Cherokee's (CHKE) CEO Henry Stupp on Q4 2016 Results - Earnings Call Transcript

| About: Cherokee Inc. (CHKE)

Cherokee, Inc. (NASDAQ:CHKE)

Q4 2016 Earnings Conference Call

April 14, 2016, 16:30 ET

Executives

Patricia Nir - VP, Addo Communications

Henry Stupp - CEO

Jason Boling - CFO

Analysts

Eric Beder - Wunderlich Securities

Jeff Van Sinderen - B. Riley & Co.

Dave King - Roth Capital Partners

Operator

Welcome to the Cherokee Inc. Fiscal Year 2016 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to your host Ms. Patricia Nir, Vice President of Addo Communications. Thank you, Patricia. You may now begin.

Patricia Nir

Thank you. Speaking today will be the Company's Chief Executive Officer, Henry Stupp; and Chief Financial Officer, Jason Boling. You can also find accompanying slides for today's call on Cherokee's Investor Relations website.

Before I hand the call over to management, please note that on this call, certain information presented contains forward-looking statements. Certain statements contained herein may also contain Forward-Looking Statements for purposes of the Safe Harbor provided by the Private Litigation Reform Act of 1995. When used the words anticipates, believes, expects, may, should and similar expressions are intended to identify such forward-looking statements.

Forward-looking statements included in this conference call involve known and unknown risks and uncertainties that may cause actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. A further list and description of these risks, uncertainties and other matters may be found in the Company's Annual Report on Form 10-K for the fiscal year 2015 and the Company's quarter report on Form 10-Q.

Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. The Company disclaims any intent or obligation to update any of the forward-looking statements contained herein to reflect future events and developments. The Company's earnings release is posted on the Company’s website at www.cherokeeglobalbrands.com.

And with that, I'll hand the call over to Cherokee’s Chief Financial Officer, Jason Boling.

Jason Boling

Thank you, Patricia. Good afternoon and thank you for joining us today. I will start today's call with a discussion of our fourth quarter and fiscal 2016 financial results. Henry will then provide further detail about our brands and partners before we open up the call to your questions. GAAP revenues for the fourth quarter increased 4.1% to $7.8 million compared with $7.5 million in the prior year period. The revenue increase is primarily attributable to the acquisition of Flip Flop shops. Revenues in the fourth quarter were partially offset by devaluations in foreign currencies in the amount of $145,000.

On a year of year comparison basis it is important to note that due to the Target Canada bankruptcy revenues relating to both the Cherokee and [indiscernible] brand in Canada were effectively eliminated at the start of the year. Even though we were able to immediately enter into new licenses for both brands with Sears Canada the product has only recently begun to hit stores this past march. We also remain cautious on Canada in the near term given the macroeconomic and foreign exchange headwinds. We expect our first year retail sales in Canada to be in the range of $20 million to $25 million. In addition to the transitions in Canada, our UK business has been replaced with a direct to retail license agreement with our Argos.

Argos launched the Cherokee brand in the UK towards the end of the second quarter of fiscal 2016 and we currently expect retail sales in the United Kingdom to be in the range of $9 million to $11 million for fiscal 2017. We are encouraged by the strength and brand positioning at this retailer and remain excited about the potential for category expansion in Argos as Argos continues to refine their assortment and improve their logistics and in stock ratios. Also recently, Sainsbury has acquired the Argos business from its parent Home Base. We are in the early stages of evaluating impact of this transition. Sainsbury operates over 1200 brick and mortar stores in the UK.

