Kingstone Companies' (KINS) CEO Barry Goldstein Q1 2016 Results - Earnings Call Transcript

| About: Kingstone Companies (KINS)

Kingstone Companies, Inc. (NASDAQ:KINS)

Q1 2016 Earnings Conference Call

May 13, 2016 08:30 AM ET

Executives

Amanda Goldstein - Investor Relations Director

Barry Goldstein - Chairman and CEO

Benjamin Walden - SVP and Chief Actuary

Analysts

Ken Billingsley - Compass Point

Robert Temko - Private Investor

Derek Pilecki - Gator Capital Management

Paul Newsome - Sandler O'Neill & Partners

Operator

Greetings and welcome to the Kingstone Companies' First Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to turn the call over to your host, Amanda Goldstein. Please go ahead.

Amanda Goldstein

Thank you very much, Kevin, and good morning, everyone. Yesterday afternoon the Company issued a press release detailing Kingstone's 2016 first quarter results. We posted a PowerPoint presentation on the Company Web site that acts as an accompaniment to this call. The speakers will not be referring to the slides, but we hope the ordering of the slides will follow the discussion. Please review the presentation and follow along if you can.

On this call, Kingstone may make forward-looking statements regarding the company, its subsidiaries, and businesses. Such statements are based on the current expectations of the management of each entity. The words anticipate, expect, believe, may, should, estimate, project, outlook, forecast, or similar words are used to identify such forward-looking information. The forward-looking events and circumstances discussed on this call may not occur, and could differ materially as a result of the known and unknown risk factors and uncertainties affecting the Company's including risk regarding the insurance industry, economic factors, and the equity markets generally, and the risk factors discussed in the Risk Factors section of its Form 10-K for the year ended December 31, 2015.

No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made, and the Company and its subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. When discussing our business operations, the Company may use certain terms of our, which are not defined under U.S. GAAP. In the event of any unintentional difference between the presentation materials and GAAP results, investor should rely on the financial information in our public filings.

With that, I’d like to turn the call over to Barry Goldstein, Kingstone’s Chairman and CEO. Please go ahead, Barry.

Barry Goldstein

Good morning, everyone, and thank you, Amanda. We appreciate you taking the time to learn more about Kingstone and I appreciate the opportunity to update you on our results. I’m joined today by Ben Walden, Kingstone’s Vice -- Senior Vice President and Chief Actuary. Unfortunately Victor Brodsky, will not be with us today. Victor is recovering from a minor concussion he received by getting hit in the side of the head by an airbag in his car. So, hope be fine, but not available for the call today.

I’ll begin today’s call with a discussion about our financial results and our growth in the first quarter of 2016. Ben will then discuss the challenges we faced during the quarter, particularly those coming from winter weather and some unfortunate fire losses. Then finally, I will return for an update on our future plans, followed by a few closing remarks.

As I hope you've already read yesterday afternoon we reported a continuation of our strong growth in the first quarter. We delivered a profit ahead of that posted in the first quarter of 2015, but we’re unfortunately hampered by winter weather and unusual spate of large fire losses.

Winter losses we always deal with just as we always have and will always have fire losses. But in Q1 we had more than our share of those larger size fire losses. To this, all I can say is that insurance is a fortuitous business and in Q1 we felt the pain.

For the quarter we saw written premiums in our continuing lines of business grow by 21.6%. And our line of homeowner and dwelling products, which now contribute over 75% of total written premiums continue to grow achieving a gain of 22.5% over last year.

As we [indiscernible] the past year or more we've seen heightened competition. But in order to further our goals we were able to adjust our product offerings after continual conversation with our selected producers. New policy issuance grew by 21.9%, keeping our underwriters very busy. We’ve seen a combination of increased quoting coupled with an improved conversion rate.

As I mentioned in March, we now ranked at the 18th largest homeowner writer in New York State. But as we enjoy less than 1% market share, there is plenty of open road in front of us. Over the past three years that is 2013, ’14, and ’15, our for-hire physical damage only business grew by over 400%.

