Micronet Enertec Technologies' (MICT) CEO David Lucatz on Q4 2015 Results - Earnings Call Transcript

| About: Micronet Enertec (MICT)

Micronet Enertec Technologies, Inc. (NASDAQ:MICT)

Q4 2015 Results Earnings Conference Call

April 14, 2016 09:00 AM ET

Executives

John Nesbett - IR, IMS

David Lucatz - Chairman, President and CEO

Tali Dinar - CFO, Enertec Electronic Ltd.

Shai Lustgarten - CEO, Micronet Limited

Analysts

Hamed Khorsand - BWS Financial

Mike Vermut - Newland Capital

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Micronet Enertec Fourth Quarter and Full Year 2015 Results Conference Call. All participants are at present in listen-only mode. Following management’s formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded.

I will now turn the call over to John Nesbett of IMS. John, please go ahead.

John Nesbett

Good morning. And thank you for calling in to review Micronet Enertec’s fourth quarter 2015 results. Management will provide an overview of the results followed by a question-and-answer session.

Importantly, there is a slide presentation, which management will use during their overview. This presentation can be found in the Investor Relations section of the Company website under Events and Presentations. You may also access a PDF copy of the presentation by clicking the link in the Company’s press release regarding the financial results issued this morning and then clicking a second link labeled April 14th Presentation. Callers accessing the PDF copy of the presentation will need to manually scroll through the slides, as management goes through the presentation.

I will now take a brief moment to read the Safe Harbor statement. During the course of this call, management will make express or implied forward-looking statements within the Private Securities Litigation Reform Act of 1995 and other U.S. federal securities laws. These forward-looking statements include but are not limited to the statements regarding our future growth in revenues, increased volume and demand in markets in which we operate, the roll-out of our new All-In-One wireless platforms, our ability to penetrate the local fleet vertical market, our ability to diversify and expand our customer base, continue demand in our Defense and Aerospace business, ability to meet the needs of our existing customers, market interest and acceptance of our products, our future revenues and profitability, the introduction of new products and our ability to provide our solution to different applications, the timing of pending U.S. federal rule-making, its implementation and the impact of the proposed rules on our business and our future, New York Taxi and Limousine Commission’s Vision Zero Vehicle Safety Technology Pilot program and its potential, our new Mobile Command & Control Centers and their ability to drive the future growth of our A&D business, the competitive advantage of our A317 product and the status of our Carrier Certification including the one with AT&T.

Much forward-looking statements and their implications involve known and unknown risks, uncertainties and other factors, which may cause actual results and performance to differ materially from those projected. Forward-looking statements contained in this presentation are subject to other risks and uncertainties, including those discussed in Risk Factors section and elsewhere in the Company’s annual report on Form 10-K for the year ended December 31, 2015, filed with the SEC.

Please note the date of this conference call is April 14, 2016, and any forward-looking statements that management makes today are based on assumptions that are reasonable as of the date. Except as otherwise required by the law, the Company is under no obligation to and expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

During this call, in addition to the GAAP financial measures, management will discuss non-GAAP financial measures as defined by SEC Reg. G, including non-GAAP net loss income. These non-GAAP measures exclude both share-based compensation expenses, the amortization of intangible assets, as well as additional items. These non-GAAP measures are not intended to be considered in isolation from, a substitute for or superior to our GAAP results, and we encourage you to consider all measures when analyzing Micronet Enertec’s performance.

A reconciliation of these non-GAAP measures to the applicable GAAP measures are included in today’s press release regarding our quarterly results and it can also be found in the Investor Relations section of our website at www. http://micronet-enertec.com/IRcompany. The slides containing the first quarter reconciliation can also be found in the Investor Relations section of the website.

On the call this morning, we have David Lucatz, Chairman, President and CEO; Shai Lustgarten, CEO of Micronet Limited.

And again, as a reminder, management will refer to a slide presentation that can be accessed via the Investor Relations section of the site under the link Press Releases.

With that, I would now like to turn the call over to David who will begin the presentation on slide four. Please go ahead, David.

