YRC Worldwide's (YRCW) CEO James Welch on Q1 2016 Results - Earnings Call Transcript

| About: YRC Worldwide, (YRCW)

YRC Worldwide, Inc. (NASDAQ:YRCW)

Q1 2016 Results Earnings Conference Call

April 28, 2016, 04:30 PM ET

Executives

Tony Carreno - VP of IR

James Welch - CEO

Jamie Pierson - EVP, CFO

Darren Hawkins - President, YRC Freight

Analysts

David James - Deutsche Bank

David Ross - Stifel

Scott Group - Wolfe Research

Art Hatfield - Raymond James

Operator

Good afternoon, and welcome to YRC Worldwide's First Quarter 2016 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Tony Carreno, Vice President, Investor Relations. Please go ahead.

Tony Carreno

Thank you, operator, and good afternoon, everyone. Welcome to YRC Worldwide's first-quarter 2016 earnings conference call. James Welch, Chief Executive Officer of YRC Worldwide; Jamie Pierson, CFO of YRC Worldwide; and Darren Hawkins, President of YRC Freight, will provide comments on the first-quarter 2016 results and will be available during the question-and-answer portion of today's call.

Before we begin, I must remind you of the inherent uncertainties in any forward-looking statements in our discussion this afternoon. During this call we may make some forward-looking statements within the meaning of federal securities law. These forward-looking statements and all other statements that might be made on this call which are not historical facts are subject to uncertainty; and a number of risks and, thus, actual results may differ materially. This includes statements regarding the Company's expectations, assumptions of future events, and intentions on strategies regarding the future.

The format of this call does not allow us to fully discuss all of these risk factors. For a full discussion of the risk factors that could cause our results to differ, please refer to this afternoon's earnings release and our most recent SEC filings, including our Forms 10-K and 10-Q. These items are available on our website at YRCW.com.

Additionally, please see today's release for a reconciliation of net income or loss to adjusted EBITDA on a consolidated basis, and operating income or loss to adjusted EBITDA on a segment basis. During this call, we may refer to our non-GAAP measure of adjusted EBITDA, simply as EBITDA.

Finally, in conjunction with today's earnings release, we have issued a presentation which will be referenced during the call. The presentation was filed in the 8-K along with the earnings release, and is available on our website at YRCW.com.

I will now turn the call over to James to provide comments on our first-quarter 2016 results.

James Welch

Thanks, Tony, and good afternoon. As always, thank you for taking the time to listen to our earnings call. After my comments, Jamie will present our financial results; and Darren will have some comments regarding YRC Freight.

We continued to make steady progress at YRCW during the first quarter of 2016. Adjusted EBITDA was up on a year-over-year basis to $62.9 million, as we executed on our strategy to improve price, freight mix, and profitability. On an LTM basis, adjusted EBITDA increased to $337.4 million for a margin of 7.1% and an improvement of $57 million or 20.3% from the $280.4 million of LTM-adjusted EBITDA in the first quarter of 2015.

The increase in the first quarter of 2016 was driven by improved yield, reduced maintenance expenses from new equipment, and parking older equipment, productivity gains, and lowered liability claims.

Revenue was down year-over-year, primarily due to the impact of lower fuel prices and, therefore, a lower fuel surcharge and softer volumes. However, we still experienced year-over-year price improvement even in a challenging quarter and economic environment for the entire industry. It's interesting to note that excluding fuel surcharge, year-over-year revenue per hundredweight has improved for eight consecutive quarters at YRC Freight and 20 consecutive quarters at our regional companies.

We continue to believe that the LTL pricing environment is stable and is a testament to the painful lessons learned during the 2008 to 2010 rate wars which took a toll on the entire industry, and took most LTL carriers several years to recover. We intend to stay committed to improving our price, freight mix, and profitability, even during the current economic environment.

We believe that we will be well positioned as the industrial economy improves and regulatory environment tightens. It appears that most of the other LTL carriers share our need to get an adequate return on capital, as well, which should be a good sign for the industry and continued pricing discipline.

