Ferroglobe's (GSM) CEO Pedro Larrea on Q1 2016 Results - Earnings Call Transcript

| About: Globe Specialty (GSM)

Ferroglobe PLC (NASDAQ:GSM)

Q1 2016 Earnings Conference Call

May 19, 2016 8:45 AM ET

Executives

Joe Ragan - Chief Financial Officer

Pedro Larrea - Chief Executive Officer

Analysts

Ian Corydon - B. Riley & Co

Garrett Nelson - BB&T Capital Markets

Vincent Anderson - Stifel

Ian Zaffino - Oppenheimer

Joe Ragan

Good morning, everyone, and welcome to the Ferroglobe First Quarter 2016 Earnings Results Conference Call. This is Joe Ragan, the Chief Financial Officer of Ferroglobe. With me today is Pedro Larrea, Chief Executive Officer. I am going to read a brief statement and then hand the call over to Pedro.

Statements made by management during this conference call that are forward-looking statements are based on current expectations. Risk factors that could cause actual results to differ materially from these forward-looking statements can be found in Ferroglobe's most recent SEC filings and the exhibits to those filings.

In addition, this discussion includes EBITDA, adjusted EBITDA and adjusted diluted earnings per share, which are non-GAAP measures. Reconciliations of these non-GAAP measures may be found in our most recent SEC filings.

Now, I will turn the call over to Pedro Larrea, our CEO.

Pedro Larrea

Good morning, everyone, and thank you for joining us on the call today. Before we go into the details of the quarter, which Joe with guide you through, let me provide some context into the current environment and our priorities for the reminder of the year.

Next slide. As you can see from our results, the pricing environment we face during the first quarter of this year was challenging. Net sales on a pro forma basis were $423.5 million, as a result of a 12% decline in volume shipped and a decline of 13% in prices across all products versus the same quarter of 2015.

Demand was largely stable for our products at most of our end markets such as silicones and aluminum continued to grow modestly, while the solar industry have remained strong through the cycle with polysilicon demand consistently growing at 15% to 20% rates worldwide. Recent improvements in other significant end markets such as steel, construction and auto industries are leading to sings of demand recovery.

Sales prices for silicon metal fell 14% measuring Q1 2016 over Q1 2015, while silicon alloys prices fell 16% and manganese alloys fell 23%. Sales of silicon fume have remained solid with pricing largely stable.

Next slide. While these market conditions are undoubtedly challenging, we have successfully navigated low pricing environment in the past. Our entrepreneur culture and lean operating model allow us to react nimbly to improve costs and to generate cash flow even in difficult times.

We realized cost savings of $19.8 million in the first quarter including taking advantage of low price commodities, negotiating better deals in southern key cost components such as supplies, energy and logistics and capturing $5 million, $20 million annualize in quick win synergies.

In addition to give you a sense of how we are running our production more efficiently, we were able to reduce our post-merger combined production costs for 20% for silicon and ferrosilicon comparing our new production footprint in 2016 to Globe legacy assets in Q1 2015.

We are also working on realizing the full value of the merger. To that end, we expect to deliver at least the announced $65 million of annualized run rate synergies by the end of 2016. Technical teams are working across the company in identifying and implementing specific initiatives in areas such as raw materials performance and prices, furnish technologies and levering a greater volume for purchasing. We are also reducing SG&A costs in areas such as sales, administration, commercial agents and financial and accounting staff across the company as well as redundant senior management.

Next Slide. We have always focused on generating free cash flow and that has not changed. During the quarter, we moved aggressively to reduce our working capital and costs and generated free cash flow of $35 million.

Working capital was improved during Q1 2016 by a total of $55 million. This improvement continues the positive trend in the past 12 months, where we obtained total working capital reduction of $144 million compared to the $100 million announced three year target. We will continue to improve working capital in 2016 and beyond.

We have implemented new guidelines especially in Europe in terms of increasing inventory turns and reducing our accounts receivables DSO.

We are implementing a culture where everyone in the company thinks and speaks like our investors. We have focus on free cash flow generating, return on invested capital, working capital velocity and cost reduction to generate industry leading margins.