David Lucatz

Thank you, John, and good morning, everyone. Q4 marked a milestone for us with our achievement of net profitability. Throughout 2015, we streamlined our efforts by consolidating Micronet’s operations in Salt Lake City, which resulted in cost saving and increasing efficiencies and profitability.

Gross margin was 39% as compared to 31% in the fourth quarter of last year. And we are pleased to have recorded net income of $89,000 or $0.02 per basic and diluted share, as compared to a net loss of $28,000 in the fourth quarter of last year.

It is important to note that we achieved profitability despite lower than expected sequential revenue growth. Our 18% revenue growth in the fourth quarter was negatively impacted by delays in the ship of certain MRM components, which in turn delayed our production shipping of final product. We expect the delayed product to ship over the next few quarters. We believe that MRM market represents a strategic opportunity as our state-of-the-art technology can meet the needs of the wide variety of MRM customers. Our backlog is up substantially from last year and also up from the third quarter. We are seeking considerable new opportunities for our products related to the recent federal ELD mandate, requiring Electronic Logging Devices for truck and bus fleet.

We just announced a $2 million order, and I’ll provide specific details on that order later in the call. We remain focused on diversifying our customer base and have been encouraged by the increasing interest from new customers.

I’m moving to slide number five.

On slide five, we find the ELD mandate opportunities. This mandate represents important growth potential for our Company as it requires fleet operator and private truck owners to use ELD rather than paper log books to log driver hours and other safety data. In early December 2015, the U.S. Department of Transportation, Federal Motor Carrier Safety Administration, or FMCSA, issued its final rule and implementation schedule for the ELD mandate. Full enforcement of the regulation will begin in 2017 and fleet operators have already begun the compliance efforts. With full implementation of this rule, industry analysts anticipate that the number of USD equipped trucks will increase for 1 million today to approximately 2.7 million in 2017. We are working with our customers as they prepare for the law and pending enforcement and we believe that our comprehensive solutions are among the competitive in the market.

I’m moving to slide number six.

Following the close of the quarter, we announced that we have received a $2 million order for a major telematics company for our A-317 rugged Android tablet for use as part of this solution for local and long haul fleet ELD compliance. We developed solution that enables the tablet to be removed [ph] from the cab for DOT, Department of Transportation review, if necessary. That capability in addition to its processing power makes our durable, reliable A-317 an effective device for ELD compliance and we look forward to capitalize on new opportunities as the marketplace begins to see greater sense of urgency to put ELD solution in place.

In slide number seven, another development, I’d like to provide an update on our February announcement of the definitive agreement to acquire the telematics business of Novatel Wireless. After further due diligence, the asset purchase agreement was terminated. Most important is that the terms of any acquisition we make are in the best interest of our shareholders. We continue to focus on the effort to drive organic revenue growth and profit going forward while exploring additional potential acquisitions.

On slide number eight, we highlight the trends that are beneficial to our business. As I discussed previously, a local fleet vertical which represents the majority our MRM revenue is expected to grow significantly over the next several years. We strongly believe that we have created a unique and all inclusive solution that will benefit from this growth and legislative change. In our A&D aerospace/defense business, the demand for our critical missile defense systems continue to provide a consistent stream of business that remain a key component of our core offering. Hence, we are positioned well to drive considerable growth going forward and have demonstrated an ability to drive efficiency that should result in enhanced profitability.

Slide number nine, the next slide illustrated our revenue breakdown for the quarter. As I mentioned at the beginning of the call, revenue went down compared to the fourth -- revenue of last year, increased 18% on a sequential basis. Given the market interest we’re seeking, we’re optimistic about the potential opportunities for our A-317 product, since it’s complied with the ELD mandate. The aerospace and defense segment came in at $3.3 million, an 8% decrease compared to last year fourth quarter but an 83% increase sequentially as compared to the third quarter of 215. We continue to see solid demand from our customers taking missile aerospace solutions.

On slide number 10, we illustrate the benefits of our next generation product line. The A-317 is a breakthrough product for us in the industry. And during the quarter, we saw very strong interest from the marketplace. The new product is rugged and sellable [ph] and it transforms our offering into a wholly connected solution offering capabilities such as 4G, LTE, Bluetooth and WiFi applications to provide total connectivity. Our tablet packages driving interface operational and connectivity features and the Android operation system into one streamline cost effective system for fleet management and several other mobile logistic enterprise needs. In our view, it is one of the most competitive solutions in the marketplace. And our initial orders and customer feedback reaffirm the effectiveness and potential growth this product represents to us.