Safety continues to be one of our better opportunities for profit improvement. The installation of in-cab safety equipment on our fleet of approximately 15,000 tractors is substantially complete, with the remaining units expected to the installed within the next 90 days. Our drivers have been receptive to this new technology. And we expect benefits will occur over time, as this is yet another step in improving our commitment to safety across all of our four operating companies.

We're also continuing to invest in our people via Smith System training, peer safety trainers, and the expansion of driving schools, with the ultimate goal to improve our hours worked between lost time injuries and miles driven between accidents.

All four of our operating companies are offering excellent on-time service to our customers. Holland, Reddaway and New Penn all have been recognized recently with customer performance awards for outstanding service. And after improving its operations and service cycle execution, the YRC Freight network has provided its best service levels in several years.

With the network running as expected, YRC Freight has implemented its new Accelerated service offering which sits between standard and time critical service offerings. Darren will have further comments about this but early signs are positive.

As the industrial economy picks back up, we believe that we have made the foundational investments and further believe YRC Freight, Holland, Reddaway, and New Penn are all well-positioned to achieve balanced volume and yield growth. When combined with the investments that we have made and will continue to make in both revenue equipment and technology, we should also be in a better position than in the past to control the costs associated with that growth, which should lead to incremental profitably.

Ending the first quarter with more than $220 million in liquidity demonstrates that we continue to have a good balance of how we are managing our capital. We have also improved our leverage ratio by continuing to improve profitability and growing into the balance sheet. More importantly, we are in a good position to continue achieving the right return on investment decisions, and reinvesting back into the business for future growth.

Jamie will cover the leverage ratio and CapEx numbers, but we are excited about our ability to invest in the infrastructure of our Company, specifically new tractors, trailers, and high-yielding technology that has helped to improve productivity.

Lastly, a quick shout out to the 32,000 employees of the various YRCW companies. As a whole, our employees have shown both resiliency and pride with the work that they are doing. Our customer focus is where it needs to be, while the goal to be more profitable is front and center.

I will now turn the call over to Jamie for his comments, and I look forward to your questions at the end of the call.

Jamie Pierson

Thanks, James, and good afternoon, everyone. For the first quarter of 2016, we reported consolidated revenue of $1.12 billion, down from the $1.19 billion reported in the first quarter of 2015.

The decrease can primarily be attributed to, first, a decline in fuel surcharge revenue, where the price of diesel decreased approximately 30% in the first quarter of 2016 compared to the same period in 2015; and, secondarily, softer volumes. However, those decreases were partially offset by continued base yielding improvements.

In terms of consolidated operating results, we reported operating income of $13.4 million in 1Q 2016 compared to just $3.7 million reported in 1Q 2015. Our first-quarter 2016 adjusted EBITDA was $62.9 million or a 7% increase compared to the $58.8 million reported in 1Q 2015, and a nearly 60 basis point margin improvement to 5.6%.

Turning to the stats, and as Tony mentioned, we did something different this quarter. We posted them in the presentation and filed it in the 8-K along with the earnings release. So you really don't have to sit here for the next five minutes and listen to me list them out, like you have in quarters past.

However, there are a few key stats that I would like to highlight. First, in 1Q 2016, YRC Freight's tonnage per day was down 6.7% compared to 1Q 2015. This was comprised of year-over-year decreases of 8.1% in January, 5.4% in February, and 6.6% in March. Revenue per hundredweight, including fuel surcharge, was down slightly by 0.5%; while revenue per hundredweight, excluding fuel surcharge, was up by 3.7%.

Second, at the regional segment, 1Q 2016 tonnage per day was down 3.8% compared to the same period a year ago. This was comprised of a year-over-year decrease of 7.3% in January, 2.2% in February, and 2.3% in March. Revenue per hundredweight, including fuel surcharge, was down 1.6%; while revenue per hundredweight, excluding fuel surcharge, was up by 2.4%.

Now to the financial results by segment. In 1Q 2016, YRC Freight's operating income was $4.1 million compared to just $240,000 in 1Q 2015. Adjusted EBITDA for the quarter was $30.1 million, for a margin of 4.3% compared to $32.1 million and a 4.4% margin in the same period last your.