We first saw an indication of a possible slowing in the year-over-year growth rate during late Q4 2015 and the slowing continued into Q1. This declined to but 29.9%, that’s kind of funny, this year may pretend the leveling off of that line of business of Uber, Lyft and other transportation network companies, as they mature we’re seeing that line slow in its growth play.

Q1 saw us rollout a few changes to our commercial liability business tailored to narrow our focus on quality business by avoiding those insureds who are only interested in shopping by price. We are not and never will be a Company that uses price to generate policies. The changes imposed result in higher average premium yielding an overall increase in written premiums from this line of 11.7%.

Finally we’re pleased that the run-off of the commercial auto business is now complete. As of May 1, there were no active commercial auto policies and our efforts to settle and close the remaining 47 claims are a major focus of our claims staff. In addition, please note that the commercial auto line was responsible for nearly all of the adverse development during the period 2010 through 2014.

Another growth metric, our policies in-force at the end of Q1 totaled 54,500, which after excluding commercial auto represents a 19% increase over last year. Our quarterly net income was slightly improved over the prior year, resulting in earnings per share of $0.07. As Ben will explain this was after the recorded catastrophe losses reduced earnings by $0.13 a share, which is an incremental improvement of $0.14 versus the impact of the harsher 2015 winter. But that was offset by the effect of fire losses in excess of 200,000 which reduced quarterly earnings an additional $0.11 per share this year versus last.

Finally, let me add some color to our investment portfolio. Keeping to our objectives of preserving capital while providing income please pay particular attention to the increase in investment income. This year’s first quarter investment income amounted to $813,000, an increase of 41% over the prior year.

During the quarter, we saw an increased unrealized gains which after-tax added $926,000 to other comprehensive income. The unrealized gains resulted an increase to book value per share of $0.13. And following the restructuring of our investment portfolio which began in Q4 2015 when we outsource the fixed income portion of our portfolio, we now hold over 22% of our available-for-sale fixed income holdings in residential mortgage-backed securities. Note that at March 31, 2015 just the year before it was just over 5%.

At the same time, this has helped to reduce our duration from just about 5.5 years to under 4.5 years at the end of this -- the last quarter. Also on Wednesday, the Board declared the 19th consecutive quarterly dividend payable on June 15 in an amount of $0.0625 per share.

With that, let me turn the call over to Ben to detail more of our operating performance. I'll return at the end to wrap it up. Ben?

Benjamin Walden

Thank you, Barry. I’ll start with a review of our loss ratio for the quarter. The 2016 first quarter net loss ratio improved 2.7 points to 65.3% from 68% in the prior year period. We continue to see the benefit of more conservative reserving practices and recorded 2.9 points of favorable prior year development compared to 1 point of unfavorable prior year development in the last period.

However, the first quarter loss ratio was again affected by severe winter weather, primarily from a single freezing event in mid-February. In addition, our core loss ratio was impacted by an increase in large fire claim activity which added nearly 7 points to the loss ratio compared to the prior period.

We record the catastrophe impact from winter weather as the excess losses above those expected during an average winter season. In the first quarter 2016, this effect was 9.7 points, slightly above our initial high-end projection of 9 points for the quarter. Several large claims from frozen pipes and resultant flooding developed during March and April affecting the final numbers.

The timing of the sub-zero freezing event in February was unfortunate as it came during the start of a holiday week when some homeowners were away on vacation arriving home to find significant water damage. Even with this large single event, the cat effect of winter weather on our loss ratio was 8 points lower than in the first quarter 2015 when we recorded 17.7 points of impact.

We still expect the full-year effect of this year's winter weather to be approximately 2 points on the overall combined ratio. Due to more favorable reinsurance treaty terms, the 2016 severe winter weather will not affect ceding commission revenues, in contrast to 2015 when winter weather impact on ceding commissions increased our combined ratio by 2.7 points for the full-year.

Our core loss ratio excluding prior year development and severe winter weather increased from 49.3% to 58.5% in the first quarter of 2016. Most of the variance was related to the unusual impact of large fire claims. While we normally see increased fire claim activity in the winter months, this first quarter we saw an unusual spike in the number of large claims. And this added 6.8 points to our core loss ratio compared to first quarter of 2015. Although the overall frequency of fire claims has remained relatively stable over the last two years, in this quarter we were hit by much higher average claim severity than in the [technical difficulty].

