Aggreko's (ARGKF) CEO Chris Weston on Q1 2016 Results - Earnings Call Transcript

| About: Aggreko PLC (ARGKF)

Aggreko PLC (OTCPK:ARGKF) Q1 2016 Earnings Conference Call April 28, 2016 3:30 AM ET

Executives

Chris Weston - CEO

Carole Cran - CFO

Analysts

Chris Gallagher - JPMorgan

Toby Reeks - Morgan Stanley

Will Kirkness - Jefferies

Josh Puddle - Berenberg

Karl Green - Credit Suisse

Rajesh Kumar - HSBC

George Gregory - Exane BNP Paribas

Nicholas de la Grense - Bank of America Merrill Lynch

David Phillips - Redburn Partners

Rory McKenzie - UBS

Operator

Welcome to the Aggreko Q1 Trading Update. My name's Dan and I'll be the coordinator for today's call. I would now like to hand over to your hosts, Christ Weston and Carole Cran, to begin.

Chris Weston

Thank you very much, Dan. Good morning, everyone and welcome to our first quarter trading update. I'll give you an overview of trading for the first three months and an update on the outlook for the year as a whole. Carole and I will then take your questions. Overall, performance in the first quarter was in line with our expectations, including known quarter 1 headwinds that I will cover, by business unit, shortly. Underlying revenues were down 14%; and reported revenues down 17%. From this point, all numbers I quote will be on an underlying basis, i.e., adjusted for currency movements and pass-through fuel.

Starting with our rental solutions business, where revenues were down 9% on the same period last year. This was due to lower levels of activity in North America, driven principally by two sectors. First, upstream oil and gas; and the full-year impact of the decline that affected us from Q2 last year, where in Q1 2015 this sector grew 6%, but on a full-year basis declined by 26%. Coming into 2016, this sector continues to be challenging and the outlook for the balance of the year is uncertain. Volumes and prices, having plateaued from November of last year through most of the first quarter of this year, have recently come under pressure.

Secondly, as I explained in March, our petrochemical and refining sector has had a weak start to 2016. Whilst the number of companies in this sector have announced significant investment plans for 2016, customers' margins are currently under pressure, as they operate at lower levels of production, due to high levels of inventory, caused by lower demand, given the warmer winter. In this environment our customers look to cut costs, including the level of spend on the type of services we provide. Outside North America, rental solutions grew year on year in both Europe and Australia-Pacific. In addition, towards the end of the quarter we started mobilizing our 108 megawatt diesel contract in Tasmania that I mentioned in March.

This emergency contract is in response to the lack of hydropower in the region and a fault in the Basslink interconnector to the mainland. The contract duration is for four months. Clearly, we will support our customer if they need us for longer. Turning to the power solutions business unit and first our industrial business. As you will recall, we successfully delivered the European Games in Baku last year which started to earn revenue in Q1, 2015. Excluding this, revenues were slightly down on last year, with growth in Russia, the Middle East and Africa being offset by more difficult trading conditions in Latin America, especially in the transactional business in Brazil and Chile, given the mining slowdown.

On a full-year basis, excluding Baku, I expect to see growth in the industrial business. This is supported by 100 megawatts of new orders that have been secured between the Middle East and the Russian businesses, year to date. Finally, power solutions utility revenues were 19% lower than the prior year. There are a few moving parts in this. Firstly, as you will recall, the pricing on the extension of our gas contracts in Bangladesh only took effect in Q2 last year and so there is a Q1 impact. In addition, our 104 megawatt diesel contract in Panama ended in June, 2015. This contract, although not particularly large volume, did have a disproportionate impact on revenues, as it was a bundle price, including fuel.

Excluding both of these, the quarter 1 revenues would have been down 14%. As we flagged last year and again in March, we also had volume off-hire from our 263 megawatt gas plant in Mozambique. In Q1, we have demobilized 108 megawatts, as the gas has been allocated to a permanent power plant. There is a further 65 megawatts that is currently out of contract, but expected to go back on hire later in the year, to provide power into the South African power pool. The remaining 90 megawatts is contracted in part to the end of the year, with the balance of 50 megawatts contracted until March, 2018. I'm pleased with the year-to-date order intake of 486 megawatts, including our recently announced 200 megawatts for three years in Zimbabwe; as well as new work in Brazil, Indonesia and Mali, among others.