Slide number 11 gives you an overview of the rollout of our new full [ph] connectivity product line. R&D for the new product line is complete, although we continue to refine and keep the technology as current as possible. We are currently in the next phase of carrier certification. It is important for this product launch as we are certified with the wireless carriers. As we reported last year, the Verizon certification is complete. AT&T is currently evaluating the product and we hope to achieve certification soon. In addition, we are in discussion with other carriers to move along certification. We have been marketing our new product through existing and new customers and backlog grew to $12.4 million at the end of the fourth quarter. As of February, we see continued growth of the backlog and today the backlog is approximately around $15 million.

I will now turn the call over to Tali, CFO for the financial review.

Tali Dinar

Thank you, David. Revenue in the fourth quarter decreased compared to the same quarter last year and increased 18% compared to the third quarter of 2015. Gross margin was 39% as compared to 31%. As David mentioned, overall revenue was impacted by the delayed delivery of certain MRM components and by the timing of receipts of orders in our aerospace and defense business.

R&D was down for the quarter, partly as a result of efficiency steps and partly as a consequence of completing various development stages of our new All-In-One platform. We expect the continued decline in R&D expenses as percentage of sales and sales growth. Sales and marketing expenses and general and administrative expenses decreased on a dollar basis as compared to the same quarter last year. Net income attributed to Micronet Enertec in the fourth quarter was $89,000 or $0.02 dollar per basic and diluted share as compared to a net loss of $28,000 in the fourth quarter last year.

Now turning to the year end results, revenues decreased to $23.6 million compared to $34.2 million in 2014. Lower sales reflect the transition stage between the new product introduction and rollout as well as operational challenges in the fourth quarter. Gross margin improved to 31% as compared to 29% in 2014. R&D expenses came down on a dollar basis while G&A expenses decreased on a dollar basis but increased as a percentage of sales.

On slide 13, you will see that on a non-GAAP basis net income for the fourth quarter was $313,000 or $0.05 per basic and diluted share. For 2015, we recorded $1.5 million non-GAAP loss as compared to a loss of $542,000 in prior year.

Turning to slide 14, you can see that our balance sheet remains strong with $12.1 million in cash and cash equivalents, $13.3 million working capital, and $17.5 million in shareholders’ equity. We feel confident in the health of our balance sheet going forward.

I will now turn the call back over to the operator.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question is from Katie Kordash [ph] of Northwest Management. Please go ahead.

Unidentified Analyst

Hi, good morning. Would you be able to elaborate in a bit more detail on the composition of the deal pipeline?

David Lucatz

Could you repeat the question, composition of what?

Unidentified Analyst

Of the deal pipeline?

David Lucatz

Okay. Are you referring to the pipeline or the backlog?

Unidentified Analyst

You could elaborate on both.

David Lucatz

Okay. Well, thank you. First, in addition to what I mentioned about the strong and the trend of the backlog which grew from $12 million to around $15 million today, we see also a strong trend in the pipeline, meaning that both divisions, in the aerospace and in MRM, we see more and more potential customers. And as a matter of fact, on the MRM side, there are few major customers who are right now -- we have a dialogue here with us on some major deals. Again nothing in our hand at the moment but certainly we see a trend of more and more potential customer. And we believe that it’s attributed to one, the fact that we have a greater technology and products; and two, effect of the ELD mandate.

Operator

The next question is from Hamed Khorsand of BWS Financial. Please go ahead.

Hamed Khorsand

Hi, good morning. Could you elaborate a little bit about your component shortfall and how that you are able sourcing up components for first quarter to meet your bullish commentary about the backlog and so forth and just talk about the bottom there?

David Lucatz

Shai, would you like to address it?

