared to 2014 and can actually accommodate growing investment in research and development while demonstrating solid profitability. Our ability to keep investing in technological innovation yet generate profits and increase cash position to more than 97 million will support our plans to continue our organic and inorganic growth. A key part of our long term strategy has been increased diversification. At the beginning of 2015 we set our goals to diversify both our revenue mix, customer base and our technology and product offerings. Analyzing our annual performance we can proudly say that we progressed well with all of these initiatives.

By the end of the year our revenue mix was much more balanced than ever before including growing levels of software and service revenues which drove better margins and profitability. Service revenues accounted for 37 million in the year representing an increase of 31% year over year. Our initiative to leverage our modeling and software core capabilities also materialized strongly this year with 104% growth in revenue contribution. These revenues include primarily new software products we introduced mainly modeling hybrid metrology and fleet management solutions.

On the customer front, we substantially diversified our customer base in 2015 over both the foundry and memory segment with five customers including two memory customers contributing more than 10% each to our business. This achievement supported our plans to broaden our revenue base with growing share of memory customers while keeping our leading position in foundry. For year 2015 the memory share from the overall revenue represent growth from just 15% in 2014 to 30% in 2015. In 2015 we also accomplished a major milestone in our inorganic growth plans with acquisition of ReVera, which was the first significant M&A activity for Nova on this scale. ReVera is a key contributor to our technology diversification that allows us to offer a unique and differentiated technology portfolio. I should mention that the ReVera acquisition which is now fully integrated has performed exactly as we expected both on the P&L contributions and technology synergy perspective.

Our expectation for contribution of 25 million to 30 million in annual sales was accurate and resulting is expending our addressable market and effectively compete for additional business while expanding our customer's exposure. With our wider offerings that is comprised of all 3D and X-ray technologies we now cover a variety of unique applications that are increasing our footprint with leading customers. Due to the emerging requirements to perform in-line metrology on structure the synergy between the technology allows us to combine XPS data with information derived from our OCD tools.

This hybrid combination which utilizes our own unique modeling algorithms enables process controls on structures and provide our customers with new more capable process control metric. Despite investment in acquiring complementary technology we also invested in spending our product innovations which resulted with advance OCD road map that covers now more customized market requirements across multiple technology and knowledge. As we progress through 2015 we introduce several new integrated standalone models that can meet more tightly our customers' requirements and in return expand our market opportunity in logic, DRAM, flash and foundry.

The new set of tools are already installed with several customers and aim is creating technology edge for the most complex transition embedded in the segments. More and more our progress is embraced by our customers as evidenced by the growing number of partnerships, joint development programs. One of our main initiative is to tighten the technology cooperation with other parties in order to prepare and invest together in overcoming technology obstacles arising from the complex transition our market is experiencing.

Our programs range from customers to wafer fabrication process tools providers, other and non-known metrology vendors and research institutes like [indiscernible]. The results of such an investment can be seen largely in the upcoming SPIE Conference in San Francisco with seven joint publications demonstrating the innovation breakthrough we will bring to the market. Finally we are encouraged from this year results which represents fundamental key changes in our business plans and growth trajectory. We believe that 2015 achievements will solidify our position and help us broadening both our available and serve markets for the long term goal of 200 million in revenue and $1 in non-GAAP diluted EPS.

With this encouraging accomplishments we are well positioned to capture more opportunities in the market setting the stage for our continuous growth. Our main goal in 2016 is to continue executing well our established strategic plan. The plan main elements are as follows. Keep diversifying our growth with both organic and inorganic contributions, broadening the spread of the customer base and expanding our market exposure, deliver differentiated product portfolio and technology that includes hardware and software solutions, build customer technology partnership from early R&D stages and finally maintain a resilient and flexible financial model that can yield operating margin of more than 18%.

With that I would like to share with you our guidance for the first quarter of 2016. Revenues will be in the range of 33 million to 37 million. Diluted EPS on a GAAP basis will be in the range of $0.06 to $0.11 per share and on an non-GAAP basis diluted EPS will be at the range of $0.10 to $0.17 per share.