This compares well to the 388 megawatts awarded to the same point last year. As the statement notes, our off-hire rate in Q1was 11% which is higher than last year. Our full-year expectation remains the same as the March results, around a more normal 30%. We also continue to monitor and respond to the geopolitical situation in the countries in which we operate, particularly the challenging conditions that remain in Yemen and Venezuela. Briefly, on our financial position, at the end of the first quarter, net debt stood at £510 million, a £21 million increase since the yearend.

On fleet CapEx for the year as a whole, we continue to expect to spend around £250 million, with a further £30 million of non-fleet CapEx, including investment to support our business priorities. Around £200 million of this fleet spend is replacement CapEx, designed to keep the fleet at its current size and age of around five years. It also includes a further 300 refurbishments to our higher efficiency G3+ diesel engine. The remaining £50 million has been allocated for investment in our new, more efficient gas engine which is currently in production. As ever, we will manage the CapEx spend tightly and flex it according to market conditions. Turning to the outlook. For the full year, our expectations remain unchanged. We continue to expect profit before tax and exceptional items to be slightly lower than last year, on an underlying basis.

As we stated in March, we expect profit in the first half to be lower than the prior year, in part due to contract start and end dates in our power solutions utility business. The initiatives to deliver the business priorities are progressing well, including the reduction in our cost base. I will provide more detail when we update the market in August.

Thank you very much for your attention. Carole and I will now take your questions.

Question-and-Answer Session

Operator

[Operator Instructions]. Our first question comes from the line of Chris Gallagher from JPMorgan. Please go ahead.

Chris Gallagher

A few questions. The first one, how you see the phasing of CapEx through the year. The second then, has there been any more conversations around Venezuela, given the very tight electricity market? And that would that be somewhere you'd be prepared to put more equipment? And then, the third and final one is just around M&A and your outlook on that for the year. Thank you.

Carole Cran

Yes, the £250 million fleet CapEx a fairly even split between half one and half two. Maybe slightly more skewed towards half two in terms of the gas build assumption, but, at this stage, I'd probably go half and half.

Chris Weston

On Venezuela, as you've all read, it is a very difficult situation there, economically and compounded by the current power solution. They're very reliant on hydro. I think the Guri Dam is one of the biggest in the world and that is almost empty; and they're beginning to ration power. We're very focused on collecting our receivables and that is the number one priority. Not an easy regime to be dealing with and there's a lot of effort going into that. We wouldn't deploy more equipment into Venezuela unless we were confident, like we're in other countries, of how the customer was paying us on a regular basis.

On M&A, pipeline is beginning to look at a number of different options, as we have said in the past; bolt-ons that are close adjacencies to what we do. So the likes of TC, load banks and companies that are in a similar area to us, but that we could assimilate very quickly. There are some opportunities out there and we will come back and brief you, as and when appropriate.

Operator

Our next question comes from the line of Toby Reeks from Morgan Stanley. Please go ahead.

Toby Reeks

I've got a few, if I can, as well. The first one is around the order flow which has clearly been strong. You've had a really good performance on that. The rate you've achieved year to date is ahead of the first half for the past three years. You've now signed the Zimbabwe contract. Are you confident that we should be looking at this sort of run rate through the year? Can this pace continue or has Zimbabwe taken a block out of that?

Secondly, could you talk a little bit about provisions, if you can. I, obviously, would see the Yemen and Venezuela contracts. Is collection worse or better than it was last year? And could that impact numbers as we go forward? And then, the other thing is, on a couple of contracts, I think the Bangladesh extension, we're still waiting to hear how you're doing on the remaining fleet. Could you give us an update there, please? Thank you.

Chris Weston

Yes, certainly, Toby. So firstly, on the order flow. 486 is a good start to the year. As I said in March, the prospect pipeline is strong. Certainly, the strongest I've seen it; not that, that really says much. The key here is conversion. I think it is too early in the game, at the moment, to see that we're seeing improved conversion. The market is competitive. As many of you have noticed, there is excess fleet and overhang in the market. Customers are still taking time to make their minds up.