The regional segment reported 1Q 2016 operating income of $12.4 million compared to $4.6 million in 1Q 2015. Adjusted EBITDA increased to $33.4 million, for a margin of 7.9% compared to $26.2 million and a 5.8% margin in the same period last year.

In terms of liquidity, our cash, cash equivalents, and managed accessibility under our ABL facility at March 31, 2016, was $222.1 million, a $46.5 million increase compared to the same period last year. And by improving profitability, we were able to drive down our leverage ratio by over 1/2 a turn, from 3.9 times just 12 months ago to 3.2 times this quarter. You can see the historical improvement in our leverage ratio on slide 3 of today's presentation.

As usual, I'd like to leave you with a few parting takeaways. First, even though the industrial economic backdrop hasn't been the best as of late, we remain committed to reinvest back into the business. During the first quarter of 2016, we spent $19.8 million on CapEx. And we entered into operating leases that have a capital value equivalent of $33.4 million for a total of $53.2 million.

This is equivalent to 4.75% of our first-quarter revenue and consistent with the $56.4 million of reinvestment we made in the first quarter of 2015 which, as chance would have it, was almost 3 times as much as we spent in 1Q 2014. The additions included approximately 130 leased tractors and 450 leased trailers.

Second, we believe the investments we're making are the foundation for profitably growing the business and positions us well for taking on additional volume when the industrial economy improves. The strategic investments in technology, such as the in-cab safety equipment that James already highlighted, and the linehaul investment that Dan will discuss in a minute, are examples of how we are investing for the long-term to enhance customer service, safety, efficiency, productivity, and ultimately profitability and shareholder value.

And finally, in March we completed the sale of our remaining investment outside of North America. The disposition of our investment in China-based JHJ International Transportation Company reinforces the commitment we made to sharpen our focus on North American LTL shipping. Although this strategy and commitment is not new, it serves as a reminder of our singular focus on North American LTL operations and our endless pursuit to deliver award-winning customer service with a flexible supply chain that provides the broadest coverage throughout North America.

At this point, I will turn the call over to Darren to discuss YRC Freight's results. Darren?

Darren Hawkins

Thanks, Jamie, and good afternoon everyone. YRC Freight saw improvement in service, cost control, and productivity in Q1, despite the inconsistent economic environment so far this year. We obviously would like to have seen inventory levels come down, and for a more robust volume finish in March. However, we are focusing on what we can have an impact on, and would like to call out several of those items.

From an efficiency standpoint, the YRC Freight operations team delivered year-over-year improvement in dock, city, pickup and delivery, yard and office operations, as well as linehaul over-the-road load average metrics. We are also seeing improved fuel efficiency and reduced maintenance expense as a result of the ongoing upgrades to our fleet.

In 2016, we expect to take delivery of more than 1,900 new linehaul trailers that will be equipped with track loading systems to further optimize an already-improved load average per trailer. In terms of labor and cost alignment, we focused on mitigating cost through matching labor to volume, reducing external purchase transpiration and local cartage spend, while protecting our internal driving force.

The fact that our efficiency metrics improved, even with declining tonnage - which everyone knows is difficult, to say the least - is a sign that we have been successful in these efforts.

Turning to our service performance, the highlight of the quarter was the completion of the final technology enhancements that allowed us to launch a brand-new core service called Accelerated, which provides 1 to 2 day faster transit times than our standard service at a competitive price. Accelerated is a significant addition to our already comprehensive portfolio of services.

And finally, additional technology investments are being made in linehaul, which is one of our largest cost areas. We will utilize software that is being tailored to our network, and we expect it to contribute to more efficient planning and execution as we move forward.

YRC Freight's Q1 service cycle execution delivered consistent and reliable transit times while validating the network investments that we've made over the last few years. This foundation of allowed YRC Freight to launch the Accelerated service.

While we have made significant strides, we must balance the volume equation with our strategy to get the right freight at the right price, running through our network. We intend to remain disciplined and true to our strategy by reinvesting our people, technology, and equipment, combined with projected capacity constraints from regulations, and, eventually a stronger industrial economic environment. We believe this will serve our Company well over the long-term.