Turning to reserves, our overall reserve adequacy continues to be strong. In the first quarter, we continue to see favorable loss development on prior years relative to expectations. We observed favorable development on both commercial lines and commercial auto during the quarter, and as Barry mentioned, we recently non-renewed our last commercial auto policy. With only 47 open commercial auto claims remaining, we are confident that our reserves are adequate to conclude the run-off from this line of business. We continue to make improvements to claims handling, which leaves us confident that prior year development will not create a drag on future earnings.

At this point, I'll turn it back to Barry.

Barry Goldstein

Great. Thanks, Ben. This is a good time to go over three major items that we will cover in press releases subsequent to our March call. First, in late March, we announced the addition of Billy Yankus to our Board of Directors. Bill brings an investor’s perspective to Kingstone, following his many years as a top-rated analyst, as well as a banker to the insurance industry. He has a deep [indiscernible] suite level -- industry level contacts and he has what I call that Fat [ph] Rolodex that comes with being a well respected professional for so many years. Bill now cheers our finance and insurance committee.

In mid-April, we announced a private placement of $5 million of common shares to a subsidiary of RenaissanceRe, the New York Stock Exchange listed reinsurer known in part as being the preeminent provider of catastrophe insurance. RenRe became the Company’s second-largest shareholder as a result and we look forward to deploying the capital they provided, as well as accessing the intellectual capital they possess.

In late April, we announced that David Delaney will lead our efforts to expand outside of New York State, including the recent approval we received from the State of Rhode Island. In the short-term we won't see a substantive impact to our premiums this year, but a more material contribution will be coming in 2017. David is in total accord with our long-term focus. That is the Kingstone to be a premier provider of quality personal and small commercial policies to the smaller sized agencies. Our core select producers, the ones that realize that the carrier agent relationship is in fact a two-way stream.

We will start with personal lines in area, in which we excel as does David. We will build relationships, increased product mix, and ultimately export our old school culture by having a clear and unambiguous message that we will never sell direct, we will never be thought of like so many others who are willing to cut the legs out from under their independent agents, all to chase growth by aligning themselves with direct writers. This message will resonate wherever we go, as it doesn't matter if you're in New York, New Jersey, or Connecticut, or wherever. The problem of the smaller agents are being overlooked or in fact discarded by so many of the large and nationwide and super-regional carriers.

Finally, we are rapidly approaching the June 30 expiration of our reinsurance treaties. We will be confronted with a market place which today looks very similar to what it did at this time last year. With our focus on obtaining an A.M. Best rating of A minus, we will continue to trade short-term profit margin management for long-term balance sheet stability. It’s a process I began in July 2013, first by reducing our alliance and quota share reinsurance and then last year unbundling the catastrophe insurance from the quota share treaty.

To this point, we've made great strides to protecting the Company in the event of a major Superstorm Sandy live event. If Sandy would take place today, which show the losses more than twice of what we’ve sustained in October 20, 2012, all because of the growth we experienced. But the overall impact of Sandy in 2012 was a 27% increase to our annual combined ratio. If that same storm hit today, it would result in an increase of less than 10% or just over one quarter's earnings. I’m very proud of the path we’ve chosen and will continue to follow it into this reinsurance renewals season.

With that, operator let's open it for questions.

Question-and-Answer Session

Operator

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question today is coming from Ken Billingsley from Compass Point. Please proceed with your question.

Ken Billingsley

Good morning. First I’d like to say - offer best wishes to Victor and hope he has a speedy recovery. I want to get to sort of -- what you talk about A.M. Best rate increases first, can you tell us about why you’ve focused on the A.M. Best rate increase? Will it move the needle with your book of business given the culture you've already developed with the agents and the relationships? How much will it move the needle and what you think it will do to the bottom line by getting A.M. Best rating increase?