So I recognize it's a good start, but I don't think people should be getting carried away by what that might imply at the moment. Of course, the teams are very focused on it, working very hard and doing a very good job. But we need a bit more time under our belts.

Carole Cran

Toby, yes, so the provisions, as obviously, our standard practice, we have increased them year to date. They're up around $10 million. Our working assumption is that it will stay at that level for balance of year.

Clearly, as Chris has said, we're working through the situation in Venezuela, in particular. We have seen some monies flow in the Yemen. So Venezuela is the most difficult, at the moment. So we've taken our standard approach on the provisioning at this stage and hopeful that we'll see some improvement.

Toby Reeks

Okay, sure. The guidance for the full year which I guess is fairly broad anyway, does that include increased provisions of $10 million?

Carole Cran

Yes, it does. So as you know, we've previously, as we come into a year, our starting assumption is that we will hold at that level for the balance of year. That's the working assumption. So the assumption now is that we'll hold at this circa $10 million higher level.

Chris Weston

On Bangladesh, just to remind everyone, well we have 380 megawatts in Bangladesh. 55 of that is diesel which is on contract until 2018. It's the other 325 that's gas. Of that 325, 145 at Ghorashal has already been extended out until 2018. So it's the other two sites, [indiscernible] that we're talking about which is 180 megawatts. They are in the middle of the extension process at the moment.

I think one's February and one is May and we're discussing with the customer. I think it's too early to be precise on it. Despite permanent power coming on to the merit order, it looks like they may need us, but we have to go through the normal negotiation and see what that will bear. So I'm sorry I can't give you more detail than that at the moment.

Operator

Our next question comes from the line of Will Kirkness from Jefferies. Please go ahead.

Will Kirkness

Just one question, really, around thoughts on the cost saving plans and how that's progressing. And then how the split's going to look for first half/second half, whether that's still broadly the same, so down in the first half and then flat in the second half. Thanks very much.

Chris Weston

On cost saving, very happy with how that's going. On track for the £80 million; half from headcount and half from procurement. Headcount is, by and large, done. There are a few still to leave the organization but, by and large, out. So pleased with the progress we made there. We have just had a new Chief Purchasing Officer join the organization, reporting to Carole, so bringing a wealth of experience. I think, when I put him together with the team and the structure that we've put in place, I'm very confident with what we might be able to do in the area of procurement; and happy with how it's tracking to date. Do you want to take the next one, Carole?

Carole Cran

On the split, yes, we've obviously said previously we expect it to be more skewed to the second half, given the timing of off and on-hires. I suppose, a particular note was Mozambique coming off at the start of the year; and then Zimbabwe recently awarded, but won't start to generate revenues until H2. So that still stands in terms of H1 and H2. The swing factors we've just touched on will be where we land in the next two months on the debtor book and what that implies in terms of our assumption on the provision. But what we described previously still stands.

Operator

Our next question comes from the line of Josh Puddle from Berenberg. Please go ahead.

Josh Puddle

The first question is on the Zimbabwe contract. Can you say whether the margin you're earning there is accretive or dilutive to your power solutions utility business? The second question, just again on the first half guidance. You've said that profitability will be impacted by timing. I just wondered if you're comfortable with the current consensus of £94 million which I think suggests a year-on-year decline of around £20 million. And then the third question is on events; whether there are any material events this year which we need to be factoring into our numbers? Thank you.

Chris Weston

So on Zimbabwe, material contract. Very pleased to have signed that; and comfortable with the margin that we have secured there. I don't think it'll have an impact, be dilutive or accretive. It'll be neutral on the power solutions margin. Do you want to touch on the H2 split?

Carole Cran

Yes, on first half Josh, really, the last question that Will answered, the swing factor would be the provision in terms of our view on that H1/H2 split. And then on events, probably, the only one really to note would be UEFA it's not a huge event, but that will help our Continental European business a bit in H2 and probably worth -- based on previous ones, probably worth maybe €6 million or €7 million.

Operator

Our next question comes from the line of Karl Green from Credit Suisse. Please go ahead.

Karl Green

Just a couple of questions from me. Just if you can make some general observations about the pricing environment across the rental solutions business and also industrial power solutions. That would be helpful. And then, secondly, just in terms of the utility pipeline. Obviously, Zimbabwe was a very large contract. What are the next largest scale tenders you've got sitting behind that? I wouldn't assume 200 is necessarily representative, but have you got any other reasonable sized bids that you might be able to convert as the year goes forward?