I would like to thank the 20,000 employees of YRC Freight for delivering year-over-year operating ratio and operating income improvement during a challenging Q1 economy. The first half of 2016 has economic uncertainty, for sure. But YRC Freight will continue to focus on providing award-winning customer service, controlling cost, driving yield and efficiency, while putting safety first in everything we do. Thanks for your time this afternoon.

We would now be happy to answer any questions that you may have.

Question-and-Answer Session

Operator

[Operator Instructions] And the first question comes from Art Hatfield of Raymond James. Mr. Hatfield, your line is open. Is it possible you have your phone on mute?

Okay. We will move on to the next question which is Rob Salmon of Deutsche Bank.

Unidentified Analyst

It's [Solomon Clarke][ph] on for Rob. Can you just talk a little bit about the linehaul optimization technology you recently put in place, and just maybe remind me of the timing, and if there are any incremental costs that might be associated with that?

James Welch

This is James. I'll comment and I'll let Darren talk a little bit more specifically about YRC Freight. But we are implementing this linehaul technology at a couple of our operating companies, YRC Freight being one of them. We've started the process; expect to start receiving some benefits in the second half of the year, and primarily into 2017.

But I'll let Darren talk a little bit further about YRC Freight, because that's where it has the biggest impact.

Darren Hawkins

Sure. Thanks, James, and appreciate the question. Actually, three pieces to this. Two are internal systems that we went through major upgrades on last year to have them in place for this year. They are up and running, and that's our internal [indiscernible] application that actually we manage the entire network from, from a linehaul operation. And then we also upgraded our linehaul driver management system, which was an internal application that's already in play.

The third one that's an external software application that's being tailored just for YRC Freight is the one that James referenced that's being utilized at another Opco as well. And that improves the linehaul technology from a planning, execution, and optimization standpoint, and will process that much quicker than our previous internal systems did, and that will be in play shortly at YRC Freight.

Unidentified Analyst

Okay. Is there any way to quantify the beneficial impact from those, or just touching so many bases, or --?

Darren Hawkins

At any LTL carrier, and especially at YRC Freight, outside of your labor cost, linehaul is your largest expense area. So it impacts our largest expense area. That's why we chose to make the investments in the two internal systems last year that took us about nine months to implement, and then this investment from an external application that has proven results this year.

James Welch

This is James. We are not far enough along in the rollout to make that determination, although we have some estimations but it's just way too early to share.

Unidentified Analyst

Okay, all right. And then just given some commentary from other carriers, have you seen any customers trading down to slower service offerings to maybe just reduce freight bills or anything like that?

James Welch

This is James. Obviously we try to stay up with what's happening in the marketplace. We think that the Accelerated offering that YRC Freight is implementing will pay dividends. Certainly customers are always looking for optimization. But we think with our three primary offerings of standard Ground, Accelerated, and Time Critical at YRC Freight, that we are positioned to handle customers that want to go slower or faster.

Unidentified Analyst

Okay. And then even I guess a little further on the Accelerated shipping that you guys just implemented, are there any incremental costs related to that at all?

James Welch

The Accelerated service that we launched, the way we launched that quickly after the planning that was in place, as we already had a dual speed network at YRC Freight that's been in place for a long time. And that's how we powered our time critical shipments throughout the network. We added the Accelerated shipments to that load plan. So actually it just allowed us to build more scale in that secondary load plan that we run through the network.

So Accelerated is a slight upcharge to our standard services, but we are excited about the offering. It is a core service offering. So we expect over a period of time that it will be a significant share of the shipments moving through YRC Freight. But, the standard service has been the backbone of our Company for a long time, and we expect a large majority of customers to continue with it.

Unidentified Analyst

All right, great. I'll hop back in. I think that's all for me, if I have anything else.

Operator

The next question will come from David Ross of Stifel.

David Ross

Yes, good afternoon gentlemen. Any commentary you guys can provide on April?

James Welch

We can. It's no different than a couple of the other companies that have already reported month to date. We are slightly worse at YRC Freight than when we began Q1. We are slightly better at the regionals. The good thing about what we are seeing, David, is that our customer specific negotiated increases, our contractual pricing, has continued to increase between 3% and 5%. And we're going to continue to stay very committed to our strategy of pricing for profitability, and making that our number-one priority versus market share.