Shai Lustgarten

Sure. So, we had several basically components that in Q4 were -- the deals came in, that’s a good news but the problem was that some components that are significant to the assembly of the products and to get it ready for testing and everything, we’ve received them with some defects; we couldn’t release it to our customers. What we’ve done in 2016 aside from the technology also, we’ve also done some new faces to the product, which was also something that’s received very well by the customers. That means that we went into the manufacturing with our suppliers of new molds in China and we needed to do immediate fixing to the molds. Our suppliers needed to fix the molds because the injection, the plastic injection came out were not very -- not in the quality that we will release the product to the customer. That’s basically the main reason.

Hamed Khorsand

Okay. So, I guess all the problems were solved for the first quarter?

Shai Lustgarten

Yes, sir; not only that, we also had established at the same time, additional suppliers to better serve and were working with them on forecasting to make sure that they have enough components on the shelf, should we come to this situation again.

Hamed Khorsand

So, given that we are on April 14th, why isn’t management comfortable not to give out what the first quarter looks like?

David Lucatz

For several reasons, first of all, it’s not our policy; secondly, we don’t have a final number there, it still needs to be audited. And we do not disclose information which apparently will be changed. So, we are definitely subject to get audit first before we give any number.

Hamed Khorsand

Okay. And my last question is, until this call, I didn’t see any 8-Ks or disclosures that you walked away from the acquisition. Did it happen just recently; why wasn’t there any disclosure before this and what was the reason?

David Lucatz

The reason, question is why didn’t you see, because we announced it few days ago.

Operator

The next question is from Mike Vermut of Newland Capital. Please go ahead.

Mike Vermut

Hi, guys. I actually hopped on, so I’m not sure if these have been answered yet. Can you give us a general idea of where you are talking to the large telematics players that were reengaged with the people in that [OmniCheck , SleeopCore, sleepmatics], [ph] and also looking at the OEMs a lot of recent statements by providers have gone towards the OEM providing the boxes and the connectivity in the trucks. Is there anything going on there talking to the OEMs trying to get us at the point of sale, as a standard?

David Lucatz

Thank you for the question. Shai, would you like to address it please?

Shai Lustgarten

Sure. Hi Michael; how are you?

Mike Vermut

Good, how you doing?

Shai Lustgarten

Good, thank you. So, first of all, regarding the OEM, regarding major, let me answer the first part of the question on the major players. Yes, the definitive answer to your question is yes. We are in constant talks to, I wouldn’t say all of them, we’re trying to talk to all of them but to the major ones, yes we are. Not only that, we were able to penetrate some of them already, some of them are trying our products, some of them already had tested or in the stages of after the testing of our products and we entered into some commercial already negotiations with them, which an agreement I would say. And I think that I am optimistic of course but like David said, we will announce when time comes. So, basically to answer your question, the answer is yes. And what allows us to be in that position is the new product offering that we put on the table. It is applicable to the ELD mandate. All of them are looking into the ELD mandate. It is pushing the interest in Micronet and allows us actually to start establishing very strategic relations with these major players. So, the facts are that we penetrated some of them but we started testing with some of them as well and that we’re advancing with them into commercial agreement, and I really hope to advance this way.

To second part of the question is of course -- by the way, you have the $2 million announcement is something maybe I can elaborate a little bit about that. One of the major players in the market in providing ELD services is the one that provided us the PO. Now that’s huge for Micronet, the very basic reason why is because a lot of the major players, almost all of them are using this company’s software solutions for their ELD tracking and software solutions. So, when they talk to them and they’re asking what type of hardware you guys recommended and they say Micronet, this already started and initiated another discussion with another major player. So, this is great for Micronet. We went right to the roots of the tree to be able to be applicable to the ELD mandate and I think we were very successful there.