Next slide. With that backdrop in mind, let me comment on the overall environment and what we are seeing. We are now a more diversified company with revenues spread across a winder verity of products incorporating a new product category manganese alloys and with a greater geographic diversification.

While we expect the pricing environment, particularly for silicon metal to remain challenging for the remainder of the year, we have seen this before and there are number of reason why we expect improvement as we get towards the end of 2016.

First, we are seeing competitors supply starting to come offline, especially from the higher quartile of the cost curve. This means that markets are starting to tighten and we are seeing some spot business at meaningful premiums to the index prices. We think indexes do not represent the market, but they do impact our current index based pricing contracts.

Second, there are some signals of demand recovery in some of our main markets such as steel, aluminum and silicones. While in the case of polysilicon, demand has been growing adverse significant rate and that is already showing in the selling price of polysilicon itself that has increased as much as 50% in recent months.

Manganese alloys are following in the footsteps of the steel industry in the rest recent couple of months with price increases of 8% to 20% depending on the specific products. Also silicon alloys are showing some signs of price recovery.

Next slide. Before I pass on the call to Joe, I want to end by summarizing what I believe to be our opportunities for long term value creation. Environment that we are in has only reinforced for us the benefits of a more diversified footprint both in terms of products as well geography. We are a unique company in our sector, in our ability to ship production to the most competitive location in our portfolio, in our vertical integration with efficient and logistically optimal raw material supply and in our ability to benefit from synergies across wide production footprint.

Secondly, as it’s been consistent with our track record growth strategy in the past, we will take advantage of the current environment on our strong balance sheet and continue to look at growth opportunities that are accretive and generate strong returns on our capital. Indeed, it is especially during weak markets where we have taken advantage and acquired assets on the best terms and have generated superior returns for our shareholders. This has been our strategy for years and we believe it has served us well.

The current environment is actually a good opportunity to further emphasis the focus on cost cutting and cash generation, preparing our company to fully benefit from the upcoming recovery of our markets.

With that, let me turn the call over to Joe to go through the financial highlights.

Joe Ragan

Thank you, Pedro. Before I start running you through this quarter’s highlights, let me make one point about our reported figures this quarter. While we are providing year ago quarterly numbers for pricing, pro forma volumes and net sales, we’re not providing additional pro forma numbers for first quarter 2015. Given that FerroAtlantica was a private company, we do not have audited quarterly figures to provide pro forma comparisons for first quarter 2015. Instead, we have provided pro forma full year 2015 results as a comparison.

With that let’s get into the financials. Sales volume was 227,154 metric tons for the first quarter, down 12% from the first quarter of last year on a pro forma basis. And net sales were 433.5 million, down from pro forma $543 million year-over-year. Average selling price was down 13% from the first quarter of 2015 across all products including silicon metal, silicon alloys and manganese alloys.

We continue to have a strong focus on variable expenses to match the pricing environment. While we improved some areas of both cost of goods sold and SG&A, we did have additional costs related to the facilities we have idled the negatively impacted margins.

Reported EBITDA was 21.2 million, excluding merger related fair value adjustments due diligence and transaction cost, adjusted EBITDA was 33.9 million. Transaction and due diligence expenses were 2.6 million and purchase price allocation adjustments related to the combination of Grupo FerroAtlantica and specialty metals was 10 million. As a result, EBITDA margins were 5% and 8% on an adjusted basis.

Our strong focus on cost controls allowed to achieve an 8% adjusted EBITDA margin, while facing a difficult pricing environment and negative operating leverage mitigated somewhat by lower costs.

On a reported basis, Ferroglobe posted a net loss of 25.7 million on a loss of $0.15 per share on a fully diluted basis. Excluding merger related fair value adjustments, due diligence and transaction costs, adjusted net loss was 6.3 million or a loss of $0.04 per share.

Next slide. This slide demonstrates the trends we are seeing in terms of quarterly volumes shift on a pro forma basis. We are seeing stabilization in silicon alloys and sequential growth in manganese alloys. There has been improvement of about 5% and 16% in pricing during 2016 in silicon alloys and manganese alloys respectively due to strength in the foundry and steel industries.