David Ross

And among the regional companies, where do you see the strength and weakness - if there was any strength - or were there differences in freight between the West, Central, East?

James Welch

It's been pretty relative. And obviously we don't comment too much on the individual segments. But I would say overall it's been pretty steady throughout the three operating companies that comprise the regional operating companies.

David Ross

And then the network optimization that you talked about last quarter to be implemented in 2Q 2016, was that the linehaul? Or was there some other network optimization that you guys are working on?

James Welch

That was the linehaul piece.

Darren Hawkins

Yes. And that was - David, this is Darren - it was those three pieces. Two are in play, and the third one is in full pilot stage now.

David Ross

Excellent. Thank you very much.

Operator

Next we have a question from Scott Group of Wolfe Research.

Scott Group

Thanks. Good afternoon guys. So, wanted to ask about the freight operating ratio. I'm not sure we've ever seen the OR kind of hold flat from 4Q to 1Q before, or it's certainly very rare. And certainly we are in a weak tonnage environment. So I guess I'm trying to understand, was fourth quarter a really bad quarter? Was - is first quarter a really good quarter? What's the right kind of run rate to be thinking about as we model the rest of the year here?

Darren Hawkins

Scott, this is Darren. I'll take a shot at that one. First of all, I called it out in the script, from a productivity aspect, we saw improvements. And a lot of that came from the technology investments that we've been consistent with at YRC Freight really over the last two years. I've already talked about the linehaul piece. But I'll call out the wireless infrastructure enhancement that we did at all of our distribution centers, along with the dock tablet technology. We've upgraded our forklift technology; our equipment statusing technology has been updated.

Along with that, we also have initiatives around our office operations that showed nice dividends in Q1, with a dedicated resource around that. We have a Lean initiative in our equipment services group which covers all of our maintenance sections.

And then also in Q4, we certainly anticipated Q1 uncertainty and we implemented cost controls around several areas due to what we saw would be a slack volume environment. And those cost reductions were in equipment services where we parked some of our oldest tractors, and we saw benefits in maintenance savings from that.

We also saw improved miles per gallon from a fleet aspect, everything from operating supplies, travel and employee activities and local cartage expense that I called out, were all contributing factors. The other positive thing about being a unionized carrier is we have flexibility in our contract that allows us to adjust labor to match the volume that comes in. I'm doing the same things in April and we'll do that until we see volume tighten up some.

James Welch

Another thing I would add, Scott - this is James - is that Darren and his team continue to do a good job with their customer contract negotiations. And they have hung really tough on the yield side on an initiative that they started in the middle of 2014. They've been very consistent with that.

Scott Group

Okay. So is the message that even with negative tonnage, we can continue to see some margin improvement here, as we - the rest of the year?

James Welch

Obviously we don't give - this is James - obviously we don't give forward-looking guidance. But to reiterate what Darren said, we are very focused on cost control and then matching our man force work - working power against our freight flow, and we try to do that diligently every day.

Scott Group

Jamie, anything - I think some quarter, usually you give us something on workers comp and year-over-year change. Anything you can give us there?

Jamie Pierson

Work comp actually was pretty flat on a year-over-year basis. Where we saw some really good traction actually was on the bodily and injury side. There's a lot of volatility in that number in any given quarter. And given that volatility and just kind of the litigation environment in general kind of has driven us to make the investment that we are in our 15,000 tractors. I think James said we're going to be substantially complete by the end of the first quarter on a mileage basis.

We'll finish of the smaller - the end-of-line terminals in the next 90 days, Scott. But we really do believe that what we are putting in there, in almost literally every single one of our units, will help us actually start mitigating those accidents immediately. What's going to take time to show up is when the actuaries actually catch up and give us credit for that improved experience.

Scott Group

And what's that - what was that year-over-year improvement on the bodily injuries?

Jamie Pierson

I want to say it was like $6 million or $7 million.

Scott Group

Okay, nice. Just last question. Can you update us on the Central States issues, and what that may or may not mean for you?