Although the aforementioned retail partner transitions occurred during the past year and were the major reason for the slight decline in revenue we are pleased that our revenues for the year ended January 30, 2016 remained essentially flat at 34.7 million from $35 million during fiscal 2015. Additionally we estimate the cumulative effect of currency headwinds reduced our 2016 revenues by approximately $800,000. This decrease was partially offset by revenues from our Flip Flop shop acquisition. For the quarter selling, general and administrative expenses were $5.9 or 76% of GAAP revenues compared to $4.8 million or 64% of GAAP revenues in the prior year period. The $1.1 million increase in SG&A was primarily due to the full quarter of SG&A expense associated with the Flip Flop shops. Additional legal and due diligence costs related to potential and completed acquisitions and increase in stock based compensation and increased business development costs related to the identification and establishment of new licenses from the Cherokee brand in the U.S. The additional costs related to lead or due diligence and increased business development costs accounted for approximately $400,000 or 5.5% of revenue for the quarter and for the year selling, general and administrative expenses were $21.3 million or 62% of GAAP revenues compared to $19.6 million or 56% of GAAP revenues in the prior year.

The $1.7 million increase in SG&A was due primarily to additional legal and due diligence costs related to potential acquisitions and increase in stock based compensation and increased business development cost related to the identification and establishment of licenses for the Cherokee brand in the U.S. and the cost associated with the Flip Flop shops. The additional costs related to legal and due diligence and increased business development costs accounted for approximately $1.2 million or 3.6% of revenue for the year, a 10-K filing will provide additional details relating to increases in SG&A.

For the fourth quarter operating income totaled $1.9 million or 24% of GAAP revenues which is down from 2.7 million or 36% of GAAP revenues in the prior year period. The costs associated with the aforementioned legal and due diligence efforts and the additional business development activities reduced operating margins by 5.5% for the quarter. Operating income for the full year totaled 13.3 million or 38% of GAAP revenues compared to $15.4 million or 44% GAAP revenues in the prior year period. The costs associated with the aforementioned legal and due diligence efforts and the additional business development activities reduced operating margins by 3.6% for fiscal 2016.

GAAP net income for the quarter totaled $1.4 million or $0.16 per diluted share and included the aforementioned costs which reduced diluted earnings per share by $0.03. This compares to 1.7 million or $0.19 per share in the prior year period. GAAP net income for the year totaled $8.4 million or $0.95 per diluted share and included the aforementioned costs which reduced diluted earnings per share by $0.09. This compares to $9.8 million or $1.15 per diluted share in the prior year. For the 2016 fiscal year we recorded a tax provision of $4.4 million which equates to an effective tax rate of 34.1% compared to $4.7 million or an effective tax rate of 32.4% in the prior year.

The change in the effective tax rate was due to the recognition of previously unrecognized tax benefits upon the conclusion during fiscal 2016 of certain income tax examinations. At January 30, 2016 the company had cash and cash equivalents of 6.5 million compared to 7.6 million at January 31, 2015, net debt of 17 million and a leverage ratio of 1.6. For fiscal 2016 cash flow from operations was 11.9 million compared to 10.4 million for the prior year. Stock based compensation expense totaled 2.2 million compared to 1.2 million in the prior year. The increase in stock based compensation is partially due to higher stock prices at the grant date as compared to the prior year.

We remain in a very strong financial position as we continue to support the growth of our global platform and actively explore additional strategic brand acquisitions.

Thank you for your time. I will now turn the call over to Henry.

Henry Stupp

Thank you, Jason and good afternoon everyone. I'm currently in Dubai attending the World Retail Congress and we appreciate very much for your participation on today's call. As Jason mention we have been focused on ensuring a smooth transition in the U.S. market in early calendar 2017. For the full breadth of Cherokee branded products for adults and children in all major categories including apparel, accessories, footwear and home products. We're confident that the strength of our new domestic partnerships and our existing infrastructure will transition our business away from low royalty, legacy relationships as we move towards new partnerships that will fully leverage the multi-category relevancy of the Cherokee brand. We also continue to make progress in the globalization of our brands propelling additional retail and category expansion in both the near and longer term and our strategic approached acquisitions has resulted in an expanded and diversified retail base in all major global markets including here at home with our Cherokee brand, more on that in the moment, but first I'll recap our fiscal fourth quarter and 2016 brand and corporate development highlights.

Overall we are pleased with our fiscal 2016 performance, despite the transition that are inherent in our industry we believe that our strong infrastructure, our balanced brand portfolio and our broadening distribution enabled us to achieve continued GAAP profitability while keeping our balance sheet leverage among the lowest in our sector. In fiscal 2016 we grew our scale to almost 2 billion in annual global retail sales through organic growth and the contributions from our strategic acquisitions such as Flip Flop shops.