We saw sequential declines in volumes in silicon metal and ferrosilicon during the quarter. However, we are now seeing some improvements particularly in silicon alloys.

Next slide. As Pedro already mentioned, we are focused on the decent cost improving our working capital and continuing to generate free cash flow.

Let me just provide some additional details. We generated free cash flow of 35 million in the first quarter including 55 million in working capital improvements. These working capital improvements were driven by significant improvements in both inventory and account receivables balances.

The company has generated a 144 million from improved working capital management over the past 12 months alone, well ahead of our original three year projection of 100 million.

Working capital discipline has been a strong focus over the last 12 months and we’ll continue to be in an area that we will drive for the remainder of 2016.

Our balance sheet remains strong with net debt of 421 million at the end of the first quarter of 2015 compared to 393 million at yearend 2015. The increase is partially attributable to the premium of 32 million for our shareholders in March 2016. In addition, the appreciation of the euro against the dollar has impacted the value of our euro denominated debt which affected our net debt position by 16 million.

Before I turn it back over to Pedro, let me emphasize that we remain confident in our ability to deliver synergies from the merger of FerroAtlantica and Globe Specialty Metals as well as driving further cost improvements.

We are realizing synergies from areas such as platform optimization, procurement synergies and implementation of best practices that we can capture rapidly. We expect to deliver at least 65 million of annualized run rate synergies by the end of the year. We also planned to initiate implementation of improved marketing strategies.

In addition, we see opportunities in taking advantage of improved market conditions in key raw materials globally.

And finally, we believe we can leverage our larger footprint and drive efficiencies from negotiating better contracts in terms of different cost component.

Next slide. From a balance sheet perspective, we ended the quarter with US$2.4 billion in assets and US$1.3 billion in book equity and strong metrics related to our net debt position.

Overall, we have a lot of work to do. We are pleased with the progress we have made and when our team was able to execute particularly on the cost front this quarter.

Now I’ll turn the call back to Pedro for some closing remarks.

Pedro Larrea

Thanks Joe. Ferroglobe is a newly combined company with a unique strong market position and we are early in our growth trajectory. We will continue to capitalize on our strong balance sheet and diversified products to drive earnings and deliver value to our shareholders.

The current environment is actually a good opportunity to further emphasize the focus on cost cutting and cash generation, preparing our company to fully benefit from a future recovery of our markets.

Our diversified vertically integrated and efficient portfolio also provides an excellent platform to compete in a truly global marketplace.

With that, let me turn the call back to the operator to take questions. Thank you.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Okay, so first question comes from the line of Ian Corydon from B. Riley & Co. Please go ahead, Ian.

Ian Corydon

Thanks. It’s B. Riley and Company. First question is you mentioned you are seeing a divergence between silicon metal spot and index prices. Could you just talk about what you think the magnitude of that divergence is and maybe why that’s occurring?

Pedro Larrea

Yes, we are seeing in the past few weeks divergence that are in the size of around 10%, so meaning spot business in silicon metal is as high as 10% above index. Our belief is that indexes are not reflecting the reality of the market for various reasons and I won’t go into all the details. But it’s certainly as a consequence of first very small volumes in the spot market and second just a kind of a catch 22 phenomenon of the index contracts themselves and the way they feed into the indexes. So those two dynamics are creating a divergence between index and real spot market.

Ian Corydon

Thank you. And I am just trying to make I understand the revenue disclosures in the press release versus what was in the 20-F filing. It seems like the silicon metal and manganese alloy revenue disclosures are apples-to-apples and then the third bucket of silicon alloys, does that include what in the 20-F was ferrosilicon plus other silicon based alloys?

Pedro Larrea

Yes, it did.

Ian Corydon

And so the silicon alloys capacity is somewhere around 313,500 metric tons, is that right?

Pedro Larrea

I don’t have the number in front of me but it should be the addition of yes, so ferrosilicon and other silicon based alloys. And it sounds all right.

Joe Ragan

Yeah, that’s about writing in.

Ian Corydon

Got it. And Joe, the transaction and due diligence expenses and the Globe purchase price adjustments, where do those appear in the income statement?