Barry Goldstein

Well, thanks, Ken. It’s going to help us immeasurably. The -- our business plan -- we’ve been very fortunate New York to be operating in a location that is somewhat underserved or more often than not, whether it’s homeowners and dwelling coverages today or maybe 15 years ago with automobile insurance, but once you get outside this New York City metropolitan area, the – it’s almost a necessity to have an A rating. Being almost A is – it’s good, but it's a threshold that we need not -- we don't want to have that be an impediment. Having an A rating and wanting to write commercial lines is especially important, but there is to my knowledge, I don't think there's another company out there that points its offering specifically to the small mom-and-pop main street type agency. And if in fact they do, I don't know of any A rated company that does that. As you could see from our results, we’re getting phenomenal results from dealing with the smaller agents who really see an alignment of interests with Kingstone. I sat with the analysts from A.M. Best just a couple of weeks ago and they made it a point to call out the fact that at least those analysts don't have one company there rating at this point where only one year in the last 10 was the combined ratio in excess of 90%. That’s Kingstone. We've got the numbers, we've got the credibility, we need the recognition and we need to remove those impediments for those brokers. And I think what you'll see is the rating will facilitate the growth and will hasten the growth. That’s what you will see, Ken.

Ken Billingsley

And with that for looking outside of New York specifically into the new territories and the one that David is going is leading, how do you recreate that culture and relationship with those agents that you've built up over time in New York and they understand what you are willing to accept, and how you want to write the business, how do you get any significant premium growth as you try to build that type of culture in states that are, maybe Texas that’s a little bit further away?

Barry Goldstein

Well, let at least for the purposes of this conversation focus on the nearby states like Connecticut and New Jersey. First, we have agents who are licensed in New York who have offices in Connecticut, as we have New Jersey residents who posses New York licenses. So we already have quite a number of people who we already do business with, who will be able to access once we have the right product in place. But our message is very clear. The business has changed dramatically. Black box underwriting on one hand eliminating the agency when we get to an extreme, if you want to save 15 minutes and save 15%, you know where you can go. But Kingstone is not going to be the one to hurt those agents the way so many other carriers have by aligning themselves with that company or companies. I live this life. I ran an agency chain for many years. I know what it's like to sit across the table from someone thank you, you don’t have anything to worry about, that’s a different customer and we're doing this, we will support you. Well it was anything but the truth and I can't look somebody in the face and act like that. So, I think the message resonates very clearly. It’s shown in New York and by our -- we have a phenomenal relationship with many of the agency groups particularly the PIA who has rated us the number one carrier in New York in two of their last three agency surveys at a 60 and 70 different carriers. People trust us. They like the personal service. They like the old school handholding, and they like the idea that we treat them the way they expect us, we expect them to act towards us. I don't think that changes wherever you go, Ken.

Ken Billingsley

Very good. Just one more question, on the fire claims. I know you said that the frequency was normal, but it was the severity. How many fire claims are we talking about, and how many of them were in the over 200,000 loss?

Benjamin Walden

Yes, I can give you the numbers for the quarter. We actually had six large fire claims that were above 200,000. In the prior period quarter it was three. However, on those six, the severity on those six is actually higher than the three we had in the prior period quarter as well.

Barry Goldstein

So the -- yes, the average of those above 200 were higher this year than last and they were twice as many of them.

Ken Billingsley

Okay. But the six, even the six -- what’s your normal expectation for fire? I mean, that’s a -- it’s a 100% increase year-over-year just in frequency and you said they were in line with expectations?

Benjamin Walden

Yes, fire frequency is very low. So these claims are subject to random variation. We normally see more in the winter months, because you’ve people inside turning on their heat and all of that, but it wasn't materially different in the last four quarters versus the four quarters prior to that. So we’re not really concerned on the frequency side as this being a pattern developing for fires. As we grow, we’re going to have more.

Barry Goldstein

We were happy to see the overall frequency actually tick down during the quarter, Ken. The fire frequency wasn’t up, it really was just the severity and when we’re talking about 40,000 odd homes we insure, we’re going to have fires and the more homes we insure I suppose we will start getting closer and closer to the mean over time. But it’s just unfortunate we had three separate people go through each of these fire claims to see if there was anything we could have done better. From an underwriting perspective, they weren't new policies. These are people who haven’t had claims in the past. So, it was just truly random and what could have been wasn’t and we'll just move on from there.