Chris Weston

Certainly. So firstly on pricing. In rental solutions, we've seen a lot of pressure, as you know, from oil and gas. So a lot of volumes have off-hired there and there has been pressure on pricing, as a result in oil and gas; down fairly considerably. But you've seen that playing through the numbers. For the rest of rental solutions, principally, talking about North America, we haven't seen any undue pressure on pricing as a result of kit off-hiring from the oil and gas into the rest of the market. I suspect a lot of it has gone into construction which is not a segment that we're particularly dependent upon.

There is a little bit of softness, but I don't think we're seeing anything unusual, more broadly, across the market. The other one you asked about was industrial power solutions. I don't think there's anything particular to report there. It does vary, country by country. When you look at somewhere like Russia, we're seeing both volume up, actually considerably and pricing strengthening. In Africa as a whole we've seen prices remain pretty flat; volume up strongly. Middle East, a different mixture because there's more oil and gas in it. We've seen good volume growth, but there has been pricing pressure and the two just about offset each other.

So it does vary as you go round the world. I don't think there's any particular trend that you can pull out. Brazil would be another one that has had a difficult time in the transactional business there. Both volume and pricing are off, but I don't think that would really surprise anyone. In terms of the pipeline, 200 megawatts for three years, I think, is one of the larger contracts we've ever signed on diesel. So it's a significant contract and they don't come around every single day. But looking at the prospect pipeline, it is stronger, as I said, than a year ago. It is quite well spread across the world.

Within those, you will get anything from 5 megawatts up to 100 megawatts, maybe a little bit more. Then, occasionally, you might see the odd 200, like Zimbabwe, but they don't come along a lot. But I'm pleased with what I've seen in the prospect pipeline. I do have to reiterate, conversion is what we need to see. It is much the same as it was when I last spoke to you. I think, we just need a little bit more time to see what will happen there.

Karl Green

Just going back to your comment about North American rental solutions. Would you recognize some of the suggestions that you're coming under some competitive pressure, as you do see kits' redeployment out of certain sectors into others. There're various suggestions that there's a bit of a market share battle going on at the moment. Is that something you would recognize?

Chris Weston

Undoubtedly, kit is coming off supply from oil and gas and moving into other sectors. As I said, Karl, we don't see a huge amount of that. I suspect most of it gets redeployed by general rental companies into construction sectors. And, as I said, we're not large in that area. When you start to go into some of the other sectors and not all of them, it becomes quite specialist and the kit that you need is not necessarily the same kit that you used on the oil and gas fields. That might give us some protection and it's not only the kit, it's the capability and the expertise of the individuals that you have to deploy. Now, having said all that, there is some softness. I don't recognize what you are saying or people are saying about losing market share in other sectors, though.

Operator

Our next question comes from the line of Rajesh Kumar from HSBC. Please go ahead.

Rajesh Kumar

Could we get some color on what's happening in the Olympic sites? Have we had any update on that front? Also, just touching base on the supply side. Have you seen any material differences in the prices of the kit you're buying from your suppliers in the recent quarters?

Chris Weston

Firstly, on the Olympics. We're not really involved in the Olympics to any great degree. As I said in March, we're supplying cooling to the athletes dining room which I was a little skeptical about until I went down there and saw it. It is the biggest tent in the world and, actually, pretty impressive. But in the scheme of the whole of the Olympics, it's quite small.

I spoke to the Project Manager down there, who is looking at power across the Olympics. He's comfortable with how it's progressing. I expect, like all of these large events, it has its ups and downs. I saw recently in the press that they had some power issues around some of the test events, but that's what the test events are for. They know we're available. We have a very good relationship with the IOC. But we're not partaking, at the moment.

So on the supply side, kit from our OEMs. Obviously, quite a sensitive area. Not particularly keen to talk too much about how we buy our equipment. Suppliers, the main ones that we deal with, are obviously looking for volumes. Some of them are new to us and we will negotiate the most commercially effective contract that we can in that instance. But that's all I'm prepared to really say, at the moment, I'm afraid, Rajesh.