Joe Ragan

Well both of them are added back and they are above the line, so they are in operating income in the income statement. Let me - and thanks for asking that question. Just to be clear, I want to make sure, we tried to disclose this well. There was $10 million adjustment that was related to writing up the inventory at December 23rd to fair values. So we’re just trying to recognize in the underlying earnings for adjusted EBITDA to a proper margin recognition that would have occurred if we hadn’t done that fair value step up.

Ian Corydon

Got it. And the purchase price adjustment would have been within cost of goods sold, correct?

Joe Ragan

Correct. I didn’t call it, I am sorry, yes. I am sorry.

Ian Corydon

Okay. And maybe just one more and then I’ll get back in the queue. Could you just give us a CapEx budget for this year?

Pedro Larrea

Ian, we originally - we’re looking at 100 million in a different pricing environment and a little higher volume environment. So we’re looking at that to see if that’s still appropriate. But we haven’t - we have not brought that number down, but we’re looking at it very carefully, so we’re doing in a quarter-by-quarter. But for modeling purposes, I think we should use 100 million for the year combined.

Ian Corydon

Great, thank you. Got it.

Joe Ragan

Thanks, Ian.

Operator

I have question now from Garrett Nelson from BB&T Capital Markets. Please go ahead, Garrett.

Garrett Nelson

Hi Pedro and Joe.

Joe Ragan

Good morning, Garrett.

Pedro Larrea

Good morning.

Garrett Nelson

Good morning. On the levers you can pull to unlock value, are you actually considering the sale of the hydro plants and if so, where are you in that process and can you talk about potential uses of proceeds?

Pedro Larrea

Well, hydro assets is a - are a significant of value within our portfolio probably a value that is not fully recognized. We are evaluating this different alternative to unlock that value and we have a lot of flow of different ideas going around. But we haven’t made a decision about that.

What is true again is we believe those are valuable assets and probably not fully priced in the way they are looked at from the outside.

Garrett Nelson

Okay, and then -

Joe Ragan

And for using proceeds - year as we’re first going to pay down the existing net debt that’s in order for incidence we certainly are looking M&A activities still and share buybacks is something we look at as well and dividend policy as well. So on capital allocation, the first thing we do is need to pay down debt, the existing debt.

Garrett Nelson

Okay, so pay down of debt is higher on the priority list and say acquisitions, because you did talk about utilizing the balance sheet to be aggressive with growth opportunities, is that right?

Joe Ragan

In the absence of acquisition we pay down debt, but certainly we prefer to look at an accretive transaction.

Garrett Nelson

Okay. And then is it reasonable to assume that your blended average price realization you know the $0.24 a pound in the first quarter, that’s probably going to be fairly flattish in the coming quarters with Q1 to maybe slightly lower. Can you help us understand some of the moving parts with how we should be thinking about the three buckets of your business with silicon metal, silicon alloys and manganese alloys pricing in the coming quarters.

Pedro Larrea

That’s a long question, but let me give just a flavor. I mean our view is that actually Q4 2015 and Q1 2016 are the lowest prices environment we’ve seen in the long time whether that’s the bottom or not, we believe we are either at the bottom or very close to the bottom. We are working on the assumption that that is not changing in the very short term, okay, but it is also true that we are seeing some signs of certain recovery in different products. So - and as you were asking for the different buckets, certainly on the manganese alloys business from that bottom prices, we have already seen a significant growth that I already mentioned in terms of prices in ranges that go from you know 8% to 20% depending on the specific product.

Now we talk about silicon metal, we already mentioned this divergence of prices between actual prices and indexes. And in the very late few days, we have seen specific, the last week, we closed a very significant contract with an important customer at prices that of where well above index prices. So there is some signals that you know low priced imports are drying out and that some recovery is in the workings.

We are not counting on it, so our attitude is we need to still be extremely disciplined and extremely aggressive on cost cutting and generating cash. But we think that what’s the end of the year, there should be some recovery.

Garrett Nelson

Okay. And then Joe, what should we be modeling for an effective rate going forward?

Joe Ragan

We are at 38% at the moment and we’re looking at tax optimization strategies but I would keep it at 38%.

Garrett Nelson

Okay, great, thanks very much.

Pedro Larrea

Thanks Garrett.