Ken Billingsley

What's the average home value? I know its big number when you’ve 40,000 homes, but what’s the average home value that’s being insured?

Barry Goldstein

Average coverage, it’s around 420,000 right now.

Ken Billingsley

420,000. Well, thank you for taking my questions.

Barry Goldstein

Great. Thank you, Ken.

Operator

[Operator Instructions] Our next question today is coming from Robert Temko, a Private Investor. Please proceed with your question.

Robert Temko

Thank you. I was looking at a chart of the stock of Kingstone and back in 2009 the stock was at $0.04, and now it’s substantially higher. I’m just wondering; I was not an investor in 2009. How the Company has changed since 2009, and how do you envision it seven years in the future from what it is now?

Barry Goldstein

Well, I was around then, this is Barry Goldstein. I was around then. I’m trying to remember the stock at $0.04. Maybe I just don’t want to remember it, when it was at $0.04 [ph]. But its funny, I’ve run this Company as its Chairman for the last 15 years. I’ve been the Chairman of the insurance company for 10 years, and I’m in my fifth year as the insurance company CEO. So we’ve come a long way going back to between from the time I started through mid 2009, the Company was actually a retailer or a broker that focused on the sale of non-standard automobile insurance policies through about 70 different locations located in New York, Pennsylvania and New Jersey. At the time we were one of the largest distributors of private passenger. And during that period of time, I experienced the carriers who we did business with not acting like it’s a two way street. We were just the necessary evil as far as they were concerned. When they felt like cutting commissions they did, because they could, not because it was warranted. Somebody would make a mistake at corporate and they’ll take it out on the producer. That’s something that had happened to me and something I swore I’d never do to someone else. So, what happened was in 2006, the Company which was then known as DCAP Group gained control of commercial mutual insurance company through the purchase of its surplus notes, that’s when I became the Company’s chairman. After about I guess 10 or 11 months we began to process to de-neutralize our commercial mutual and that process ended in the middle of 2009. We’ve been able to grow the Company, revenues, profits, employment. Something I’m incredibly proud of that we found the balance in the way we do things. And it’s that balance I think you’re going to find over these next seven years. We’re going to treat people the way we would want to be treated ourselves. My employees will have a constant betterment in their lifestyle. So as long as we can deliver the returns to our shareholders, we have the true alignment of interest. Our employees get a bonus every year -- every employee gets a bonus. The bonus is essentially a percentage equal to one minus our combined ratio times their annual salary. We do good, the employee does good. We do good, because our brokers give us quality business. The brokers get incremental commissions. We work with a number of different re-insurers. We’ve worked with the same re-insurance intermediary. I’m very proud to say I work with a great group of guys out of Connecticut for Aon, and we will continue to work with them. We’ve delivered profits to our re-insurers, and we’ll continue to do that. And we’ll continue with the same conservative outlook trying just to get better and stronger and not focus on quarterly earnings and not focus on short-term fixes. This is a business that you can very quickly step into a big hole by making a small little change to make up for something each quarter. So, I think what you’ll see from us is a Company that will continue to be customer service oriented, opportunistic, nimble enough to make quick decisions, and the things for a small company like us that we call niches are things that are often discarded by the larger companies that just keep getting larger. So we’ll have more opportunities to avail ourselves up as we expand, and that’s who I think you’ll see us seven years from now. I hope that answers your question.

Robert Temko

Yes. Thanks very much. I wish I had bought the stock at $0.04 if it continues on the same path it will be a $2000 stock in seven years, but thank you very much.

Barry Goldstein

Now you’re talking my language. Thank you.

Robert Temko

You are welcome.

Operator

Thank you. [Operator Instructions] Our next question today is coming from Derek Pilecki from Gator Capital Management. Please proceed with your question.

Derek Pilecki

Hi. Good morning, Barry.

Barry Goldstein

Derek, how are you?

Derek Pilecki

I’m doing well. How about you?

Barry Goldstein

Been doing fine.

Derek Pilecki

Question about quota share to reinsurance. The last few years you’ve reduced the amount you’ve purchased and then with the RenRe transaction raising capital. As you enter into this reinsurance negotiation is your goal to reduce the amount of quota share again or do you think with the growth from the additional states that you’ll keep quota share level with last year and just grow the premium?