Rajesh Kumar

Just a quick follow-up on the order pipeline. Basically, diesel prices and gas prices have come down quite a long way. There was some implication that could be bringing down the cost of temporary power. Earlier you had indicated that the cost of rental was something like 20% of the total cost of renting. When you're bidding now, what are your assumptions? Is it more like 30% or 40%? Or does it continue to stay at 20% of the total and you bring the overall price down?

Chris Weston

It continues to remain at about 20%. When you're in these tender processes, they are competitive. The customers focus not only on the rental charge which is the smaller proportion, but they are much more interested in fuel efficiency and your fuel numbers. So that is playing a larger role. That's how we see it, at the moment. Pressure around prices differs around the world. I think there is still an overhang in fleet around the place. You heard about the likes of Al Taka, [indiscernible] to name a couple, APR, who probably have excess fleet. Competition is intense, but it does vary country by country around the world.

Operator

Our next question comes from the line of George Gregory from Exane. Please go ahead.

George Gregory

Four, if I may. Firstly, just on the provision, if I could just clarify and apologies I think I missed this, was the 10 million incremental U.S. dollars or sterling? And related to that, if your guidance is unchanged despite an increased provision, just wondering what the offset is?

Carole Cran

Sorry, I thought you said you had four questions.

George Gregory

I do; I thought I would take them one by one.

Carole Cran

$10 million to answer your first question. I guess $10 million in the context of the full-year number, there's lots of puts and takes on timing of on and off hires; MOB costs; service costs; the full panoply of the cost base, so in the round. That's why we're reiterating the guidance, despite that increase in assumption on the provision.

George Gregory

The other three, just timing on the Bangladesh renewal decision. Thirdly, any contracts that you might be able to reference in terms of the upcoming pipeline, Chris. Finally, just a bigger picture question on the Olympics contract; let's assume that the subcontractors manage to execute. Clearly, historically you've had a bit of a stronghold on these types of contracts. Do you think that has any implication on your historic stronghold on those major events contracts?

Chris Weston

Timing on Bangladesh decision, I think contracts, as I said, ended in February and are due to end in May. In negotiation, there is a process that has to be followed; it has to get signed off by a number of people, whatever the outcome. That process is underway at the moment. As soon as we have a decision, we will let you know. We cannot be precise on that; it's of unknown duration. I would imagine that we will know though by August results. No contracts in particular to reference.

I think I've said quite a lot about the pipeline. It is broadly based around the world and of various size. It is slightly skewed toward diesel, probably because oil prices are lower and that has a material impact on the contract costs. But no particular contracts to reference, at the moment. On the Olympics, the contracts and I don't think they made an announcement, but they have definitely been awarded to two very small local players in Brazil, [indiscernible]. I think in the case of the latter, there is some kind of tax incentive involved in the structure, but they are very small; they do not have the capability to do this around the world.

I'm very confident that our position in events, of all sorts all over the world, is a strong one and will continue to be so. We have a good and constructive relationship with the IOC. We continue to work with them and are already looking at Korea and Japan.

Operator

Our next question comes from the line of Nicholas de la Grense from Bank of America Merrill Lynch. Please go ahead.

Nicholas de la Grense

A couple from me. With regard to the Bangladesh renewals, is it reasonable to assume that that fleet is still operating and generating revenues while you discuss extensions or has it stopped? Also, clearly the pricing took a big step down last year. Is there an expectation that it may step down again on renewals? And then just a general comment, I think all the order intake year to date has been diesel. If you could comment on the pricing of those new contracts that would be helpful, given the context, a lot of oversupply in the diesel fleet globally.

Chris Weston

On Bangladesh, yes, it does continue to earn revenue; and, no, we're not expecting any further reductions in price. And then on pricing year to date, we're comfortable where that has come in, broadly flat, I suppose, on a year ago. So comfortable with what we're seeing there, Nick.

Operator

Our next question comes from the line of David Phillips from Redburn. Please go ahead.

David Phillips

One from me, please. Just wondering, in the relatively short period of time that APR has been privately owned, have you seen any change in their competitive practice or their willingness to either tender or even downsize?