Our global footprint now spans over 9000 doors and 50 countries worldwide. Agility in retail remains imperative and retailers want to partner with companies that enable that agility, not getting away of it. Now more than ever retailers are seeking the vision, agility and scale that we bring to the table as they make unprecedented investments in digital and in supply chain and store upgrades. Quick decision making and quick response are cornerstones of our platform. We move at the pace of retail and do the heavy lifting for our partners so they can continue to do what they do best.

Taking this approach has allowed us to transition to new licensing partnerships with retailers and wholesalers leveraging our full platform of capabilities or tapping into our high equity lifestyle brands. Bottom line with change comes opportunity and we pose growing complexity will continue to work to our advantage. A recent announcements for the Cherokee brand in the

United States highlight how the powerful combination of our platform and portfolio is working to attract best in class partnerships and a breath of categories. We announced our first phase of multi-category licensing agreement in February covering men's and boys casual sportswear, sweaters and [indiscernible] boys and girls. Girls activewear, sportswear, dresses, denim and sweaters and swim and sleepwear. Across these categories we're partnering with industry leading suppliers and category experts but our trusted resources to leading U.S. retailers across multiple tiers and channels. Through these partnerships we satisfy the demand for Cherokee branded products across the United States while providing a gateway to new markets and ongoing category expansion.

As we continue to build our domestic licensee base we will be poised to identify and on-board new retail partners that will ensure the continued availability of Cherokee branded products for spring 2017. We expect a comprehensive assortment of Cherokee product will be available in the United States including the reintroduction of Cherokee adult apparel as Cherokee brand continues to resonate strongly with the U.S. consumer. We look forward to sharing exciting partnership updates later this year. Fiscal 2017 is off to a solid start with the [indiscernible] of the Cherokee brand at Target. Our existing agreement with Target run through January 31, 2017 and we expect Cherokee product availability at Target for most of this year. The annual minimum guarantees related to the Target U.S. agreements for the Cherokee brand including school uniforms are $11.3 million.

Let's now turn to some exciting developments on the international front. We're seeing nice traction with our direct to retail partner Argos in the United Kingdom and Ireland. We're taking a measured approach to scaling our initial launch with Argos and consumer response has been quite positive. The growing awareness of the Cherokee brand in Europe is driving interest and we believe it will ultimately lead to further expansion. This week we are pleased to announce a partnership with Albert Stores, a division of [indiscernible] for the launch of the Cherokee branded product in the Czech Republic which will be available this fall. We have launched the Cherokee brand with Sears Canada and we must acknowledge that continued economic and currency headwind spaced in the Canadian consumer present near term growth challenges.

We continue to report strong repo sales in Asia led by the performance of Cherokee branded products at Nishimatsuya in Japan and [indiscernible] in China. With increases in retail sales of 17.1% and 30.8% in local currency respectively over the prior year. The Cherokee brand is also experiencing continued success at Pick 'n Pay in South Africa where retail sales grew 57.2% in local currency over the prior year. We’re excited about our expanding presence in Latin America through the merger of Comercial Mexicana and Soriana Mexicana. As you may recall this merger was completed late last year and we've seen the anticipated uplift in retail sales of and Comercial Mexicana which grew 3.5% in local currency over the prior year.

Future growth in this region is expected to benefit from the rollout of Cherokee products of Soriana Mexicana's combined store base which will begin later this year and from a broad expansion plan for fiscal 2018, I will turn now to our Tony Hawk brand where strong brand awareness continues to fuel our global expansion. In Europe, the Tony Hawk brand officially launched with Sports Direct in the fourth fiscal quarter and we expect expansion both online and in-store across the United Kingdom. As the UK's leading sports retailer Sports Direct is a strong anchor partner for the Tony Hawk brand in Europe.