Jamie Pierson

Yes. So I think there's been some questions regarding some of the recent press today. The good news is, for us, we have it contractually locked down through the - I guess it was probably the first quarter of 2019 - March, to be exact. So for us, Scott, the good news is we've got it locked down at about $1.75 per hour. And there's nothing that legislatively can change that between now and then. So it's about as predictable of a number as we can get.

Scott Group

Sounds good. Thank you, guys.

Operator

And next, we have a question from Art Hatfield of Raymond James.

Art Hatfield

Let me apologize first for getting hung up before, and you may have answered these questions. I'm not going to touch on pricing. I'm guessing somebody's asked about that, and I can go back. But can you talk a little bit about your interaction with customers, maybe some of your older customers who left during those difficult years of through 2008, and really up until a few years ago?

And kind of what you're seeing with them, any potential for them coming back? And also maybe if you have seen any new customer wins with the roll-out of - I know it's early - but with the roll-out of the Accelerated offering.

James Welch

I'll touch on the first part, Art, and then I'll let Darren touch on Accelerated. We've worked really hard at looking at our customer list. And obviously we did a lot of calling of that customer list back during the middle of 2014 moving forward, and especially at YRC Freight exited a lot of 300 pound freight. So we've taken the opportunity with the rate environment that was really pretty good over the last couple of years to get a better book of business on board.

Certainly, we keep a list of customers that we formally had back in the Yellow and Roadway days, and have a consistent sales effort against those customers. Some of them, we've had a chance to get back into. Some of them, we really haven't chosen to get back into because the rates were such - at the time that we departed that it really wasn't something that we wanted to get back into.

So really what we have tried to do consistently is just get the freight mix, the right price in the right lanes, and have freight that contributes to growing our EBITDA, and that's been our total focus.

I'll let Darren shift and talk about Accelerated, and what that's doing.

Darren Hawkins

Thanks James. Art, this is Darren. First of all, at YRC Freight we have 125,000 active customers. Naturally we've done a lot of work around our lane-based pricing efforts to ensure that the origin and destination pairs we are handling with them are complementary to our margin and to our network.

So those customers, although some share has changed with them, a lot of that has been directed. And it's been through a partnership with a customer where they could get the shipments in our network that work for them and work for us.

And elaborating on that further, that's where Accelerated really comes in. It's not just an assessorial upgrade. Accelerated is a core service. So when we say it falls in with standard, naturally standard is the lion's share of our shipments. We are really good at the standard service.

We've been reliable and predictable, as James and I both said in our script comments. But Accelerated fits in that space where it takes our standard service and makes it 1 to 2 days faster on a transit time, which really puts us in a good competitive position with the national carriers on service, time, and price.

What we've seen in April, since the launch on April 1, is a strong showing. We've seen some good activity in the Accelerated area. And we are excited to watch it over time, as we believe it will become a significant portion of our shipment count on a daily basis.

Art Hatfield

Great. Thank you for that. That's very helpful. Just one other thing, and I know you guys haven't been giving numbers surrounding this - but can you kind of talk about the trend that you are seeing in your claims ratios with your customers?

James Welch

You are right; we don't give our specific numbers. But I can tell you that overall we've had a reduction in our claims ratio. The thing that we are concentrating on is with all of the new equipment that we are bringing on of making sure that our dockworkers know how to stack and load freight with these new trailers that have the 16-inch centers that allow us to load a better quality of trailer than we ever have in the past. And so we think that's going to bode well for us as we are able to take on more trailers.

And Darren is in the process of taking on a couple thousand new trailers this year. And a lot of his linehaul fleet will be with the new load deck bar trailers that will allow us to load a better load. So, our claims ratios at the regional companies are very competitive, but we keep that front-and-center at all times.

Art Hatfield

Great, thanks. That's all I've got today.

Operator

This concludes our question-and-answer session.

I would like to turn the conference back over to the Company for any closing remarks.

Tony Carreno

This is Tony. Thanks again to everyone for joining us today. Please contact me with any follow-up questions that you may have. This concludes our call.

And, operator, I'm turning the call back to you. Thank you.

Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

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

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

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