Barry Goldstein

Well like everybody says, great question. But that actually is a great question, Derek. This is something we’re going back and forth on now. We do have a long-term goal to eliminate quota share. And one of the benefits, well one of the reasons for setting that out as a goal was so that we could reclaim the profits that was seated to the re-insurers during that period of time when the terms of the quote of share weren’t necessarily as good as they are now. One of the things we did last year and what kind of gets very confusing is by unbundling the catastrophe insurance from the quota share going from a gross to a net treaty. It makes accounting, its makes understanding our business very, very difficult. So we got the need for me to be clear and have people be able to really understand our business model, gets a little clouded up by even just having the quota share. But going into the season, we -- by RenRe making the investment that they did, that brought us back -- brought our net leverage back to a rate that we felt comfortable or we feel comfortable. We could cut down the quota share going forward or keep it the same. I will -- I don’t think there’s going to be a set of circumstances where we will revert to a gross treaty again. But I don’t see any likelihood of -- we’ll be between 25% and 40%. We won't see more, we won't go below 25%. And we do have to keep in mind that, however successful my new best friend David Delaney is and building us out in Connecticut and New Jersey. We want to stay somewhere very close to that 1.5 to 1 net leverage. If he moves a little faster than plan, I don’t want to stop him, but I also don’t want to compromise the conservatism that 1.5 to 1 means to us. I know I did answer your question in particular, but I hope I gave you enough color that you feel comfortable.

Derek Pilecki

Yes. I appreciate it. Thanks for the insight.

Barry Goldstein

Okay. Great.

Operator

Thank you. Our next question today is coming from Paul Newsome from Sandler O'Neill. Please proceed with your question.

Paul Newsome

Good morning. Thanks for the call. Could you talk about your confidence prospectively in maintaining your goal of sort of 20-20 in the futures top line growth ROE, just given the [multiple speakers] changes?

Barry Goldstein

Well, I think what you’ve seen Paul, is we’ve been able to adjust our offerings in New York and are in fact our largest line personal lines which now is three quarters of our business, only because its grown at an accelerated rate. So those lines for just New York have grown at more than a 20% rate. We have to get factor out, get rid of commercial order. And whatever incremental premium comes in from the -- from outside New York, we’ll just -- just enhance that. In terms of margins, because we started this conversation as 20-20-20, with 20% growth, 20% profit margin and pointing towards a 20% ROE. Like I said, we -- whether we can get to an 80% combined or a little bit more or a little bit less, I forget exactly what we came in at last year, but we’re off to a better start this year that we were then. So I feel -- I think we came in at 80% on the doc last year. So, all things equal, I feel comfortable looking at an 80% for this year as well. Of course subject to weather and also some random events that could take place. In terms of ROE, just adding the incremental equity that RenRe came with, will dilute that some as I’m sure you’re aware. But if that’s the price that quality incremental capital brings then so be it. So, maybe its time for me to get off that 20-20-20 and say I’ll be happy with 20-20 and mid to high teens in ROE. And if it just so happens, I hit the 20% because we get a little bit lucky then I’ll just describe it to that. So maybe with 20 -- lets talk 20-20 now in terms of premium generation and profit margin, and leave the ROE to the mid to high teens.

Paul Newsome

Sounds good. Thank you.

Barry Goldstein

Okay. Great.

Operator

Thank you. We’ve reached the end of our question-and-answer session. I’d like to turn the floor back over to Kingstone Company’s management for any further or closing comments.

Barry Goldstein

Great. Thanks everybody for spending the time on the call. I hope we were able to give you a little more color into our results, and I think you can tell by the tone of my voice. I would have liked to have been delivering better results. I’m happy that they were better than the year before. I’ve given you the reasons that they weren’t as good as we’d hoped, but that’s my job. And it is what it is, fires come, things happen, we deal with them. So thanks for staying with us and being interested in the Company and we look forward to talking to you again real soon.

Operator

Thank you. That does conclude today's teleconference. You may disconnect your line at time and have a wonderful day. We thank you for your participation today.

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!