Joe Ragan

Thank you.

Operator

Our next question comes from the line of Vincent Anderson from Stifel. Please go ahead.

Vincent Anderson

Good morning.

Pedro Larrea

Good morning, Vincent. How are you doing?

Vincent Anderson

Good, thank you. So if I could just start off digging in real quick to your comments on your marketing going forward. First, just historically I was curious how the European silicon metal contracts kind of played out in the fixed versus floating and how those indexes worked if there were flows?

And then just following on to that broadly, when you look going forward with your new larger footprint silicon metal, how would you prioritize maybe market share versus price stability in an environment like we have today? Thanks.

Pedro Larrea

Thank you. I mean in terms of the European market, there is one main difference with the U.S. market in silicon metal and that is that was in the North American market, most of the contracts are closed by the end of the previous year and there is relatively little spot activity in the European market. There is something like probably 25% to 30% of the total business that is being negotiated quarter-by-quarter or even month-by-month. So that is a main difference. In terms of whether there is more index pricing or more fixed pricing than in the U.S. I would the mix is relatively similar except for what I just mentioned and the fact that because you have a greater share of spot business that spot business is an effect of the end of the day very much related to the evolution of the prices along the year.

Now whether we prioritize market share versus pricing, I would say that what we are being a very disciplined is in making sure that we don’t sell at a loss. And when we see index prices going as low as they have been, we are making sure that we don’t go for sales that are not making a healthy margin.

Vincent Anderson

Great, thank you. And just following on to that, actually the manganese alloys business is predominately a spread - predominately spread economics over ore prices. How would you describe if you can your supply agreements for manganese or I believe they are heavily concentrated with BHP?

Pedro Larrea

Well, you are right. I think it’s to a large extend, the manganese alloys business is spread business as you described it. Sometimes with certain time lags alright and also of course depending on whether you have locked some price for a given period, we have a relatively concentrated purchase structure with what used to be BHP now South 32 and with Eramet, but we do keep supplies from alternative sources to make sure that we are always competitive.

And contracts are typically around one year, but prices are negotiated more in the shorter term, so they - again they follow pretty much the manganese or spot prices sometimes with certain lags like right now we have some purchased material at low prices that will go into second quarter.

Vincent Anderson

That’s very helpful, thank you.

Pedro Larrea

Thank you.

Vincent Anderson

If I could ask just one more and I’ll get back in the queue. I mean South America, if I remember correctly is specifically Argentina, are those power supply agreements coming under scrutiny with the new regime, is there anything we need to look out for there and then of course just a geopolitical stability in Venezuela, if could comment on how those plans are looking right now that would be great? Thank you.

Pedro Larrea

Yeah, we are in Argentina, there’s been a revisions to traffic structures that affect us and we are currently negotiating with the government way we can get more favorable schemes right now are Argentina planned is I don’t temporarily due to that reason, so - but we have the advantage of having alternative location to produce the same product and that is not effecting our ability to serve the markets. So you could call that today as a swing capacity if you wish.

And Venezuela, Venezuela there is certainly political unrest right now that is until today, it has not been affecting our business which is mainly an exporting business. So the turmoil there has directly affected our business so far.

Vincent Anderson

Great, thank you.

Operator

[Operator Instructions] We have a question now from Ian Zaffino from Oppenheimer. Please go ahead with your questions.

Ian Zaffino

Okay, thank you. Can you guys maybe talk about the profitability of your U.S. business maybe compared to your national business? And then maybe the opportunities to continue to maybe switch production from one country to the other to take advantage of the lower currencies? Help us understand that? Thanks.

Pedro Larrea

Okay, Joe.

Joe Ragan

It’s Joe. The cost structure is very different U.S. versus Europe and so is the contract structure. So at the moment for the contracts for 2016, we still have higher cost or higher priced contracts with flows and more of a fixed cost element. So although the spot prices are very low currently, they are much lower than what our contract prices are, so the U.S. assets the majority of them are profitable with similar margin to the European assets. And I think that was - I don’t think you are talking about South Africa or Argentina in that question, you are really talking Europe versus North America, is that correct?