Now let me hand over the call to Dror to review our financial results in detail. Dror?

Dror David

Thanks, Eitan. Good day everyone. In my following prepared remarks I would refer mainly to non-GAAP results unless otherwise specifically mentioned. You can find a detailed reconciliation between GAAP and non-GAAP results fair item at the end of the quarterly press release.

Total revenues in the third quarter of 2015 were $40 million at the high end of our quarterly guidance similar to the third quarter of year and up 55% over the fourth quarter of 2014. Product revenues distribution in the quarter was 80% from the foundry segment and 20% from the memory segment. During the quarter, the company had four 10% customers. Of the company’s overall product revenues, PSMC accounted for 33%, Samsung and Applied Materials each accounted for 13% and UMC accounted for 12%.

Blended gross margins in the quarter came in at 55% at the high end of the company's target model of 53% to 55%. For the first quarter of 2015, the company guidance assumes non-GAAP gross margins to come of approximately 53%. Operating expenses in the quarter came in at $16.3 million similar to the previous quarter. For the first quarter of 2016 the company guidance assumes non-GAAP operating expenses of 14.5 million to 15 million. This level is lower than previous quarters mainly due to the timing of net R&D expenditures and prototype intake.

The company's normalized quarterly operating expenses level is expected to be approximately 15.5 million in the rest 2016. This level is again lower than the expenses run rate in the second half of 2015 and reflects some recent efficiency measures which were taken to better streamline the company operations as part of the post-merger integration of ReVera acquisition. Amortization of intangibles in 2016 which has impact on GAAP profitability is expected to be 2.5 million on an annual basis in 2016. Operating margins in the quarter on a non-GAAP basis came in at 14%, tax expenses in the fourth quarter on a non-GAAP basis was 0.7 million.

Non-GAAP net income in the quarter was 5.3 million or $0.19 per diluted share at the high end of the company quarterly guidance. The company generated 12.7 in cash flow from operating activities in the fourth quarter of 2015.

Moving into key balance sheet metrics, inventory turns and DSOs remain stable in the quarter. in the fourth quarter of 2015 we increased our capital expenditures to 2.2 million as we continue to expand our global facilities and infrastructure. Annually the company presented record revenues of 148.5 million up 23% year over year. On an annual basis 70% of 2015 product revenues came from the foundry segment. The company significantly increased its exposure to the memory segment in 2015 and memory revenues accounted for 30% of the revenues in 2015 relative to 15% in 2014. In 2015 the company significantly improved its customer distribution. On an absolute dollar of value the company revenues from its larger customer PSMC increased in 2015. On a percentage basis PSMC revenues as percent of product revenues decreased from 39% in 2014 to 33% in 2015. In parallel the company added three new 10% customers in 2015.

Samsung accounted for 15% of annual product revenues, UMC accounted for 12% of product revenues and [indiscernible] accounted for 10% of product revenues. Annual blended gross margins on a non-GAAP basis came in a 55% for the year at the high end of our target model and up 2% over the previous year. Tax expenses in 2015 on a non-GAAP basis were 1.6 million. This low level of tax expenses is attributed to tax incentives in Israel and to net operating losses which were acquired with ReVera and enabled us to reduce the tax rate on U.S. based profits.

For 2016 on an annual basis we expect non-GAAP tax rate to be approximately 10% and GAAP tax rate to be approximately 17%. Non-GAAP earnings per diluted share in 2015 were $0.76 up from $0.69 in 2014. We’re happy to announce that ReVera acquisition which was completed in April 2015 was already accretive on a non-GAAP basis to the company's earnings per share in 2015 and we expected to continue to be accretive to non-GAAP earnings per share in 2016.

During 2015 the company generated 25.8 million in cash flow from operating activities and we finished 2015 with 98 million in cash reserves which will enable the company to act upon business opportunities in the future.