Chris Weston

Yes, APR private, very early days. I get the impression from what we're seeing in the market that they are very conscious of the excess capacity that they have in their fleet. So I think they are both looking at selling fleet. But also, not everywhere but in areas, they are being very aggressive on price. I think that is a reflection of the competitive market and the situation they find themselves in with excess fleet. I don't know if it is noticeable in spots around the world, but like all these things, it differs country by country. But it's very, very early days.

Operator

[Operator Instructions]. Our next question comes from the line of Toby Reeks from Morgan Stanley. Please go ahead.

Toby Reeks

Can I get two more in? One is on Tasmania, the contract you've won there, the emergency power. Is that essentially an IPP-type priced and margin contract? The secondly, the £50 million that you have earmarked, if my math is correct from what you said earlier, Carole, for the new gas fleet, how many megawatts will that buy?

Carole Cran

In Tasmania, Toby, on their price, yes, probably similar, maybe even slightly more than a normal [indiscernible]. However, it's four months in duration. Obviously, the MOB costs are the same whether it's four months or a year. As you can imagine, our Australian business doesn't have 108 megawatts of diesel sitting waiting for such an emergency and so we have had to transport kit in from the various points of the Aggreko world.

So I would say, therefore, margins are comparable to a fully loaded project margin, is the assumption. Then on the gas, yes, the £50 million would imply that we would be growing the fleet maybe by about 150 megawatts, so not dissimilar to last year. But on the condition that we've stated before, that we will only build it if the prospect pipeline supports the build.

Toby Reeks

So you've £50 million for 150 megawatts of new gas basically, yes.

Carole Cran

Yes, give or take, yes. Yes, plus there's all the ancillaries that go with it, yes.

Operator

Our next question comes from the line of Rory McKenzie from UBS. Please go ahead.

Rory McKenzie

Can you just help us understand the sequential trends in rental and power industrial? Can you tell us what the underlying revenue growth was in those two divisions for H1 2015 and H2 2015, just so we can see how that tracks?

Carole Cran

Rory, we'll come back to you, if you don't mind, on that. We've just not go that immediately to hand.

Rory McKenzie

Sure. Okay, that's fine. Then on utility, you mentioned some wind in Indonesia and I know, Chris, you've talked about de-scoping some of your offering in competitive regions. Are you seeing volume picking up as you're able to lower prices in those areas? Is that how you're adapting to those markets?

Chris Weston

We have seen volume growth in Indonesia. So that business has got more megawatts on hire than it did at the beginning of the year, up roughly 30 to 40 megawatts which is good. I think they are very interested in gas. We've talked about the switch from diesel to gas. So a lot of the enquiries that we're seeing, at the moment, are on how you provide gas power into the remote islands. That could be a fairly fruitful area for us.

What we've, in fact, done is actually open a local lay-down yard, so we've got kit in the country. It is a cross-set, if you like, of a transactional fleet that is going into the industrial sector to serve things like cement works, mining, etc. I think that has got off to a reasonably good start. Very early days and time will tell, but pleased with what we're seeing there.

Operator

Our next question comes from the line of Rajesh Kumar from HSBC. Please go ahead.

Rajesh Kumar

I might have misunderstood your answer when you said that the cost of rental versus fuel remains at 20/80, similar to the scenario you had in the past, because that would imply a 39% decline in the fleet rental cost or the price. Your commentary seems to be that the pricing is fine. So obviously I'm misunderstanding something. Can you please help me understand that better?

Carole Cran

Rajesh, given that I've got the history on -- I think when we spoke in the past at our $120 oil, we would have said that we were about $0.03 in terms of our capacity or our rental, charge. At that point, the diesel would have been, say, $25 to $30. So it's actually more like a 90/10 back at that peak point. The 80/20 is more representative of where it is today. So we're not implying that our rental charge has materially moved in that intervening period.

Operator

[Operator Instructions]. Chris and Carole, we currently have no further questions registered so I'll hand back to you.

Chris Weston

Thank you very much, Dan. Thank you very much, everyone, for dialing in. I'm sure we'll speak over the coming weeks and look forward to seeing you in August. Thank you.

Operator

Ladies and gentlemen, this concludes the Aggreko Q1 trading update. If you would like to hear any part of today's call again, a recording will be made available shortly. Thank you for joining; 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!