Regarding the OEMs, that’s an interesting discussion. So, the OEMs are looking to provide hardware solutions that will be applicable to software services, SaaS providers. And as you can see in the consumer vehicle segments today, you can see that a lot of them already come with a lot of hardware that allows them to talk to smartphones, tablets et cetera. But this is mainly on the consumer level. It is also starting in the long haul circle, but in the professional segments as well. And we are talking today -- we’re doing two things, one, we’re talking to the OEMs and we already finished testing with the one major OEM in the field. So, I hope that our -- the Micronet solution will become a solution that is integrated together with an OEM into their platform, that’s one. And the other thing of course is we are continuing to invest a lot in our strengths, which is customization. As you know a lot of our customers are SaaS provider out there, they require, a lot of them require like all the ones that you mentioned, Michael, require customized hardware. And this is one of the strengths that we were able to demonstrate to the market in the last year and also shortened our R&D cycle. So, this is something that we continue to put efforts in. And I believe at the end of the day, you will see Micronet integrated into OEM solutions plus Micronet completing OEM solutions that provide our product to be used for purpose to our customers. I hope I answered your question.

Mike Vermut

You did, that was great. Couple more questions. What is the target for simplifying our corporate structure? I’m sure there’s a lot of ways having, listing in Israel, listing in the U.S.; you have duplicate costs involved. It just complicates the whole situation here. Is there an effort going on to simplify the structure and is there a timeframe on that?

David Lucatz

Yes. We mentioned it in the past several times. Of course we are subject to market conditions but basically our goal is -- it’s not the long-term goal, it’s an short-term goal to simplify the structure and have just one public company. As you mentioned, it doesn’t make any sense to us to have two public companies. But, we do all of this, but it’s not everything is in our hand. But as a goal, I would say as a plan, yes, definitely.

Mike Vermut

Excellent, and then another question for you. When looking at margins, revenue; you did a fantastic job on the cost side; should we assume increase, I know you are not going to give the exact numbers but increased profitability throughout the year?

David Lucatz

I just want to go back and make and clarify things. The fourth quarter was a great quarter in terms of margin. If you look -- we look at the 2016, we don’t expect the margin to remain in the area of 39; our expectation and plan is to be in the range between 30 to 35 but closer to 35. So, we do see a better and better gross margin, as a result of the quarter become more and more full production and we manage to catch expenses. Also, we need also to bear in mind that the aerospace/defense affects and sometime can the shift the gross margin. But as a general, our target is 35%, and we are getting closer and closer to that.

Mike Vermut

Great. But then, I assume your revenues for this quarter should be increasing quarter-to-quarter as we get closer to the ELD mandate and you start penetrating the OEMs, the larger telematics players?

David Lucatz

Sooner or later, you are right. I cannot of course tell you that the third quarter or second quarter but as a trend, yes. We believe that the more we get order from customers who are in ELD mandate; we get the better revenue and of course better profitability.

Mike Vermut

Great, now last question. Does it make sense for the two businesses to remain the other or should we be looking to focus on the telematics business?

David Lucatz

It’s more -- it’s really a kind of personal perspective, any investor can have his own opinion about it. I can say one thing that we -- as it is as put right now, the 2016 is going to be good for the two divisions, okay? So, perhaps in a long run or sometime in the future, we need to consider what to sell. But at this very moment, I think we have reason to -- we have several reasons to focus on the telematics but we have also some reasons, people who are interested in defense and aerospace to see the business there. So, I wouldn’t go further. Our duty is to make sure that the Company is running and makes money. And perhaps strategic wise, we should look forward, long term. But as I said, in 2016, we don’t expect at this moment to see any changes. But we do our best to make sure that the divisions, the two companies will like money.

Mike Vermut

Excellent, okay. And last question, has there been any decision on the breakout fee? It seems to me that if due diligence didn’t yield what you expected that the breakout fee will be a move point.

David Lucatz

Well, still it’s -- we just got the termination notice few days ago; it’s still under the examination for legal advisor and we’ll make our decision shortly.

Mike Vermut

Okay, excellent. Okay, great job on this revenue and getting to profitability, guys. And hopefully 2016 is even better.

Operator

The next question is from Carlos Brenner. [Ph] Please go ahead.

Unidentified Analyst

Can you tell us about your EBITDA in the fourth quarter and what you see it to be during 2016?

David Lucatz

Yes, sure. Thank you for asking question. We see a very good EBITDA in the fourth quarter. As a matter of fact the EBITDA was over $600,000 positive. We believe 2016 will represent the same trend. And EBITDA in the fourth quarter was positive as compared to the first three quarters were negative. For us, it’s a very strong and good sign.