Europe licensing revenue for the Tony Hawk brand at Coles remain flat at 1.2 million for the quarter and 4.8 million for the full fiscal year. We are working closely with Wal-Mart Canada on the upcoming fiscal Q3 Tony Hawk watch. Wal-Mart is globally recognized as one of the largest most innovative retailers in the world and our partnership will be an important launch pad for the brand one that is already sparking strong interest among additional international retailers who are excited to accelerate the global brand roll-out and we're already in advanced discussions with retailers in Chile and Argentina and additional countries in Latin America as well as Asia, South Africa and the Middle East.

We have identified a clear, multi-year growth plan for the Tony Hawk brand both domestically and internationally. I will turn now to another exciting growth vehicle for the Cherokee global brand, Flip Flop shops. Since the acquisition of Flip Flop shops in October 13 of last year we received approximately $459,000 in revenues. We've opened over 10 new franchise, retail location with over 90 stores today and additional stores underdevelopment, a progress toward achieving significantly scale is underway.

As we plot expansion for Flip Flop shops we’re especially excited about exploring shop and shop opportunities with large scale retailers around the globe. Retailers are embracing shop and shop opportunities as never before as they seek to provide differentiation and destination shopping. Flip Flop shops provide a curated showcase for the hottest brands and latest style and retailers are responding favorably to this opportunity. We are currently negotiating strategic partnerships in Australia, Continental Europe and Central America and we are in advance discussions in India. We will continue to provide updates are they are available.

Clearly Flip Flop shops is resonating with retailers and will continue to drive organic growth for Cherokee global brands without us taking on any manufacturing or inventory risk. In other brands, our Liz Lange brand continues to perform well with royalty revenue at target of 8.2% compared to the prior year. With respect to Everyday California who are our wholesale licensing partners we have recently launched in Canada and we're planning to launch this fall in select specialty retailer accounts throughout the United States and lastly our Point Cove launch with Hawaiian trends in India continues to perform well and we plan to expand the product assortment by adding new categories in the near future. We're also excited about expanding our proprietary Point Cove brand into new markets through licensing partnerships in the U.S. and abroad.

In summary we are encouraged by our start to the year and optimistic about our prospects in fiscal 2017 as we transition beyond our legacy relationships and fully leverage the power of our platform and our portfolio. Through agile business model we are quickly establishing new platform partnerships and successfully and profitably excel in the global reach of our brand portfolio. Our brands continue to grow our global distribution and awareness and are further supported by our brand management and marketing expertise. Through our [indiscernible] approach we are strategically aligned with their licensees and partners to drive sales and create new long term value and growth across our entire brand portfolio. Importantly we're in a strong financial position with a strong balance sheet that positions us to pursue both organic growth and further our brand acquisition efforts. Thank you again for your time today. And your continued support of Cherokee global brand. We will now open the call to your questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions]. Our first question comes from Eric Beder from Wunderlich Securities.

Eric Beder

Could you talk a little bit about how the 360 model will work in kind of the new world post target for those target pieces? Those are more traditional license agreements that you’ve done before, how does that interact with your model and how you maximize [Technical Difficulty].

Henry Stupp

Well there are couple of things, our ability to hit the market and ensure a smooth transition can only happen because we have a product development design sourcing infrastructure, marketing infrastructure that’s already in place that our new wholesale licensees can immediately tap into and in fact they can get all of the assets and immediately start building even broader product assortment, so that's one thing. The other thing and one of the strategic reason that we chose to go majority wholesale in the United States is that many of our new domestic partnerships will actually be connected with our international partners on a [indiscernible] basis to also introduce additional categories and broaden the product line. So the whole 360 is very much part of our capabilities platform that we believe in and our ability to transition and as results of it and the exception of partners that we put into place.

Eric Beder

And what are you guys seeing in the M&A market in terms of multiples and how impressive do you want to be there? No need to be strategic, [indiscernible] where you feel that you should be adding to in terms of that?