Finally before concluding my prepared remarks please be aware that as part of the annual audit some changes have been made to the purchase price allocation related to ReVera acquisition in the balance sheet items of deferred tax assets and goodwill. These changes have already been reflected in the company balance sheet as of December 31, 2015.

With that I will move the call back to Eitan.

Eitan Oppenhaim

Thank you, Dror. With that we will be pleased take your questions.

Question-and-Answer Session

Operator

[Operator Instructions]. We will go first to Edwin Mok with Needham & Company. Your line is open.

Edwin Mok

So first just two question on the financials. I think you mentioned that your gross margin is 53% this quarter and last quarter I think you guys tried for similar level and you end up doing 55%, is this just last quarter you have reached strong stock results that helped the gross margin, what happened last quarter and why gross margin coming in at 53% this quarter.

Dror David

So for the first quarter yes the reason is softer revenues. As you know softer revenues has significantly increased in recent quarters and we've seen another pick up in the fourth quarter. And for the first quarter of the year the main reason for the decrease is different product distribution and also the reduction in revenues which slightly reduces the gross margin in the quarter.

Edwin Mok

And then on the OpEx side you mentioned that you have taken some steps to integrate ReVera and that you get some savings all done, that gets you to 16.5 million. That kind of seems like a different strategy you guys are taking on managing [indiscernible] historically you guys pay aggressive in terms R&D. Can you explain what's your rationale behind that? And is it just redundancy that you guys are eliminating or you guys found ways to improve on the expense side and then if I can get some color on that and is that kind of the 15.5 million the new level that you expect to see sustainable even as you grow your revenue?

Dror David

So first of all yes this is the level that we expect for the rest of 2016 around 15.5 million a quarter. I think that in terms of how we streamline the operations you know that we already had a U.S. based activity actually at the same location we're based in the U.S. and also some global operations which are at the same location. So in general - now this we have almost concluded the integration between both companies and sales channels and so forth. We find ways to better streamline both headcount and expenses and offices which save us some money on the operating expenses. But I can say that in general we do not expect R&D expenses to reduce significantly between 2015 and 2016.

Edwin Mok

And then I guess two question on the product side, first is I think historically you guys have [indiscernible] you’ve done well in terms of broadening but still I think foundries are very key part of the market. Some of your peers has talked about potentially being a stronger second half of this year and in terms of FinFET related foundry investment, can you kind of describe how I understand different companies sometimes position differentially and you guys have made some announcement on 10 nanometer. Maybe just help us to understand how if your customer decide to aggressively invest in 10 nanometer how will you see that, are you guys more front end loaded or back end loaded on those investment and maybe talk about your exposure there on 10 nanometer investment [indiscernible].

Eitan Oppenhaim

So when we’re looking right now on the foundry market in 2016 we see multiple incremental expense that is coming from '14 or '16 up to 28 or even 40 nanometer technology nodes. So those are not mega extension but still with incremental extension and on those nodes including some of them in the increased interest expanding in China. While those ones are still incremental we are exposed to the mega event in PSMC which is if this is the 10 nanometer pilot lines and ramp. If we’re is looking right now from timing perspective the pilot line probably will run fully by the end of the second quarter with ramp up starting somewhere quarter after, somewhere at the middle or the end of the third quarter. According to the magnitude of the ramp which is not yet declared and if all our plans will be as we planned it the second half will be higher than the first half because of the 10 nanometer ramp up. This is how we see the foundry redistribution.

Edwin Mok

One of your competitors talked about potential share gain specially on this large customer, but in foundry space in general, can you talk about your positioning in the foundry space? Is there any change that you see in the marketplace?

Eitan Oppenhaim

I prefer to talk on our strength than compare competition on this call but I can say that our foundry ponder position the last few years are actually becoming stronger from year to year, I think that in 2015 we will see our position expanding not only from integrated in [indiscernible] and some stand alone in part of the steps but also to a strong position in edge and despite that we see also ReVera coming in both by themselves to an XPS solutions as well as to synergize solutions for both XPS and OCD. So if you’re looking right now in the position on foundry I can tell you that for markets for perspective integrated metrology over the whole foundry it will be more that 90% of spending in foundry went to Nova. And in standalone we increased our position in edge in a large range as well. So our position in foundry is actually becoming stronger in 2015.