Ian Zaffino

Yes, I am just to trying to get - just okay, so the U.S. is profitable but I guess if contracts will begin to this year, but it’s still be profitable to assume kind of a flat pricing environment?

Joe Ragan

That would change the profitability significantly, so that’s something we are watching very carefully, but figure - all our figure - we are actually able to balance geographically now much better within our cost profile.

Ian Zaffino

Right and this quarter then you had - go ahead.

Pedro Larrea

We do have the edibility, so I mean it’s clear that compared to our competitors, we have that advantage which is you know we can ship production from one country to another, that is certainly possible and we are actually doing that very actively every day.

Ian Zaffino

Okay. And then I guess last question would be and this highest question, but if you are selling above the index, how come you are not then reporting those selling prices through the indexes and getting those indexes then therefore up?

Pedro Larrea

Well that’s a good question. And our view, we have already seen in the very past few days, indexes going up again, so that will - we think that will be happening soon, okay. And it’s just that again the flow of negatively prices small volumes in the past months have had a - in our view a disproportionate effect on the indexes.

Ian Zaffino

Okay, thank you very much, guys.

Pedro Larrea

Thanks, Ian.

Operator

Our next question comes from the line of Vincent Anderson. Please go ahead - from Stifel.

Vincent Anderson

All right. Good morning again. Just two quick ones, you had mentioned in a previous slide deck, pretty big spread on a new polysilicon technology that you are pretty excited about, is there any update on that?

Pedro Larrea

Yeah, well, we - that new technology what is typically known as UMG silicones are upgraded with metallurgical grade which is the substitute to polysilicon is a technology we have developed in the past few years. What is the update, we - now we know we have the technology to produce the product that the market is demanding, so the product is there, the quality is there, we have tested it with customers and they are ready to use it. So all that is checked and we are sure about it. And we also have the design of what would be an industrial factory to product that product. We are now in the process of again how would I say design phase and ready to make decisions in terms of going forward with that factoring the coming months.

And as you say with very good prospects of significant margins and producing UMG and selling it in into the market. It would be a factory that would be in the first stage between 1,500 and 3,000 tons per year of UMG production.

Joe Ragan

Right, we are really - Vincent, we’re really looking at this. It is a great opportunity. And just to be clear, it’s an important end market for solar is. And we’re the beginning of the supply chain, our silicon metal that’s where the solar supply chain starts. So it’s a great opportunity. AT the moment, I can tell you that we’re really focused on our core business, driving synergies and delivering to the results. And this is something that just an option for us, it’s an excellent option. They worked well within our strategy.

Vincent Anderson

Okay, thanks. So in the near term, probably not a priority from a capital allocation standpoint.

Joe Ragan

No.

Vincent Anderson

Okay. Great, thanks. And if just one more, on the raw material side of your efficiency gains, I was just curious if your cash costs on your U.S. coal production versus where API 2is right now, I know historically you really like that coal from an efficiency and a quality perspective. But with where you buy Colombian coal today, are there any opportunities to reduce cost further by maybe idling some of those U.S. mines?

Pedro Larrea

Well, that’s an excellent question. Not in the U.S. in the way we are - we analyze our cost is clear that it is today, its - still we’re running our U.S. facilities with our own coal. And that is what our North American facilities with our own coal both in terms of cost and in terms of performance. In the rest of our footprint in Europe and South African, bear in mind that South Africa by the way we have our own also our own proprietary charcoal production very efficient, so there we also have our own production and again very, very competitive. And when we look at Europe, you are right, today, our own coal - our own North American coal is in terms of price not competitive with Colombian coal and we are testing performance to see if there is improvement potential.

But it’s also an open option. So when prices of coal go up in the international markets, we always have the option to run our own coal if it is more competitive in the meantime we preserve our reserves by buying from third parties that today are more competitive.

Vincent Anderson

Great, thank you, that’s all I’ve got.

Pedro Larrea

Thank you.

Operator

And with that, I would like to turn the call back over to Mr. Larrea for closing remarks. Thank you.

Pedro Larrea

Okay, thank you, Dave. With that I would like to conclude today call. Thank you everyone for joining.

Joe Ragan

Thanks.

Operator

This concludes today’s conference. 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!