Henry Stupp

I think it's fair to say that there will be continuing to acquire. We were active last year little bit more than prior year. I do believe that valuations will start to see fall a little bit from where they had recently grew significantly and I say that because I do believe that fewer companies that have the leverage ability that's we have inherent in our balance sheet so as to be a little bit more aggressive than that acquire. So we’re certainly being called just about every day with new brand opportunities and we will be selective and carefully add to our portfolio as we have in the past.

Eric Beder

Okay. And finally I guess a question for Jason, what do you consider the maximum leverage ratio that you guys will be comfortable with?

Jason Boling

Sure. We typically sell it little bit between 3 and 3.5 times, we’re comfortable with that Henry and I have talked about that a lot and as far as you know what that gets us based upon our existing balance sheet it provides us close to $30 million to $40 million and since we only have net debt right now of about 17, provide this a lot [indiscernible] brands.

Operator

Our next question comes from Jeff Van Sinderen from B. Riley.

Jeff Van Sinderen

I know it's early but Henry maybe you could give us a little more color even if it's just qualitative on how work is progressing with some of your new domestic licensees for the Cherokee brand and maybe is there any sense you could give us on how you expect the transition from the Target DTR to the new licenses to unfold in terms of your P&L and then maybe any sense you could give us on which retailers or which type of retailers you expect the Cherokee brand to be in for Spring 2017, just trying to get a better sense I guess of where all that stands and how much visibility you have there?

Henry Stupp

We have visibility to where we want to get, we’re not going to [indiscernible] start announcing who will [Technical Difficulty] retail side. We have a very active license agreement with Target that’s performing quite well. We’re [indiscernible] throughout the year and we’re very pleased with the results that we have seen. Target has certainly put their best efforts fully this year and [indiscernible] start talking about new partnerships and we’re delighted with the product and the performance we’ve seen. That said we’re active, we’re leading as I’ve said in my prepared remarks with retailers and our licensees are significant suppliers to all major retailers in the United States.

From a P&L standpoint we also talk about how the royalties are significantly higher with our wholesale partners and that should have [indiscernible].

Jeff Van Sinderen

Okay. And then maybe if we can shift a little bit to Flip Flop shops, it sounds like things are going well there. Just wondering what you think the timing might be as far as I think you mentioned some international shop and shop deals that you're working on but just wondering when you think domestic shop and shops might be on the horizon?

Henry Stupp

We’re in active discussions right now both domestically and internationally. I know from an international standpoint I think that the ramp up would be a little bit quicker mostly because it's store planning requirements domestically by the time we can actually can get something down in the stores I think [indiscernible]. So international I could see the ramp up happening quicker. We’re active there in both scenarios, there are several partners here at home that we’re talking with and internationally having this global platforms and these relationships that have not only continuing to improve as you see in the Cherokee brand that we would see really terrific trading partners and obviously we’re talking broadly about expanding our relationships on the platform sampling with some of our existing licensee. So I think stay tuned there will be announcements in short order.

Operator

[Operator Instructions]. Our next question comes from Dave King from Roth Capital Partners.

Dave King

I guess first off with respect to the comment in release about potentially you know growing a brand awareness in fiscal '17 both domestically and internationally how should we think about that in terms of the ability to translate that into revenue growth both for fiscal '17and then just beyond and how should we be thinking about that on our end as we build our model?

Henry Stupp

Well so one of the biggest parts of this is we are going to spend some money to build the brand and the fact of the matter with Target the contract is no longer going to be renewed at the end. We need to make sure that we have the partners in place for fiscal '18. So we can't really comment right now on what type of growth we’re going to end up with and you know where we will be. So from that perspective we're very happy with what Target has been doing and has been accomplishing so far that we've seen this year and we’re very happy with what our wholesale licensees are talking about and what they're doing and where we believe they'll take the business. They're very happy with various retailers that we're in contact with. So we can't give numbers we can't get specific guidance to that extent.

Dave King

And then I guess maybe just on the '17 outlook, obviously it sounds like that some of that still has to get shaken out in terms of whether Target will be compared for the full year or not but should we be thinking about '17 still being a growth year or you know given the transitions and the ramp up of some of the different relationships that maybe down a little bit. I guess just kind of a frame of reference, I don’t necessarily want to [indiscernible] official guidance such as kind of just a trajectory how should we be thinking about it?