Edwin Mok

And then lastly, some of your peers [indiscernible] bullish in 3D NAND investment, can you help us understand your exposure to 3D NAND investment and how that is [indiscernible] versus planar NAND.

Eitan Oppenhaim

I don’t think there is differentiation between planar and [indiscernible] regarding the exposure and the market share. If you know the company is doing enrolled into the memory but we are more exposed into foundries. So we move around 80% foundry to 70% foundry and we grew in the memory from 15% to 20% to 30%. So we are doing inward inside those memories.

Now if you're looking right now on all the memory customers all of them having exposure to Nova, some of them has more integrated exposure and some of them has some standalone exposure. Historically we penetrate those memory customers with integrated metrology. So definitely if we’re looking right now on the opportunities going ahead most of the opportunities in the memory right away DRAM and V-NAND are coming from the standalone. I can mention again because this issue of the integrated came in multiple events actually more than 90% of the spending or the investment in integrated metrology in all the DRAM providers in 2015 went into Nova.

Okay, so we actually strengthen our position and integrated as well in the memory besides the in-road we’re doing with standalone.

Operator

Our next question will come from Patrick Ho with Stifel Nicolaus. Please go ahead.

Patrick Ho

Eitan, maybe now that you almost have a ReVera in for a full year. Can you detail some of the I guess emerging application applications that you're finding x-ray metrology in being applicable for - where are some of the new applications and growth opportunities you see with x-ray metrology as you head into 2016.

Eitan Oppenhaim

If the broader question and looking on the organic growth the company can have in 2016 we now look on two ways to grow, one is in the OCD that actually have many opportunities to grow in 2016 and we also have ReVera as itself with the XPS and XRF [ph] to grow in the materials and thickness application. If we’re looking right now on ReVera growth most of the applications that we see right now it's with to penetrative and further it's more on the thickness. If you're looking right now on thin film application that you need to speed ultra-thin layers actually ReVera is becoming the only solution to solve it. So this is one area that the XPS can grow.

Now if we're looking at combining those two product portfolio and looking right now on synergize organic growth and without getting into competitive applications because I don't want to talk about it too much there are many applications in the gate area where the combination of parameters from ReVera that measure the thickness and the materials combine into the model of the OCD that measure geometrical parameters actually give more accurate results that the customer saw before from optical metrology solution. And actually those hybrid solution which doesn't necessarily need to combine hardware together actually are installed already with two customers and give the benefit as I just mentioned.

Patrick Ho

And maybe as a follow up question as it relates to ReVera and the strong results you posted in your software revenues. You know how is the integration of your software product portfolio with ReVera's products being growing. Are you able to leverage that yet or is that something that we could see over the next couple of years where you will benefit from that transition?

Eitan Oppenhaim

The answer for the short term and the answer for the long term, the answer for the short term the whole hybrid solution that we see right now in the customers are done on the unique algorithms of Nova. The ability to take parameter from one system and actually combine into another system model it's actually something that we invented and this is one of the software product that we are selling part of our software revenue coming from hybrid solution and hybrid solution is algorithm of Nova. So once we do that hybridization with XPS systems we use our own product, our own software modeling product in order to this hybrid. So this is the short term. So the short term shows already results on the synergy.

On the long term and I say this few time in my strategic presentation. We see a past [ph] where you can see actually modeling done on x-ray and this is something that we're looking through, this is something that probably will have benefit to the industry. It's too soon to say on each application but it is something that we are heavily investing in 2016 as well.

Patrick Ho

And final question from me, you gave some color about the foundry and the 3D NAND RAMS from an industry basis this year. Can you just give your perspective on the DRAM industry spending trends and again if you see any potential pick up in the second half of the year as we head into 2017?