Unidentified Analyst

Okay, thank you very much. Can you elaborate a little bit more about your -- if you can, your discussions, the potential with ELD local fleet that you talk about, at the same, any negotiations, any discussions with these companies or potential let’s say any businesses or potential big transactions that you can have?

David Lucatz

Yes, sure, thank you. Shai, could you address it please?

Shai Lustgarten

Yes. So, related to Michael’s question as well, the discussions are becoming -- our penetration actually is becoming more and more successful as we advance forward our marketing and sales efforts in presenting the solutions as Micronet provides. You have to understand, the ELD mandate is like a catalyst, it’s like something that is pushing all the companies out there to move forward in our space and it creates a lot of opportunities to them. Now, what is assisting Micronet very well in that aspect is that in April of 2015 -- 2015 for us was a year that we introduced new technology, new product offerings and one that now we’re happy to say that a lot of customers understand its value, and it’s moving very fast for us. That’s why you see the significant growth in the backlog. The technology that Micronet is offering is unique, it’s unique technology but its’ not only applicable to the ELD mandate but is applicable to the technological trend in the market in the space today.

It’s before, only black boxes or I would say other means of hardware that are enabling to transmit the data was enough, today everybody are looking for much more sophisticated solutions. That’s exactly what we saw, that’s exactly what we invested our efforts in, and that’s what we introduced in 2015. Now, luckily, we thought about it but we didn’t know when the mandate will be issued but luckily it was issued. And now, it’s also applicable to that and that’s exactly why -- regarding your question that’s exactly why we see the penetration into new players very significant. So, it’s not only coming in the means of the course in the backlog but also coming in customer concentration if before we worked with one customer, today we’re working with 15 major ones and it’s growing. And the backlog is increasing; we are making our operational, I would say tweaking it to making sure that we don’t suffer things that we suffered in Q4 of 2015. And we’re moving that way as well very fast and it’s solved already. So, all the means are there to make Micronet a gamechanger in the space.

Unidentified Analyst

I see. One more question. Is ELD mandatory only for large fleet or also for just every truck, every long haul truck or every truck from a size of vehicle, if so, how do you aim to approach this let’s say small fleet of these truck owners.

Shai Lustgarten

So, the ELD mandate is related to everybody, and not only to large fleet. It relates to even all the moms and pops and smaller ones as well. What -- the way we are approaching that is by of course talking to all of our customers, the low hanging fruits, all of them. The second thing that -- because they are selling to large fleets and they are selling also to small fleets and even sometimes [audio gap] but we’re also talking to distributors, we’re also making sure that our products are there on the shelf in places that one truck might go and say to an installer and ask them to find a solution for them to be compatible to the market, so we are trying this up to a large distributors in the U.S., so we can approach that market as well. Actually, we see very significant -- a significant role of the small fleets out there as the potential market to Micronet and to our customers. So, we’re moving in all directions to make sure that these people know we exist and can use our products.

Unidentified Analyst

Thank you very much, great job with the EBITDA. Thank you. And we will follow you.

Operator

At this time, there’re no further questions. Before I ask David to go ahead with the concluding statement, I would like to remind participants that a replay of this call will be available within two hours. In the U.S., please dial 1 (888) 269-0005; in Israel, please dial 03-925-5929; internationally, please dial (972) 3925-5929. David, would you like to make your closing remarks?

David Lucatz

Yes, thank you. We’re very excited about the progress we’re making and particularly encouraged to have achieved profitability in the fourth quarter of 215. We are seeking tremendous marketplace interest in our products and believe that ELD mandate provides opportunity to drive growth in our MRM business. Our projects with the major telematics companies give potentially significant growth engine for Micronet and support the market acceptance of our new All-in-One technology. We look forward to providing our technology to meet the compliance needs of new and existing customers. Our Salt Lake City facility is fully integrated and our MRM business is positioned as the U.S. based operation with the U.S. based sales team.

I would like to take this opportunity and thank our dedicated team of employees and managers and I look forward to speaking with you in next quarter. Thank you.

Operator

Thank you. This concludes Micronet Enertec Technologies fourth quarter 2015 results conference call. Thank you for your participation. You may go ahead and 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!