Jason Boling

So I mean it really just is dependent upon so many different factors. So as we've talked about before, Target we're expecting Target to have product in through January 17, the level of it we don’t know. The timing around it we don't know, at least we don’t have specific enough details. So we can't really tell you whether it's going to be a growth year or not. You know what the minimums are. We absolutely believe you know that's not a problem clearly because of the minimal guarantees.

Henry Stupp

So Dave just to give you some, just to add on to what Jason was saying. We provided some more specifics in the prepared remarks and we had previously relating to our operational expectations in Canada and also with the target here in the U.S. I will say that we are a great [indiscernible] company and we have enough [indiscernible] in the flyer that we believe that any potential slippage that may occur from these past years revenue from Target to the minimum which we included in our remarks should be more than made up by the new relationships and the new licensees that we have entered into and of course the additional revenue from Flip Flop shops.

We are seeing wonderful growth in a lot of our markets and with all the transitions that has happened for example Target Canada excelling and a subsequent replacement of the Sears Canada we’re also seeing some interesting changes at retail which may turn out to be quite positive source one that we’re very excited about right now is the merger between Comercial Mexicana and Soriana Mexicana, present just over 100 Soriana Mexicana locations and the merger will bring us to a total store count of that 6700 stores and will slowly start later this year introducing Cherokee into Soriana stores as we continue to grow and that's a significant impact for us moving forward. We’re also interested to hear what the plans are with the merger with Argos and Sainsbury in UK, where Sainsbury operates 1200 brick and mortar stores and so [indiscernible] governance in UK so as time progresses we learn [ph] from that. And then there is just a work that we have with our partnerships Nishimatsuya in Japan, Pick 'n Pay in South Africa that are adding categories and introducing broader product lines and that’s grown as well.

The idea behind what we choose to do several years ago when I joined and we started to reshape the company was to balance the revenue and we’re starting to see the results of efforts. It's no longer the one brand generating 96% of revenue five years ago, it's now multiple brands in multiple markets with multiple licensees and it's balancing out of revenue streams.

Dave King

And then as a follow-up to Eric's question in terms of the M&A environment and the appetite there. It sounds Henry like you’re starting to see more opportunities coming, I guess maybe can you just talk about how bid ask is trended to-date and whether or not you’ve seen that come down just yet and then maybe as a follow up to that some of the legal due diligence cost that you had, should we be expecting that to start ramping a little bit more at this point just given the opportunities or is it just you know still -- I guess how should we be thinking about that, are you guys going to be more aggressive now over the near term or is it probably just as aggressive, is that the right way to think about it? Thank you.

Henry Stupp

We have always clearly stated that we’re going to prudent acquisitions as long as it stays within the metrics that we now want and generally for us we have stated we want to stay between 5.5 to 7.5 times of EBIT [ph] and we do believe there are ample opportunities out there relating to that frame work. In terms of how many and when we are notoriously quite on that front, we don't want to make any announcements about how often and when we should expect us to acquire something and that's really a strategic decision that we make. However everybody you have worked with knows that our client for the last few years was -- let the air come out a little bit in these acquisitions that have transpired that we felt you know we would [indiscernible] organic growth, keep the balance sheet really clean and let it all shake out and we kind are at that stage now where we’re seeing that some of the acquirers that have been aggressively requiring are now going to be growing up the brands that they have acquired as they should and we’re now in a position of a solid organic growth with our brand and an unlikely balance sheet for us to be able to get a little bit more [indiscernible] in the future and that’s how you should look at it. But we have spoken before and you know this has been our game plan for the number of years. We have never strayed from that.

Operator

Thank you. At this time we have no further questions. I will turn the call back over to Henry Stupp for closing comments.

Henry Stupp

Thanks everyone for joining us. I appreciate your continued support of Cherokee Global Brands and we do have some follow-up call scheduled and of course Jason and I are reachable. Once again thank you and have a very good day.

Operator

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. 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!