Eitan Oppenhaim

So looking right now on DRAM following the strong years that the DRAM had before, we do see that there is - the 2016 will be a reduced year in spending in DRAM. I think the customer right now are focusing on making the 20 or 2x device much more stable and we start to see some conversion to do one 1x as well. But the overall DRAM spending will be actually reduced from 2015. I don't have the visibility right now to the second half but I think the DRAM at least from our perspective DRAM will not will be a growth engine this year.

Operator

Our next question will come from Keith Maher with Singular Research. Please go ahead.

Keith Maher

I'm just wondering if you could maybe talk a bit about, you referenced this in the prepared remarks just a potential for making acquisitions, if you could talk about what kinds of technologies or companies you’re looking for and things like the size of the company and if they need to be profitable or not and just valuation parameters, just any color you can provide there it would be helpful.

Dror David

So Keith, when we're looking right now on a target list or looking right now on M&A activity and acquisition potential, we’re looking on fuel. When we set our strategic plan in place we said that firstly we will acquire a technology that will complement our portfolio so we can diversify the OCD technology to something else and this is what's done with ReVera. When you’re looking right now in the next year to come and if we want to come closer to the 200 million very soon we need to invest the time and effort in order to do a larger acquisition.

And when we're looking right now on potential targets we're looking on companies that can actually bring the same model as Nova, as Nova bringing to the table if you're looking right now on ReVera contribution to the P&L actually we don't see almost any impact on the P&L and we're looking on companies that are working on the same model. The same model of the profitability, the same of gross margin but those companies has to have the potential to grow even further. So this is overall frame of what we're looking at.

Keith Maher

I don’t know if you can comment but I mean how far along might you be looking at potential candidates and what are the odds you would actually make an acquisition this year?

Dror David

Keith, this is the same question came at the beginning of last year and we prove that we can do that with ReVera, I think that there are companies in the market. I think that once we widen the space a bit beyond the front ends. I think that there are target at least we can look at and once we also increase the threshold to be a larger acquisition and I think that looking on our financial situation it should not be an issue. I think that we can find something like that.

Keith Maher

Was there any reason you didn’t repurchase shares this quarter, this past quarter?

Dror David

Well actually during the 2015 we executed something like I think around 1/3rd of the overall program of 12 million. Actually we have executed totally 11 million from the 12 million program and we do plan to execute the rest of that during the first and maybe the second quarter of the year.

Keith Maher

Okay. The Board I assume is going to revisit, any program after that?

Dror David

Yes once we conclude this program we will need to think about the next steps definitely.

Keith Maher

Okay. The question of that shift, assets from goodwill to deferred taxes, could you talk about, are there any financial implications of that? I mean what does that means?

Dror David

Yes. So the only meaning in terms of how the financials are presented is allocation between the deferred tax assets into goodwill. What it means it means that at the date of the acquisition we expected to be able to use these deferred tax assets at a reasonable timeline and based on our annual audit and the final tax planning for the next year it resulted in a situation where we believe that some of these tax assets will not be able to be utilized in the near future and therefore they were reallocated to - these tax assets were relocated to goodwill. This will not have any impact on the profitability of the company looking forward.

Keith Maher

And just maybe one final question, you shared the chart of customer concentration and obviously for 2014 for actually both chart that you’re showing 10% plus customers, would you be able to share with us what percentage of sales Samsung [indiscernible] represented in 2014?

Dror David

Yes well each one of them was less than 10%. I can say that practically each of these customers at least doubled its revenues in 2015 relative to 2014.

Operator

And ladies and gentlemen that does conclude our question and answer session. I would now like to turn the call back to management for any closing comments.

Eitan Oppenhaim

Thank you, operator. I would like to thank you everyone for joining our 2015 fourth quarter and the full year financial results call today. Thank you very much and have a good day.

Operator

Ladies and gentlemen that does conclude today's conference. Thank you for your participation.

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!